kakeith406/op-fed huggingface dataset:
Prior discussion:
speaker: MR. GUFFEY.
text: I'm not sure that I would be prepared to go to $500 million. On the other hand, I feel that there may be some advantage to showing some modestly higher interest rates earlier rather than later--that is, to permit the market to understand that somewhat higher interest rates effected by the Federal Reserve, as opposed to just the technical factors, would be acceptable in the near term. However, the point is--and I think Jerry made this point very well--that this does not mean a change in Federal Reserve policy but rather the management of Federal Reserve policy at or about the level that we presently operate. The other thing that I would just mention is that, contrary to some other comments that have been made, I would move the reference on the dollar in the directive to a more prominent level; I would move it up in that sentence as proposed in the directive language and as mentioned by Don Kohn. 
speaker: CHAIRMAN VOLCKER.
text: Mr. Forrestal. 

MR. FORRESTAL. "But even if our trading partners don't make those moves, if the dollar were to fall somewhat more I'd be prepared to go ahead unilaterally on our own."

Full utterance: As I look at the domestic economy, Mr. Chairman, I don't see any case at all for doing anything with respect to policy at the present time. We have had reports around the table this morning that reflect perhaps somewhat better economic conditions than we had last time. The forecast isn't all that bad, although inflation looks like it's going to be ticking up toward the end of the year. But I think all of this is premature with respect to policy. For purely domestic reasons I would prefer to stay where we are. The only reason that I would favor a move in interest rates or a move in the borrowing is because of the dollar. Again, I think perhaps we are in a position where we can afford to wait a little longer to see what happens with the dollar. It's possible that this Japan bashing that's going on with respect to the semi-conductor situation may resolve itself. When we get past this quarter some of the window dressing that the Japanese are engaged in may sort itself out and we may have a little easing of the pressure on the dollar. If that doesn't happen I would certainly want to be in a position to move rapidly to counter any further significant drop in the dollar. With respect to Governor Johnson's point, I think it certainly would be wonderful if we could get the interest rate differentials to contract a little. But even if our trading partners don't make those moves, if the dollar were to fall somewhat more I'd be prepared to go ahead unilaterally on our own. With respect to the directive, I too would favor giving a more prominent place in that directive to the foreign exchange situation. One other point that I would make is that I'm not so sure that the word "instability" that is in the directive is the right one. The phrase "in light of the recent instability" strikes me as being a bit on the strong side. I would prefer language that would suggest recent weakness of the dollar.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: CHAIRMAN VOLCKER.
text: If they came in at 4 percent, all other things being equal, would that be a cause for easing? 
speaker: MR. JOHNSON.
text: Not if we had to restrain reserves. 
speaker: MR. BOYKIN.
text: Not [unintelligible] at this point in time. 
speaker: MR. BLACK.
text: I think the only feasible alternative to what you suggested is 6 percent. 
speaker: CHAIRMAN VOLCKER.
text: We can say 4 to 6 percent, or we can say around 6 percent or less. 

MR. BLACK. "That's the best one if we don't go with 4 to 7 percent."

Full utterance: That's the best one if we don't go with 4 to 7 percent.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): ambiguous
Prior discussion:
speaker: MR. BOEHNE.
text: I think it really comes down to some doubt about whether we can keep these adjustments to be one-time adjustments or whether we're about to set off a new upward trend in inflation. I think that is the real change in the last six weeks to two months--that concern about inflation is significantly higher than it was the last time we met. 
speaker: MR. JOHNSON.
text: Are we going around the table now? I wanted to ask Jim something before we did that. 
speaker: CHAIRMAN VOLCKER.
text: You can insert a question. 

MR. JOHNSON. "And I've never gotten a really satisfactory explanation of which one makes the most sense."


