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Prefatory Note The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act. 1 In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing). 2 A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. Content last modified 6/05/2009. (CONFIDENTIAL FR) August 20, 1971. MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Prepared for the Federal Open Market Committee By the Staff BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM August 20, 1971. CONFIDENTIAL (FR) MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) Security markets have responded strongly to the President's announcement of new domestic and international economic measures. Prices of both equities and fixed-income securities bounded upward on the basis of new hopes for stronger economic recovery and more effective control of inflation and the balance of payments problem; and, related to the latter, expectations that monetary policy might be less restrictive than anticipated earlier. Yields on Treasury coupon issues have declined by 50 to 70 basis points; corporate bond yields have dropped by around 80 basis points; and municipal yields have fallen by about 50 basis points. (2) Treasury bill yields have also declined sharply on balance over the past week, as persistent large Desk purchases for foreign official accounts--and more recently for System Account--have tended to pre-empt scarce market supplies of bills at a time when dealers have also been trying to add to depleted positions. Currently, bill yields are 60 to 80 basis points below their levels of a week ago, with the 3-month issue bid at 4.65 per cent, compared with 5.15 per cent on August 13 per cent at the time of the last Committee meeting. credit markets, and 5.46 In private short-term rate declines have thus far been less pronounced--ranging generally from 1/8 to 1/4 of a percentage point. -2(3) The declines in bond yields and Treasury bill rates following the President's message occurred against a background of relatively taut money market conditions. In the period immediately following the July 27 Committee meeting, when the outcome of the Treasury's August refinancing operations was still unknown, the Desk sought to maintain fairly steady money market conditions as characterized by a Federal funds rate of about 5-1/2 per the cent or slightly less. Early in August, it became clear that/refinancing operations would turn out successfully, and market conditions in general tended to strengthen. With growth in the monetary aggregates remaining substantial, the Desk became a more reluctant supplier of reserves, and the Federal funds rate has since averaged around 5-5/8 per cent, even though other short-term rates declined following the President's address. In the face of foreign exchange market uncertainties, banks have generally pursued rather cautious reserve management policies, particularly on the Friday preceding the Camp David meetings when member bank borrowings bulged to nearly $1.7 billion. Borrowings dropped off following the President's speech, but nevertheless, averaged $1.2 billion in the statement week ending August 18. Net borrowed reserves for that week ran to an average of nearly $900 million. Over the earlier weeks of the inter-meeting period, member bank borrowing ranged from $550 to $750 million, and net borrowed reserves from about $300 to $550 million. (4) The narrowly defined money supply increased substantially in July, although at a pace somewhat below the 12 per cent annual rate indicated in the July 27 path (as shown in the table below). On the basis -3^as^ of incomplete data the average level in August is about projected, but the annual growth rate is somewhat above path because of the shortfall in July. Growth in the other monetary aggregates in July and apparently also [in early] August was reasonably close to expectations, although the credit proxy edged somewhat above path in both months and M 2 did the same in August. Recent Paths of the Key Monetary Aggregates (Seasonally adjusted, billions of dollars) July 27 Path 1/ A. B. Annual Rates of Growth, per cent Month July August 2/ 12.0 6.0 Actuals or Current Estimates 10.6 7.5 July 27 Path 1/ 8.0 6.5 Actuals or Current Estimate 7.4 8.0 Adjusted Proxy July 27 Actuals or Current Path 1/ Estimate 6.5 11.0 7.6 11.5 Actual levels, billions of $ Month July August 2/ 227.9 229.0 227.6 229.0 454.5 457.0 454.2 457.2 347.6 350.8 347.9 351.3 227.6 228.2 229.1 228.9 227.0 226.7 228.7 229.2 454.2 455.2 456.5 456.7 454.0 454.2 456.4 457.4 347.7 348.9 349.8 350.8 348.5 Week ending July 28 Aug. 4 Aug. 11 Aug. 18 p 1/ 2/ Consistent with the directive the Committee adopted at the July 27 meeting, and close to the alternative A path in the blue book prepared for that meeting. Data are preliminary for week of 18th and projected thereafter. p-- Preliminary. 348.0 348.5 350.9 -4(5) The need for reserves in July turned out to be even less than indicated in the last blue book. Although growth of reservesin August appears to be somewhat more rapid than the sharp increase projected, July and August taken together show average reserve growth about on track with staff estimates. The 17 per cent annual growth rate for total reservesin August reflected mainly sharply increased Government deposits--arising from central bank purchases of special Treasury certificates--along with some further growth of private demand deposits. With average member bank borrowings leveling off at about the level to which they had risen in July, nonborrowed reserves appear to be growing in August at about the same rate as total reserves. Reserve Aggregates (Daily averages in millions of dollars, seasonally adjusted) Total Nonborrowed Required Bluebook Path 1/ Actual Bluebook Path 1/ Actual Bluebook Path 1/ Ac tual July August pe/ 31,339 31,693 31,266 31,715 30,445 30,825 30,466 30,890 31,161 31,486 31,094 31,508 Annual Rate of Increase (July over June) 3.0 0.2 -14.0 -13.1 Month Annual Rate of Increase (August over July) 13.5 17.0 31,634 31,624 31,786 31,813 31,469 31,826 15.0 16.5 30,744 30,824 30,876 31,058 4.5 1.9 12.5 16.0 31,424 31,443 31,531 31,357 31,489 31,507 Week ending August 4 August 11 August 18 p/ 1/ Path in July 27 FOMC path. pe--Partially estimated. p -- Preliminary. 