Word: frb
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...Board leaned in the opposite direction, convinced that the boom was still picking up speed so fast that it might get out of hand. Last week the Federal Reserve governors decided it was time to put more checks on credit and industrial expansion. With a flourish of his pen FRB Chairman William McChesney Martin Jr. okayed, for the fifth time in a year, an increase in the discount rate for eleven of FRB's twelve district banks, thus making it more expensive to borrow money...
More than anything else, what finally made up FRB's mind was the spring flood of optimism, cheering reports of first-quarter earnings (see below), the big expansion plans of U.S. businessmen, the big spending plans of the U.S. consumer. Retail trade for March, said the Commerce Department, climbed 2% over February and 4% above March of last year. After a survey of economists and businessmen, the U.S. Chamber of Commerce predicted that consumer incomes will go up 3% to 5% this year, and that all of this $8 billion to $14 billion will be spent...
Wearing a dark suit and a cautious smile. Federal Reserve Board Chairman William McChesney Martin went before a joint congressional committee last week to testify on the state of the U.S. economy. After Martin explained how the FRB was "feeling its way" in the current credit situation, neither easing nor tightening credit, Illinois' Democratic Senator Paul Douglas tried some specific questions: DOUGLAS: Do you have any worries about the automobile industry...
...looking at the U.S. last week, not even FRB's Martin could be seriously worried over the economy's health. Though the January employment report showed a 1,300,000 seasonal job slide since December, the total of 62,900,000 employed was still 2,700,000 better than January 1955. Construction for January was also down from December, but 1% ahead of 1955. January retail sales slipped $5.3 billion from December; even so, the figures were 6% better than the same month...
Actually, there are many economists who oppose the idea of direct consumer controls. They argue that FRB's indirect controls and the rise of interest rates have worked effectively to slow consumer credit without hamstringing the economy's overall growth. Though the FRB tends toward direct controls, it is staying neutral in the debate. It says that if it had Regulation W type powers, it would have clamped them on last summer when consumer installment credit was jumping at the rate of $400 million to $500 million monthly. But without direct controls, it had to rely...