Opinion: no
Prior discussion:
speaker: CHAIRMAN GREENSPAN.
text: Vice President Hendricks, would you like to comment? 
speaker: MR. HENDRICKS.
text: Our preference would be to line up fairly closely with Si Keehn's suggestion on the decision. We would go with $600 million, but would lean on the side of further tightening. 
speaker: CHAIRMAN GREENSPAN.
text: Vice President Eisenmenger. 
speaker: MR. EISENMENGER.
text: I support you, Mr. Chairman: $600 million and a symmetric directive. 

CHAIRMAN GREENSPAN. "I, personally, would go along with those vague notions of Governor Johnson on the issue of not fighting the world to try to get $600 million in this maintenance period, because it may be a futile endeavor."

Full utterance: Well, it is clear that there is a fairly strong consensus here for alternative B, at $600 million on borrowing; there is a small support amongst the voting members for a tilt toward something stronger in the language, and something on the other side. I, personally, would go along with those vague notions of Governor Johnson on the issue of not fighting the world to try to get $600 million in this maintenance period, because it may be a futile endeavor. It may, in fact, give signals, which is a point that Governor Seger raised earlier in this meeting that struck me as a reason not to specifically fight that number. But, as I read the instructions that I've just been given, the language apparently should read: "In the implementation of policy for the immediate future, the Committee seeks to maintain the degree of pressure on reserve positions sought in recent weeks. Somewhat greater or somewhat lesser reserve restraint would be acceptable depending on indications of inflationary pressures, strength in the business expansion, developments in foreign exchange markets, as well as the behavior of the aggregates. This approach is expected to be consistent with growth in M2 and M3 over the period from August to December at annual rates of around 4-1/2 percent and 6 percent, respectively. M1 is expected to continue to grow relatively slowly. The Chairman may call for Committee consultation if it appears to the Manager for Domestic Operations that reserve conditions during the period before the next meeting are likely to be associated with a federal funds rate persistently outside a range of 5 to 9 percent."

Opinion: yes
About monetary policy: yes
Prior discussion:
speaker: MR. HELLER.
text: 6-1/2 percent, yes. 
speaker: MR. ANGELL.
text: Let's not argue about that. 
speaker: MR. BOEHNE.
text: I would suggest, what about 6 to 7 percent? Okay? 
speaker: CHAIRMAN GREENSPAN.
text: Put it that way--yes, I feel comfortable with that. 

VICE CHAIRMAN CORRIGAN. "Yes, especially if Don thinks that the numbers are coming in a little higher anyway."


Opinion: no
Prior discussion:
speaker: MR. BERNARD.
text: "Taking account of conditions in financial markets, somewhat lesser reserve restraint or somewhat greater reserve restraint would be acceptable depending on the strength of the business expansion, indications of inflationary pressures, developments in foreign exchange markets, as well as the behavior of the monetary aggregates. The contemplated reserve conditions are expected to be consistent with growth in both M2 and M3 over the period from November through March at annual rates of 6 to 7 percent. Over the same period, growth in M1 is expected to remain relatively limited. The Chairman may call for Committee consultation if it appears to the Manager for Domestic Operations that reserve conditions during the period before the next meeting are likely to be associated with a federal funds rate persistently outside a range of"--we had 4 to 8 percent. 
speaker: MS. SEGER.
text: 6-1/4 to 6-1/2 percent. 

VICE CHAIRMAN CORRIGAN. "You're calling a spade a spade."


Opinion: no
Prior discussion:
speaker: MR. STERN.
text: What it says about the longer-term prospect for real growth, I am not altogether sure, but it makes me marginally more confident about the outlook. As several people already have commented, the really striking feature about the outlook--both the one presented in the Greenbook and the one that we have developed [at our Bank]--is the acceleration of inflation that seems to be in prospect. Obviously, there is a lot of uncertainty surrounding that, as there always is. And the acceleration is not dramatic, but I certainly find it troubling. I think that perhaps that is the key aspect at this point. 

MR. HOSKINS. "If we don't get that, then I think we are going to get the inflation forecast that my own staff is turning out, which is very similar to yours."

