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Strictly Confidential (FR) Class I FOMC Strictly Confidential (FR) Class I FOMC February 2, 1979 February 2, 1979 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Prepared for the Federal Open Market Committee By the staff Board of Governors of the Federal Reserve System STRICTLY CONFIDENTIAL (FR) CLASS I - FOMC February 2, 1979 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) M-1 is estimated to have declined at a 5 per cent annual rate in January, and at a 1½ per cent annual rate over the DecemberJanuary period, considerably below the range specified by the FOMC at its December meeting,1/ as demand deposits have weakened much more than anticipated. Over the two months, shifting of funds from demand deposits into Automatic Transfer Service (ATS) savings accounts and NOW accounts in New York State reduced M-1 growth by about 3 percentage points. In addition to the impact of ATS and NOW's, and the usual lagged effect of higher interest rates, demand deposits may be declining as a result of greatly increased public awareness of options for holding precautionary and transactions balances in various interest-bearing forms in the wake of recent publicity associated with ATS and similar accounts. 2/ 1/ These figures do not incorporate the benchmark revisions based on recently available June 1978 Call Report data for nonmember banks; the revised aggregates will be published on February 8. As shown in Appendix III, the benchmark revision was negligible for M-1; however, the benchmark revision increased M-2 growth by 0.5 per cent, with most of the increase occurring in the second half of the year. The revision in the aggregates for the June benchmark will also incorporate revised seasonal factors. All tables on subsequent pages of the Bluebook (with the exception of the first two tables following the appendices) are based on the revised series. 2/ In December and January, for example, money market funds--both open- and closed-end--increased by about $2.5 billion per month on average, following average increases of about $950 million a month in the preceding two months. -2- Comparison of FOMC Policy Ranges for December-January to Latest Staff Estimates Ranges Latest Estimates M-1 2 to 6 -1.5 M-2 5 to 9½ 0.1 Federal funds rate (per cent per annum) 9¾ to 10½ Avg. for statement week ending Dec. 27 10.25 Jan. 3 10.59 10 9.97 17 10.05 24 10.05 31 10.12 (2) M-2 is estimated to have shown virtually no growth over December and January, and it, too, was much weaker than the low end of the range set by the FOMC in December. Growth in the interest-bearing component of M-2 slowed over the past two months, with outstanding deposits subject to fixed rate ceilings actually declining in continuing adjustment to higher market rates. Net inflows of deposits to savings and loan associations in December-January were only a shade below the October-November pace, as these institutions continued aggressively to offer money market certificates (MMC's). Deposit inflows to mutual savings banks were at a considerably reduced pace over the past two months. (3) With the total inflows of funds to deposit accounts subject to interest rate ceilings remaining weak in December and January, banks issued additional large time deposits--some of which are included in M-2--and probably increased their RP's with nonbank investors. Growth in bank credit slowed to only a 1 per cent annual rate in December, following rapid expansion in the two preceding months, but partial data for large banks suggest that growth in bank credit has picked up in January. (4) Following the December FOMC meeting, the Account Manage- ment immediately raised its Federal funds rate objective from 9-7/8 per cent to 10 per cent or a bit higher. Funds generally traded at rates significantly above this level in the latter part of December and early January, however, as the Desk encountered difficulties in supplying reserves because of a shortage of readily available collateral. On December 29 and on January 12, the FOMC decided that, despite the relatively weak growth of the aggregates, the Desk should continue to seek a funds rate of 10 per cent or a bit higher, and the funds rate has remained around this level since early January. (5) With the funds rate of about 10 per cent, reserves of the banking system changed little on balance over the December-January period. Nonborrowed reserves contracted at about a 1½ per cent annual rate, and total reserves increased at a 2¾ per cent rate; over the first three quarters of 1978, when deposit growth had been strong, these aggregates had grown at 7 to 8 per cent annual rates. Member bank borrowings rose from $700 million in November to about $1 billion in January, as the spread of the funds rate over the discount rate widened slightly. With growth of currency remaining strong, the monetary base continued to rise about a 9 per cent annual rate over the past two months on average, but the rate of growth diminished in January. (6) After coming under renewed selling pressure in the last half of December, the foreign exchange value of the dollar steadied in early January, and has risen considerably in recent days. In early February, the weighted average dollar exchange rate was about 8 per cent above its late October level and more than 2 per cent above its level at the time of the December FOMC meeting. . Toward the end of the period, the United States purchased $2 billion equivalent of foreign currencies, net, virtually all of which was used to repay swap debt. (7) While interest rates rose somewhat further in the weeks immediately following the December FOMC meeting, these increases have been generally more than offset by declines in January. Interest rates on short-term private obligations, in particular, have fallen considerably on balance since the December meeting--generally about 40 to 50 basis points.1/ Mortgage yields have edged up slightly, 1/ The largest declines in short-term yields were those on CD's which, despite large offerings of these instruments, fell 60 basis points in the primary market since the December FOMC meeting. CD rates had increased sharply just before the meeting and the recent declines bring them into more characteristic alignment with other short-term rates. With their costs of funds falling, two large banks have lowered their prime lending rate 1/4 of a point to 11.50 per cent. but bond yields have dropped 10 to 20 basis points. in market interest rates reflected The decline market perceptions of a reduced likelihood of a further tightening of monetary policy in light of the recent performance of the dollar in exchange markets, the slow growth of the monetary aggregates, and the recent modest growth of total business credit demands. An exception to the general pattern of declining market rates has been the behavior of yields on short-dated (3 months or less) Treasury bills, which have changed little on balance since the December meeting. These yields did not decline in association with falling private rates owing to large Federal Reserve sales of bills, the continuation of larger Treasury auctions of 3-month bills since November, and, after mid-January, a shift by foreign official institutions from purchases to sales of bills. (8) The table on the next page shows percentage annual rates of change in related monetary and financial flows over various time periods. 