[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]


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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:
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    \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.
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    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