31,976 30,636 (6) The following table summarizes developments in the major financial aggregates for selected recent periods: 4th and 1st Qtrs. Second combined (March over Sept.) Quarter (June over March) August over June 8.9 6.6 8.8 10.3 5.3 1.7 6.2 11.3 9.0 13.7 12.6 7.7 14.6 14.7 n.a. 9.7 6.5 9.7 10.5 7.4 n.a. Large CD's $ 6.1 $ 0.7 Bank-related commercial paper N.S.A. - 2.9 0.0 n.a. Nonbank commercial paper - 0.4 - 0.9 n.a. Total Reserves Nonborrowed Reserves Concepts of Money M 1 (Currency plus demand deposits 1/) M2 (M1 plus time deposits at commercial banks other than large CD's) M3 (M plus deposits at 2 thrift institutions) Bank Credit Total member bank deposits (Bank credit proxy adj.) Loans and investments of commercial banks 2/ Short-term market paper (Actual $ change in billions) 1/ 2/ $1.4 Other than interbank and U.S. Government. Based on month-end figures. Includes loans sold to affiliates and branches. N.S.A. Not seasonally adjusted. NOTE: All items are based on averages of daily figures, except for data on total loans and investments of commercial banks, commercial paper and thrift institutions--which are either end-of-month or last Wednesday of month figures. Prospective developments The President's new economic program seems likely to have at given levels of interest rates. the effect of reducing rates of growth in the aggregates/ First, as the (7) program strengthens confidence in economic and financial prospects, the drop-off we had been anticipating earlier from the apparently very high recent liquidity demands for money should be accentuated. program should moderate inflationary expectations Second, the and reduce the inflation premiums built into current levels of interest rates. Third, our projections indicate that the program will result in slightly smaller increases of nominal GNP over the third and fourth quarters due to an abrupt slowing in the rate of price increase, which implies that the transactions demand for money should also be somewhat lower than otherwise. Finally, insofar as the program is viewed by the market as reducing the need for further firming of monetary policy, expectations of upward pressure on interest rates should be lessened. (8) While the direction of these effects seems clear, their magnitude is impossible to quantify with any precision. In addition, in the very short run these effects may be masked by transitory increases in cash holdings arising from greater investor activity in domestic securities markets and from current disturbances in foreign exchange markets. As a result, the problems of forming judgments regarding appropriate growth rates for the monetary and credit aggregates and of estimating probable relations among growth rates in such aggregates and money market conditions are even -7- more difficult than usual. Under such circumstances one option the Committee may wish to consider is a neutralist approach in monetary policy for the time being, in order to rock the financial boat as little as possible until ^thecan make a fuller Committee^ evaluation of the responses to the new program. (9) Two broad policy approaches are described below which probably define the limits within which most would consider a neutralist policy to fall. Both, as it happens, might be characterized--in their own contexts-- as policies calling for minimum change. The first specifies the maintenance of current money market conditions, a course which the staff believes would imply some weakening after August in the growth rates of the aggregates from those associated with the policy accepted at the last meeting. second would specify maintenance ^of^ growth in M The at the rate consistent with the directive adopted at the last meeting, a course which in our view would require an easing of money market conditions. The specifications given for the second alternative (B) might also be employed with directive language presented in a later section under the label of alternative C. As noted in that section, C differs from B with respect to operating techniques rather than objectives. Specifically, under C the Desk would place main emphasis on bank reserves rather than on money market conditions in making operating decisions. (10) The text table that follows specifies: (1) the growth path for M 1 thought to be consistent with the unchanged Federal funds rate assumption of alternative A; and (2) the funds rate thought to be needed to achieve the 6 per cent annual growth rate in M1 (for the third and fourth quarters combined) that was associated with the directive adopted at the last meeting 1/ The table on the next page shows the paths for all of the monetary aggregates under the two alternatives. Alternative A Alternative B Federal funds rate 5-3/8--5-3/4% 4-1/2--5% Member bank borrowings $700-$900 million $450-$650 million 4-3/4--5-1/2% 4--4-3/4% August 7-1/2% 7-1/2% September 5% 7% 3rd Quarter 8% 8-1/2% 4th Quarter 3% 4% Second half 5-1/2% 6% rate 3-month bill Growth in M1 (SAAR) (11) Staff projections in the last blue book--slightly modified to take into account the 5-3/8-5-3/4 per cent range for the funds rate approved at the July 27 meeting--indicated that M1 would grow at an annual rate averaging around 7 per cent for August and September and around 4 per cent for the fourth quarter. Now, however, it seems more likely that a funds rate at the mid-point of that range would lead to M1 growth at about a 5.0 per cent rate in September and only a 3.0 per cent rate in the fourth quarter. 