1978 Past Twelve Months Jan.'79 over Jan.'78 Past Six Months Jan.'79 over June '78 Nonborrowed reserves 6.9 3.8 3.6 -3.7 Total reserves 6.9 5.0 2.0 0.3 7.5 9.2 8.6 8.5 8.3 6.9 7.3 3.1 -1.8 -5.0 M-l+ (M-l plus savings deposits at commercial banks, NOW accounts at banks and thrift institutions, credit union share draft accounts, and demand deposits at mutual savings banks). 11.0 5.3 1.0 -4.6 -7.6 M-2 (M-l plus time deposits at commercial banks other than large CD's) 10.4 8.5 6.3 2.1 -1.1 M-3 (M-2 plus deposits at thrift institutions) 12.2 9.4 8.4 5.4 3.7 1976 & 1977 Average Monetary base Past Three Months Jan.'79 over Oct.'78 Past Months Jan.'79 over Dec.'78 Concepts of Money M-1 (Currency plus demand deposits) 1/ M-4 (M-2 plus CD's) 8.6 10.5 8.4 6.9 3.8 M-5 (M-3 plus CD's) 11.0 10.5 9.6 8.1 6.3 Bank Credit Loans and investments of all commercial banks 2/ Month-end basis 11.3 Monthly average 11.4 10.9 -3/ 5.95/ n.a. 11.13/ 57.4 7.4;1/ n.a. Short-term Market Paper (Monthly average change in billions) Large CD's Nonbank commercial paper -0.5 0.2 1.9 2.1 2.1 4.0 1.2 13/ 1.2- 1. 7- 2.3 4.0 5 / n.a. 1/ Other than interbank and U.S. Government. 2/ Includes loans sold to affiliates and branches. 3/ Dec. '78 over Dec. '77. 4/ Dec. '78 over June '78. 5/ Dec. '78 over Sept:.'78. NOTE: All items are based on averages of daily figures, except for data on totalL loans and investments of commercial banks, commercial paper, and thrift institutions--which are derived from either end-of-month or Wednesday statement date figures. Growth rates for reserve measures in this and subsequent tables are adjusted to remove the effect of discontinuities from breaks in the series when reserve requirements are changed. Prospective developments: long-run (9) Alternative longer-run growth ranges for the monetary aggregates and bank credit over the one-year QIV '78 to QIV '79 period are shown in the table below for Committee consideration. Alt. A Alt. B M-1 2½ to 5½ 1½ to 4½ M-2 5 to 7½ M-3 6½ to 9 Bank Credit 8 to 11 (10) 4½ to 7 6 to 8½ 7½ to 10½ Alt. C ½ Current Range to 3½ 2 to 6 4 to 6½ 6½ to 9 5½ to 8 7½ to 10 8½ to 11½ 7 to 10 Alternative B is based on the FOMC's current expectation that M-1 growth over the QIII '78 to QIII '79 period would be around the upper limit of a 4 to 6½ per cent range in the absence of new transactions accounts, such as ATS. At its October meeting, the Committee expected that M-1 growth over the longer-run would be in a 2 to 6 per cent range, which allows for a potential downward effect on M-1 from ATS of 1/2 to 4-1/2 percentage points. On the basis of experience gained with ATS and NOW accounts in New York since that time, the staff believes that it is now reasonable to assume that growth in such accounts will reduce M-1 growth over the QIV'78 to QIV '79 period from what it other1/ Given wise would have been by 3 to 3-1/2 percentage points. that assumption, alternative B proposes a 1-1/2 to 4-1/2 per cent range for M-1; this range assumes--unlike recent M-1 ranges--that the more likely growth of M-1 is at the mid-point rather than near 1/ Including a small allowance for introduction of POA accounts at S&L's this spring. the upper end.1/ The range is narrower than that adopted in October but remains a little wider than earlier M-1 ranges to reflect some continued uncertainty about ATS effects. more and less expansive, respectively. Alternatives A and C are Proposed ranges for the broader aggregates have been lowered, for reasons discussed in paragraphs (13) and (14) below. (11) Expansion of nominal GNP over the longer-run policy period, while projected to moderate, is still expected to be around 10 per cent, and M-1 growth is likely to resume as the public brings its cash balances back into line with growing transactions needs. However, the staff expects that the demand for M-1 will not be so strong over the year, on average, as to require a significant change in the prevailing Federal funds rate if M-1 growth at the midpoint of the alternative B range is to be achieved over the year 1979. With nominal GNP projected to expand more rapidly in the first half of 1979 than in the second, short-term rates could edge higher over the next few months and then recede later in the year. Alternative C, on the other hand, would probably involve an increase in the funds rate from current levels to nearly 11 per cent in the course of the year. By contrast, alternative A would imply a reduction in the funds rate, reaching year-end levels about ¾ of a percentage point below the current level. The staff projection of the quarterly pattern of the funds rate for each alternative is shown in Appendix I. 1/ A return to this more usual interpretation of the M-1 range may be a desirable simplification as reporting under the Humphrey-Hawkins Act is initiated. The 3 per cent midpoint of this range,plus allowance for a 3 to 3½ per cent effect on M-1 from ATS and similar accounts, yields the 6¼ per cent rate of growth that has been the FOMC's basic assumption. (12) The specifications imply further rapid increase in the velocity of M-1, even abstracting from ATS effects, as shown in Appendix II. The recent weakness in M-1 at a time of strong economic growth is considerably larger than can be explained by standard econometric specifications of the relationship between interest rates and money demand and by the shift of demand balances to ATS and NOW accounts. The shortfall in money demand apparently reflects a wider adoption and more intensive use of techniques to economize on cash, induced in part by the sustained high interest rate levels, and the staff has assumed that a downward shift in money demand is likely to continue over 1979. The shift is projected to reduce M-1 growth (and thus increase V-l) by about 2 percentage points over the longer-run policy period. (13) Under alternative B, M-2 growth for the year ahead is expected to be in a 4½ to 7 per cent range and M-3 growth in a 6 to 8½ per cent range, 2½ percentage points lower, respectively, than their current longer-run ranges for the QIII '78 to QIII '79 period. This reduction reflects the slower rate of growth in the time and savings deposit component of these two aggregates that is now expected on average over the course of the year, given recent experience. The public has been diverting larger amounts of funds than expected from deposits subject to fixed ceiling rates to market instruments. Our projections assume a pick-up in growth of such deposits, but not to the pace earlier expected. Growth of the -10broader monetary aggregates is, of course, slower under alternative C and more rapid under alternative A. (14) The range for bank credit growth for alternative B has been reduced to 7½ to 10 per cent--1 percentage point lower than its current range, reflecting