_____________________________________________________________________________________________Page 1 Minutes of the Federal Open Market Committee January 28–29, 2014 A meeting of the Federal Open Market Committee was Nellie Liang, Director, Office of Financial Stability Pol- held in the offices of the Board of Governors of the icy and Research, Board of Governors Federal Reserve System in Washington, D.C., on Tuesday, January 28, 2014, at 2:00 p.m. and continued Stephen A. Meyer and William Nelson, Deputy Direc- on Wednesday, January 29, 2014, at 9:00 a.m. tors, Division of Monetary Affairs, Board of Gov- ernors PRESENT: Ben Bernanke, Chairman Jon W. Faust, Special Adviser to the Board, Office of William C. Dudley, Vice Chairman Board Members, Board of Governors Richard W. Fisher Narayana Kocherlakota Linda Robertson and David W. Skidmore, Assistants to Sandra Pianalto the Board, Office of Board Members, Board of Charles I. Plosser Governors Jerome H. Powell Jeremy C. Stein Trevor A. Reeve, Senior Associate Director, Division Daniel K. Tarullo of International Finance, Board of Governors Janet L. Yellen Joyce K. Zickler, Senior Adviser, Division of Monetary Christine Cumming, Charles L. Evans, Jeffrey M. Lack- Affairs, Board of Governors er, Dennis P. Lockhart, and John C. Williams, Al- ternate Members of the Federal Open Market Daniel M. Covitz and Michael T. Kiley, Associate Di- Committee rectors, Division of Research and Statistics, Board of Governors James Bullard, Esther L. George, and Eric Rosengren, Presidents of the Federal Reserve Banks of St. Jane E. Ihrig, Deputy Associate Director, Division of Louis, Kansas City, and Boston, respectively Monetary Affairs, Board of Governors William B. English, Secretary and Economist Edward Nelson, Assistant Director, Division of Mone- Matthew M. Luecke, Deputy Secretary tary Affairs, Board of Governors; John J. Stevens, Michelle A. Smith, Assistant Secretary Assistant Director, Division of Research and Statis- Scott G. Alvarez, General Counsel tics, Board of Governors Thomas C. Baxter, Deputy General Counsel Steven B. Kamin, Economist Jeremy B. Rudd, Adviser, Division of Research and David W. Wilcox, Economist Statistics, Board of Governors James A. Clouse, Thomas A. Connors, Evan F. Dana L. Burnett, Section Chief, Division of Monetary Koenig, Thomas Laubach, Michael P. Leahy, Affairs, Board of Governors Loretta J. Mester, Paolo A. Pesenti, Samuel Schulhofer-Wohl, Mark E. Schweitzer, and William Burcu Duygan-Bump, Senior Project Manager, Divi- Wascher, Associate Economists sion of Monetary Affairs, Board of Governors Simon Potter, Manager, System Open Market Account David H. Small, Project Manager, Division of Mone- tary Affairs, Board of Governors Lorie K. Logan, Deputy Manager, System Open Mar- ket Account Andrew Figura, Group Manager, Division of Research and Statistics, Board of Governors Michael S. Gibson, Director, Division of Banking Su- pervision and Regulation, Board of Governors _____________________________________________________________________________________________Page 2 Federal Open Market Committee Michele Cavallo, Senior Economist, Division of Inter- Richard W. Fisher, President of the Federal Reserve national Finance, Board of Governors Bank of Dallas, with Dennis P. Lockhart, President of the Federal Reserve Bank of Atlanta, as alternate Yuriy Kitsul, Economist, Division of Monetary Affairs, Board of Governors Narayana Kocherlakota, President of the Federal Re- serve Bank of Minneapolis, with John C. Williams, Randall A. Williams, Records Project Manager, Divi- President of the Federal Reserve Bank of San Francis- sion of Monetary Affairs, Board of Governors co, as alternate Kenneth C. Montgomery, First Vice President, Federal By unanimous vote, the Committee selected Ben Reserve Bank of Boston Bernanke to serve as Chairman through January 31, 2014, and Janet L. Yellen to serve as Chairman, effec- David Altig, Glenn D. Rudebusch, and Daniel G. Sulli- tive February 1, 2014, until the selection of her succes- van, Executive Vice Presidents, Federal Reserve sor at the first regularly scheduled meeting of the Banks of Atlanta, San Francisco, and Chicago, re- Committee in 2015. spectively By unanimous vote, the following officers of the Troy Davig, Geoffrey Tootell, and Christopher J. Wal- Committee were selected to serve until the selection of ler, Senior Vice Presidents, Federal Reserve Banks their successors at the first regularly scheduled meeting of Kansas City, Boston, and St. Louis, respectively of the Committee in 2015: Robert L. Hetzel, Senior Economist, Federal Reserve William C. Dudley Vice Chairman Bank of Richmond William B. English Secretary and Economist Matthew M. Luecke Deputy Secretary Annual Organizational Matters¹ Michelle A. Smith