Minutes of the Federal Open Market Committee January 29–30, 2013
A meeting of the Federal Open Market Committee washeld in the offices of the Board of Governors of theFederal Reserve System in Washington, D.C., on Tuesday, January 29, 2013, at 2:00 p.m., and continuedon Wednesday, January 30, 2013, at 9:00 a.m.PRESENT:Ben Bernanke, Chairman William C. Dudley, Vice Chairman James BullardElizabeth DukeCharles L. EvansEsther L. George Jerome H. PowellSarah Bloom RaskinEric Rosengren Jeremy C. SteinDaniel K. Tarullo Janet L. YellenChristine Cumming, Richard W. Fisher, NarayanaKocherlakota, Sandra Pianalto, and Charles I.Plosser, Alternate Members of the FederalOpen Market Committee Jeffrey M. Lacker, Dennis P. Lockhart, and John C. Williams, Presidents of the Federal ReserveBanks of Richmond, Atlanta, and San Francis-co, respectively William B. English, Secretary and EconomistDeborah J. Danker, Deputy Secretary Matthew M. Luecke, Assistant Secretary David W. Skidmore, Assistant Secretary Michelle A. Smith, Assistant Secretary Scott G. Alvarez, General Counsel Thomas C. Baxter, Deputy General CounselSteven B. Kamin, EconomistDavid W. Wilcox, Economist Thomas A. Connors, Troy Davig, Michael P.Leahy, James J. McAndrews, Stephen A. Mey-er, David Reifschneider, Daniel G. Sullivan,Christopher J. Waller, and William Wascher, Associate EconomistsSimon Potter, Manager, System Open Market Ac-countNellie Liang,¹ Director, Office of Financial Stability Policy and Research, Board of Governors Jon W. Faust, Special Advisor to the Board, Officeof Board Members, Board of Governors James A. Clouse and William Nelson, Deputy Di-rectors, Division of Monetary Affairs, Board of Governors; Mark E. Van Der Weide, Deputy Director, Division of Banking Supervision andRegulation, Board of GovernorsLinda Robertson, Assistant to the Board, Office of Board Members, Board of Governors Joyce K. Zickler, Senior Adviser, Division of Mon-etary Affairs, Board of GovernorsEric M. Engen, Thomas Laubach, and David E.Lebow, Associate Directors, Division of Re-search and Statistics, Board of GovernorsBeth Anne Wilson, Deputy Associate Director, Di- vision of International Finance, Board of Gov-ernorsKaren M. Pence and Stacey Tevlin, Assistant Di-rectors, Division of Research and Statistics,Board of Governors Jeremy B. Rudd, Adviser, Division of Research andStatistics, Board of GovernorsDavid H. Small, Project Manager, Division of Monetary Affairs, Board of Governors Andrew Figura, Group Manager, Division of Re-search and Statistics, Board of Governors John C. Driscoll and Jennifer E. Roush, SeniorEconomists, Division of Monetary Affairs,Board of Governors; Ruth Judson, SeniorEconomist, Division of International Finance,Board of Governors _______________________
¹ Attended Tuesday’s session only
.
Page 1 _____________________________________________________________________________________________
Jonathan D. Rose, Economist, Division of Mone-tary Affairs, Board of GovernorsSarah G. Green, First Vice President, Federal Re-serve Bank of RichmondDavid Altig, Jeff Fuhrer, Loretta J. Mester, GlennD. Rudebusch, and Mark S. Sniderman, Execu-tive Vice Presidents, Federal Reserve Banks of Atlanta, Boston, Philadelphia, San Francisco,and Cleveland, respectively Ron Feldman and Lorie K. Logan, Senior VicePresidents, Federal Reserve Banks of Minne-apolis and New York, respectively Evan F. Koenig and Steven M. Friedman, VicePresidents, Federal Reserve Banks of Dallasand New York, respectively Matthew D. Raskin, Markets Officer, Federal Re-serve Bank of New York Robert L. Hetzel, Senior Economist, Federal Re-serve Bank of Richmond
Annual Organizational Matters
2
In the agenda for this meeting, it was reported that ad- vices of the election of the following members and al-ternate members of the Federal Open Market Commit-tee for a term beginning January 29, 2013, had beenreceived and that these individuals had executed theiroaths of office.
The elected members and alternate members were asfollows: William C. Dudley, President of the Federal ReserveBank of New York, with Christine Cumming, First Vice President of the Federal Reserve Bank of New York, as alternate.Eric Rosengren, President of the Federal Reserve Bank of Boston, with Charles I. Plosser, President of theFederal Reserve Bank of Philadelphia, as alternate.
2
Versions of the current Committee documents are availableat http://www.federalreserve.gov/monetarypolicy/rules_authorizations.htm .