the slowing of economic activity, the sustained higher level of interest rates, and the cumulative reduction in bank liquidity. To sustain such credit growth in the face of slower inflows of demand and consumer-type time and savings deposits, banks would have to rely increasingly on large negotiable time deposits, nondeposit borrowings, including Eurodollars, and to reduce further their holdings of liquid assets. Thrifts are also likely to have to rely on FHLB and other borrowings, as well as reductions in their liquidity position, to fund their mortgage lending. Prospective developments: short-run (15) Three alternative short-run specifications for the monetary aggregates and the Federal funds rate are presented below for Committee consideration. Alternative I calls for a reduction in the Federal funds rate by ½ percentage point from the current level; such a decline over the intermeeting period would be most consistent with the alternative A longer-run range. Alternative II calls for no change in the current 9¾ to 10½ per cent funds rate range, with a midpoint near the present Desk objective. This alternative would be consistent with both the alternative B and C longer-run ranges. Alternative III, which calls for increases in the funds rate to around the midpoint of a 10¼ to 11 per cent range, is most -11consistent with longer-run alternative C. (More detailed and longer-run data are shown in tables on pages 12 and 13). Alt. I Alt. II Alt. III M-1 5 to 10 4½ to 9½ 4 to 9 M-2 5½ to 9½ 5 to 9 4½ to 8½ Ranges for Feb.-Mar.1/ Federal funds rate (Intermeeting period) (16) 9¼ to 10 9¾ to 10½ 10¼ to 11 In considering short-run alternatives, the FOMC may wish to take into account the growth rates for the aggregates from the estimated January levels that would be required to reach levels in March and June that are implied by the longer-run ranges. The table on page 14 provides such information for longer-run alternative B.2/ As shown by the middle column of the table, M-1 would have to grow at a 8-1/4 per cent annual rate from January--and M-2 by a 10-1/4 per cent annual rate--to reach the level in March that is implied by growth along the midpoint path of the longer-run QIV '78 - QIV '79 range. Growth for M-1 would have to be about 3 percentage points lower to reach the low end of the alternative B range of growth, and 3 points higher to reach the upper end. Over the five months from January to June, M-1 would have to expand at a 5 per cent annual rate and M-2 at a 7 per cent annual rate to reach midpoint paths. 1/ Ranges for the forthcoming short-run policy period expressed as three-month growth ranges are shown in Appendix V for comparison purposes. 2/ Similar information for alternatives A and C are shown in Appendix VI. -12Alternative Levels and Growth Rates for Key Monetary Aggregates M-11 / M-2 Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C 1979 January February March 360.0 361.9 364.5 360.0 361.8 364.2 360.0 361.7 363.9 875.5 880.2 886.0 875.5 880.0 885.3 875.5 879.7 884.7 1978 QIV 361.4 361.4 361.4 873.8 873.8 873.8 1979 QI QII QIII QIV 362.1 368.0 371.8 374.7 362.0 367.0 369.4 372.2 361.9 366.1 367.3 368.6 880.6 896.6 912.4 929.7 880.3 894.9 908.6 924.2 880.0 893.5 905.6 919.1 6.3 8.6 6.0 8.0 5.7 7.3 6.4 7.9 6.2 7.2 5.8 6.8 QI 0.8 0.7 0.6 3.1 3.0 2.8 QII 6.5 5.5 4.6 7.3 6.6 6.1 QIII 4.1 2.6 1.3 7.0 6.1 5.4 QIV 4.2 3.0 1.4 7.6 6.9 6.0 QIV '78-QII '79 3.7 3.1 2.6 5.2 4.8 4.5 QII '79-QIV '79 4.2 2.8 1.4 7.4 6.5 5.7 4.0 3.0 2.0 6.4 5.8 5.2 Growth Rates Monthly: 1979 February March Quarterly Average: 1979 Semi-Annual: Annual: QIV '78-QIV '79 I/ The staff has assumed that over the longer-run policy period from QIV '78 to QIV '79 M-l growth will be reduced 3 to 3 percentage points by ATS. In projecting GNP, monetary aggregates, and interest rates the staff has carried forward the assumption in most recent Bluebooks that M-l, in the absence of ATS, would increase at a 6% per cent annual rate over the longer-run. Thus, the observed growth of M-l is expected to be 3 per cent over the QIV '78 to QIV '79 period. -13Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) Bank Credit1 / M-3 Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C 1979 January February March 1505.5 1515.5 1526.2 1505.5 1515.0 1525.0 1505.5 1514.5 1523.6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1978 QIV 1493.5 1493.5 1493.5 967.2 967.2 967.2 1979 QI QII QIII QIV 1515.7 1547.0 1578.2 1611.4 1515.2 1543.5 1570.8 1600.5 1514.5 1540.4 1564.6 1590.7 988.0 1010.5 1034.0 1057.1 987.8 1009.7 1032.4 1055.2 987.5 1008.9 1030.8 1053.3 8.0 8.5 7.6 7.9 7.2 7.2 n.a. n.a. n.a. n.a. n.a. n.a. 5.9 8.3 8.1 8.4 5.8 7.5 7.1 7.6 5.6 6.8 6.3 6.7 8.6 9.1 9.3 8.9 8.5 8.9 9.0 8.8 8.4 8.7 8.7 8.7 7.2 8.3 6.7 7.4 6.3 6.5 9.0 9.2 8.8 9.0 8.6 8.8 7.9 7.2 6.5 9.3 9.1 8.9 Growth Rates Monthly: 1979 February March Quarterly Average: 1979 QI QII QIII QIV Semi-Annual: QIV '78-QII '79 QII '79--QIV '79 Annual: QIV '78-QIV '79 I/ w January 1979 bank credit data are not available, therefore, monthly bank credit estimates are not available. -14- Growth Rates from January Levels Required to Achieve Levels Implied by Alternative B Longer-run Ranges (Per cent annual rate) Achieve Level by: Low End of Range Midpoint of Range High End of Range M-1 March 1979 June 1979 1/ Quarter IV '79- 5.3 3.1 2.3 8.3 5.1 4.1 11.3 7.3 5.9 M-2 March 1979 June 1979 1/ Quarter IV '79(17) 7.8 5.8 5.2 10.2 7.6 6.6 The staff believes that if 12.8 9.3 8.2 the 13-1/4 per cent annual rate of growth of nominal GNP projected for the current quarter develops, it will call forth a substantial increase in M-1 in February-March. Under alternative II, M-1 is projected to increase in a range centered on a 7 per cent annual rate, which would put M-1 just below the midpoint of the alternative B long-run path by March. Even such a resurgence in growth would bring the growth rate of M-1 for the first quarter (quarterly average basis) to only a 3/4 per cent annual rate, and would imply another substantial increase in V-1, 2/ at about a 12 per cent annual rate, as shown in Appendix II. (18) Under alternative II, M-2 is expected to expand at a 5 to 9 per cent annual rate range in February-March, considerably 1/ This, of course, represents the end-point of the long-run policy period. 