Word: frb
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...chief argument for direct controls is to put more curbs on consumer credit, which has increased $6 billion, to $36.2 billion since 1954. Like Banker Sproul, the President's Council of Economic Advisers thinks that the FRB should have the power to impose direct consumer credit controls. Currently, the FRB can enforce only indirect restrictions on consumer credit through its overall monetary operations. It can restrict credit only by increasing loan costs through boosts in the rediscount rate and reserves of member banks and sales of Government securities. But on the basis of past history, the council feels that...
...potential inflationary spots in 1956's economy. Yet, said he, there are still some businessmen clamoring for fewer Government credit controls every time "sales do not exceed expectations or fail to set a record." For 1956 the need was for tighter, not looser reins on inflation through the FRB's checks on bank reserves and interest rates. Said Martin: "If it were possible to have good times without controls, then we could go along without change. It is the duty of the Federal Reserve to see that money [is] our servant, not our master...
...kept a steady hand on the nation's economic throttles. The trick was to keep credit easy enough to have a full head of steam, so that the economy would clip along full speed, yet not blow up into an inflationary boom and bust. As credit soared, the FRB put on the brakes by boosting the rediscount rate to member banks, thus making borrowing more expensive...
...FRB hopes to hold the consumer-credit rise to $3 billion for a total of $39 billion. The enormous debt consumers already owe will make the FRB's job easier; repaying 1955's loans will soak up enough money to make people think twice before taking on new debts...
There were other signs that the nation's money managers were no longer thinking in terms of further credit restraints. One big reason: the illness of President Eisenhower had done as much as any FRB action to prick the speculative bubble on the boom. In fact, indications were that U.S. credit might be eased, perhaps in January, after the Christmas buying rush...