Full utterance: The Fourth District is pretty much as I reported last time. Manufacturing activity is very strong. We have several firms, primarily in primary metals, that have reported that they are at capacity levels; they simply can't produce anything else. One of those firms is considering some kind of expansion at this point, because they believe the demand is going to last a lot longer than they had anticipated before. That is primarily because of the client involved. We see a reaching of capacity limits now across a broad spectrum of manufacturing activities, from glass through chemicals, at least with the firms within our District. Not everybody, though, is planning to move ahead to build plants or expand capacity; there are still a lot of people who are not quite ready to take that step. In terms of price increases, you heard me say last time that, at least at a couple of firms, primary metals--steel principally--have risen 15 percent or so. I have not heard of any new price increases since then, but that is coming out of the gate at the start of the year with a pretty hefty price increase. We are getting the same thing in chemical products now: 10 to 15 percent price increases. But they have not shown up in the national indices. In terms of the overall outlook for the country, we are very similar to the staff in terms of real growth. The composition is somewhat different: we actually have stronger PCE--as we've had for the last six months, probably--and weaker net exports. I have some concerns if you're right on exports and we're wrong. But if we're right on PCE and you are wrong, we have a problem. Given the potential for that problem, I see a resource-constraint type of problem; trying to make room to ship goods abroad with our resources requires a slowdown in the expansion of consumption. If we don't get that, then I think we are going to get the inflation forecast that my own staff is turning out, which is very similar to yours. And frankly, I find the CPI [projection] of 5 percent in the second half of the year a very distressing number to have to face, when I think that our objective, as I stated before, ought to be price stability--and by that I mean zero.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. JOHNSON.
text: He is. 
speaker: MR. KELLEY.
text: That's a fast turnaround in two weeks. 
speaker: MR. BLACK.
text: He doesn't expect his own or his associates' [wages to go up], but he's worried about the inflationary pressures emanating elsewhere with no increases in salaries or wages for his own people. That's one of the problems. 
speaker: MR. JOHNSON.
text: Right, he is. 

MR. JOHNSON. "No, he is very responsible; I respect his judgment."

Full utterance: No, he is very responsible; I respect his judgment. So, on the wage front, once again I say there's nothing yet, but you do get the feeling that something is out there. At the same time, I think all of the strong good feelings going on now are a cumulative effect of the positive growth we've seen in the past. And where we go from here, I think, is going to be the lagged response to what we've been doing over the last 6 months or so. And so we've got to be careful. I do think that probably the risks are still more on the upside than the downside as well. But I think that we need to be very careful from this point on that we pay attention to the lags that are taking place in the forward-looking markets where we have been effective in my opinion.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. JOHNSON.
text: On the Hoey survey, was that last survey taken before or after our discount rate [action]? 
speaker: MR. KOHN.
text: I don't know. 
speaker: MR. JOHNSON.
text: It's a February survey number. 
speaker: MR. KOHN.
text: Yes, it was the last half of February, but I don't know the exact date. I know it was after that first PPI number and before the second; that I checked on. 

MR. JOHNSON. "That's all I need."


Opinion: no
Prior discussion:
speaker: MS. SEGER.
text: but I don't think it has been done. Too much additional tightening, I think, could negatively impact those third world nations. Finally, I'm very concerned about the dollar perhaps not performing as Ted and his people think it will--that it will stay strong and that that will prevent this export expansion that we all want which, in turn, will make it even more difficult to narrow our trade deficit. So, for all those reasons I would prefer to sit tight and have symmetrical language. 
speaker: CHAIRMAN GREENSPAN.
text: President Forrestal. 

MR. FORRESTAL. "But even if it is not a pause, even if we are seeing some real slowing, I think the risks of recession with a firmer policy are minimal."

