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Meeting of the Federal Open Market CommitteeJune 29-30, 1999A meeting of the Federal Open Market Committee was held in the offices of the Boardof Governors of the Federal Reserve System in Washington, D.C., on Tuesday, June 29, 1999, at2:30 p.m. and continued on Wednesday, June 30, 1999, at 9:00 a.m.PRESENT:
Mr. Greenspan, ChairmanMr. McDonough, Vice ChairmanMr. BoehneMr. FergusonMr. GramlichMr. KelleyMr. McTeer Mr. Meyer Mr. MoskowMr. SternMessrs. Broaddus, Guynn, Jordan, and Parry, Alternate Members of 
the Federal Open Market Committee
Mr. Hoenig, Ms. Minehan, and Mr. Poole, Presidents of the Federal
Banks of St. Louis, Boston, and Kansas City respectively
Mr. Kohn, Secretary and Economist
Mr. Bernard, Deputy Secretary
Ms. Fox, Assistant Secretary
Mr. Gillum, Assistant Secretary
Mr. Mattingly, General Counsel
Mr. Prell, Economist
Ms. Johnson, Economist
Messrs. Alexander, Cecchetti, Hooper, Hunter, Lang,
Lindsey, Rolnick, Rosenblum,1/ Slifman, and
Stockton, Associate Economists
Mr. Fisher, Manager, System Open Market Account
Mr. Ettin, Deputy Director, Division of Research
and Statistics, Board of Governors
Messrs. Madigan and Simpson, Associate Directors, Divisions of 
Monetary Affairs and Research and Statistics respectively,
Board of Governors
 _________________________ 1/ Attended Tuesday’s session only.
 
6/29-30/992
Messrs. Porter 2/ and Reinhart, Deputy Associate Directors, Division of Monetary Affairs, Board of GovernorsMr. Reifschneider, 2/ Section Chief, Division of Research and Statistics,Board of GovernorsMses. Edwards 3/ and Mauskopf 3/ and Messrs. Lebow 2/ andOrphanides, 2/ Senior Economists, Divisions of Monetary Affairs,International Finance, Research and Statistics, and Monetary Affairsrespectively, Board of GovernorsMs. Garrett and Mr. Tetlow, 2/ Economists, Divisions of Monetary Affairsand Research and Statistics respectively, Board of GovernorsMs. Low, Open Market Secretariat Assistant, Division of Monetary Affairs, Board of GovernorsMr. Barron, First Vice President, Federal Reserve Bank of AtlantaMessrs. Beebe, Eisenbeis, Goodfriend, Hakkio, Rasche, and Sniderman,Senior Vice Presidents, Federal Reserve Banks of San Francisco,Atlanta, Richmond, Kansas City, St. Louis, and ClevelandrespectivelyMr. Fuhrer and Ms. Perelmuter, Vice Presidents, Federal Reserve Banksof Boston and New York respectively _________________________ 
2/ Attended portion of the meeting relating to the discussion of the policy implications of 
uncertainty about key economic variables.
3/ Attended portions of the meeting relating to the Committee’s review of the economic outlook 
and consideration of its monetary and debt ranges for 1999 and 2000.
 
Transcript of Federal Open Market Committee Meeting of June 29-30, 1999Tuesday, June 29--Afternoon SessionCHAIRMAN GREENSPAN. Good afternoon, everyone. Would somebody like tomove approval of the minutes of the May 18 meeting?VICE CHAIRMAN MCDONOUGH. So move.CHAIRMAN GREENSPAN. Without objection. Mr. Fisher.MR. FISHER. Thank you, Mr. Chairman. I will be referring to the usual package of colored charts that is in front of you.
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/Mr. Chairman and members of the Committee, four perceptions arecurrently influencing financial market behavior. It seems to me that eachof these perceptions contains certain elements of truth but also, I fear,certain fallacies that could come back to haunt us. These perceptions are:First, that signs of a pickup in European growth are causing a rise inexpectations for a European Central Bank (ECB) rate hike later this year;second, that the strength of the U.S. economy has been the major factor causing the weakening of the euro over the last six months; third, that theJapanese monetary authorities can be relied upon to stabilize the yen withverbal and official intervention; and fourth, that the levels of interest ratesand of economic activity in the United States will be principallydetermined by the words and deeds of the members of the Federal OpenMarket Committee. In my remarks, I will address each of these perceptions in turn.In the charts on the first page of the package, you can see that theforward rates jumped a bit on the Committee’s announcement on May 18 but stabilized or even rallied a bit until May 27 and then began to back upthrough most of June. I will return to the issue of the course of U.S.interest rates later when I discuss the bond market.For now, I would like to focus on the euro forward rates, whichappear to have followed U.S. rates up. Euro-area 6-month and 9-monthforward 3-month deposit rates are up 25 basis points or so since your lastmeeting. There have been a number of positive signs for the euro-11economy, including greater-than-expected first-quarter GDP in Germany,increased German manufacturing orders, and improvement in German andFrench business sentiment. But some less upbeat data have also beenreported in Europe, including an increase in German unemployment inMay, a decrease in German retail sales in April, weak French exports in
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/ A copy of the material used by Mr. Fisher is appended to the transcript. (Appendix 1)
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