1/ To achieve M1 growth rates previously specified for the third Weekly paths are appended on page 19. Alternative Monthly and Quarterly Paths of Key Monetary Aggregates (Seasonally adjusted, billions of dollars) M1 M2 Alt. A Alt. B Alt. A Alt. 229.0 230.0 231.7 229.0 230. 3 232.5 456.9 459.3 465.7 B 456.9 459.7 467.9 1971 August September December Per Cent Annual Rates of Growth August September 3rd Q. 1971 4th Q. 1971 8.0 3.0 7.0 6.5 7.5 5.0 8.5 4.0 Adjusted Credit Proxy Alt. A Alt. B 351.3 352.4 358.8 351.3 352.6 359. 7 7.0 7.5 7.0 5.5 7.5 7.0 Total Reserves Alt. A Alt. 1971 August September December 31.7 32.2 32.8 31.7 32.2 32.9 Per Cent Annual Rates of Growth August September 12.0 4.0 12.0 4.5 17.0 17.0 17.0 18.0 3rd Q. 1971 4th Q. 1971 8.0 7.5 8.0 8.0 11.5 7.5 11.5 9.0 B -10and fourth quarters--which averaged a little over 6 per cent--a reduction of the funds rate target into a 4-1/2--5 per cent range would seem to be needed. (12) As explained in the last blue book, the expectation that money supply growth will taper off in the fourth quarter rests essentially on two propositions: first, that liquidity demands will abate as economic recovery helps to restore consumer confidence, and second that the lagged effects of cumulative interest rate advances since last spring will continue to make the high cost of holding cash more and more evident. rates have recently turned down, Although interest past experience suggests that, even if these declines are significantly extended, their effects on money demands may not provide much offset to the cumulative effects of earlier rate advances for some time. The smaller growth now expected in money supply for the fourth quarter compared to the projection in the last blue book is attributable chiefly to the already-noted possibilities for reduced money demand stemming from the President's program. (13) To the extent money demands are cut back--either because curtailed price advances slow the growth of nominal GNP or because of a reduction in liquidity demands--the growth rate in M1 needed to support the expansion in economic activity previously expected is, of course, also smaller. For this reason, if the staff presumptions about the possible effects of the President's program are correct, the 8 per cent annual growth rate for M 1 suggested for the last half of the year in the recent chart show would be more than sufficient to support the rate ^of^ economic expansion envisaged in that presentation. However, given the current highly uncertain status of -11financial and economic relationships, it is difficult to be sure what rate of growth in M 1 is appropriate or how much confidence one can place in projections based largely on past experience. (14) Under alternative A, rates of growth in the other monetary aggregates are projected to slow significantly after August. The degree of expected slackening is considerably smaller than for M1, however, reflecting both the probability of somewhat stronger bank credit demands and increased success in competing for consumer-type deposits in an environment of lower market interest rates. Also Government deposits are assumed to remain at higher than normal levels, as the Treasury hedges against the possibility of a sudden cash-in of special Treasury certificates by foreign central banks. Under alternative A banks would probably have to press more actively to obtain CD funds than under alternative B in order to offset the slower growth in demand accounts. Under alternative B, growth rates for both M2 and the credit proxy show little change from the third to fourth quarters the lower interest rates realized under on the assumption that ^that^ alternative would be associated with a greater improvement in time deposit performance. (15) Holding the Federal funds rate close to the recently pre- vailing rate would be likely to act as a brake on further declines in other interest rates. In short-term markets, the heavy foreign central bank demands which have so strongly intensified recent downward pressures on Treasury bill rates should soon abate. In these circumstances, a reversal in bill rates can be expected, and that reversal could be particularly sharp if the Federal -12- funds rate is held unchanged and dealer financing costs therefore remain relatively high. Such a development would tend to be reflected in interest rate expectations in longer-term markets as well, where underlying supplydemand relationships might otherwise maintain downward (16) pressure on rates. While the market probably has already discounted some re- duction in the Federal funds rate, sizable downward movement--say, to the lower end of the range specified in alternative B--would undoubtedly be interpreted by the market as a significant policy move. This would encourage further yield declines in both short- and long-term markets. It is possible that such a move could carry rates to unsustainably low levels, but, on the other