[Federal Register Volume 64, Number 103 (Friday, May 28, 1999)]
[Notices]
[Pages 29030-29031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13593]


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FEDERAL RESERVE SYSTEM


Federal Open Market Committee; Domestic Policy Directive of March 
30, 1999.

    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 30, 1999.\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 30, 1999, 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 
expansion in economic activity is still robust. Nonfarm payroll 
employment posted sizable further gains in January and February, and 
the civilian unemployment rate remained below 4\1/2\ percent. Total 
industrial production edged higher over the first two months of the 
year. Total retail sales rose sharply further over the two months, and 
housing starts increased appreciably from an already elevated level. 
Available indicators suggest that business capital spending decelerated 
in early 1999 but growth was still relatively rapid. The nominal 
deficit on U.S. trade in goods and services widened substantially in 
January from its fourth-quarter average. Inflation has remained subdued 
despite very tight labor markets.
    Short-term interest rates have changed little since the meeting on 
February 2-3, 1999, while longer-term rates have risen somewhat on 
balance. Key measures of share prices in equity markets have registered 
mixed changes over the intermeeting period. In foreign exchange 
markets, the trade-weighted value of the dollar has risen somewhat over 
the period in relation to the currencies of a broad group of important 
U.S. trading partners, and the appreciation has been a bit larger 
against a subset of major currencies.
    M2 and M3 continued to record large increases in January and 
February, but available data pointed to substantial moderation in 
March. Both aggregates are estimated to have increased over the first 
quarter at rates somewhat above the Committee's annual ranges. Total 
domestic nonfinancial debt has continued to expand at a pace somewhat 
above the middle of its 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 February 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 1998 to the fourth quarter of 1999. The 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.
    To promote the Committee's long-run objectives of price stability 
and sustainable economic growth, the Committee in the immediate future 
seeks conditions in reserve markets consistent with maintaining the 
federal funds rate at an average of around 4\3/4\ percent. In view of 
the evidence currently available, the Committee believes that 
prospective developments

[[Page 29031]]

are equally likely to warrant an increase or a decrease in the federal 
funds rate operating objective during the intermeeting period.
    By order of the Federal Open Market Committee, May 24, 1999.
Donald L. Kohn,
Secretary, Federal Open Market Committee.
[FR Doc. 99-13593 Filed 5-27-99; 8:45 am]
BILLING CODE 6210-01-F