Prior discussion:
speaker: MR. FORD.
text: I am concerned that we not go too far beyond "B" toward "A" because we don't yet know what will happen as we get into the second half of the year, and I wouldn't want us to give up all our leeway as we look ahead to the second half of the year. My feeling is that we should go generally for "B" with a somewhat lower initial borrowing assumption, though not a lot lower than we had last time, and a wider fed funds range--dropping [the lower limit] down to perhaps 10 percent and making the range, say, 10 to 16 percent. That would widen the range to 6 points as we had it some time ago. It would allow for more unusual variability [given] the current conditions that we face with the special situation in the market. 
speaker: MR. MARTIN.
text: Governor Partee. 

MR. PARTEE. "So, I would take "B" for this time but reserve"

Full utterance: Well, I think we do need to review the long-range targets. A very, very large proportion of the increase in M1 since the beginning of the year has been in NOW accounts. I think it's 85 percent. I had that number someplace but I can't find it now; but it's a very large proportion. That is suggestive of the possibility of a change in precautionary balances that might not continue, but at least we shouldn't try to offset the lower growth rates for something that occurred in the early part of the year and is already water over the dam. I also didn't know that Argentina accounted for million of the money supply increase in April. That takes off a good deal of the strength in currency this year. I thought that April bulge indicated that people were spending. All that increase in currency indicates is that the Argentineans are afraid they might have their money taken away from them. We should make allowance for that kind of thing, and that's going to continue for some time into the future. As far as this meeting is concerned, I'm also attracted to continuing on the target path that we set at the beginning of the quarter, which is alternative B. It calls for an increase in the money supply in June--May is largely over and seems to be minus--of 4.3 percent or thereabouts and continued expansion in M2 throughout the quarter. I'd be most concerned if we didn't get that June increase. Last year we didn't, if you recall; money growth in June was very weak. And we ought to be prepared to move in case weakness develops as we go through the period. So, I would take "B" for this time but reserve [my options] on the question of respecifying the aggregates for the year, which we'll be doing at our early July meeting. I rather like Mr. Ford's idea of widening the [funds rate] range. I wouldn't look forward to a 16 percent funds rate; on the other hand, I do think it could drop as low as 10 percent. So, I would widen it just on the lower end and make it 10 to 15 percent; and I'd choose a beginning borrowing number that is somewhat skewed in the direction of encouraging lower rates, which is probably around $700 million. I would agree with you on that, Tom. In sum, I would take $700 million as my initial borrowing figure, 10 to 15 percent for the funds rate range, and the aggregates as specified in alternative B.

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