kakeith406/op-fed huggingface dataset:
Prior discussion:
speaker: MR. PARTEE.
text: It's in the longer-term paragraph, isn't it? 
speaker: MR. ALTMANN.
text: That's right. 
speaker: CHAIRMAN VOLCKER.
text: Why do we need it in there now? 
speaker: MR. ALTMANN.
text: That was the decision made at the time that the Committee considered it. 
speaker: MR. PARTEE.
text: I thought that's what the Humphrey-Hawkins Act called for. 

CHAIRMAN VOLCKER. "It calls for a decision, but I don't know that it says how it has to go in [the directive]."

Full utterance: It calls for a decision, but I don't know that it says how it has to go in [the directive]. We have to put down some language in the report anyway, but I don't quite see why it has to be in the directive. Steve has some [suggested] language. Let me just try it out in terms of the tenor of it. "Looking ahead to 1981, the Committee decided to work toward a further slowing in monetary growth rates that is consistent with an orderly reduction in the rate of inflation, while taking into account the impact on individual aggregates of the introduction of NOW accounts on a nationwide basis, a change in public preference for deposits and closely-related assets and emerging economic conditions." I suppose it's that last phrase that--

Opinion: yes
Prior discussion:
speaker: MR. KICHLINE.
text: Just a small amount--3 percent relative to [a decline of] 8-3/4 percent in the second quarter. So they are still down. 
speaker: CHAIRMAN VOLCKER.
text: Three percent down. But you have a GNP estimate down 3 percent, roughly. I just-- 

MR. KICHLINE. "Well, I am referring to the nonfarm business sector."


Opinion: no
Prior discussion:
speaker: MR. WALLICH.
text: We didn't pay all [our mark indebtedness] off and we could have done so at that time. Now the question really is: If similar conditions develop, and there's no assurance that they will, should we follow the same strategy or should we follow a different strategy? That is, should we lean harder against the wind, which in this case would mean not just to gather in [marks] to pay off debt but to accumulate some reserves which might be split with the Treasury or be all for the Treasury or all for us. There's a problem of risk in financing to be considered. But I believe we should think ahead a little and not just leave it to the developments of the day. 

MR. SCHULTZ. "But we're coming up pretty close to the limit right now."


Opinion: no
Prior discussion:
speaker: CHAIRMAN VOLCKER.
text: And I suppose we need to make the borrowing number a little more concrete to give us some feeling of how fast we should react if the number comes in high--I don't know that it's so much a question of how fast, but how strongly--and the reverse if it comes in low, as to how passive we should be in relieving the borrowing pressure on the market as some have suggested. 
speaker: MR. GUFFEY.
text: Mr. Chairman, following those comments, I'm attracted to Tony Solomon's proposal that we adopt the A alternative with a borrowing level of about $1.3 billion. I would also suggest that we move the federal funds range to 9 to 15 percent, with some caution as we go above 14 percent if that is indicated. 
speaker: MR. WALLICH.
text: If we do that, aren't we saying "A," but doing "B" in effect? It seems very close to that because-- 

CHAIRMAN VOLCKER. "It's just the opposite of what we did last time."


Opinion: no
Prior discussion:
speaker: MR. MORRIS.
text: Confidence in [none], Chuck? 
speaker: MR. PARTEE.
text: Absolutely none. 
speaker: CHAIRMAN VOLCKER.
text: Including your own? 
speaker: MR. PARTEE.
text: Well, we owe it to ourselves-- 
speaker: CHAIRMAN VOLCKER.
text: I'll strike that. 

MR. WALLICH. "And we would get some of the protection that you have in mind, Chuck."


Opinion: no
Prior discussion:
speaker: MR. AXILROD.
text: That is exactly what was done after the February 24th call. The borrowing level in the last 2 weeks of the first 4 weeks of the 8-week interval--I don't know what it was in the 3rd week, but it was very low in the 4th week--would have been zero. It was understood after that call that half the adjustment would be made to keep it at around $1 billion. And in the next 4-week period, we reverted to the original path, which itself implied borrowing of around $1 or $1.1 billion at that time. I thought that was made clear at the time. 

MR. PARTEE. "I think we have to be very clear in terms of what the understandings are."

