U.S. Money Supply Rises $2.7 Billion
NEW YORK, Feb. 6ÛÓThe basic money supply known as Ml rose $2.7 billion in the latest week but other data in the Federal Reserve BoardÛªs weekly report show no change in interest rate policy.</br></br>ÛÏThe latest Ml figure leaves money supply roughly $5 billion below the FedÛªs new growth targets using the parallel line concept,Û said William V. Sullivan, Jr., senior vice president at Dean Witter Reynolds. "Other data are reasonably friendly in that they show comfortable reserve positions among banks.Û</br></br>But David M. Jones, economist at Aubrey G. Lanston & Co., said the Fed ÛÏcertainly would have no reason to change the policy dial at this point, especially with the FOMC meeting scheduled for next week.Û</br></br>The FedÛªs policy committeeÛÓthe Federal Open Market CommitteeÛÓis to hold its February meeting, and Jones said the focus should be on the economy, which ÛÏis showing solid growth in the quarter.Û</br></br>Sullivan also noted that the week after the FOMC meeting, on Feb. 19, Fed Chairman Paul A. Volcker will give his semi-annual testimony to Congress. "There is always a chance that policy will shift, but for now any bias the Fed might have tilts toward accommodation.Û