Word: frb
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REDISCOUNT RATE, at which banks borrow from the Federal Reserve, may be nudged higher in the near future to tighten up credit all around, block any new inflation. The FRB's flexible-money policy, which switched from one of "active ease'' to "ease" last fall, is now described as "light restraint." Officials are moving cautiously, and the rediscount rate is not likely to go up by more than one-eighth of one percent from the present...
Said a top Federal Reserve Board official last week: "We thought we had an obligation to warn the elevator operators that it is one thing to buy stocks for cash and another thing to use borrowed money." With that, FRB suddenly announced a boost in margin requirements: investors would have to put up 60% cash to buy stocks instead...
...FRB's unexpected action scared the stock market into the biggest sell-off since the start of the Korean war. As prices dropped, the high-speed reporting tape fell as much as 15 minutes behind floor transactions. Sitting in their boardrooms, brokers could only guess, from a few scattered "flash prices," what was happening on the floor at any given moment. By day's end volume hit 4,640,000 shares. General Motors, which only two days before had hit a new high of 107⅜ on rumors of a stock split, and then lost seven points when...
...market down by announcing that his Banking and Currency Committee "probably will make a study" of the market's recent sharp rise. Said Fulbright: "The situation looks very dangerous to me. It is too reminiscent of 1929." Committee Member A. Willis Robertson, a Virginia Democrat, disagreed, said that FRB and the Treasury Department were capable of watching the market without the help of any Congressional investigation. Added Alabama's John Sparkman: "I have never felt that we were at the top of the market's rise . . . I don't feel that yesterday's break shows...
Because of the changes in the economy, FRB's industrial production index itself is no longer the statistical touchstone it once was. A whole new group of nonmanufacturing industries has grown up and must be counted, notably such huge service industries as airlines and buses, trucks, hotels and entertainment. The booming construction industry is not a factor in FRB's industrial index, though it is one of the greatest strengths of the present-day economy...