Full utterance: It just shows how tricky this whole thing is; I hadn't understood it. I think we have to be very clear in terms of what the understandings are. Nothing happened adversely as a result of it, but I thought we had made a downward adjustment in the path that [would not be changed] until the Committee reconsidered the matter.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. MORRIS.
text: The idea that the country is going to adapt to this in a few months just does not jive with the New England experience. Now, maybe the rest of the country moves a lot faster than we do in New England, but I doubt it. 
speaker: MR. SCHULTZ.
text: The fact that we have much higher interest rates now indicates that the adjustment would take place more rapidly. We are seeing shorter lag times in everything. 
speaker: MR. MORRIS.
text: Well, it may be more rapidly, but to argue that the adjustment is largely over I think is just wrong. 

CHAIRMAN VOLCKER. "I'm a little surprised that you came out for "C." It's against that background that I ask this."

Full utterance: Well, we will see. It would certainly ease our problems if it were over fairly soon. I'm a bit confused by what you said, [Larry]. I just want to clarify it. I'm a little surprised that you came out for "C." It's against that background that I ask this. My confusion is what numbers you are using. The numbers in the table, as I understand it, are adjusted M1 figures. So, when you talk about 7.3 percent last year, you are talking about the unadjusted figure.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): neutral
Prior discussion:
speaker: MR. SCHULTZ.
text: What we've done so far isn't having too much effect. So, I guess I would now come out somewhere between "B" and "C," keeping borrowing around $2 billion and perhaps shading that up if necessary. 
speaker: CHAIRMAN VOLCKER.
text: Mr. Solomon. 
speaker: VICE CHAIRMAN SOLOMON.
text: Well, unless the President told you this morning that he's willing to change his fiscal policy and have a balanced budget in fiscal 1982 by forgetting about tax cuts and cutting back on defense increases-- 
speaker: CHAIRMAN VOLCKER.
text: The question answers itself. 

VICE CHAIRMAN SOLOMON. "I'm influenced not only by the strength of the economy--and there is a widespread feeling around the country, and certainly in the market, that with the exception of the troubled sectors the economy is very strong--but I'm also influenced by the fact that if the President's program goes through, even with a compromise on the tax cut package, the fourth quarter is likely to be much stronger, and the third quarter probably somewhat stronger, than the present quarter."

Full utterance: Unless you could tell us that, I feel that we have to go even further this way. I feel we should take alternative C, but not the initial borrowing assumption of $3 billion. I'd start off with a $2-1/4 to $2-1/2 billion borrowing assumption. I think that we have to have a fed funds range going up to 22 percent. And even that will be skewed; in other words, we are likely to be near the ceiling fairly quickly unless we are very lucky and we see much lower growth in May. I recognize, if we do get something on the order of 5-1/2 or 6 percent [M-1B] growth in May, what this would require in June and that, therefore, pressure is likely to continue mounting over that period until the end of June. It seems to me that we are better off to be very firm and vigorous in our responses early in the game. I'm influenced not only by the strength of the economy--and there is a widespread feeling around the country, and certainly in the market, that with the exception of the troubled sectors the economy is very strong--but I'm also influenced by the fact that if the President's program goes through, even with a compromise on the tax cut package, the fourth quarter is likely to be much stronger, and the third quarter probably somewhat stronger, than the present quarter. And in those circumstances we might have major problems [achieving] our fourth-quarter targets. I feel we are better off trying to nip this now than trying to be more gentle in our approach; the latter approach is going to store up a lot of problems toward the end of the year. That's all I'll say right now.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): entailment
Prior discussion:
speaker: MR. CORRIGAN.
text: We have more than our share of frustrations in policy here, too. We just got through revising up the money supply a little in the first quarter, convincing ourselves that that made more sense. But now we find that the GNP may be revised up more, so we're further away than we thought we were. 
speaker: CHAIRMAN VOLCKER.
text: Wait 'til next year's revision! 
speaker: MR. SCHULTZ.
text: Yes. 

MR. CORRIGAN. "As I suggested earlier, there are some risks here, and I think we have to be prepared to take some risks."

