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Describes the efforts of Allan Sproul, president of the Federal Reserve Bank of New York, to weaken the operating restrictions imposed in March 1953, Sproul’s initial success following a break in the bill market in late May, and his ultimate failure when FOMC members decided to retain in their own hands (rather than delegate to the manager of the Open Market Account) the authority to breach the restrictions.
Describes the imposition of an additional restriction on the scope of open market operations when the FOMC decided that System transactions should not be undertaken for any reason other than reserves management.
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