Charles L. Evans, President of the Federal ReserveBank of Chicago, with Sandra Pianalto, President of theFederal Reserve Bank of Cleveland, as alternate. James Bullard, President of the Federal Reserve Bank of St. Louis, with Richard W. Fisher, President of theFederal Reserve Bank of Dallas, as alternate.Esther L. George, President of the Federal ReserveBank of Kansas City, with Narayana Kocherlakota,President of the Federal Reserve Bank of Minneapolis,as alternate.By unanimous vote, the following officers of the Fed-eral Open Market Committee were selected to serveuntil the selection of their successors at the first regu-larly scheduled meeting of the Committee in 2014:Ben Bernanke Chairman William C. Dudley Vice Chairman William B. English Secretary and EconomistDeborah J. Danker Deputy Secretary Matthew M. Luecke Assistant Secretary David W. Skidmore Assistant Secretary Michelle A. Smith Assistant Secretary Scott G. Alvarez General Counsel Thomas C. Baxter Deputy General CounselRichard M. Ashton Assistant General CounselSteven B. Kamin EconomistDavid W. Wilcox Economist Thomas A. Connors Troy Davig Michael P. Leahy James J. McAndrewsStephen A. MeyerDavid ReifschneiderDaniel G. SullivanGeoffrey TootellChristopher J. Waller William Wascher Associate EconomistsBy unanimous vote, the Federal Reserve Bank of New York was selected to execute transactions for the Sys-tem Open Market Account.By unanimous vote, Simon Potter was selected to serveat the pleasure of the Committee as Manager, SystemOpen Market Account, on the understanding that hisselection was subject to being satisfactory to the Feder-al Reserve Bank of New York.
Page 2 Federal Open Market Committee _____________________________________________________________________________________________
Secretary’s note: Advice subsequently wasreceived that the selection of Mr. Potter asManager was satisfactory to the Federal Re-serve Bank of New York.By unanimous vote, the Authorization for DomesticOpen Market Operations was approved with twoamendments. The first broadened the actions that theOpen Market Desk may take, at the Chairman’s in-struction during an intermeeting period, to includetransactions to address temporary disruptions of anoperational or highly unusual nature in U.S. dollarfunding markets. For example, if secured funding rates were to increase to high levels in the wake of a naturaldisaster, the risk of a broader, more systemic disruptionto the functioning of asset markets could result. In thiscase, the prospect that repurchase operations couldpotentially alleviate some of the market strains might warrant immediate action. Consistent with Committeepractice, the Chairman, if feasible, would consult withthe Committee before making any such instruction. The second amendment harmonized the language re-ferring to the Committee’s longer-run objectives withthat in the Committee’s Statement on Longer-RunGoals and Monetary Policy Strategy. The Guidelinesfor the Conduct of System Open Market Operations inFederal-Agency Issues remained suspended. AUTHORIZATION FOR DOMESTIC OPENMARKET OPERATIONS(Amended effective on January 29, 2013)1. The Federal Open Market Committee authorizesand directs the Federal Reserve Bank of New York, tothe extent necessary to carry out the most recent do-mestic policy directive adopted at a meeting of theCommittee: A. To buy or sell U.S. government securities, in-cluding securities of the Federal Financing Bank, andsecurities that are direct obligations of, or fully guar-anteed as to principal and interest by, any agency of the United States in the open market, from or to se-curities dealers and foreign and international ac-counts maintained at the Federal Reserve Bank of New York, on a cash, regular, or deferred delivery basis, for the System Open Market Account at mar-ket prices, and, for such Account, to exchange matur-ing U.S. government and federal agency securities with the Treasury or the individual agencies or to al-low them to mature without replacement; andB. To buy or sell in the open market U.S. govern-ment securities, and securities that are direct obliga-tions of, or fully guaranteed as to principal and inter-est by, any agency of the United States, for the Sys-tem Open Market Account under agreements to re-sell or repurchase such securities or obligations (in-cluding such transactions as are commonly referredto as repo and reverse repo transactions) in 65 busi-ness days or less, at rates that, unless otherwise ex-pressly authorized by the Committee, shall be deter-mined by competitive bidding, after applying reason-able limitations on the volume of agreements withindividual counterparties.2. The Federal Open Market Committee authorizesthe Federal Reserve Bank of New York to undertaketransactions of the type described in paragraphs 1.Aand 1.B from time to time for the purpose of testing operational readiness. The aggregate par value of suchtransactions of the type described in paragraph 1.Ashall not exceed $5 billion per calendar year. The out-standing amount of such transactions of the type de-scribed in paragraph 1.B shall not exceed $5 billion atany given time. These transactions shall be conducted with prior notice to the Committee.3. In order to ensure the effective conduct of openmarket operations, the Federal Open Market Commit-tee authorizes the Federal Reserve Bank of New York to use agents in agency MBS-related transactions.4. In order to ensure the effective conduct of openmarket operations, the Federal Open Market Commit-tee authorizes the Federal Reserve Bank of New York to lend on an overnight basis U.S. government securi-ties and securities that are direct obligations of any agency of the United States, held in the System OpenMarket Account, to dealers at rates that shall be deter-mined by competitive bidding. The Federal ReserveBank of New York shall set a minimum lending feeconsistent with the objectives of the program and apply reasonable limitations on the total amount of a specificissue that may be auctioned and on the amount of se-curities that each dealer may borrow. The Federal Re-serve Bank of New York may reject bids that couldfacilitate a dealer’s ability to control a single issue asdetermined solely by the Federal Reserve Bank of New York. The Federal Reserve Bank of New York may lend securities on longer than an overnight basis to ac-commodate weekend, holiday, and similar trading con- ventions.5. In order to ensure the effective conduct of openmarket operations, while assisting in the provision of short-term investments or other authorized services forforeign and international accounts maintained at theFederal Reserve Bank of New York and accountsmaintained at the Federal Reserve Bank of New York
Minutes of the Meeting of January 29–30, 2013 Page 3 _____________________________________________________________________________________________
|