2/ Adjusted for the retarding effects of ATS on M-1, increase would be 8 per cent annual rate. the velocity -15more rapidly than in the previous three months, but growth at the 7 per cent midpoint would be a little less than needed to bring M-2 up to the low end of the range specified under alternative B. The acceleration of this aggregate reflects the expected strengthening of both M-1 and the interest-bearing component of M-2, with much of the strength in the latter likely to result from a slowing of recent unusually rapid savings account withdrawals. (19) At thrift institutions, the rate of deposit inflows may edge off from the recent pace. money market certificates Sizable net issuance of 6-month (MMC's) is expected, as in recent months, to account for all of the growth of S&L and MSB deposits, as these certificates continue to be marketed rather aggressively in response to relatively strong demand for mortgage loans and in order to compete with both other depository institutions and alternative financial instruments paying high market rates of interest. With some moderation in total thrift deposit inflows, and a continuing shift in the deposit mix at thrifts toward high cost MMC's, mortgage markets conditions are expected to tighten somewhat further in the intermeeting period. (20) If Federal funds continue to trade at a rate of 10 per cent or slightly higher over the intermeeting period, as contemplated under alternative II, other short-term rates are also likely to remain about unchanged, as recent market rate declines appear to reflect full adjustment to the weak growth of the aggregates. Business -16short-term credit demands may strengthen a bit in coming weeks, and the Treasury is expected to offer a sizable block of cash management bills in early March. But these short-term demands are likely to be accommodated without significant upward pressure on rates unless a resurgence in growth of the monetary aggregates causes adjustments in market expectations about the future course of monetary policy. (21) Yields on longer-term securities would also be expected to remain at about current levels over the intermeeting period under alternative II. Security offerings by corporations, state and local governments, and the U.S. Treasury are expected to be moderate. In its mid-February refunding, the Treasury has announced that it intends to auction $2¼ billion and $2 billion of 8 and 29¾ year securities, respectively, in order to rollover maturing debt and raise about $1.25 billion of new money. Following this operation, the Treasury can raise the additional $10 billion of new cash needed by the end of the quarter through sale of cash management bills and routine offerings of short- and intermediate-term notes. (22) The foreign exchange value of the dollar over coming weeks may be sustained, under money market conditions implied by alternative II, as banks obtain more funds from abroad to meet relatively strong credit demands in a period of modest growth in domestic deposits. The relatively high interest rates in the U.S. and recent evidence of strength in the dollar may also encourage investment in the dollar-denominated assets by private market participants. Of course, the behavior of the dollar on exchange markets will also depend -17on a number of other factors, including future developments in the Middle East. (23) Under alternative III, the Federal funds rate would be expected to rise to the midpoint of a 10 to 11 per cent range. Growth in M-1 would likely be in a 4 to 9 per cent and M-2 in 4 per cent annual rate range, respectively. to 8 A tightening action at this time is likely to come as a surprise to the market in light of the recent weakness in the aggregates. As a result, market participants might conclude that a further tightening could follow and thus a comparatively sharp increase in short-term interest rates could occur. The higher level of money market rates would further encourage outflows of deposits subject to fixed rate ceilings, induce even more aggressive offerings of MMC's and large denomination time deposits, and foster a firming of bank lending terms--with the prime rate moving up to record levels of over 12 per cent. The dollar would tend to move higher in foreign exchange markets. In bond markets, interest rates would rise, but both the moderate volume of new security offerings and strengthened market expectations that inflation will be curbed would tend to limit such movements. In the mortgage market, however, rates would likely move significantly higher in response to reduced deposit inflows at thrifts and the further rise in the cost of their MMC's. (24) Alternative I involves a decline in the funds rate over the intermeeting period to the midpoint of a 9¼ to 10 per cent range. In response to the reduction of the System's funds rate -18target, short-term rates would decline further, and a sizable shortterm rally is likely to develop in bond markets, as investors come to believe that interest rates may have peaked. At the same time, the decline in interest rates--if not accompanied by indications of weakening economic activity--may lead to a significant drop in the foreign exchange value of the dollar if market participants become more concerned about the outlook for inflation in this country. -19Directive language (25) Given immediately below are suggested operational paragraphs for the directive in the customary form. (An alternative formulation with money market emphasis is shown in paragraph (26)). In the short run, the Committee seeks to achieve bank reserve and money market conditions that are broadly consistent with the longer-run ranges for monetary aggregates cited above, while giving due regard to the program for supporting the foreign exchange value of the dollar, to developing conditions in domestic financial markets, and to uncertainties associated with the introduction of ATS. Early in the period before the next regular meeting, System open market operations are to be directed at attaining a weekly average Federal funds rate (I) (II) (III) slightly below the current level. AT ABOUT THE CURRENT LEVEL. slightly above the current level. Subsequently, operations shall be directed at maintaining the 9¾ to 10½] weekly average Federal funds rate within the range of [DEL: ____ TO ____ per cent. In deciding on the specific objective for the Federal funds rate the Manager shall be guided mainly by the relationship between the latest estimates of annual December-January]FEBRUARY-MARCH period rates of growth in the [DEL: of M-1 and M-2 and the following ranges of tolerance--2 to 6 TO 5-to-9] ____TO ____ per cent per cent for M-1 and [DEL: for M-2. [DEL: If, giving approximatety equal weight toM-1and M-2, their rates of growthappear to be significantly above the -20midpoints the of shall be indicated ranges, the objective for the funds rate raised in an orderly fashion within its range,if their rates ofgrowth appear tobe approaching the 1ower limits of the indicatedranges, the funds rate sha11 be lowered in an orderly fashion IF, within itsrange.] WITH APPROXIMATELY EQUAL WEIGHT GIVEN TO M-1 AND M-2, THEIR RATES OF GROWTH APPEAR TO BE Monetary aggregates emphasis SIGNIFICANTLY ABOVE OR BELOW THE MIDPOINTS Money market emphasis CLOSE TO OR BEYOND THE UPPER OR LOWER LIMITS OF THE INDICATED RANGES, THE OBJECTIVE FOR THE FUNDS RATE IS TO BE RAISED OR LOWERED IN AN ORDERLY FASHION WITHIN ITS RANGE. If the rates of growth in the aggregates appear to be outside the limits] ABOVE THE UPPER LIMIT OR BELOW THE falling[DEL: LOWER LIMIT of the indicated ranges at a time when the objective for the funds rate has already been moved to the corresponding limit of its range, the Manager will promptly notify the Chairman, who will then decide whether the situation calls for supplementary instructions from the Committee. (26) In view of uncertainties about interpretation of the aggregates, presented below