[Federal Register Volume 61, Number 108 (Tuesday, June 4, 1996)]
[Notices]
[Pages 28209-28210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13860]



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ENVIRONMENTAL PROTECTION AGENCY

Federal Open Market Committee; Domestic Policy Directive of March 
26, 1996
    In accordance with Sec.  271.5 of its rules regarding availability 
of information (12

[[Page 28210]]

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 26, 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 March 26, 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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    Many of the data for recent months reviewed at this meeting were 
influenced to an uncertain degree by unusually severe winter weather, 
industrial strikes, and U.S. government shutdowns. On balance, the 
expansion in economic activity appears to have picked up after slowing 
appreciably in late 1995. Nonfarm payroll employment surged in 
February, considerably more than offsetting a large drop in January, 
and the civilian unemployment rate fell to 5.5 percent. Manufacturing 
production increased sharply in February after a sizable decline in 
January. Growth of consumer spending, which had been sluggish earlier 
in the winter, spurted in February, paced by strong motor vehicle 
purchases. Housing starts rose in January and February. Orders and 
contracts point to continuing expansion of spending on business 
equipment and nonresidential structures. The nominal deficit on U.S. 
trade in goods and services narrowed substantially in the fourth 
quarter from its average rate in the third quarter. There has been no 
clear change in underlying inflation trends.
    Changes in short-term market interest rates have been mixed while 
long-term rates have risen appreciably since the Committee meeting on 
January 30-31. In foreign exchange markets, the trade-weighted value of 
the dollar in terms of the other G-10 currencies has declined slightly 
over the intermeeting period.
    Growth of M2 and M3 has strengthened considerably in recent months, 
while expansion in total domestic nonfinancial debt has remained 
moderate on balance.
    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 January 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 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 
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, May 29, 1996.
Donald L. Kohn,
Secretary, Federal Open Market Committee.
[FR Doc. 96-13860 Filed 6-3-96; 8:45 am]
BILLING CODE 6210-01-F