Full utterance: Well, Mr. Chairman, I think that a somewhat firmer policy at the moment would be appropriate. My judgment is that we are, in fact, experiencing a pause and not a sustained downturn in the economy. But even if it is not a pause, even if we are seeing some real slowing, I think the risks of recession with a firmer policy are minimal. The Greenbook forecast, with which I agree, is predicated upon some tightening beginning in the second quarter--some tightening from where we are at the moment--and that does not produce a recession in 1990. Moreover, it does not produce any great improvement in the inflation rate. So, not only do I think that we don't need to back off, I think we need to continue our pressure on reserves in order to stay ahead of this inflation curve. We ought to go ahead and do the job now and make a tightening move. I wouldn't do it to any great degree but I think a funds rate around 10 percent, or whatever the equivalent borrowing is, would be appropriate. My preference would be to move now by some small degree.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): entailment
Prior discussion:
speaker: MR. BLACK.
text: Mr. Chairman, I'm very sympathetic to the point that Lee Hoskins made because I tend to focus on the longer run, as I think he does. And I think our long-run problem is inflation rather than recession. I'm also sympathetic to the points made by those who favor symmetry just because I'd like to send a signal to the market that we don't really approve of the G-7 action. But I also share Wayne's feeling that monetary policy has been a little tighter than most people assume and that it may be [sufficient to] hold down the inflation risk. So, I think your original formulation is probably the best one for now; I would go with "B" asymmetrical on the easing side. 

MR. GUFFEY. "I wanted that last time, as you may remember, and I've seen no accumulating evidence that suggests we are any closer to a recession at this meeting than we were at the last meeting."

Full utterance: [Unintelligible] and I think most of the comments around the table about using monetary policy with respect to the dollar are right on the mark. I don't think the old adage "you can't serve two masters" is to be taken lightly. I think monetary policy should be devoted to domestic economic policy and not to the dollar. And further, with respect to the prescription for the period ahead, I would accept "B" but would want a symmetric directive. I wanted that last time, as you may remember, and I've seen no accumulating evidence that suggests we are any closer to a recession at this meeting than we were at the last meeting. As a matter of fact, in my own view, we're further away from it. As a result, I think there's a greater demand for a symmetric directive than there was last time. Therefore, I would prefer "B" symmetric.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: MR. KOHN.
text: I think it's possibly quite feasible. I don't think we're in a situation where we're in danger of somehow letting the funds rate/discount rate relationship get out of whack or losing control over where it's running now. 
speaker: MR. HOSKINS.
text: I'd like you to talk a little about why we don't have an alternative C. It surprises me that the risks of recession clearly dominate the staff thinking relative to the risks of inflation. Another way to say that is that to me it looks like Federal Reserve policy is designed to prevent the inflation rate from falling. 

MR. KOHN. "But the other factor was that policy had just eased and thinking about reversing that action after it had just been taken seemed so strange."

Full utterance: I gave this some thought. There were two major factors weighing in my mind for not having an alternative C. One was that not having it in the Bluebook didn't mean the Committee couldn't vote on it at the meeting if it wanted to. But the other factor was that policy had just eased and thinking about reversing that action after it had just been taken seemed so strange. And, we are just talking about policy between now and [the next meeting]--December 17th or 18th or whenever it is. So, I made a judgment that alternative C was so unlikely to be chosen that I didn't put it in the Bluebook.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: MS. SEGER.
text: Well, [remember] some of the pieces of 2X4s that floated around this building that came in from builders in the early '80s! I think that suggests that at a certain point the sectoral burden gets a little heavy, and they speak out even if it's by flooding [us with] 2X4s. Anyway, thank you. It was a very interesting presentation. 
speaker: CHAIRMAN GREENSPAN.
text: President Melzer. 

MR. MELZER. "I think I know what would happen to the expectational effects and the credibility and so forth."

Full utterance: I had one question, Mike. You mentioned at the beginning that five years was a relatively short time frame in the sense, I think, that if you didn't get right at it there was no way you could slow money growth by enough, quickly enough. I don't want to read too much into what you said. My question revolves around what would happen to the sacrifice ratio if the time frame were longer? I think I know what would happen to the expectational effects and the credibility and so forth. But do you have any sense of that? If you made it 10 years instead of 5, does the sacrifice ratio come down materially?