is an alternative formulation of the operational paragraphs with primary emphasis on money market conditions. The role of the aggregates in this formulation is through a proviso clause, which permits the funds rate to move up if growth of the -21aggregates is excessively strong. In the short run, the Committee seeks to achieve bank reserve and money market conditions that are broadly consistent with the longer-run ranges for monetary aggregates cited above, while giving due regard to the program for supporting the foreign exchange value of the dollar, to developing conditions in domestic financial markets, and to uncertainties associated with the introduction of ATS. In the period before the next regular meeting, System open market operations are to be directed at attaining a weekly average Federal funds rate (A) at about the current level of (B) slightly above the current level, provided that over the February-March period the annual rates of growth of M-1 and M-2, given approximately equal weight, appear to be no higher than ____ per cent and ____ per cent, respectively. If growth of M-1 and M-2 for the 2-month period appears to be in excess of the indicated limits, the objective for the Federal funds rate is to be raised in an orderly fashion up to a maximum of ____ per cent. If the rates of growth in the aggregates appear to be falling above the indicated limits at a time when the objective for the funds rate has already been moved to its limit, the Manager will promptly notify the Chairman, who will then decide whether the situation calls for supplementary instructions from the Committee. Chart 1 Recently Established M-1 Growth Ranges and Actual M-1 Billions of dollars 8% Projection --- - 375 - 365 Q3 '78-03 '79 2 . . ...-- 355 3-Q2 '79 / 365 ,4% ---- 355 365 Q1 '78-Q1 '79 355 365 355 SQ4 '77-Q4 '78 -- 4% 345 335 I III 1977 I I 1978 I I II I I SI 1979 I I 325 Chart 2 Recently Established M-2 Growth Ranges and Actual M-2 Billions of dollars 945 945 Projection -- -9% -900 930 915 Q3'78-Q3'79 - 885 - 870 - _ 855 Q2'78-Q2'79 0, - 870 855 885 870 855 --870 885 88 5 S-S- '77-Q4'78. SQ4 F -855 -- _. . 840 - - 825 810 S810 795 - 795 I 1977 i i SI I 1978 I I I 9 I 1979 i I 780 Chart 3 Recently Established M-3 Growth Ranges And Actual M-3 Billions of dollars 1640 Projection /10%4 - 1610 Q3 '78-Q3 '79 So - 1580 07%% / S-1550 -1520 1490 1 0 % 4 -- ~ --1550 Q2 '78-Q2 '79 1520 , 1370- .,. - do 1490 10%1550 178-Q 1340- 1520 79 1310 _ 1490 1370 "1550 1340- - 1310- 1520 1490 7%% 1370 - 1460 - 1430 S04 '77-Q4 '78 1340 r 1310 - 1400 1370 - - 1370 1340 -/ - 1340 1310 I I I 1977 I I I I I I I I 1978 I I I I 19 7I 9 1979 _ 1 I 1310 Chart 4 Recently Established Bank Credit Growth Ranges and Actual Bank Credit Billions of dollars /10 Q3 '78-Q3'79 Projection 1055 S' 1035 S- 1015 S- S) '975 S^11 ,7 995 % S- 955 Q2 '78-Q2 '79 a '935 975 S 95 5 935 875 855 - 710 975 tQ1 '78-01 '79 S855 835 -- 955 3 875 855 - 975 - 955 875- - 935 855 - - ;915 835 , o 5 0Q4 '77-Q4 '78 835 - 895 875 - 875 855 - f855 835 I835 APPENDIX I Projected Federal Funds Rate Alt. A 1979--QI QII QIII QIV Alt. B Alt. C 9-5/8 to 10-1/8 10 to 10-1/2 10-1/4 to 10-3/4 9-1/4 to 10 10 to 10-3/4 10-1/4 to 11 8-7/8 to 9-7/8 9-3/4 to 10-3/4 10-3/8 to 11-3/8 8-7/8 to 9-7/8 9-1/2 to 10-1/2 10-3/8 to 11-3/8 APPENDIX II Implied Velocity Growth Rates Alt. A Alt. B Alt. C V-1 (GNP/M-1) 1978--III IV 1.2 9.5 1979--I II III IV 12.2 3.6 4.8 5.7 (8.5) (8.7 (0.0 (1.6 (3.2 1.2 9.5 k8.5) 12.0 (8.6 3.9 (0.3 5.3 (2.1 5.6 (3.0 1.2 9.5 (8.5) 12.1 (8.6) 4.4 (0.8) 5.8 (2.5) 6.1 (3.4) V-2 (GNP/M-2) 1978--III IV -0.6 6.1 1979--I II III IV 9.8 2.8 2.0 2.3 Note: -0.6 6.1 Figures in parentheses reflect V-l without ATS. -0.6 6.1 9.8 2.9 1.7 1.4 APPENDIX III Revisions in the Monetary Aggregates Benchmark adjustments for domestic nonmember banks and revised seasonal factors have been incorporated into the money stock series and related data. The benchmark adjustments are based on the June 1978 call report and go back to March 1978. Seasonal factors have been revised to incorporate an additional year of data and adjustments resulting from the Board staff's annual review of these factors. Growth rates for the revised M-1 and M-2 in 1978 are 7.3 and 8.5 per cent, respectively. about unchanged for the year, but M-2 growth was raised M-1 growth was percentage point. The impact of benchmark and seasonal factor changes on monthly, quarterly, and annual M-1 and M-2 growth rates for 1978 are shown in Tables III-1 and 111-2. The benchmark adjustments are based on data for the universe of domestic nonmember banks for June 1978. The adjustments added $100 million to the level of M-1 in June 1978 and about the same amount at the end of 1978. The level of M-2 was raised by $2.0 billion in June 1978 and by $4.4 billion at the end of the year. As shown in column 4 of Tables III-1 and III-2, the benchmark adjustment had minimal impact on M-1 growth but added 0.5 percentage point to M-2 (QIV'77 to QIV'78). Impacts of seasonal factor revisions, shown in the last column of Tables III-1 and III-2, were minor. April M-1 growth was lowered about 3-1/4 percentage points and November growth was raised by about the same amount. Impacts on M-2 growth rates were generally about one-third the effect on M-1. Table III-1 Comparison of Old and Revised M-1 Growth Rates (Per cent annual rate) Old Year Series 1978 Revised Series Difference 2/ Difference due to: / Seasonal Benchmark Factors 0.1 0.1 0.4 -0.7 0.5 0 0.2 0.2 0 7.3 0 Quarters 1978 QI QII QIII QIV 6.2 9.9 7.6 4.5 6.6 9.2 8.1 4.4 -0.1 0.4 -0.9 0.3 -0.1 Months 1978 Jan Feb Mar 11.3 1.8 2.8 0 1.4 -1.1 Apr May June 19.6 7.2 7.5 16.4 9.7 6.2 -3.2 2.5 -1.3 0 0.7 -0.3 July Aug Sept 4.8 8.5 14.1 6.8 8.5 13.8 2.0 0 -0.3 0.6 -0.4 -0.3 3.7 -4.6 1.7 -2.0 0.7 -5.0 -2.0 2.6 -0.3 0 0.3 -0.4 0 0 Oct Nov Dec 1979 Jan 11 2/ 0 1.4 -1.1 11.3 0.4 3.9 2.0 -5.0 QIV 1977 average to QIV 1978 average. In percentage points. -3.2 1.8 -1.0 -2.3 3.0 -0.3 0 Table III-2 Comparison of Old and Revised M-2 Growth Rates (Per cent annual rates) 2/ Old Series Year 1978-1 Revised Series Difference Difference due to:/ Seasonal Benchmark Factors 8.0 8.5 0.5 0.5 6.9 7.9 8.9 7.5 7.0 0.1 0.5 1.0 0.3 0 0.6 0.9 0.4 9.5 9.8 4.7 5.0 4.7 0 Quarters 1978 QI QII QIII QIV 8.4 9.9 7.7 0.1 -0.1 0.1 -0.1 Months 1978 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 1979 Jan 5.1 11.2 7.1 7.8 11.2 9.2 8.0 10.4 12.5 7.0 4.3 1.5 0.3 0.3 -0.4 0.3 0.3 -0.4 8.5 0 2.1 0.7 0.6 1.3 1.0 -0.6 0.8 -0.3 8.7 11.6 13.0 0.7 1.2 0.5 1.1 0.2 0.5 -0.4 1.0 0 6.5 4.7 2.2 -0.5 0.4 0.7 0.3 0.5 0.6 -0.8 -0.1 0.1 -1.8 QIV 1977 average to QIV 1978 average. In percentage points. 