[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H. Con. Res. 329 Introduced in House (IH)]







105th CONGRESS
  2d Session
H. CON. RES. 329

  Expressing the sense of the Congress regarding the reduction of the 
        Federal Funds rate by the Federal Open Market Committee.


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                    IN THE HOUSE OF REPRESENTATIVES

                           September 23, 1998

 Mr. Hinchey submitted the following concurrent resolution; which was 
      referred to the Committee on Banking and Financial Services

_______________________________________________________________________

                         CONCURRENT RESOLUTION


 
  Expressing the sense of the Congress regarding the reduction of the 
        Federal Funds rate by the Federal Open Market Committee.

    Resolved by the House of Representatives (the Senate concurring),

SECTION 1. FINDINGS.

    The Congress finds, as of the date of the adoption of this 
Concurrent Resolution, that--
            (1) real interest rates are at historically high levels, 
        the highest in 9 years;
            (2) the Federal Funds rate is 5.5 percent, where it has 
        been since March 1997, despite an inflation rate of 1.6 
        percent;
            (3) between 1992 and 1994, the Federal Funds rate averaged 
        3.6 percent, while inflation was at 2.8 percent;
            (4) to confirm that real interest rates are historically 
        high, the Chairman of the Board of Governors of the Federal 
        Reserve System, Alan Greenspan, said during his Humphrey-
        Hawkins testimony before the Committee on Banking and Financial 
        Services of the House of Representatives on February 24, 1998, 
        ``Statistically, it is a fact that real interest rates are 
        higher now than they have been on the average of the post-World 
        War II period.'';
            (5) inflation over the 2 years preceding the date of 
        enactment of this Act was at its lowest level since the 1960's;
            (6) interest rates on 30-year Treasury bonds have sunk to 
        record lows and are below the Federal funds rate, a signal that 
        the United States economy could be headed for a recession;
            (7) United States corporate earnings in the second quarter 
        of 1998 were down 1.3 percent from a year earlier;
            (8) a reduction in interest rates would increase resources 
        for business growth;
            (9) the farm debt is at its highest level since 1985, and 
        broad commodity price indexes are extremely low;
            (10) there are significant, widespread signs of global 
        deflation, to which the United States has not been exposed 
        since the Great Depression;
            (11) there has been a deterioration in a number of 
        economies around the world, which will negatively impact the 
        United States through fewer purchases of United States exports 
        and a greater influx of cheap imports to the United States;
            (12) the United States economy is a large, healthy economic 
        engine, and if the United States economy does slow, it would be 
        exceedingly difficult for the world-wide economy to recover;
            (13) a decline in equity values could dampen confidence and 
        slow consumer and business spending, which together represents 
        four-fifths of the United States economy;
            (14) a decline in United States interest rates would help 
        bolster the currencies of countries throughout the world 
        suffering from economic hardships; and
            (15) a reduction in interest rates would strengthen the 
        United States economy over the next year while the world's 
        weakened economies recover.

SEC. 2. SENSE OF THE CONGRESS REGARDING INTEREST RATES.

    It is the sense of the Congress that the Federal Open Market 
Committee should promptly reduce the Federal Funds rate.
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