TRANSCRIPT

FEDERAL OPEN MARKET COMMITTEE MEETING

August 15, 1978

Prefatory Note

This transcript has been produced from the original raw transcript in the FOMC Secretariat's files. The Secretariat has lightly edited the original to facilitate the reader's understanding. Where one or more words were missed or garbled in the transcription, the notation "unintelligible" has been inserted. In some instances, words have been added in brackets to complete a speaker's thought or to correct an obvious transcription error or misstatement.

Errors undoubtedly remain. The raw transcript was not fully edited for accuracy at the time it was produced because it was intended only as an aid to the Secretariat in preparing the record of the Committee's policy actions. The edited transcript has not been reviewed by present or past members of the Committee.

Aside from the editing to facilitate the reader's understanding, the only deletions involve a very small amount of confidential information regarding foreign central banks, businesses, and persons that are identified or identifiable. Deleted passages are indicated by gaps in the text. All information deleted in this manner is exempt from disclosure under applicable provisions of the Freedom of Information Act.

Staff Statements Appended to the Transcript

Mr. Pardee, Deputy Manager for Foreign Operations Mr. Zeisel, Associate Economist Mr. Sternlight, Deputy Manager for Domestic Operations Mr. Axilrod, Economist

Meeting of Federal Open Market Committee

August 15, 1978

A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal

Reserve System in Washington, D. C.,on Tuesday, August 15,

1978, at 9:30 a.m.

PRESENT: Mr. Miller, Chairman Mr. Volcker, Vice Chairman Mr. Baughman Mr. Coldwell Mr. Eastburn Mr. Gardner Mr. Jackson Mr. Partee Mr. Wallich Mr. Willes Mr. Winn

Messrs. Balles, Kimbrel, and Mayo, Alternate Members of the Federal Open Market Committee

Mr. Morris, President of the Federal Reserve Bank of Boston

Mr. Altmann, Secretary Mr. Bernard, Assistant Secretary Mr. O'Connell, General Counsel Mr. Axilrod, Economist

Messrs. Burns, J. Davis, R. Davis, Ettin, Kaminow, Keir, Truman, and Zeisel, Associate Economists

Mr. Pardee, Deputy Manager for Foreign Operations Mr. Sternlight, Deputy Manager for Domestic Operations 8/15/78 - 2 -

Mr. Coyne, Assistant to the Board of Governors Mr. Kalchbrenner, Associate Director, Division of Research and Statistics, Board of Governors Mr. Siegman, Associate Director, Division of International Finance, Board of Governors Ms. Farar, Economist, Open Market Secretariat, Board of Governors Mrs. Deck, Staff Assistant, Open Market Secretariat, Board of Governors

Messrs. Czerwinski, Moriarty, and Rankin, First Vice Presidents, Federal Reserve Banks of Kansas City, St. Louis, and Richmond, respectively

Messrs. T. Davis, Eisenmenger, and Scheld, Senior Vice Presidents, Federal Reserve Banks of Kansas City, Boston, and Chicago, respectively

Messrs. Brandt, Broaddus, and Keran, Vice Presidents, Federal Reserve Banks of Atlanta, Richmond, and San Francisco, respectively

Mr. Burger, Assistant Vice President, Federal Reserve Bank of St. Louis

Mr. Duprey, Senior Economist, Federal Reserve Bank of Minneapolis

Ms. Tschinkel, Adviser, Federal Reserve Bank of New York

Transcript of Federal Open Market Committee Meeting of August 15, 1978

CHAIRMAN MILLER. First, I want to apologize for a little delay this morning. It was because the Treasury [breakfast] had more eggs than usual and I didn't want to pass up the last opportunity to be fed before this ordeal. Before FOMC meetings I get a very big appetite! Second, I have to apologize for Steve Axilrod, but he's going on vacation this afternoon and he doesn't normally dress this way. Actually, when people saw him yesterday in this outfit, the exchange markets, as you know, went wild. Let's see what hap