Volcker to Tell Hill Fed Sticking to Its Guns: Volcker Is Expected To Stick to His Guns
Federal Reserve Chairman Paul A. Volcker is expected to tell Congress next week that the Fed is sticking to its guns. The Federal Open Market Committee, which sets monetary policy for the central bank, met this week and basically reaffirmed its goal of holding money supply growth to a range of 2V& percent to 5Vz percent from the fourth quarter of 1981 to the fourth quarter of 1982.</br></br>In addition, the Fed will be aiming at the midpoint of that range, Volcker is expected to announce. Treasury Secretary Donald T. Regan, speaking just on behalf of Treasury,</br></br>None of this will come as any surprise to financial markets, because Volcker has been taking a particularly tough line in public statements about the need to keep a tight rein on money growth until there is more progress in reducing inflation. Other Fed officials have taken a similar stance.</br></br>Volcker and the other officials acknowledge they do not relish their role, which in the short run is putting them in the position of forcing up interest rates in the midst of a continuing recession to contain the recent surge in money growth.</br></br>after President Reagan sends Congress his fiscal 1983 budget with an estimated $90 billion deficitÛÓa deficit many analysts believe ultimately will turn out to be far larger. Moreover, with the prospect of large continuing deficits, the Fed feels it is the only antiinflation game in town.