Volcker to Disclose Fed's Money Growth Goal Today: Fed Targets Apt to Get President's Blessing
Federal Reserve Chairman Paul A. Volcker goes before the Senate Banking Committee this morning to disclose the FedÛªs official targets for the growth of money and credit during 1981, targets that are apt to get the Reagan administrationÛªs full blessing.</br></br>Volcker is expected to set money growth targets similar to the ÛÏtentativeÛ targets the Fed announced last July for 1981 which generally call for about a one-half-percentage-point drop from 1980 levels. Some of the precise figures, however, will be strongly influenced by regulatory changes such as the nationwide advent. of NOW (negotiated order of withdrawal) accounts on Jan. L.</br></br>to lay out the most specific set of policy instructions any administration ever has given the Fed publically.</br></br>"To achieve the goals of the administrationÛªs economic program, consistent. monetary policy must be applied,Û the explanation of that program declared. ÛÏThus, it is expected that the rate of money and credit growth will be brought down to levels consistent with noninflationary expansion of the economy .... The economic scenario assumes that the growth rates of money and credit are steadily reduced from the 1980 levels to one-half those levels by 1986.Û Whatever.they may think about the specificity of that statement, Volcker and the other members of the Federal Open Market Committee that sets Fed policy have no trouble with the actual target. In fact, the Fed chair-See FED. D2. Col. 3</br></br>But for all the apparent agreement with the administration on money growth targets, Federal Reserve officials are concerned about what comes next.