mission to regulate the availability of money and also will curtail its opportunities to make a profit on its open market transactions. These contentions are supported by two affidavits prepared by Federal Reserve officials.
In response, plaintiff has offered six affidavits prepared by experts apparently taking issue with defendant's projections of the probable result of current disclosure of the DPD. Plaintiff's experts express their view that prompt publication of the DPD would result in beneficial rather than detrimental effects. If this apparent disagreement is in fact real, it would seem that summary judgment would not be appropriate at this time since material issues of fact genuinely remain in dispute.
Defendant contends, however, that plaintiff's experts concede that prompt release of the DPD would have some effects on market reaction to operation of the FOMC but disagree with the FOMC whether those effects will be beneficial or detrimental. Defendant's argument continues that the latter inquiry is actually a challenge to FOMC's policy making functions which, if appropriately the subject of judicial review at all, are not subject to judicial review in this FOIA action.
Defendant has indicated that the following adverse effects might reasonably be expected to flow from prompt publication of the DPD.
First, the announcement effect of prompt disclosure would allow private investors to anticipate FOMC action resulting in exaggerated market response. Second, the announcement would primarily benefit large investors who are capable of promptly assessing the impact of FOMC policy and would place them at a competitive advantage over smaller investors.
Third, as a result of the exaggerated response, risk in government securities would increase making them less desirable to investors and consequently increasing the cost of marketing. Fourth, by revealing FOMC's market strategy, prompt publication would place the FOMC at a competitive disadvantage in the market. Finally, defendant contends that since its experience is based on its present practice prompt disclosure would, at least for some time, place it in the undesirable position of being unable to predict market response to FOMC activities from past experience.
There appears to be no consensus among plaintiff's affiants as to precisely why the FOMC's hypothesis is in error though all agree that prompt disclosure of the DPD would enhance and not hinder monetary policy. What is apparent, however, upon reviewing the affidavits is that the dispute among the experts in this case is not one over facts in any objective sense but rather is a dispute over economic theory.
It may in fact be finally reducible to a dispute over proper monetary policy.
At bottom, the FOMC has concluded that uncertainty in the monetary markets best serves its needs.
Admittedly, in reaching this conclusion, the FOMC was required to choose between competing economic theories and competing economic policies. While Congress has entrusted the FOMC with making such determinations, it is at once apparent that this Court is an inappropriate forum for weighing the wisdom of the FOMC's choice.
This is particularly true in the context of this FOIA case.
Even assuming, however, that a material factual dispute exists over whether prompt release of the DPD would help or hinder the FOMC in pursuing sound monetary policy, no credible evidence has been offered by the plaintiff to controvert the defendant's assertion that premature release of the DPD would harm the government's commercial interest in profitably trading in government securities.
As the largest active participant in the government securities market, the FOMC, through its actions, exerts a major influence on the price of government securities in the open market. As explained in the affidavit of Governor Partee:
To the extent that speculators anticipate the actions of the Account Manager, they will tend to buy when they expect the Manager to buy, in order to profit from any increase in prices occasioned by the Manager's actions; and they will sell when they expect the Manager to sell, in order to minimize losses resulting from lower prices occasioned by the Manager's selling. Such increased contemporaneous competition may well require the Manager to pay a higher price when he buys securities, and to accept a lower price when he sells, than would otherwise be necessary.