[Federal Register Volume 59, Number 40 (Tuesday, March 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4539]
[[Page Unknown]]
[Federal Register: March 1, 1994]
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FEDERAL RESERVE SYSTEM
Federal Open Market Committee; Domestic Policy Directive of
December 21, 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 December 21, 1993.\1\ The directive was issued to the
Federal Reserve Bank of New York as follows:
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\1\ Copies of the Minutes of the Federal Open Market Committee
meeting of December 21, 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.
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The information reviewed at this meeting suggests a strong
advance in economic activity in recent months. Total nonfarm payroll
employment rose appreciably further in November, and the civilian
unemployment rate fell considerably to 6.4 percent. Industrial
production increased sharply in October and November, partly
reflecting a continuing rebound in the output of motor vehicles.
Retail sales were up moderately in November after a large increase
in October. Housing starts advanced substantially in November.
Business equipment expenditures have been rising rapidly, and
nonresidential construction has turned up from depressed levels. The
nominal U.S. merchandise trade deficit in October was about
unchanged from its average rate in the third quarter. Broad indexes
of consumer and producer prices suggest little change in inflation
trends, although prices of some raw materials have increased
recently.
Short-term interest rates have changed little, while
intermediate- and long-term rates have risen slightly since the
Committee meeting on November 16. In foreign exchange markets, the
trade-weighted value of the dollar in terms of the other G-10
currencies is about unchanged on balance over the intermeeting
period.
Growth of M2 and M3 strengthened in November, and both
aggregates have risen at somewhat faster rates since late summer
than earlier in the year. For the year through November, M2 and M3
are estimated to have grown at rates somewhat 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 November 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 moderate growth in M2 and M3 over coming months.
By order of the Federal Open Market Committee, February 22,
1994.
Normand Bernard,
Deputy Secretary, Federal Open Market Committee.
[FR Doc. 94-4539 Filed 2-28-94; 8:45 am]
BILLING CODE 6210-01-F