0.7 0.3 Appendix Table IV-1 MONEY STOCK--M-1 (Annual rates of growth, compounded quarterly)1 Base Period Ending Period 1975 741V 1 1978 751V 761 7611 76III 761V 771 7711 77111 77IV 781 7811 78111 2.0 5.1 6.7 7.4 4.6 5.4 5.2 3.0 4.6 5.3 5.0 3.9 4.7 III 4.9 5.5 5.4 4.8 5.6 6.6 IV 4.8 5.3 5.2 4.6 5.1 5.4 4.2 5.2 5.6 5.6 5.2 5.8 6.1 5.9 7.7 I 5.4 5.9 5.9 5,6 6.1 6.5 6.5 7.7 7.6 II 5.7 6.1 6.1 5.9 6.4 6.7 6.8 7.6 7.6 7.6 III IV 6.0 6.4 6.4 6.3 6.7 7.1 7.2 8.0 8.1 8.3 8.9 6.1 6.5 6.5 6.4 6.9 7.2 7.3 7.9 8.0 8.1 8.3 7.6 6.1 6.5 6.6 6.5 6,8 7.1 7.2 7.7 7.7 7.7 7.8 7.2 6.8 6.4 6.7 6.8 6,7 7.1 7.4 7.5 8.0 8.0 8.1 8,2 8.0 8.2 6.5 6.8 6.9 6.9 7.2 7.5 7.6 8.0 8.1 8.1 8.2 8.1 8.2 9.0 $.4 6.4 6.7 6.7 6.7 7.0 7.2 7.3 7.6 7.6 7.6 7.6 7.3 7.3 7.4 6.4 4.4 Alt. At, Alt. 5.9 6.1 6.1 6.0 6.2 6.3 6.3 6.5 6.4 6.3 6.1 5.8 5.6 5.4 4.8 4.1 5.7 5.9 5.9 5.8 6.0 6.1 6.0 6.2 6.0 5.9 5.7 5.4 5.1 4.9 4.1 3.3 Alt. 5.5 5.7 5.7 5.6 5.7 5.8 5.7 5.9 5.7 5.5 5.3 4.9 4.6 3.4 2.5 1 III IV 1/ 75111 5.9 II 1979 7511 3.9 IV II 1977 751 9.6 IV Based on quarterly average data. 4.3 781V Appendix Table IV-2 MONEY STOCK--M-2 (Annual rates of growth, compounded quarterly)- Ending Period 1975 1976 1977 1978 741V If 7511 75111 75IV 761 7611 Base Period 76111 76IV 771 7711 I 6.6 II 8.2 9.8 III 8.9 10.1 10.4 IV 8.4 9.1 8.7 6.9 I 8.9 9.5 9.4 8.9 11.0 II 9.2 9.7 9.7 9.4 10.6 10.3 III 9.2 9.6 9.6 9.3 10.2 9.8 9.2 IV 9.7 10.1 10.2 10.1 10.9 10.9 11.2 13.2 I 9.9 10.3 10.3 10.3 11.0 11.0 11.2 12.3 11.4 II 9.8 10.2 10.2 10.2 10.7 10.7 10.8 11.3 10.4 9.3 III 9.9 10.2 10.2 10.2 10.7 10.6 10.7 11.1 10.4 9.9 10.5 IV 9.7 10.0 10.0 10.0 10.4 10.3 10.3 10.5 I 9.5 9.8 9.8 9.7 10.0 9.9 9.8 II 9.5 9.7 9.7 9.6 9.9 9.7 III 9.5 9.7 9.7 9.7 9.9 IV 9.4 9.6 9.6 9.5 9.7 ** 1979 751 * * * -" k * * ** 77111 77IV 781 7811 78111 9.8 9.3 9.3 8.1 9.9 9.3 8.8 8.6 7.6 9.7 9.7 9.2 8.7 8.6 8.0 8.7 9.8 9.7 9.8 9.3 9.0 8.9 8.6 9.5 10.3 9.6 9.6 9.6 9.2 8.9 8.8 8.4 9.0 9.1 7.9 78IV *r~ III Alt. 8.8 8.9 8.8 8.6 8.6 8.2 8.0 7.8 7.5 7.4 7.5 7.3 6.7 6.4 Alt. 8.7 8.7 8.6 8.5 8.4 8.0 7.7 7.6 7.2 7.1 7.1 6.9 6.2 5.8 Alt. 8.6 8.6 8.4 8.3 8.2 7.8 7.5 7.3 7.0 6.8 6.8 6.5 5.7 5.2 Based on quarterly average data. Appendix Table IV-3 MONEY STOCK--M-3 (Annual rates of growth, compounded quarterly)1 Ending Period 1975 1976 1977 1978 1979 1/ 74IV I 751 7511 75111 751V 761 7611 Base Period 771 7611I 761V 77II 77111 771V 781 7811 78111 781V 8.5 II 10.7 13.0 III 11.6 13.2 13.5 IV 11.1 12.0 11.6 9.7 I 11.4 12.2 11.9 11.2 12.6 II 11.6 12.2 12.0 11.6 12.5 12.4 III 11.6 12,1 11.9 11.5 12.1 11.9 11.4 IV 11.9 12.4 12.3 12.1 11.7 12.8 13.0 14.5 I 12.1 12.5 12.4 12.3 12.8 12.8 13.0 13.8 13.0 II 11.9 12.3 12.2 12.1 12.5 12.4 12.5 12.8 12.0 10.9 III 12.0 12.3 12.3 12.1 12.5 12.4 12.4 12.7 12.1 11.7 12.4 IV 11.9 12.2 12.1 11.9 12.2 12.2 12.1 12.3 11.7 11.3 11.4 10.5 I 11.6 11.8 11.7 11.6 11.8 11.7 11.6 11.6 11.0 10.5 10.4 9.4 8.3 II 11,4 11.6 11.5 11.3 11.5 11.3 11,2 11.2 10.6 10.2 10.0 9.2 8.5 8.7 III 11.3 11.5 11.4 11.3 11.4 11.3 11.2 11.1 10.6 10.3 10.1 9.6 9.3 9.8 10,8 IV 11.2 11.4 11.3 11.1 11.3 * ************ 11.1 11.0 11.0 10.5 10.2 10,1 9.6 9.4 9.7 10.3 9.7 Alt. A 10.6 10.7 10.5 10.4 10.4 10.3 10,1 10.0 9.6 9.3 9.2 8.8 8.6 8.7 8.7 8.3 7.9 Alt. B 10.4 10.5 10.4 10.2 10.2 10.1 9.9 9.8 9.4 9.1 8,9 8.5 8.3 8.3 8.2 7.7 7.2 Alt, C 10.3 10,4 10.2 10.0 10.1 9.9 9.7 9.6 9.2 8.8 8.6 8.2 7.9 7.9 7,7 7.1 6.5 III Based on quarterly average data. APPENDIX V Alternative Short-Run Growth Rates and Federal Fund Rate Ranges The table below shows growth rate ranges for M-1 and M-2 expressed as the growth from the average of the three-months ending in December to the average of the three-month ending in March. These ranges are based on the same staff projections of February and March as appear in the present two month ranges shown in paragraph 15 averaging process--which, Bluebook, of the text. This three month as explained in Appendix IV of the December changes the growth rates, narrows the ranges, and reduces the difference in growth rates between alternatives--was proposed for consideration by the Subcommittee on the Directive in its December 13, 1978, memorandum to the FOMC. Alt. A Alt. B Alt. C Ranges for average of three-months ending in March over three months ending in December M-1 -1/4 to 1-3/4 -1/4 to 1-3/4 -1/2 to 1-1/2 M-2 2-1/4 to 3-3/4 2-1/4 to 3-3/4 2 to 3-1/2 9-1/4 to 10 9-3/4 to 10-1/2 Federal funds rate (Intermeeting period) 10-1/4 to 11 APPENDIX VI Growth Rates from January Levels Required to Achieve Longer-run Targets Alternatives A and C (Per cent annual rate) Achieve Target by: Low End of Range Alt. A Mid-Point High End of Range of Range M-1. March 1979 June 1979 QIV 1979 7.3 4.5 3.5 10.3 6.5 5.3 13.3 8.7 7.1 M-2 March 1979 June 1979 QIV 1979 Achieve Target by: 8.8 6.5 5.8 Low End of Range 11.3 8.3 7.3 Alt. C Mid-Point of Range 13.8 10.0 8.7 High End of Range M-l March 1979 June 1979 QIV 1979 3.3 1.7 6.3 3.7 9.3 5.9 1.1 2.9 4.7 M-2 March 1979 June 1979 QIV 1979 6.9 5.1 4.6 9.3 6.9 6.1 11.8 8.6 7.6 CONFIDENTIAL (FR) CLASS II FOMC Table 1 MONETARY AGGREGATES FEB. 2, 1979 ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED Money Supply Broad Narrow (M2) 2 1 Period ___(Ml) Total U.S. Govt. Deposits 3 Total / 1 Time & Savings Deposits Other Than C's si g aIn 1 56 1 Nondeposit cDourcs s 7 Ft 9 £ MONTHLY LEVELS-$5IL 1978--OCT. 362.0 360.6 361.2 (359.7) NOV. 0EC. 1979--JAN. I 867.4 870. 872.0 (870.7) 21.2 21.7 17.1 13.0) 593.6 605.3 607.9 (612.11 505.4 509.9 510.0 (511.0) 8.R 10.4 4.5 9.1 10.6 12. 11.3 9.9 7.6 4.5 7,c B.9 7.' 10.1 9.5 12.5 6.4 10.0r 9.6 3.7 -4.6 ?.0 -5.0) 7.0 4.3 '.1 7.9 23.7 5.2 S 8.31 -1.51 0.1) ( 223.9 221.8 220.? 1218.3) 281.5 28A .0 290.6 (292.7) 1.3 4.5 -7.1 11.4 17.0 19.0 22.9 1.6 1.3 -0.0 10.5 17.3 IP.1 32.8 7.5 28.4 17.7 27.7 10.8 8.') 1.4 98.0 20.1 50.71 88.2 95.4 97.0 (101.1) 74.9 73.0 76,8 ANNUAL GROWTH QUARTFRLY 1978--2N1 QTR. 3PD qT9. 4TH OTD. 11.'; 9.7 0.3 6.8 7.4 6.5 40.4 QUARTERLv-AV 1978--2ND 3RD 4TH QT,. nTR. OTR. MONTHLY 197F--9CT. NOV. nEC. 1979--JAN. DFC.-JAN. WEEKLV 6.71 2.4 0. -1.6 -11.3 -P.7 1 1.31) -10.4) -9.5) 9.81) 35.81 LFVFLS-tBIL 1978-DEC. 1? S20 27 1479-JAN. NDTF: 1/ 1 9.1 10. 7 360.7 360.9 '61.2 3hO. 6 871.8 871.6 871.1 I 10 D 17 0 359.8 873.3 "70.2 ?60. 7 872.0 24 P 357.6 R69.1 362.4 n4TA SHOWN IN DAPENTHESFS TN'LU)FS TPFAUQRY OREMNO I2INCL'JDES RORROWINGS FROM MENTS TO REPURCHASE, ANO (EUR'qnl.LA BRDROWINS), 17.0 607.4 607.9 19.3 If).a 1q.3 ".?3 6h08.1 17.4 11.2 13.4 14.1 608.4 609.8 612.1 613.9 607.2 511.2 510.8 510.4 510.5 510.4 511.3 511.6 290.3 220.8 220.7 220.1 720.0 290.1 219.8 219.5 ?18.3 217.7 291.0 290.9 292.9 293.9 290.3 290.5 96.3 97.1 97.7 6. 7 77.0 77.7 76.9 75.6 97.6 99.4 100.8 102.3 ARE CURAENT PROJECTIONS. P - PRELII4NArY OFPOSITS rT COMMFRCIAL BANKS AND FEDERAL RESERVF RANKS AND TREASURY NOTE SALANCES. OTHEP THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, SECURITIES SOLD UNDEP rTHER LIABILTTIES FOR BOROWED MONEY, PLUS ;,qSS LIABILITIES TP OWN FOREIGN BRANCHES LOANS SnL5 TO AFFILTITFS, LOAN RoS, AND OTHFR MINOR ITEMS. AGREE- CONFIDENTIAL (F.R.) CLASS II-FOMC TABLE 2 BANK RESERVES ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED 1979 REQUIRED RESERVES BANK RESERVES Period FEB. 2, Total Reserves Nonborrowed Reserves Monetary Base Total Required Private Demand Total Time Deposits Gov't. and Interbank 1 2 3 4 5 6 7 140,782 141,46? 142,65? (143,602) 41,261 41,018 41,280 (41,196) 23,059 22,705 22,670 (22,677) MONTHLY LEVELS-tMILLIONS ........................ 41,434 41,251 4L,I12 141,440) 1978--0CT. Nnv. DFC. 1979--JAN. DERCFNT ANNUAL 40,156 40,549 40,644 (40,438) 16,618 16,841 17,019 (17,032) ( 1,584 1,472 1,590 1,496) GRnWTH QIJARTFRLY QTP. 978--2N3 3D QTP, 4TH QTR, 11.5 4.6 3.' 