Assistant Secretary In the agenda for this meeting, it was reported that ad- Scott G. Alvarez General Counsel vices of the election of the following members and al- Thomas C. Baxter Deputy General Counsel ternate members of the Federal Open Market Commit- Richard M. Ashton Assistant General Counsel tee (the “Committee”) for a term beginning January 28, Steven B. Kamin Economist 2014, had been received and that these individuals had David W. Wilcox Economist executed their oaths of office. James A. Clouse The elected members and alternate members were as Thomas A. Connors follows: Evan F. Koenig Thomas Laubach William C. Dudley, President of the Federal Reserve Michael P. Leahy Bank of New York, with Christine Cumming, First Loretta J. Mester Vice President of the Federal Reserve Bank of New Paolo A. Pesenti York, as alternate Samuel Schulhofer-Wohl Mark E. Schweitzer Charles I. Plosser, President of the Federal Reserve William Wascher Associate Economists Bank of Philadelphia, with Jeffrey M. Lacker, President of the Federal Reserve Bank of Richmond, as alternate By unanimous vote, the Federal Reserve Bank of New York was selected to execute transactions for the Sys- Sandra Pianalto, President of the Federal Reserve Bank tem Open Market Account. of Cleveland, with Charles L. Evans, President of the Federal Reserve Bank of Chicago, as alternate By unanimous vote, the Authorization for Domestic ____________________ Open Market Operations was approved with an ¹ Versions of the current Committee documents are amendment that makes the structure of paragraphs 1.A available at www.federalreserve.gov/monetarypolicy/ru and 1.B more similar. The Guidelines for the Conduct les_authorizations.htm. of System Open Market Operations in Federal-Agency Issues remained suspended. _____________________________________________________________________________________________Minutes of the Meeting of January 28–29, 2014 Page 3 AUTHORIZATION FOR DOMESTIC OPEN to lend on an overnight basis U.S. government securi- MARKET OPERATIONS ties and securities that are direct obligations of any (As amended effective January 28, 2014) agency of the United States, held in the System Open Market Account, to dealers at rates that shall be deter- 1. The Federal Open Market Committee authorizes mined by competitive bidding. The Federal Reserve and directs the Federal Reserve Bank of New York, to Bank of New York shall set a minimum lending fee the extent necessary to carry out the most recent do- consistent with the objectives of the program and apply mestic policy directive adopted at a meeting of the reasonable limitations on the total amount of a specific Committee: issue that may be auctioned and on the amount of se- A. To buy or sell in the open market U.S. govern- curities that each dealer may borrow. The Federal Re- ment securities, including securities of the Federal serve Bank of New York may reject bids that could Financing Bank, and securities that are direct obliga- facilitate a dealer’s ability to control a single issue as tions of, or fully guaranteed as to principal and inter- determined solely by the Federal Reserve Bank of New est by, any agency of the United States, from or to York. The Federal Reserve Bank of New York may securities dealers and foreign and international ac- lend securities on longer than an overnight basis to ac- counts maintained at the Federal Reserve Bank of commodate weekend, holiday, and similar trading con- New York, on a cash, regular, or deferred delivery ventions. basis, for the System Open Market Account at mar- 5. In order to ensure the effective conduct of open ket prices, and, for such Account, to exchange matur- market operations, while assisting in the provision of ing U.S. government and federal agency securities short-term investments or other authorized services for with the Treasury or the individual agencies or to al- foreign and international accounts maintained at the low them to mature without replacement; and Federal Reserve Bank of New York and accounts B. To buy or sell in the open market U.S. govern- maintained at the Federal Reserve Bank of New York ment securities, and securities that are direct obliga- as fiscal agent of the United States pursuant to section tions of, or fully guaranteed as to principal and inter- 15 of the Federal Reserve Act, the Federal Open Mar- est by, any agency of the United States, for the Sys- ket Committee authorizes and directs the Federal Re- tem Open Market Account under agreements to re- serve Bank of New York: sell or repurchase such securities or obligations (in- A. For the System Open Market Account, to sell cluding such transactions as are commonly referred U.S. government securities and securities that are di- to as repo and reverse repo transactions)