IV
105TH CONGRESS
2D SESSION
H. CON. RES. 329
Expressing the sense of the Congress regarding the reduction of the Federal
Funds rate by the Federal Open Market Committee.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 23, 1998
Mr. HINCHEY submitted the following concurrent resolution; which was
referred to the Committee on Banking and Financial Services
CONCURRENT RESOLUTION
Expressing the sense of the Congress regarding the reduction
of the Federal Funds rate by the Federal Open Market
Committee.
Resolved by the House of Representatives (the Senate
concurring),
SECTION 1. FINDINGS.
The Congress finds, as of the date of the adoption
of this Concurrent Resolution, that—
(1) real interest rates are at historically high
levels, the highest in 9 years;
(2) the Federal Funds rate is 5.5 percent,
where it has been since March 1997, despite an in-
flation rate of 1.6 percent;
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(3) between 1992 and 1994, the Federal Funds
rate averaged 3.6 percent, while inflation was at 2.8
percent;
(4) to confirm that real interest rates are his-
torically high, the Chairman of the Board of Gov-
ernors of the Federal Reserve System, Alan Green-
span, said during his Humphrey-Hawkins testimony
before the Committee on Banking and Financial
Services of the House of Representatives on Feb-
ruary 24, 1998, ‘‘Statistically, it is a fact that real
interest rates are higher now than they have been on
the average of the post-World War II period.’’;
(5) inflation over the 2 years preceding the date
of enactment of this Act was at its lowest level since
the 1960’s;
(6) interest rates on 30-year Treasury bonds
have sunk to record lows and are below the Federal
funds rate, a signal that the United States economy
could be headed for a recession;
(7) United States corporate earnings in the sec-
ond quarter of 1998 were down 1.3 percent from a
year earlier;
(8) a reduction in interest rates would increase
resources for business growth;
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(9) the farm debt is at its highest level since
1985, and broad commodity price indexes are ex-
tremely low;
(10) there are significant, widespread signs of
global deflation, to which the United States has not
been exposed since the Great Depression;
(11) there has been a deterioration in a number
of economies around the world, which will negatively
impact the United States through fewer purchases of
United States exports and a greater influx of cheap
imports to the United States;
(12) the United States economy is a large,
healthy economic engine, and if the United States
economy does slow, it would be exceedingly difficult
for the world-wide economy to recover;
(13) a decline in equity values could dampen
confidence and slow consumer and business spend-
ing, which together represents four-fifths of the
United States economy;
(14) a decline in United States interest rates
would help bolster the currencies of countries
throughout the world suffering from economic hard-
ships; and
•HCON 329 IH
(15) a reduction in interest rates would
strengthen the United States economy over the next
year while the world’s weakened economies recover.
SEC. 2. SENSE OF THE CONGRESS REGARDING INTEREST
RATES.
It is the sense of the Congress that the Federal Open
Market Committee should promptly reduce the Federal
Funds rate.
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