95-29696. Federal Open Market Committee; Domestic Policy Directive of September 26, 1995.  

  • [Federal Register Volume 60, Number 234 (Wednesday, December 6, 1995)]
    [Notices]
    [Pages 62468-62469]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-29696]
    
    
    
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    FEDERAL RESERVE SYSTEM
    
    Federal Open Market Committee; Domestic Policy Directive of 
    September 26, 1995.
    
        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 September 26, 1995.\1\ The directive was issued to the 
    
    [[Page 62469]]
    Federal Reserve Bank of New York as follows:
    
        \1\Copies of the Minutes of the Federal Open Market Committee 
    meeting of September 26, 1995, 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.
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        The information reviewed at this meeting suggests that economic 
    activity is expanding at a moderate rate in the current quarter. 
    Nonfarm payroll employment increased considerably in August after 
    essentially no growth in July; the civilian unemployment rate edged 
    down to 5.6 percent in August. Industrial production posted a large 
    increase in August to a level moderately above the average of the 
    second quarter. Total nominal retail sales rose slightly on balance 
    over July and August after registering appreciable gains in the prior 
    two months. Housing starts were up a little in August after increasing 
    sharply in July. Orders for nondefense capital goods have softened but 
    still point to substantial expansion of spending on business equipment 
    over coming months; nonresidential construction has been strong of late 
    The nominal deficit on U.S. trade in goods and services widened 
    slightly in July from its average rate in the second quarter. After 
    increasing at elevated rates in the early part of the year, consumer 
    and producer prices have risen more slowly in recent months.
        Market interest rates have fallen somewhat since the Committee 
    meeting on August 22. In foreign exchange markets, the trade-weighted 
    value of the dollar in terms of the other G-10 currencies has declined 
    over the intermeeting period, with most of the decline occurring over 
    the past several days.
        M2 and M3 continued to register sizable increases in August but 
    growth of those aggregates appears to have moderated somewhat in 
    September. For the year through August, M2 expanded at a rate somewhat 
    below the upper end of its range for 1995 and M3 grew at a rate 
    appreciably above its range. Total domestic nonfinancial debt has grown 
    at a rate around the midpoint of its monitoring range in recent months.
        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 reaffirmed the range it had established on January 
    31-February 1 for growth of M2 of 1 to 5 percent, measured from the 
    fourth quarter of 1994 to the fourth quarter of 1995. The Committee 
    also retained the monitoring range of 3 to 7 percent for the year that 
    it had set for growth of total domestic nonfinancial debt. The 
    Committee raised the 1995 range for M3 to 2 to 6 percent as a technical 
    adjustment to take account of changing intermediation patterns. For 
    1996, the Committee established on a tentative basis the same ranges as 
    in 1995 for growth of the monetary aggregates and debt, measured from 
    the fourth quarter of 1995 to the fourth quarter of 1996. 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 
    would be acceptable in the intermeeting period. The contemplated 
    reserve conditions are expected to be consistent with growth in M2 and 
    M3 over the balance of the year near the pace of recent months.
    
        By order of the Federal Open Market Committee, November 27, 
    1995.
    Donald L. Kohn,
    Secretary, Federal Open Market Committee.
    [FR Doc. 95-29696 Filed 12-5-95; 8:45 am]
    BILLING CODE 6210-01-F-M
    
    

Document Information

Published:
12/06/1995
Department:
Federal Reserve System
Entry Type:
Notice
Document Number:
95-29696
Pages:
62468-62469 (2 pages)
PDF File:
95-29696.pdf