Prior discussion:
speaker: MS. TEETERS.
text: Now is the time to sit back and let them work and not make it seem as if we're panicking about what's going on in the economy currently, which I think some people are doing. Also, I doubt that most of the spot prices are going to hold; some of them have been pushed up and are now beginning to recede somewhat. So, my recommendation is no change in policy at the present time. 
speaker: CHAIRMAN MILLER.
text: Thank you, Nancy. Bob. 

MR. BLACK. "If so, that's an important reason for not doing anything at this particular time."

Full utterance: Mr. Chairman, I come out somewhat less optimistic than the staff. Like many, we've been impressed by the strength we've had in the economy. It has been much greater up until now, as far as the statistics show, than we had expected. But I'm becoming increasingly concerned by the appearance of scattered signs that we frequently do see before a major downturn. The Redbook mentioned a number of these, [including] a lengthening of delivery times, high capacity utilization, tight supplies in the market for skilled labor, and the inventory figures. The last inventory figure, though partly explainable, coupled with an apparently heavy shift toward short-term borrowing on the part of businesses is certainly the sort of thing one might expect. And I'm especially concerned about the probability that in view of the petroleum situation we'll have some spawning of a general shortage psychology, which will lead to inventory buildups and probably heavy demands for short-term credit. And that will make it pretty difficult to keep M1 under control without pushing interest rates up rather high. Coupling this with the latest price data and the impending labor negotiations, I have to rate the possibility of stagflation or worse as pretty high. So my figures would come out lower than the staff's, somewhere in the neighborhood of what Chuck Partee said. Turning to the policy question, I think we have a difficult choice this morning. The weakness in the aggregates has persisted for about five months and this weakness has been a source of increasing concern to many of us, both within and [outside] the System. It seems to me that one could make a pretty good case for some easing this morning. But on the other side of the coin, there are three reasons why maybe we ought not take any action this morning. One, of course, is that we really don't know what those aggregates are saying. We, like so many others--John Balles and Dave Eastburn as well as Steve Axilrod--have tried to see what we could do by adding back in the things that might have been reducing the aggregates. And some of the arguments that people have made don't seem to us to hold water. But I don't think we can rule out the possibility, indeed the probability, that there has been a downward shift in the demand for money. If so, that's an important reason for not doing anything at this particular time. The second point is that historically we often have had a burst in the aggregates in April because of faulty seasonal adjustments, and I don't think we can rule that out. We could also have a temporary spurt in economic activity. And finally, the improvement in the dollar in the foreign exchange markets has been so fragile that I think any reversal of policy now could certainly jeopardize that. That gets me to the point where we work on [the specifics of] policy, and I won't say anything about that until after the break.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction