[Federal Register Volume 59, Number 13 (Thursday, January 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1318]
[[Page Unknown]]
[Federal Register: January 20, 1994]
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
Federal Open Market Committee; Domestic Policy Directive of
November 16, 1993
In accordance with Sec. 271.5 of its rules regarding availability
of information (12 CFR part 271), there is set forth below the domestic
policy directive issued by the Federal Open Market Committee at its
meeting held on November 16, 1993.\1\ The directive was issued to the
Federal Reserve Bank of New York as follows:
---------------------------------------------------------------------------
\1\ Copies of the Minutes of the Federal Open Market Committee
meeting of November 16, 1993, which include the domestic policy
directive issued at that meeting, are available upon request to the
Board of Governors of the Federal Reserve System, Washington, D.C.
20551. The minutes are published in the Federal Reserve Bulletin and
in the Board's annual report.
---------------------------------------------------------------------------
The information reviewed at this meeting suggests some
strengthening in the expansion of economic activity in recent
months. Total nonfarm payroll employment rose appreciably in
September and October, while the civilian unemployment rate edged up
to 6.8 percent in October. Industrial production increased sharply
in October, partly reflecting a continuing rebound in the output of
motor vehicles. Retail sales were up substantially in October after
changing little in September. Housing activity picked up further in
the third quarter. The expansion of business capital spending has
slowed from a robust pace earlier in the year. The nominal U.S.
merchandise trade deficit in July-August was about unchanged from
its average rate in the second quarter. Consumer prices have
increased moderately on balance in recent months and producer prices
have fallen.
Most interest rates have increased somewhat since the Committee
meeting on September 21. In foreign exchange markets, the trade-
weighted value of the dollar in terms of the other G-10 currencies
appreciated over the intermeeting period.
Growth of M2 picked up slightly on balance in September and
October, while M3 strengthened to a somewhat greater extent over the
two months. For the year through October, M2 and M3 are estimated to
have grown at rates a little above the lower end of the Committee's
ranges for the year. Total domestic nonfinancial debt has expanded
at a moderate rate in recent months, and for the year through August
it is estimated to have increased at a rate in the lower half of the
Committee's monitoring range.
The Federal Open Market Committee seeks monetary and financial
conditions that will foster price stability and promote sustainable
growth in output. In furtherance of these objectives, the Committee
at its meeting in July lowered the ranges it had established in
February for growth of M2 and M3 to ranges of 1 to 5 percent and 0
to 4 percent respectively, measured from the fourth quarter of 1992
to the fourth quarter of 1993. The Committee anticipated that
developments contributing to unusual velocity increases would
persist over the balance of the year and that money growth within
these lower ranges would be consistent with its broad policy
objectives. The monitoring range for growth of total domestic
nonfinancial debt also was lowered to 4 to 8 percent for the year.
For 1994, the Committee agreed on tentative ranges for monetary
growth, measured from the fourth quarter of 1993 to the fourth
quarter of 1994, of 1 to 5 percent for M2 and 0 to 4 percent for M3.
The Committee provisionally set the monitoring range for growth of
total domestic nonfinancial debt at 4 to 8 percent for 1994. The
behavior of the monetary aggregates will continue to be evaluated in
the light of progress toward price level stability, movements in
their velocities, and developments in the economy and financial
markets.
In the implementation of policy for the immediate future, the
Committee seeks to maintain the existing degree of pressure on
reserve positions. In the context of the Committee's long-run
objectives for price stability and sustainable economic growth, and
giving careful consideration to economic, financial, and monetary
developments, slightly greater reserve restraint or slightly lesser
reserve restraint might be acceptable in the intermeeting period.
The contemplated reserve conditions are expected to be consistent
with modest growth in M2 and M3 over coming months.
By order of the Federal Open Market Committee, January 13, 1994.
Normand Bernard,
Deputy Secretary, Federal Open Market Committee.
[FR Doc. 94-1318 Filed 1-19-94; 8:45 am]
BILLING CODE 6210-01-F