Full utterance: We have a little frustration, too, with respect to this question of how quickly the banking system responds to what we do. We saw a classic illustration of that in this period here, apropos to your comment earlier, Governor Partee. We seem to have a situation where, even when we begin to firm up, what happens for a couple of weeks is that the banks sit there and wait until Wednesday and cover their whole position on Wednesday. And the funds rate doesn't change except on Wednesday and then everybody discounts the change. And then for a week or two after the banks run down their excess reserves and end up with deficiencies. Somehow or other, in ways that are not clear to me, it takes a couple more weeks and we revise away all those deficiencies with "as-of" adjustments. Then finally, after all of those processes have run their course, we begin to see some pressure either in terms of borrowing or the funds rate, or both. I will also confess to a little continuing sense of frustration about the construction of and subsequent adjustments to the reserve paths, which comes up again in this forthcoming period. The Bluebook indicates that, looking out over the April-June period, any of the alternatives contemplates a substantial acceleration in reserve growth while at the same time about the same or less growth in money. I don't know what all that means except that maybe we don't know as much as we think we know. As I suggested earlier, there are some risks here, and I think we have to be prepared to take some risks. In the current circumstances I come out somewhere around "C," too, partly because I think the economy, if anything, is stronger, and partly because I think money growth is likely to be stronger in the short run than we expect. And finally, like Governor Rice, if we have to take a bit of a slowdown or a decline in the economy, which we may have to do, I'd rather do it now than later, partly because I think it makes more sense in the context of hitting the annual targets but partly because it forestalls an even more serious problem that would occur if we let [money growth] continue to build up. Given all of that, I come out somewhere around "C."

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): entailment
Prior discussion:
speaker: CHAIRMAN VOLCKER.
text: I hope you are right in this sense. But what we are probably running into here is this: If the low money figure for publication this week is confirmed and next week is low, this $800 million that we started with will probably be lowered pretty promptly. If we get a bulge in the first week of October, it won't be. But if the first week in October is another low number--meaning it might be positive but only $1 billion or so--we'll probably get the borrowings down further. 
speaker: MR. AXILROD.
text: Yes, in constructing this path we have allowed for an increase on the order of $2-1/2 billion in the first week of October. 

CHAIRMAN VOLCKER. "If it's $4 or $5 billion, we wouldn't be."

Full utterance: I don't know what the number is. But let's say it's distinctly below $2-1/2 billion; we will probably gradually be lowering the borrowing right off. If it's $4 or $5 billion, we wouldn't be.

Opinion: no
Prior discussion:
speaker: MR. AXILROD.
text: Well, in the short run our experience is that [growth in] money market funds tends to speed up with rate declines because of the lag in [the adjustment of] their rates. As rates declined this time, we found a rather unusual experience in that savings deposits at banks accelerated. I assume it was just some sort of cautionary inflow. But all the evidence we have is that, yes, as rates decline we still tend to see growth in M2 as deposits become a little more attractive relatively speaking. Now, this doesn't hold quite to the extent it did before because we do have components of M2 that move with market rates. 

MR. BLACK. "That would be interesting to watch over time."

Full utterance: That would be interesting to watch over time. I'm not sure that that will [continue].

Opinion: yes
About monetary policy: yes
Prior discussion:
speaker: MR. BOEHNE.
text: So, it seems to be very widespread. 
speaker: MR. PARTEE.
text: Eastern Pennsylvania you mean? 
speaker: MR. BOEHNE.
text: There is an area around Lancaster and Harrisburg, the South Central area, where generally the unemployment rate is well under the national average. We have a director from Armstrong Cork in that area and he says that even Lancaster is feeling it this time around and they usually don't feel it. 
speaker: CHAIRMAN VOLCKER.
text: Mr. Keehn. 

MR. KEEHN. "On the specific question--I'll comment [on my general views] later--I think there has been within the last 30 to 45 days a decided shift on the part of labor out our way."