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. SYRON.
text: I think it has a nice added-- 
speaker: VICE CHAIRMAN CORRIGAN.
text: Again, I don't want to seem like I'm marketing that idea because I'm not sure I believe it myself. But the fact of the matter is that there is almost this mystique about that period in the '50s and early '60s. People kind of look back and think about it and they say: "Hey, wow." So what you're trying to capture is not a statistical phenomenon but almost a kind of state of mind. 

MR. LAWARE. "Well, we better make sure that we can do it."

Full utterance: Well, we better make sure that we can do it.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. GUFFEY.
text: Jerry, it would be helpful if you'd speak up a little. 
speaker: VICE CHAIRMAN CORRIGAN.
text: I was saying that I think one can make a pretty good analytical case that even in the time frame of the past six weeks or so the risks have shifted in the direction in which rather than worrying about a strong dollar we could find ourselves worrying about a weak dollar. And I think that just reinforces the basic case that a number of people have stated here. So quite apart from the theology of it or the politics of it, I think the substance of it is clearly on that side. 
speaker: MR. ANGELL.
text: Well, that was my point precisely. 

MR. BLACK. "If we didn't approve it, Sam would end up having to buy some dollars with some of his earnings on foreign currencies to stay below the limit."


Opinion: no
Prior discussion:
speaker: CHAIRMAN GREENSPAN.
text: What I'm trying to say is that there are two types of inflation. One is the oil price pass-through. The other is whether it embodies itself in the wage structure. It's the second that we have to be very careful to avoid. 
speaker: MR. PARRY.
text: That's right. 

CHAIRMAN GREENSPAN. "If we believe that the oil price goes up and the [unintelligible] comes down and there's no wage effect, it's a complete washout."

Full utterance: If we believe that the oil price goes up and the [unintelligible] comes down and there's no wage effect, it's a complete washout. There is no way to keep the [higher] price in there unless it embodies itself in some nonprice cost, in other words wage costs, cost of capital, or something.

Opinion: yes
About monetary policy: no
Prior discussion:
speaker: MR. MELZER.
text: Which, of course, we haven't seen. 
speaker: VICE CHAIRMAN CORRIGAN.
text: We haven't seen it because [of how] we're conducting policy. But the only fail-safe experiment--and that's what it would be--that would resolve that issue, no matter how you define the base and no matter how you measure reserves, would be the willingness of this Committee to run a policy that carries with it the risks of a 2 percent federal funds rate. 
speaker: MR. MELZER.
text: I'm not suggesting that we use it as an operating target. 
speaker: VICE CHAIRMAN CORRIGAN.
text: I know you're not. 

MR. MELZER. "I'm just saying that if it were up to me, in this environment where we're worried about getting the money growth path, I'd hate to be sitting here three months from now with a slope on that line of total reserves that was still totally flat as it has been over the last year."

Full utterance: I'm just saying that if it were up to me, in this environment where we're worried about getting the money growth path, I'd hate to be sitting here three months from now with a slope on that line of total reserves that was still totally flat as it has been over the last year.

Opinion: yes
About monetary policy: yes
Stance toward easing (NLI): contradiction
Prior discussion:
speaker: VICE CHAIRMAN CORRIGAN.
text: We haven't seen it because [of how] we're conducting policy. But the only fail-safe experiment--and that's what it would be--that would resolve that issue, no matter how you define the base and no matter how you measure reserves, would be the willingness of this Committee to run a policy that carries with it the risks of a 2 percent federal funds rate. 
speaker: MR. MELZER.
text: I'm not suggesting that we use it as an operating target. 
speaker: VICE CHAIRMAN CORRIGAN.
text: I know you're not. 
speaker: MR. MELZER.
text: I'm just saying that if it were up to me, in this environment where we're worried about getting the money growth path, I'd hate to be sitting here three months from now with a slope on that line of total reserves that was still totally flat as it has been over the last year. 

VICE CHAIRMAN CORRIGAN. "That's part of the reason why I made the suggestion about trying to get some reserves out through the discount window in a way in which Peter could do a pretty good job of protecting against--"


Opinion: no