hand, it is still unclear whether the decline in market yields to date has fully discounted the changed outlook on inflation. (17) Alternative C, as noted earlier, differs from B only with respect to the indicated operating techniques. This alternative is provided in the event the FOMC may wish to move in the direction Committee on the Directive. recommended by the If the public appetite for demand as against time deposits proves different from that assumed in the alternative B specifications, for example, the Committee might nevertheless wish to provide only the quantity of reserves consistent with those projections. In that event, the market would have to adjust for any resultant reserve excess or deficiency. This would imply the possibility of significantly larger the changes in money market conditions, however, ^and^Committee may wish to set outside limits of acceptable variation in the Federal funds rate--perhaps -13a band of plus or minus one percentage point around the 4-3/4 per cent midpoint of the funds rate range specified under alternative B. (18) If the Committee adopts alternative C it may want to instruct the Manager to make his operating decisions on the basis of available evidence regarding the relationship between the actual supply of reserves and the supply considered to be best calculated to promote growth in the monetary and credit aggregates at the desired rates. In addition, the Manager might be given leeway to adjust the target paths for total and nonborrowed reserves to take account of deviations in U.S. Government deposits and distribution between reserve city and country banks from original prodeposit^ ^in jections. The Manager might also be advised that in making day-to-day operating decisions he should refer particularly to information on nonborrowed reserves, but should also take into account data on member bank borrowings for what they indicate about both the behavior of total reserves and the degree of tension in the banking system. Similarly, he might be instructed to use information on the cost of reserves--as reflected primarily in the Federal funds rate--as a supplementary and early indicator of the effective supply of reserves in the market. (19) Shown in the table below are monthly and weekly aggregates reserve paths consistent with alternative C. The indicated percentage growth rates for reserves are far above those projected for M 1 and M 2 chiefly because of the use of reserves to support sharply increased levels of certain types of deposits (mainly Government deposits) not included in M 1 and M 2 . -14Total and Nonborrowed Reserve Paths--alternative C (Daily averages in millions of dollars, seasonally adjusted) Nonborrowed Reserves Total Reserves August September December 30,890 31,690 32,180 31,715 32.187 32,895 Per Cent Annual Rates of Growth August September 17.0 18.0 16.5 31.0 3rd Q. 1971 4th Q. 1971 11.5 9.0 11.5 6.0 Weekly Paths Total Reserves Seasonally Adjusted 1/ Not Seasonally Adjusted Nonborrowed Reserves Seasonally Adjusted 1/ Not Seasonally Adjusted August 25 31,604 30,270 30,739 29,720 September 1 8 15 22 31,929 32,478 32,226 31,955 30,466 30,940 30,817 30,721 30,137 32,007 31,707 31,530 29,916 30,390 30,267 30,171 1/ The level of this series also reflects step adjustments made in the past to avoid discontinuities because of reserve requirement changes. -15(20) Total reserves for both August and September would be expected to increase at around a 17.0 per cent annual rate of growth. In the fourth quarter the rate of increase would be reduced to about half the AugustSeptember rate. Nonborrowed reserves after declining sharply in July--re- flecting the over $300 million increase in member bank borrowings--are expected to track very closely to total reserves on the assumption that borrowings will show no appreciable further increase on average in August. In September, however, borrowings are projected to average sharply lower than in August, so that nonborrowed reserves would have to increase at a very rapid pace if targeted rates of growth in M 1 and M 2 are to be achieved. If the decline in borrowings needed to achieve the alternative B paths is somewhat overstated, the growth in nonborrowed reserve could be commensurately smaller. -16Possible directive language (21) This section presents three possible alternatives for the second paragraph of the directive corresponding to the approaches to policy and operating techniques outlined in paragraph ( 9) above. (22) Alternative A. This language is proposed for possible use if the Committee decides to call for maintaining about the prevailing money market conditions, subject to a proviso clause. "To implement this policy, current the of account taking [DEL: Treasury the markets, capital in developments of and financing monetary inCommittee growth moderate more achieve to seeks aggregates ahead.] months he overt System open market operations until the next meeting of the Committee shall be conducted with a view to MAINTAINING ABOUT THE PREVAILING [DEL: and] reserve bank achieving money market conditions; [DEL: objectives] these with consistent PROVIDED THAT MONEY MARKET CONDITIONS SHALL BE MODIFIED IF IT APPEARS THAT THE MONETARY AND CREDIT AGGREGATES ARE DEVIATING SIGNIFICANTLY FROM THE GROWTH PATHS EXPECTED." If the Committee adopts this alternative, it market conditions notedfor alternative A in may wish to consider the money paragraph (10) as a description of "prevailing" conditions, and for purposes of the proviso clause to adopt the growth paths for the monetary and credit aggregates discussed