Prior discussion:
speaker: MR. JORDAN.
text: I don't think that monetary policy can do much about that anyway. At this point, I mainly would be interested in seeing that the rate of inflation in 1996 and 1997 resumes decelerating a percentage point or two from where it has been in the last couple of years. Right now, I don't have any reason to believe that we are not on a track to achieve that result. So I am comfortable with the national forecast. 
speaker: CHAIRMAN GREENSPAN.
text: President Boehne. 

MR. BOEHNE. "We need to try to distinguish between cyclical increases that are likely to moderate as the cycle matures and increases of a more underlying or core character."

Full utterance: There are some clear signs of moderating growth in the Philadelphia District. Manufacturers in particular indicate a slackening pace that is apparent in new and unfilled orders as well as current shipments. Retailers report a slowing pace of sales, especially in autos and other durables, although I think there is considerable uncertainty among retailers as to whether this is just a temporary slackening to be followed by a pickup or the beginning of a slower trend. Residential sales and construction are in a lull and there likewise I think most realtors are not sure whether this is just a lull that will pass or the beginning of a long, dry spell. Commercial real estate conditions are soft, but the cycle seems to have bottomed out in areas of the District that show more strength. Looking across the District, even in those areas where economic activity is stronger than in others, there really is an absence of wage and price pressures. They just remain subdued and are a nonproblem. Increasingly in the District, the outlook for moderating growth is becoming the conventional wisdom, following the fast finish of last year, which temporarily raised spirits that 1995 might be a very strong year. Since the Philadelphia District has been a laggard during this expansion, there is some feeling that the good times could have lasted longer--the same view that Cathy Minehan finds in New England. For the nation, I think we need more than the usual amount of humility about our assessment of the outlook. To be sure, there are increasing signs of slowing growth, but we could be surprised either on the up side or the down side. Areas like inventories or net exports or consumption expenditures all strike me as having more potential than usual for surprises for reasons that have been discussed. How much inventory accumulation is intended or unintended? Certainly, the net export outlook has a number of crosscurrents. Since the lull in consumption expenditures has been mainly in the durables side, just how temporary is that or is it more permanent? We are likely to have some increases in inflation in 1995. We need to try to distinguish between cyclical increases that are likely to moderate as the cycle matures and increases of a more underlying or core character. In this context, a slowing of economic activity makes credible the case that we may see more of a cyclical increase than an underlying increase. But here too, we need to keep a few upticks in inflation in the context of a cycle. This comes back to the importance of gauging the strength of economic activity, and I think this is a time for monitoring.

Opinion: yes
About monetary policy: no