Full utterance: On the specific question--I'll comment [on my general views] later--I think there has been within the last 30 to 45 days a decided shift on the part of labor out our way. Their focus is now shifting from concentration on the financial aspects of the package to the job per se. For example, the UAW has indicated a willingness to reopen the auto workers contract; the Teamsters have reopened [their contract] and the trucking people that I talk to expect some significant concessions there. The UAW has specifically said they will reopen the Harvester contract; there they are going to try to get rid of the last increase that was given in October and there is going to be a discussion about the COLA increase coming up in the next couple of months as well as the pension increase that is scheduled for April. Harvester expects to get a hundred million dollars a year out of the renegotiation the union has authorized. I would echo Tony's comments; the industrial CEOs I have talked to are extremely gloomy and are expecting a very difficult 1982--a far deeper recession than most of the financial people I've talked to anticipate. Therefore, I think they are going to go into negotiations with a tougher attitude than they might have had six or eight months ago. I think there has been a big change on that front.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: CHAIRMAN VOLCKER.
text: But this is a reflection of a change in law. It's like the M1 adjustment problem. 
speaker: VICE CHAIRMAN SOLOMON.
text: It's so clearly understandable by everybody that there's a rationale for taking it out. 
speaker: CHAIRMAN VOLCKER.
text: I'm not arguing against taking it out. I'm just arguing against the notion that it will give us a clean analytically nice figure when we take it out. 

MR. BALLES. "So, despite all of our frustrations about what money is, how it behaves, and what should be in M1 and M2, it is still the only game in town as far as I am concerned."

Full utterance: Mr. Chairman, one more observation: I'd just like to remind you that back in the mid-1970s we had one of the several Committees on the directive--some of us at this table served on it--chaired first by Bob Holland and later by Chuck Partee. We took a long, hard look at optimal control, working on the ultimate variables and not using money as the intermediate target. And the net of that was a dry hole. It just didn't prove to be doable in practice. So, despite all of our frustrations about what money is, how it behaves, and what should be in M1 and M2, it is still the only game in town as far as I am concerned. Some of the academics--and it is a real minority--are urging us to target on real interest rates or to target on nominal GNP. They get little, if any, support from their peers. That came out loud and clear in this recent academic conference that I mentioned yesterday. Despite the frustrations about the money supply--will the real money supply please stand up!--I think it's the only hope we have.

Opinion: yes
About monetary policy: yes
Prior discussion:
speaker: MR. GRAMLEY.
text: Is that published? 
speaker: MR. AXILROD.
text: Yes. 
speaker: MR. GRAMLEY.
text: So the people in the market know what that number is? 
speaker: MR. AXILROD.
text: Oh, yes; that's right. 
speaker: MR. GRAMLEY.
text: Are you not saying that, although we expect something in the 8 to 9 percent range, we should relax until it's 12 to 14 percent or something like that? 

MR. AXILROD. "I would not really want to give any technical advice on that particular point."

Full utterance: Well, I would relax myself if it were between 8 and 10 percent. I think you're getting on to strong policy judgments beyond that. I would not really want to give any technical advice on that particular point.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: CHAIRMAN VOLCKER.
text: It's a matter of choice here. We have a directive now that says immediately in the next sentence that somewhat more rapid growth would be acceptable [depending upon certain developments]. So, I think one could interpret this M2 running a bit high as basically being in line with the existing directive given that second sentence. 
speaker: MR. MORRIS.
text: I think M2 is being distorted by the fact that when interest rates go down, it pays the wealthy investor to move out of market instruments into money market funds. 

CHAIRMAN VOLCKER. "I'm just making a technical point."


Opinion: no
Prior discussion:
speaker: CHAIRMAN VOLCKER.
text: In a very big sense, I think we are on the verge of victory in what we've been trying to do. It's a delicate situation, but it's also a very risky situation. 
speaker: VICE CHAIRMAN SOLOMON.
text: What kind of victory, a Pyrrhic victory? 
speaker: CHAIRMAN VOLCKER.
text: No, though it could turn into a Pyrrhic victory. 
speaker: MR. PARTEE.
text: We're going to get prices going down. 

CHAIRMAN VOLCKER. "I don't know whether we can [unintelligible] that issue."

