[Federal Register Volume 61, Number 73 (Monday, April 15, 1996)]
[Notices]
[Page 16503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9210]
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FEDERAL RESERVE SYSTEM
Federal Open Market Committee; Domestic Policy Directive of
January 30-31, 1996.
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 January 30-31, 1996.\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 January 30-31, 1996, 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 the economy
has been growing rather slowly in recent months. Nonfarm payroll
employment continued to expand moderately in December, and the civilian
unemployment rate remained at 5.6 percent. Industrial production
increased only slightly further in the fourth quarter. Growth of
consumer spending was modest, on balance, over the past several months.
Housing starts rebounded in November from a sizable October decline.
Orders for nondefense capital goods point to a moderation in the
expansion of spending on business equipment, and nonresidential
construction has risen appreciably further. The nominal deficit on U.S.
trade in goods and services narrowed in October from its average rate
in the third quarter. There has been no clear change in underlying
inflation trends.
Most market interest rates have declined somewhat since the
Committee meeting on December 19. In foreign exchange markets, the
trade-weighted value of the dollar in terms of the other G-10
currencies has risen further over the intermeeting period.
Growth of M2 and M3 strengthened in December and January. From the
fourth quarter of 1994 to the fourth quarter of 1995, M2 expanded in
the upper half of its range and M3 grew at the upper end of its range.
Growth in total domestic nonfinancial debt has been moderate in recent
months, placing this aggregate near the midpoint of its monitoring
range for the year.
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
this meeting established ranges for growth of M2 and M3 of 1 to 5
percent and 2 to 6 percent respectively, measured from the fourth
quarter of 1995 to the fourth quarter of 1996. The monitoring range for
growth of total domestic nonfinancial debt was set at 3 to 7 percent
for the year. 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 decrease slightly the existing degree of pressure on
reserve positions, taking account of a possible reduction in the
discount rate. 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 moderate growth
in M2 and M3 over coming months.
By order of the Federal Open Market Committee, April 5, 1996.
Donald L. Kohn,
Secretary, Federal Open Market Committee.
[FR Doc. 96-9210 Filed 4-12-96; 8:45 am]
BILLING CODE 6210-01-F