earlier in connection with alternative A as the "expected" paths. The proviso clause has been formulated in two-way terms--guarding against shortfalls as well as excesses relative to the expected paths--on the assumption that -17- the Committee would not want to see the aggregates grow at less than the indicated rates, which for the months beyond August are below those associated with the directive the Committee adopted at its preceding meeting. If the Committee favors a money market orientation for its primary instruction but would prefer to see the aggregates grow at rates somewhat above those projected under unchanged money market conditions, it might modify the alternative A language to call for operations with a view to "attaining somewhat less firm money market conditions" and associate with the revised language the money market and aggregate specifications described above in connection with alternative B. (23) Alternative B. This language is proposed for possible use if the Committee decides (a) to formulate its primary instruction in terms of desired growth rates in the monetary and credit aggregates, and (b) to adopt as targets growth rates similar to those associated with the directive adopted at the previous meeting, as discussed above in connection with alternative B. current the of account taking "To implement this policy, [DEL: markets,] capital in developments of and financing Treasury more] achieve Committee seeks to PROMOTE [DEL: the moderate growth in mone- tary AND CREDIT aggregates over the months ahead. System open market operations until the next meeting of the Committee shall be conducted with a view to achieving bank reserve and money those] market conditions consistent with THAT [DEL: objectives." -18If the Committee favors an aggregate orientation for its primary instruction but would prefer to see the aggregates grow at rates somewhat below those discussed in connection with this alternative, it could adopt the language of alternative B (or C) but associate with such language the growth rates discussed in connection with alternative A. (24) Alternative C. This language is proposed for possible use if the Committee decides to seek the objectives discussed above in connection with alternative B, but would prefer to have the Desk shift emphasis from money market conditions to bank reserves in implementing policy. current the of account taking "To implement this policy, [DEL: markets,] capital in developments of and financing Treasury the Committee seeks to PROMOTE [DEL: more] achieve moderate growth in monetary AND CREDIT aggregates over the months ahead. System open market operations until the next meeting of the Committee shall be conducted with a view to achieving bank reserve [DEL: and market] money conditions consistent with THAT [DEL: objectives; these] PROVIDED, HOWEVER, THAT OPERATIONS SHALL BE MODIFIED IF NECESSARY TO AVOID EXCESSIVE FLUCTUATIONS IN MONEY MARKET CONDITIONS." A proviso clause designed to guard against excessive fluctuation in money market conditions is suggested in this alternative for reasons discussed in paragraph (17). As will be noted, the primary instructions of this alternative differs from the language of alternative B only in the deletion of the words "and money market" from the phrase "with a view to achieving bank reserve and money market conditions." -19Alternative Weekly Paths of Key Monetary Aggregates (Seasonally adjusted, billions of dollars) M1 M2 Alt. A Alt. B Credit Prosy Alt. A Alt. B 230.2 459.0 459.0 354.5 354.5 229.3 229.0 228.9 231.6 458.1 458.0 458.0 460.8 458.1 458.0 458.2 461.1 353.4 353.3 352.6 352.7 353.4 353.3 352.8 353.0 Alt. A August September 230.2 229.3 25 Alt. 229.0 228.8 231.4 B Credit Proxy Total Reserves Alt. A August September 25 Alt. 354.5 354.5 31.6 31.6 353.4 353.3 352.6 352.7 353.4 353.3 352.8 353.0 31.9 32.5 32.2 31.9 31.9 32.5 32.2 32.2 B Alt. A Alt. B STRICTTY CONFIDENTIAL(FR) CHART 1 8/24/71 MONETARY AGGREGATES MONEY SUPPLY M1 BILLIONS OF DOLLARS 230 9.0% PATH 220 -210 i i i ! i i i i i I I 1 1 4 41 1 I I ! i ;- MONEY SUPPLY M2 8.0% P, (8/18/71: i 1 1970 - Actual Currently Projected A 1971 --- Wkly Path, Indicated at FOMC Meeting 7/27/71, M ! I J J A S 7- Longer Run Path (FR) 8/20/71 STRICTLY CONFIDENTIAL CHART 1A MONETARY AGGREGATES ADJUSTED CREDIT PROXY BILLIONS OF DOLLARS 355 -335 9.0% -325 348 344 34V I I IJ J I- RESERVES 7.5% 32 31 27 1971 1970 J 1 A I M J 1 A a '71 --- Actual Currently Projected --- Wkly. Path, Indicated at FOMC Meeting (7/27/71) .. Longer Run Path CHART 2 8/20/71 INTEREST BEARING SOURCES OF BANK FUNDS BILLIONS OF DOLLARS TOTAL TIME AND SAVINGS DEPOSITS TIME AND SAVINGS DEPOSITS OTHER THAN CD'S CD'S CHART 3 MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDITIONS 1970 1971 INTEREST RATE Short-term 1970 1971 INTEREST RATES Long-term 1970 1971 Table 1 STRICTLY CONFIDENTIAL (FR) PATHS OF KEY MONETARY AGGREGATES I II I L- Path as of July 27 2 1971 I II Total Reserves Narrow Money Supply (M1) 1/ Period August 20, sof 27 Actuals & Current Prol 8 Actuals & Current Prof. Monthly Pattern in Billions of Dollars Jan. Feb. Mar. 214,8 217.3 219.4 423.0 430.8 437.6 334.1 337.7 340.2 30.2 30.5 30.3 Apr. May Tune 1971 221.1 221,9 225.6 442.0 447.3 451.4 341.7 343.8 345.7 30.8 31.3 31.3 Ju lv 227.9 229.0 Aug. 227.6 (229.0) 454.5 457.0 454.2 (457.2) 347.6 150.8 347.9 (35 1.3) 31.3 (31.7) 10.9 6.5 ( .0) 11.0 6.6 (1115) Annual Percentage Rates of Change--Quarterly and Monthly 1971- 8.9 ts1t tr. 2nd Ott. 3rd Qtr. 17.8 12.6 (7.0) 11.3 9 0 ( 8.0) 8.0 9.0 lan. Feb. Mar 1.1 14.0 11.6 11.5 22.1 18.9 10.5 12.9 8.9 12.2 11.4 9.2 Apr. 1971: 9.3 15.9 9.1 12.1 14.4 11.0 5.3 7.4 6.6 2.7 17.6 7.6 f11,5) 0.3 (17.0) May Tune 12.0 6.0 Aug. 10.6 ( 7,5) 8.0 7.4 ( 8.0) 6.5 6.5 11.0 0.2 Weekly Pattern in Billions of Dollars June 10 225.4 452.0 Tuly 1971- 227 6 228.7 227.4 227.7 227. 