3.7 5.0 5.3 10.4 8.5 8.3 11.7 4.4 2.9 13.1 8.3 -3.1 10.1 4.4 6.7 6.6 R.2 ?. 1.1 6.? 5.4 8.1 9.0 8.7 7.? 8.2 2.8 5.0 9.5 3.1 11.5 6.6 4.2 ( 9.9 5.q 10.1 8.0) ( R.3 -7.1 7.7 -2.4) I 9.1) t 2.6) QU6RTERLY-AV 197A--2F!9 QTP. 3RD QTR. 4TH QTP. MnNTRLY 7. q197--OCT. NOV. WC. 1979--JAM. ( .3 7.0 -?.1) ( 1.3 11.7 2.9 -6.1) ( 2.71 ( -1.6) - DFC.-JAN. -8.7 16.1 12.7 0.9) 11.2 -18.4 -1.9 0.4) ( ( -0.71 1 6.8) WFFKLY LEVELS-t4ILLITNS NnTF: q178-9FC. 6 13 20 77 41 ,57 42,069 41,379 40,670 40n,59 41,479 40,812 30,266 14 2,24h 142,855 142,279 142,173 41230 41,917 41,142 430,74 22,664 22,63? 22,759 22,623 17,029 16,998 17,012 17,052 1,537 2,288 1,370 1,058 1979-JAN. 3 In 17 24 31 42,162 40,539 42,164 41,134 41,614 40,979 1 39 854 41,267 40,211 40,197 144,395 142,639 144,155 143 358 141,917 41,436 40,611 41,702 41,129 41,238 22,675 22,Qt 22,866 22537 22,717 16,995 16t 86 16,966 17,053 17,141 1,766 1,030 1,869 t,545 1,381 DESFRVF SERIFS HAVE BEEN A4JUSTFD TO REMOVE DISCONTINUITIES DATA SHOWN IN PAPENTHESFS APF CUIRRFNT PROJFCTIONS. ASSOCIATFD WITH CHANGES IN RFSEPVF REOUIREMENT RATIO. TABLE 3 1/ NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES($ million, not seasonally adjusted) Treasury Treasury Change 2J 1972 1978--Qtr. Qtr. Qtr. Qtr. I II III IV 1978--July Aug. Sept. Oct. Nov. Dec. 1 8 15 Dec. 1979--Jan, LEVEL-Jan, f/ 2/ 5/ 4/ 5/ 6/ Over 10 Total 789 579 797 3,284 167 129 196 1,070 642 4,361 3,025 2,833 553 186 628 166 108 1,001 -2,655 5,444 1,123 459 468 349 250 247 334 235 247 2,175 2,246 1,697 1,844 3,152 1,156 774 -5,072 1,135 235 283 424 238 2,635 350 110 -170 -2,151 507 - 5 n Wi 46 120 439 191 105 5 - 10 Over 10 592 400 1,665 824 469 Total Holdings 1,631 9,273 6,303 7,267 6,227 10,035 -- 792 1,' 059 364 3, 382 1,i 613 891 I, 433 - 386 707 - 46 -92 127 -81 -I 301 173 - 628 87 163 113 122 947 751 139 807 1,037 108 -92 -81 - -2,052 29 6 13 20 27 -245 -653 -1,268 -305 -628 163 108 1,037 ----- -121 3 10 17 24 31 -1,141 -1,287 -1,198 -512 3T 39.5 -- -3>79 10.5 31.4 14.7 10.7 67.3 1.7 3.5 1.5 .8 7.5 - -1,358 -46 -154 1,272 3,607 -2,892 34 -1,133 1,224 266 -2,130 231 1,043 -2,536 1,701 1,102 625 -1,154 -2,754 -1,594 -1,265 728 -1,672 -2,052 -923 1,540 683 -1,809 -6,663 -245 -657 -1,268 -305 -10,500 6,851 -3,358 - 6 -643 L73 -- Net -555 7,930 4,632 -3,283 -- -1,667 -923 504 716 22 ft_ 5-10 Net Change Outright -2,751 1978--Nov. h4 11o 1 - 5 1,582 1,415 1,747 6,202 5,187 4,660 863 1977--Qtr. IV Federal Agencies Net purchases 4/ 539 500 434 1,510 1,048 758 1,280 -468 1974 1975 1976 1977 fi i -490 7,232 1973 u n Treasury Coupons Net urchases 3/ STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC FEBRUARY 2, 1979 -125 -1,141 -1,287 -1,204 -891 1,783 2,092 2,643 -2,186 6,552 -6,022 -3,234 827 4,549 -3,933 114.4 M\ V Change from end-of-pariod to end-of-period. Outright transactions in market and with foreign accounts, and redemptions (- ) in bill auctions. Outright transactions in market and with foreign accounts, and short-term not as acquired in exchange for maturing bills. Excludes redemptions, maturity shifts, rollovers of maturing coupon issues, and direct Treasury borrowing from the System. Outright transactions in market and with foreign accounts only. Excludes red emptions and maturity shifts. In addition to net purchases of securitiej, also reflects changes in System h oldings of bankers' acceptances, direct Treasury borrowings from the System, and redemptions (-) of Agency and Treasury coupon issues. Includes changes in both RP's (+) and matched sale-purchase transactions (-). TABLE 4 SECURITY DEALER POSITIONS AND BANK POSITIONS (millions of dollars) U.S. Govt. Security Underwriting Dealer Positions Syndicate Positions ills 7,234 S Cupon Issues Corporate Bonds Municipal Bonds STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC FEBRUARY 2, 1979 Member Bank Reserve Positions Borrowing at FRB** R xess** Reserves t al Total son Seasonal Basic Reserve Deficit** e York 8 New 38 Others 3,017 -1,445 1,861 20 -9,151 -4,234 -13,975 1,729 1978--High Low 5,625 278 2,043 -1,076 1,716 172 -8,224 -2,370 -14,657 1977--Dec. 4,257 804 570 -7,403 -11,350 1978--Jan. Feb. Mar. 4,127 2,713 327 1,492 740 484 406 328 -6,047 -4,980 -6,778 -12,299 -12,603 -11,060 Apr. May June 3,183 1,023 2,847 -183 5 78 557 1,212 1,094 -6,196 -4,038 -4,514 -12,998 July Aug. 1,196 1,994 2,571 -626 423 125 1,317 1,139 1,060 -3,651 -4,793 -5,098 -10,204 -11,089 -11,357 1,495 1,960 1,697 -309 462 '219 1,277 703 868 -4,651 -3,345 -11,551 -13,448 -12,533 1 8 1,786 15 22 29 1,660 1,462 2,004 12 1,032 687 275 135 113 386 245 55 153 1,305 698 633 604 792 -3,843 -4,221 -4,763 -2,519 -2,370 -10,522 -12,872 -13,128 -14,657 -13,585 6 13 20 27 1,909 2,480 2,234 -281 835 64 1,007 327 152 237 -55 698 591 568 1,413 -2,481 -4,099 -2,688 -3,507 -13,235 -13,323 -12,567 -12,258 3 138 *2,195 726 -10,520 -72p *2,913 *3,463 *3,670 *441 *451 *364 462p 5 p 372p 1,183 68 5p 89 7 p 924p 1,427p -4,188 *833 -4,182 -4,341 -13,555 -12,858 -1 2,648p -11,267p 1977--High Low 3,418 Sept. Oct. Nov. Dec. 1978--Nov. Dec. 1979--Jan. 10 17 24 .31 1,639 -83 544 -3,448 6 -2, 22p -2,384p -8,206 -8,273 -11,653 -12,202 NOTE: Government security dealer trading positions are on a commitment basis. Trading positions, which exclude Treasury securities financed by repurchase agreements maturing in 16 days or more, are indicators of dealer holdings available for sale over the near-term. Underwriting syndicate positions consist of issues still in syndicate, excluding trading positions. The basic reserve deficit is excess reserves less borrowing at Federal Reserve less net Federal funds purchases. Weekly data are daily averages for statement weeks, except for corporate and municipal issues in syndicate which are Friday figures. Strictly confidential. * Monthly averages for excess reserves and borrowings are weighted averages of statement week figures. STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC TABLE 5 SELECTED INTEREST RATES (per cent) FEBRUARY 2, 1979 Short-Term rasyB Federal Funds (1) 6.65 1977--High Low 4,47 1978--High Low 10.25 6.58 1977--Dec. 6.56 s Treasury Bills Auction Market 1-yr I 6-mo 3-mo .... (2) 6.27 4.41 9.30 6.16 6.07 CD's New Comm. ueNYC 90-Day aper 90-119 Day 7,87 34 8.3 8.38 5.57 8.96 8.94 8.27 8,60 8.67 8.67 5.71 5.62 5.61 9.02 9.15 9.20 9.17 9.31 9.35 8.56 8,64 8.60 8.85 8.98 9.07 5.80 6.03 6.22 9.36 9.57 9.70 9.44 9.66 9.91 8.71 8.90 9.05 6.75 6.76 6.75 7.93 7.61 8.14 8.00 8.00 7.67 7.70 8.22 8.21 68 8.1 8.6 9 8.71 6.82 8.00 7.85 8.32 8.910 7.06 8.27 8.63 8.07 8.30 8.44 8.53 8.95 9.09 9.00 9.01 9.41 8.54 8.69 8.45 8.47 9.1 4 8.812 8,816 9.18 6.28 9.74 10.01 9.15 8.91 6.12 9.79 9.81 8.97 8.86 8.69 9.1 17 9.2 7 9.13 9.27 9.41 6.09 6.13 6.19 6.51 9.76 9.86 10,11 10.35 9.79 10.03 10.30 10.50 9,04 9.25 9.39 9.38 9.51p 6,47 9.12 10.15 Dec. 1979--Jan. 9.29 9.77 22 9.68 29 9.85 6 13 20 27 9.87 3 10 17 24 31 Daily--Jan. 25 Feb. 1 9.68 9.79 9.75 10.25 10.59 9.97 10.05 10.05 10.12 10.02 10.0 4 p 8.35 8.85 8.39 7.56 9.68 8.43 7.30 8.98 1 *8 15 8.98 8.46 10.60 9.13 7.75 7.83 1978--Nov. 9.00 8.65 10.38 8.98 6.61 7.86 8.34 Jan. 5.93 5.45 6.67 5.58 30 9.: 8.6 1 7.59 Dec. 8.2 36 7.S 90 9.00 8.01 7.85 7.99 8.64 9.08 9.35 7.26 Sec. (16) 9..59 7.40 8.00 8.96 9,76 10,03 10.07 7.99 5.83 Auc. (15) 7.75 7.66 Nov. 7.39 y (14) 11.57 7.01 7.08 7,85 Oct. 7.75 6,25 GNMA y (13) 10.52 6.68 6.65 6.65 6.84 7.20 8.45 (LU) FNMA Offered (12) 10.65 6.29 6.41 6,73 Sept. ... (0) Recentl 8.48 7.95 9.54 8.48 6.89 7.36 7,60 8.04 ..... ^L New Iss ue 1) (1 . 