Full utterance: But, in my opinion, it's only going to be manageable with unusual exertions. And in the end I'm afraid this institution may be called upon for unusual exertion simply because there is no other in a comparable position. It's the only possibility in terms of having the leadership and the resources necessary to deal with some of these problems. I don't know whether we can [unintelligible] that issue. But I think that is the nature of the problem.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. AXILROD.
text: So the built-in response could be less and the practical question would be [whether to take] a $200 million, roughly, movement of total reserves beyond where the Committee wanted it on average to trigger an ad hoc adjustment to the nonborrowed [reserve path]. It may be as we gain experience that it will turn out to be more [appropriately] like $100 million movements if M2 is targeted. That would trigger a downward movement of some amount in the nonborrowed path because the automatic adjustment isn't big enough. That's the nature of what would happen. 
speaker: MR. GUFFEY.
text: But you're going to expand that when you go to the shadow type of reserve requirement--the 3 percent as opposed to the 2 percent? 

MR. AXILROD. "Well, that would only be if the Committee wanted to; we just suggested that."


Opinion: no
Prior discussion:
speaker: CHAIRMAN VOLCKER.
text: I don't know how much longer [we can continue]. We're not going to get through everybody on this [issue today]. Not everybody wants to say something. Maybe we can go through a few more. Mr. Boehne. 

MR. BOEHNE. "But I certainly would stay quite flexible, with a sharp eye on interest rates."

Full utterance: Well, I think it is the time for focusing on what works rather than some predetermined theology. That is clearly what we need. Jerry Corrigan put it well: An intermediate target is a very useful thing to have both for political and self discipline reasons. I think it's going to be a while, if ever, before M1 is clear. The idea that M1 is going to clear up enough by midyear just strikes me as unrealistic. Perhaps it will, but I think it is going to take a while for the reasons that Pres Martin mentioned. I would go with M2 as a primary target and with M3 as a secondary target, using credit as an informational variable. But I certainly would stay quite flexible, with a sharp eye on interest rates. With respect to the point that you raised about making our targets consistent with the Administration's, it does seem to me that velocity gives us a fair amount of leeway. [This year] we've had the sharpest drop in velocity in the postwar period, and heaven knows what velocity will do next year. It would seem to me that quite wide ranges could be very helpful in terms of being consistent with what we think is appropriate for M2 and M3. As to when or whether we will ever get back to M1, I would approach the issue with complete pragmatism, not a theological bias, and just keep an open mind. If it does clear up and we can make a case that it's a reliable variable at some point, then it's fine with me to go back to it. But I don't think we ought to force it.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): neutral
Prior discussion:
speaker: CHAIRMAN VOLCKER.
text: The bill rate is now slightly higher than it was in the middle of September. 
speaker: MR. PARTEE.
text: But Tony is right. The discount rate and the funds rate have been closely linked. 
speaker: CHAIRMAN VOLCKER.
text: They are bound to be when we are operating in a fairly narrow band of nonborrowed reserves. 
speaker: MR. PARTEE.
text: Paul, do I understand that we have been asked to give more of a Committee forecast with the GNP and associated numbers like real GNP and-- 

CHAIRMAN VOLCKER. "Well, what I understand is that we were asked to give a Committee or a Board forecast."


Opinion: no
Prior discussion:
speaker: MR. PARTEE.
text: That will really be serious. 
speaker: CHAIRMAN VOLCKER.
text: Then we have a real problem. But they already have [commitments for] basically more than $4 billion except that some of that is contingent on getting more, so it's not perfectly clear yet. 
speaker: VICE CHAIRMAN SOLOMON.
text: Some of it is contingent also on not triggering the 1 percent SEC disclosure requirement; some of it is contingent on not exceeding the legal limit; most of it is contingent, in theory at least, on everybody else putting up their share. Certainly the IMF would accept $4-1/2 billion; whether they will accept significantly below $4-1/2 billion is the question. 

CHAIRMAN VOLCKER. "Well, we just have to wait and see."

Full utterance: I don't think the IMF has said they would accept $4-1/2 billion except as a starting point--that they might go ahead temporarily if Mexico will be getting the rest later. Well, we just have to wait and see. But that's the general strategy. On Brazil, which is not irrelevant even though we have no money in there, the Treasury lent them $1-1/4 billion a couple of weeks [ago], which is the total amount of the Fund compensatory finance and first tranche--

Opinion: yes
About monetary policy: no