0 454.2 455.2 4593. 454.5 454.0 228.2 229.1 228.9 229.3 226.7 228.7 229.2 (230.2) 455.2 456.5 456.7 457.8 454,2 456.4 457.4 (458.9) Aug. 7 14 21 28 4 11 18 pe 25 -I-~ NOTES -- - 347.7 348.9 349.8 350.8 351.9 tf^^k^^^^^^^^^^^^ Annual rates of change other than those for the past are rounded to the nearest half per cent. Data sh1own in parenthesis are current projections. I/ Currency plls private demand deposits. 2/ M plus time deposits other than large CD's. pe--Partially estimated. FR712-D ev 2/16/71 STRICTLY CONFIDENTIAL (FR) Table 1-A PATHS OF KEY MONETARY AGGREGATES August 20, 1971 Billions of Dollars 1971: 6 7 6.2 4.8 Mar Apr May June 235.3 240 9 246.1 208.2 213.5 218.3 27.1 27.4 27 8 S4 Jan I eb 248 3 221.0 223.4 225.8 27.3 27 9 28.6 it. z 254.4 3.9 3.3 4 3 July Aug 3.7 ( 6.3) 1 .4 4 256.8 259.0 256.8 (258.2) 226.6 228.0 226.4 (228.2) 30.2 31.0 4.1 30.1 (30.0) (3.7) Annual Percentage Rates of Change-Quarterly and Monthly 1971: 1st Qtr. 2nd Qtr 3rd Qtr 27.3 13.5 ( 8.5) 10.0 7.0 27.2 13.7 (6.0) Tan. Feh Mar 25.5 28.6 25.9 22.3 30.5 27.0 Apr. Nay june 1971. 10.7 15.6 14.3 14.8 13.0 12.9 11. ( 6.5) 13.5 10.5 July Augp 4.5 7.5 4.3 (8.5) Weekly Pattern in Billions of Dollars Tune 30 2.7 255.4 226 6 28.8 4 7 Tlly 2 5 2.9 4.0 4.1 256 0 256.6 3 7 1071: 226.6 226 5 226.5 226.8 227.0 30.5 29.6 30.1 30.1 30.5 4 2 4 1 4.4 4.1 3.7 3.8 4 3 4.5 4.6 5.7 30.9 31.0 31.1 31.1 3.7 41 3.6 (88) 227.5 227.8 228.2 (228.8) 30.0 5 0 227.0 227 .4 227.8 228.5 Aug. NOTES: 7 34 4 11 18 pe 25 25 7.1 256.9 257.5 25 7.9 25 8.4 25 8.9 259.6 257.5 257.5 258.2 (258.9) --- ' - * - Annual rates of change other than those for the past are rounded to the nearest half per cent. Data shown in parenthesis are current projections. pe - Partially estimated, & ~-.I. 29.7 30.0 (30,1) - a i (3.6) -- FR 712-K Rev2/16/71 Table 2 CONFIDENTIAL (FR) AGGREGATE RESERVES AND MONETARY VARIABLES Pero RETROSPECTIVE CHANGES, SEASONALLY ADJUSTED (Annual rates in percent) Reserve Aggregates' Monetary Variables 1 2 3 Total 4 Money Supply Adjusted 5 Member Total Nonborrowed serves Reserves Reserves epositsa Credit Proxy Total Currency Deposts S_ _ Anumally 1968 1969 1970 + 7.8 - 1.6 + 6.4 + 6.0 n.a. n.a. + 8.3 + 7.8 + 9.5 + 9.0 - 4.0 +11.8 - 3.0 8 Private Demand Deposits Time DepOsits Adusted Adusted + 7.9 + 2.4 + 5.1 +11.1 - 5.0 + 5.4 + 7.4 + 6.0 + 6.3 4 3.1 August 20, 9 1971 Addenda 10 Thrift Norbank Commercial Instit. Deposits Paper Deposs Paper +18.4 + 6.3 + 3.4 + 7.8 n.a. n.a. + 7.3 Semi-annuall 1st Half 1970 2nd Half 1970 - 0.2 +13.0 + 1.9 +17.1 + 3.3 +20.0 + 3.5 +12.9 + 5.9 + 4.8 + 7.8 + 4.6 + 5.3 + 4.7 + 7.8 +27.9 + 4.7 +10.6 +12.8 1st Half 1971 + 8.9 + 8.2 +13.5 + 8.8 +10.3 + 9.4 +10.5 +20.8 +20.7 -18.2 - + 0.6 + 6.0 +24.1 +15.1 + 0.5 + 6.5 +17.2 + 8.3 + + + + + + + + + + + + + 1.4 + 2.5 + 7.0 + 9.3 +11.6 +17.8 +14.1 +32.2 + 21.8 + 1.7 Qaurter lv 1st Qtr. 1970 2nd Qtr. 1970 3rd Qtr. 1970 - 2.9 + 2.6 +19.1 4th Qtr. 1970 + 6.6 + 4.1 +24.4 + 9.4 1st Qtr. 1971 +11.0 +6.6 +11.0 +5.3 +17.0 + 9.6 +10.9 + 6.5 + 8.9 +11.3 + 9.0 + 9.6 + 8.9 +11.8 +27.3 +13.5 +23.3 +17.2 -24.7 -12.5 Apr. May June +21.3 -13.9 + 0.5 +25.4 -19.0 + 6.2 +16.8 + 5.8 +13.7 - 1.2 + 7.0 + 9.9 + 5.2 + 2.3 +10.3 +15.3 + 2.5 +10.5 + 3.0 + 2.2 +19.7 +10.9 +11.4 + 8.1 + 5.3 + 7.3 +34.4 +18.9 -30.0 July Aug. Sept. + 6.0 -16.1 +48.8 +40.1 +22.7 +29.2 +19.0 +18.1 +23.2 + 9.7 + 5.7 + 6.8 4 5.7 + 7.5 + 2.5 + 4.4 + 8.9 + 6.6 +35.6 +11.9 + 5.9 +10.0 -87.5 +28.8 +29.8 +49.6 Oct. Nov. Dec. - 1.9 + 3.6 +10.1 +13.1 + 1.1 + 7.0 +16.5 + 1.1 + 2.8 + 6.2 + 7.5 + 4.9 + 4.9 - 0.7 + 2.2 + 6.6 +20.3 +15.1 +28.8 +16.6 + 9.4 +14.5 +32.4 -28.7 +58.1 Jan. Feb. Mar. +12.2 +11.4 + 1.1 +14.0 411.6 + 9.3 +15. 2 + 7.4 + 9.8 + 9.7 +12.0 + 9.5 - 1.4 +25.1 +18.5 +24.9 +21.8 +14.2 + 5.3 - + 9.1 +10.6 + 7.1 +11.7 +25.5 +28.6 +25.9 +10.7 +15.0 +14.3 +11.3 - 9.0 -10.9 -55.2 + 4.4 +11.1 +10.5 +12.9 + 8.9 + 5.3 + 7.4 2nd Qtr. 1971 1970: 1971: +23.3 +27.5 +18.4 + 9.2 + 2.7 Apr. May June July 1 ____ NOTE: +17.0 +0.2 0.3 _I ____II_____I 0.4 + 4.4 +22.8 + 8.8 +15.1 + 8.8 + 9.7 +12.4 - 6.2 -13.1 ---- - 4.5 +21.4 +16.1 +19.3 +14.9 +12.2 -8.8 6.6 L'7.6 -- _- 5.9 5.8 6.1 3.4 L 6.1 9.4 3.3 5.8 ___- 5.3 5.3 6.7 2.7 +16.0 +12.2 + 7.8 +17.6 + 9.7 +10.3 I____ +14.9 +16.1 + 7.5 -16.2 +20.4 - 7.2 -15.8 -26.3 -32.1 - p - PTetiminary. FR 712 - E Aggregate reserve series have been adjusted to eliminate changes in percentage reserve requirements against deposits, but reserve requirements and requirements on bank-related commercial paper are included beginning October 1, 1970. on Eurodollar borrowings are included beginning October 16, 1969, CONFIDENTIAL (FR) Table 3 AGGREGATE RESERVES AND MONETARY VARIABLES August 20, 1971 SEASONALLY ADJUSTED (In millions of dollars) (In billions of dollars) 28,001 27,722 27,723 26,966 26,615 26,782 27,823 27,523 27,536 284.8 282.9 286.2 205.2 204.5 206.6 46.2 46.4 46.7 1 159.0 158.1 159.8 193.3 193.5 195.3 10.6 10.6 11.5 182.7 182.9 183.8" 304.8 303.4 306.1 29.4 30.0 30.4 28,216 27,890 27,902 27,350 26,916 27,056 28,046 27,692 27,713 290.2 289.1 290.5 208.3 209.2 209.6 47.1 47.7 47.8 L61.2 1 161.6 161.9 198.5 200.3 202.2 12.9 13.2 13.2 185.6 187.1 189.0 309.6 309.3 311.1 31.2 31.7 30.9 July Aug. Sept. 28,041 28,585 29,240 26,694 27,780 28,708 27,896 28,408 29,024 296.0 303.2 308,0 210.6 211,8 212.8 48.1 48.2 48.2 162.5 163.7 164.6 