[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