[Federal Register Volume 59, Number 103 (Tuesday, May 31, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13151]


[[Page Unknown]]

[Federal Register: May 31, 1994]


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FEDERAL EMERGENCY MANAGEMENT AGENCY
 

FEDERAL RESERVE SYSTEM

Federal Open Market Committee; Domestic Policy Directive of March 
22, 1994

    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 March 22, 1994.\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 March 22, 1994, 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 has expanded appreciably further in the early months of 
1994. Severe weather and changes in statistical methodology 
distorted movements in official labor market data in January and 
February, but it appears that employment increased somewhat on 
balance over the two months and that unemployment fell. Industrial 
production also increased substantially over this period after a 
sharp rise in the fourth quarter. Consumer spending and housing 
activity apparently have been held down to some extent by adverse 
weather in January and February; retail sales were little changed on 
balance over the two months and housing starts fell considerably. 
Trends in contracts and orders point to a sizable increase in 
business fixed investment but at a rate well below that for the 
fourth quarter of 1993. The nominal deficit on U.S. trade in goods 
and services in January was slightly smaller than the average in the 
fourth quarter. Increases in broad indexes of consumer and producer 
prices have remained moderate in recent months despite a surge in 
energy prices.
    Most market interest rates have risen considerably since the 
Committee meeting on February 3-4, 1994. In foreign exchange 
markets, the trade-weighted value of the dollar in terms of the 
other G-10 currencies depreciated over the intermeeting period.
    M2 declined somewhat and M3 was down sharply in February, but 
data for early March point to some rebound in both aggregates. Total 
domestic nonfinancial debt has expanded at a moderate rate 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 February established ranges for growth of M2 and 
M3 of 1 to 5 percent and 0 to 4 percent respectively, measured from 
the fourth quarter of 1993 to the fourth quarter of 1994. The 
Committee anticipated that developments contributing to unusual 
velocity increases could persist during the year and that money 
growth within these ranges would be consistent with its broad policy 
objectives. The monitoring range for growth of total domestic 
nonfinancial debt was set at 4 to 8 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 increase slightly 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 the first half of 1994.

    By order of the Federal Open Market Committee, May 24, 1994.
Normand Bernard,
Deputy Secretary, Federal Open Market Committee.
[FR Doc. 94-13151 Filed 5-27-94; 8:45 am]
BILLING CODE 6210-01-F