208.2 213.2 218.5 191.3 184.2 196.8 315.8 324.5 28 7 28.5 29.7 Oct. NOV. Dec. 29,385 29,925 28,928 29,033 29,584 28,134 29,233 29,703 310.6 314.0 319.6 213.0 213.5 214.6 48.5 48.7 48.9 164.5 164.8 165.7 222.2 225.0 230.4 199.1 201.1 204.4 324.8 326.7 331.2 30.5 29.7 31.2 Jan. Feb. Mar. 30,229 30,515 30,748 29,801 30,176 30,398 30.029 30,255 30,534 323.9 329.1 333.2 214.8 217.3 219.4 49.2 49.6 50.0 165.5 167.7 169.4 235.3 240.9 246.1 208.2 213 5 218.3 334.1 337.7 340.2 31.0 30.7 29.3 Apr. May .Tune 30,816 31,253 31,257 30,644 30,961 30,801 30,611 30,998 31,046 336.6 339.7 341.2 221.1 223.9 225.6 50.5 50.9 51.2 170.5 173.0 174.4 248.3 251.4 254.4 221.0 223.4 225.8 341.7 343.8 345.7 29 4 29.0 28.3 July p 1971: Jan. Feb. Mar. Apr. F ay June 1970: 31,266 30,465 31,094 343.7 227.6 51.7 175.9 256.8 226.6 347.9 27.6 7 14 21 28 31,032 30,831 31,552 31,414 30,462 29,950 30,849 30,769 31,026 31,135 31,332 343.2 343.4 343.3 344.4 228.7 227.4 227.7 227 0 51.8 51.7 51.8 51.7 176.9 175.7 176.0 175.3 256.0 256.6 256.9 257.5 226.5 226.5 226.8 227.0 347 3 347.5 347.6 348.5 28.1 28.3 28.3 28.3 4 p 11 p 31,813 31,469 31,058 30,976 31,357 31,489 344.2 344.5 226.7 228.7 51.8 51.9 174.9 176.8 257.5 257.5 227.5 227.8 348.0 348.5 27.9 27.8 29,474 321,9 Week endIng: 1971: July Aug. NOTES. 30,346 Aggregate reserve series have been adjusted to eliminate changes in percentage reserve requirements against deposits, Euro-dollar borrowings are included beginning October 16, 1969, and requirements on bank-related commercial paper are 1970. Adjusted credit proxy includes mainly total member bank deposits subject to reserve requirements, bank-related dollar horrowings of U.S. banks. Weekly data are daily averages for statement weeks. Monthly data are daily average paper figures which are for last day of month. p - Preliminary. but reserve requirements on included beginning October 1, commercial paper, and Euroexcept for nonbank commercial FR 712 - F Table 4 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Free eri Excess reserves reserves Member I Banks Borrowings Reserve Total C Major banks Outside N.Y. 8 N.Y t Other Country Monthly (reserves weeks ending in)' 1970--January February March April May June July August September October November December 759 916 751 - 687 765 736 -1,134 706 374 - 274 199 84 169 210 129 178 159 171 183 175 235 193 210 264 928 1,126 880 865 924 907 1,317 881 609 467 409 348 148 106 90 227 165 140 218 143 101 12 42 36 287 317 225 331 241 289 460 278 115 40 17 16 232 289 287 119 228 217 348 273 274 313 294 265 261 414 278 188 290 261 291 187 119 102 57 30 1971--January February March - 140 71 120 238 264 192 378 335 312 45 29 41 36 30 17 262 248 238 35 29 16 - 2 6 303 672 154 218 211 158 152 212 514 830 15 78 103 77 9 36 85 223 119 60 159 270 9 38 167 260 - 138 245 380 72 545 32 282 407 277 472 354 71 -82 26 60 -63 20 250 249 284 266 26 28 43 42 April Mv June July p 1971--Jan. 6 13 20 27 02 Feb 3 10 17 24 - 46 42 264 67 237 205 297 317 283 247 561 250 --114 - --121 ,- 253 229 280 228 30 18 46 22 Mar. 3 10 17 24 31 - 88 339 25 265 119 170 82 265 68 376 258 421 290 333 257 -108 46 52 -- 1 51 -15 18 241 249 231 251 217 16 13 13 15 22 Apr. 7 14 21 28 277 208 81 48 197 150 84 176 -17 -42 --- - 80 58 3 128 1 34 184 127 79 86 33 6 4 14 5 12 19 26 - 191 131 204 93 365 230 102 174 174 99 306 267 46 39 134 91 40 20 47 36 61 22 74 84 27 18 51 56 June 2 9 16 23 30 - 361 80 149 409 518 285 73 254 210 212 646 153 403 619 750 171 46 86 103 107 100 27 4 161 192 217 25 152 202 203 58 55 161 153 July 7 14 21 28 - 384 986 839 478 277 5 282 67 661 991 1,121 545 -252 47 9 149 309 344 88 257 189 397 236 255 241 :33 212 Aug. 4 p 11 p 18 p - 294 569 891 471 24 289 765 593 1,180 122 47 245 307 328 335 293 218 262 May p - Preliminary. 43 0 336 308 Table 5 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) Total Federal Period U.S. Government securities Reserve credit (Excl. float) holdings Federal Total Repurchase Bills 1/ I Other Agency agreements Securities Bankers' Year: 1969 (12/25/68 - 12/31/69) 1970 (12/31/69 - 12/30/70) +5,539 +3,351 +5,192 +4,276 +4,279 ( -) +3,220 (- 143) + 707 +1,180 + - 206 124 1971--Jan. 6 13 20 27 + 938 185 + 51 327 64 + 83 + 59 13 - 204 428 19 236 S 65 - + + + - + 534 + - + 109 - 3 10 17 24 + 8 - 236 - 928 + 61 171 +1,082 - 518 + - 26 61 333 218 (+ ((+ (- 74) 412) 412) 367) 3 10 17 24 31 + + + 279 275 761 516 502 + + + + + + + 120 407 64 60 5 (+ ((4 ((+ 367) 204) 204) 107) 107) + 207 7 14 21 28 + 155 - 255 + + 148 + 145 -66+ -423 43 + + + + 4 128 360 30 ((+ (+ (- 82) 12) 70) ) 5 12 19 26 + + + + 771 201 503 115 + + + + + 384 ( --9- 173 ( -+ 400 (- ) ) ) + + 256(-- ) + 2 9 16 23 30 + 305 13 (- 974 - 57 - 418 2/ 47 2/ 106 2/ +1,059 + - - 439 - 463 + 348 +1,151 7 14 21 28 + + + 362 364 743 957 373 74 562 359 + + + - + + + - (57) (87) (+ 144) ( -) 4 p 11 P 18 p + 336 - 205 + + + + + 484 141 1 - 73 acceptances Feb. Mar. Apr. May June July Aug. 1/ 2/ +1,523 54 + 202 + 160 +1,156 722 108 153 81 286 414 736 432 530 712 272 304 144 - 131 208 25 27 (+ 97) (+ 46) (- 159) (+ 85) - 67 63 + - 16 + + 87 110 643 + 6 - 16 + 85 - 509 - 68 97 - 41 104 + 68 + 62 + 153 + + 604 554 372 + 90 - 90 + 36 + 124 + 84 + 113 + - 17 298 50 73 + 47 - 68 11 7 328 99 167 + 50 71 + + - 56 - 168 ) - 70 ( -) (39) (+ 39) ( -) - 73 + 106 + 209 + + 162 + 27 - + 35 + + 207 134 537 - 586 + - 40 49 157 101 ( -- ) 50 (-70) 25 (+70 ) - + 109 9 7 6 4 6 8 -27 119 Figures in parenthesis reflect reserve effect of match sale-purchase agreement. Includes effect of changes in special certificates of $ +94 million of the week of June 9, and $ -510 million of the week of June 23. p - Preliminary + - + - 23 9 + 47 - 20 + - 47 21 -14 -25 -18 $ +416 million of the week of June 16, 35 28 Member banks borrowings + - 245 884 Table 6 MAJOR SOURCES AND USES OF RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) r e s e r v e s of a upp ly a ffecting s Factor Federal Reserve eriod credit (exl. float) e cfloat / 1/ Currency Gold outside stock banks stock banks float)~~~o i n ( S i g n Treasury Float operations i c a t icate a +5,539 1971--Tan. + + 6 13 20 +3,351 27 Feb. Mar. 3 10 17 24 + - 3 10 17 24 31 Apr. 7 14 21 28 May 5 12 19 26 June 2 938 534 64 S204 -2 +1,150- - 385 ---- 8 236 -2, 6776 -3, 122 + 773 + + 188 -+ - + ±+ - 813 63 + 108 - 275 +1,523 + 289 - 256 50 - 928 + 418 + + + 279 275 761 516 506 99 - 105 + + + 279 275 348 54 + + + + 771 201 503 115 + 508 - 186 60 243 S249 - 131 - 384 + 307 - 171 - 229 - 248 + 83 + 218 + 305 974 + 202 + 160 +1,156 + 169 + 522 + 398 362 364 743 957 - 28 + + + - 4 p 11 p 18 p + + 336 205 484 9 16 23 30 July Aug. 7 14 21 - 648 - 776 54 - 244 + 176 + 204 + 266 - 86 - 114 1/ For retrospective details, see Table 5. I/ Includes $400 million in special drawing account. p - Preliminary. - 17 + 125 deposits deposits and and gold loans F.R. accounts reserves)s on effect Year: 1969 (12/25/68 - 12/31/69 1970 (12/31/69 - 12/30/70 Other nonmember Foreign re e r v e s ) reserves - 45 - 32 - 515 + + 92 20 4+ - 40 37 - - 147 88 + + 280 + 85 9 + - 227 50 368 276 + 150 + 308 + - 173 4- 171 24 440 252 99 + 217 + 187 + + + + + - 306 561 406 188 + 317 + 111 + + 81 178 146 250 351 + - 8 4 + 305 + + 402 542 533 844 4- + + - 752 185 357 304 371 - 50 - 26 34 - 130 + 7 + 97 4+ 23 72 + + - + - 127 70 + 205 res 168 167 350 306 250 673 191 889 + 376 + 217 + 11 - 453 e reserves + - + - 327 291 122 291 334 Excess r + 111 - 898 -1,655 + + - total reserves rseral + 657 + 144 + 727 -1,047 54 1 497 211 421 177 = Bank use of reserves inquired + 108 / + + + - Change +1,340 +1,257 + 241 + 667 + 235 + 241 4 301 10 = 99 - 45 - 315 - 33 28 + 228 + 33 - + 28 43 + 82 + 110 + - 89 29 - 1 + + 27 + +1,448 +1,163 + 24 213 401 S 94 89 148 61 - 513 + 60 + 190 + 183 - 197 69 - 127 33 - 135 - 128 + 72 - 212 + 181 - 44 + 22 + 45 - 272 + 277 - 215 + 404 - 447 + 265 Table 7 Reconciliation--Money supply and Credit Proxy Adjusted (Billions of dollars, not seasonally adjusted) _ Levels, 1971 Item March Junel July 6.2 226.1 226.9 449.6 452.7 2.3 7.2 13.3 Money supply--M 1 217.4 223.6 2. Plus: Time deposits other than large CD's 218.9 Enuals: 436.3 Money supply--M, 2nd Qtr., 1971 June to July, 1973 225.9 1. 3. Dollar Change Plus: 4. U.S. Gov't. deposits at member banks 4.5 4.4 5.7 -0.1 4.3 4.0 4.2 -4.3 0.2 28.0 28.4 29.5 0.4 1.1 7.0 4.4 4.1 -2.6 Time deposit of U.S. Gov't. and commercial banks 1.9 1.9 1.9 F.R. Float 2.7 2.7 3.0 Demand deposits at nonmember banks 38.3 39.9 40.5 Time deposits at nonmember banks 56.5 58.8 59.4 Currency component of the money supply 49.5 51.1 51.9 Deposits at Edge Act Corps., agencies and foreign branches 0.8 0.7 0.8 Foreign deposits at F.R. 0.4 0.4 0.4 5. Net domestic commercial bank deposits at member banks 6. Large CD's 7. Nondeposit funds 1/ 8. 9. 0.3 0.3 Less: 10. 11. 12. 13. 14. 2.3 0.8 -0.1 Equals: 15. Credit Proxy Adjusted 339.2 344.7 -348.2 ,.5 p - Preliminary. 1/ Includes borrowings from banks own foreign branches,commercial paper and other minor item. NOTE: Sums of levels and changes -may not add because of rounding. Table 7A Reconciliation--Money Supply and Credit Proxy Adjusted (Billions of dollars, seasonally adjusted) 1971 Levels, ]March Item June July June to July, 1971 2nd Qtr. 1971 Dollar Percentage Dollar Percentage Change Change Change Change 1. Money supply--M I 219.4 225,6 227.6 6.2 11.3 2. Plus: Time deposits other than large CD's 218.3 225,8 226.6 7.5 437.6 451.4 454.2 13.8 10.6 13.7 12.6 3. Equals: 2.0 Money supply-- M2 Plus: 4. U.S. Gov't. deposits at member banks 5. Net domestic commercial bank deposits at member banks 6. Large CD's 7. Nondeposit funds 1/ 4.8 3.9 3.7 -0.9 -0.2 4.7 4.3 4.2 -0.4 -0.1 27.8 28.6 30.1 0.8 1.5 7.0 4.4 4.1 -2.6 -0.3 50.0 51.2 51.7 1.2 0.5 91.8 95.7 96.7 3.9 1.0 340.2 345.7 Less: 8. 9. Currency component of the money supply Deposits at nonmember banks, and other items 2/ Equals: 10. Adiusted Credit Proxy 347.9 2.2 1/ Includes borrowings from banks own foreign branchcs, commercial paper and <other minor items. 2/ Other items include imoney supply type deposits at Edge Act corporations and domestic branches of foreign banks. NOIE: Suams of leveisand changes may not add because of rounding. p - Preli-minary. Table 8 Reserve Absorbtion by Type of Deposit--Selected Periods (Millions of dollars, seasonally adjusted) March 1971JuLy 1971 Dec. 1970July 1971 Change in total reserves Reserves absorbed by: Demand deposits adjusted Interbank deposits U.S. Government deposits Time and Savings deposits Eurodollars and Commercial paper 1/ Excess reserves Adjustment due to lagged accounting Per cent of total reserve change absorbed by: Demand deposits adjusted Interbank deposits U.S. Government deposits Time and Savings deposits Eurodollars and Commercial paper 1/ Excess reserves Adjustment due to lagged accounting 1/ Dec. 1970March 1971 1,341 823 518 812 329 -387 810 289 213 -219 495 523 116 -168 315 -111 -51 -85 -9 -26 -42 -61 139 -200 60.6 24.5 -28.9 60.4 35.1 25.9 -26.6 60.2 101.0 22.4 -32.4 60.8 -8.3 -3.8 -10.3 -1.1 -5,0 -8,1 -4,6 16,9 -38,6 Member bank borrowings from own foreign branches subject to Regulation M reserve requirements and commercial paper subject to Regulation D.
@FedFRASER