4.63 Apr. May June 7.81 (I) yr Home Mortgages econdary Market 6.66 Mar. July Rate ields r 20-yr Long-Term Corp.-Aaa tilit Municipal 6.70 6.82 Aug. Govt.-Constant 4.50 6.44 6.45 6.29 6.70 U.S. aturity ....... (6) (5) 6.78 6.79 1978--Jan. Feb. Ba 6.77 6.73 10.44 10.20 10.00 10.00 8.39 10.14 10.37 10.25 11.55 8.33 8.41 8.62 9.04 9.33 11.75 9.50 9.94 10.94 9.33 10.01 10.24 10.21 10.25 10.61 10.75 10.15 11.43 11,50 9.12 8.95 8.96 9.16 10.25 8.93 8.90 10.25 9.14 10.65 10.25 10.27 10.36 9.30 10.50 10.52 11.50 11.50 11.57 10.46 10,40 10.25 10.12 9.76 10.57 11.75 10.37 10.31 10.19 11.75 9.58 9.60 11.75 11.75 10.02 11.75 10,04 11.75 9.96 11.75 10.38 10.96 9.12 9.19 9.52 10.39 10.70 9.67 9.90 10.20 9.30 10.05 9,24 10,20 9.25 10.28 8.78 9.28 10.30 9.48 9.39 9.40 9.35 9.43 8.79 8.85 9.31 9.35 9.54 10.35 10.35 10.35 10.40 9.51 10.38 10.60 9.00 8,99 9.59 9.2 8 54 9.5 9.28 8,80 8.80 8.72 8,72 9.10 8.38 8.36 8.98 10.25 10.25 8.75 8.90 8.98 10.27 10.33 9.21 8.99 9.51 10.38 9.01 9.55 10.38 10.67 9.59 9.22 9.21 9.03 9,42 9.18p 9.06 8.95p 8.95 9.57 9.45 9.41p 10.40 10.40 n.a. 10.73 9.32 2 9.1 p 8 8.98 8.90 8.90p . 93p 8.90p 9.39 9.43 9.65 9.68 9.72 9.71 9.70 9.67 9.55 NOTE: Weekly data for columns 1, 2, 3, 6, and 7 are statement week averages of daily data, Weekly data in column 4 are average rates set in the auctions of 6month bills that will be issued on the Thursday following the end of the statement week. Data in column 5 are 1-day Wednesday quotes. For columns 8 through 11, Columns 12 and 13 are 1-day quotes for Friday and Thursday, respectively, the weekly date is the mid-point of the calendar week over which data are averaged. following the end of the statement week. Column 14 is an average of contract interest rates on commitments for conventional first mortgages with 80 per cent loan-to-value ratios made by a sample of insured savings and loan associations on the Friday following the end of the statement week. Column 15 gives FNMA Column 16 is a 1-day quote for Monday preceding the end of the statement week. The FNMA auction data for Monday preceding the end of the statement week. GNMA yields are average auction yield is the average yield in bi-weekly auction for short-term forward commitments for Government underwritten mortgages. net yields to investors on mortgage-backed securities for immediate delivery, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying the coupon rate 50 basis points below the current FHA/VA ceiling. FEB. 2, 1979 Appendix Table 1-A Money and Credit Aggregate Measures Period Nonborrowed Credit Total Monetary Base Loans and 2 3 Investments rn m_ 4 0.6 5.3 6.9 0.8 3.0 6.9 6.7 8.3 9.2 8.0 11.3 11.3 5.8 12.6 7.9 7.3 9.3 5.3 10.9 9.8 8.5 Total 2 1 1976 1977 1978 Money Stock Measures Bdnk Bank Reserves M-1 M-l 6 5 PER CENT ANNUAL M-2 M-4 M-5 M-6 M7 9 9 10 10 1 11 12 12.7 11.7 9.4 7.1 10.1 10.5 10.2 11.7 10.5 9.9 11.5 10.2 9.9 11.6 11,0 11.1 10.3 11.8 12.0 11.9 11.3 10.0 M-3 8 7 ATES OF IROWTH) SEMI-ANNUALLY: 2ND HALF 1977 6.9 3.0 9.3 10.7 8.1 7.5 9.1 1ST HALF 2ND HALF 1978 1978 7.6 5.9 7.6 6.0 8.7 9.2 12.7 9.4 8.0 6.2 6.3 4.3 7.7 8.9 6.6 10.4 6.2 2.7 9.3 2.7 6.7 4.6 8.0 9.6 9.6 8.0 10.4 17.0 8.7 5.9 5.3 10.8 9.8 0.4 4.1 8.6 7.5 -1.8 8.9 6.2 8.6 3.1 14.5 0.6 6.6 5.4 9.7 7.6 9.5 8.6 10.1 14.9 10.8 7.7 6.6 9.2 8.1 4.4 5.6 15.0 9.6 6.3 14.4 8.5 7.9 19.9 16.6 13.7 11.0 5.1 9.7 9.8 6.7 1.1 10.0 10.6 9.8 10.0 10.5 9.9 9.9 6.5 9.7 11.2 4.7 7.5 9.4 11.6 7.1 9.5 11.2 11.0 7.6 9.3 10.3 11.4 8.8 9.2 10.1 11.0 7.9 10.8 11.2 10.9 7.9 5.0 7.2 6.0 2.5 7.0 8.4 9.9 7.7 8.1 8.4 10.4 9.4 10.2 10.6 10.1 9.4 10.0 9.8 10.5 10.3 10.1 9.6 9.7 9.8 11.5 10.9 10.1 9.7 7.8 5.6 6.3 7.9 9.6 9.9 9.6 11.0 11.3 1.8 2.8 16.4 9.7 6.2 6.8 8.5 13.8 1.7 -2.0 1.7 8.6 1.5 2.3 12.1 8.4 5.2 2.9 7.2 12.1 9.8 5.0 4.7 11.2 9.8 12.0 8.6 7.6 13.0 11.9 8.3 9.6 10.0 13.1 6.0 12.6 4.1 11.1 8.5 8.1 11.1 10.4 11.8 8.4 7.4 11.0 10.4 8.6 8.3 10.1 14.3 7.6 9.9 6.2 13.1 9.9 9.1 12.2 11.3 9.7 8.6 9.9 14.0 7.5 9.9 6.2 8.3 QUARTERLY: 1ST QTR. 1978 2ND-QTR. 1978 3RD QTR. 1978 4TH QTR. 1978 QUARTERLY-AV: 1ST 2ND 3RD 4TH QTR. QTR. QTR. QTR. 1978 1978 1978 1978 MONTHLY: 1977--DEC. 1978--JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT, NOV. DEC. 1/ 2/ P - 18.0 7.1 -5.2 8.3 11.0 11.6 14.8 -5.0 8.6 5.4 -3.5 6.1 20.9 9.6 -2.9 1.3 -8.9 15.6 8.5 0.2 11.3 -0.9 13.5 1.3 14.2 6.2 3.6 7.9 10.5 10.1 10.3 5.3 13.0 7.9 6.5 9.4 BASED ON DATA ADJUSTED FOR CHANGES IN BASED ON QUARTERLY AVERAGE DATA. PRELIMINARY RESERVE REQUIREMENTS. 0.8 -4.9 -1.4 9.2 8.5 8.7 11.6 13.0 6.5 4.7 2.7 6.4 6.3 9.3 9.6 11.5 13.4 8.9 6.7 5.6 9. 1 10.1 10.5 13.4 8.4 11.5 6.3 Appendix Table 1-B FEB. 2, 1979 Money and Credit Aggregate Measures Seasonally Adjusted, Billions of Dollars Bank Reserves 1 Period Total Nonborrowed 1 2 Monetary Base Money Stock Measures Credt Total Loans nd Invest- M M 4 M-7 - M-5 M-6 876.3 1235.6 1374.3 1500.9 803.0 883.1 973.0 1298.0 1448.0 1597.6 1436.4 1602.2 1760.8 1484.2 1658.5 1834.2 M-1 M1+ M-2 809.4 -3 S-r-ments ANNUALLY% 37,013 38,923 41,497 36,960 38,354 40,629 120,670 130,771 142,648 788.9 875.5 971.1 313.8 361.5 517.2 560.6 586.7 1977--DEC. 38,923 38,354 130,771 875.5 338.7 560.6 809.4 1374.3 883.1 1448.0 1602.2 1658.5 1978--JAN. FEB. MAR. 39t507 39,741 39,570 39,023 39,336 39,242 132,316 132,997 133,400 886.0 892.3 898.6 341.9 342.4 343.2 564.6 566.4 816.0 819.4 822.6 1385.5 1392.9 1400.2 891.9 898.3 904.0 1461.4 1471.7 1481.6 1617.9 1629.2 1639.2 1676.6 1690.5 1703.3 APR. 9AY JUNE 39,843 40,208 40,597 39,286 38,996 39t503 L34,277 135,450 136,594 913.5 926.1 936.7 347.9 350.7 352.5 572.1 576.1 830.3 836.7 842.6 913.8 922.9 929.3 1495.3 578.6 1411.8 1422.1 1433.1 1654.2 1668.5 1680.4 1720.6 1736.8 1750.8 JULY 41,099 40,928 41,223 39,782 39,788 40,163 137,763 138,370 139,865 945.3 949.3 354.5 AUG. SEPT. 580.0 583.5 589.4 848.7 856.9 866.2 1444.6 1458.4 1474.7 936.7 944.5 954.8 1532.6 1546.0 957.0 357.0 361.1 1563.2 1692.0 1706.2 1726.6 1763.3 1777.8 1798.6 OCT. NOV. OEC. 41,410 41,288 41,497 40,133 40,585 40,629 140,781 141,542 142,648 964.8 970.2 971.1 361.6 361.0 361.5 589.8 587.4 586.7 870.9 1485.6 1493.9 1500.9 959.6 969.7 973.0 1574.2 1589.3 1597.6 1737.5 1751.8 1760.8 1809.9 1824.8 1834.2 6 13 20 27 41,506 42 120 41,304 40,789 40,808 41,529 40,737 39,376 142,197 143,051 142,255 142,191 361.3 361.2 361.3 361.1 586.9 586.7 586.4 585.9 875.7 875.8 875.9 875.9 971.9 972.6 972.9 972.4 3 10P 17P 24P 31P 41,969 40,675 42,143 41,282 41,727 40,786 39,990 41,246 40,359 40,300 144,105 142,679 144,134 143,504 144,026 362.4 360.6 360.9 357.9 587.4 584.8 583.8 580.1 878.0 974.6 973.8 976.7 1976 1977 1078 338.7 740.6 MONTHLY: 565.3 874.3 876.3 1508.3 1519.8 WEEKLY: 9 1 78-DEC. 9 1 79-JAN. NOTES: WEEKLY DATA M3, M5, M6, I/ RASED ON DATA P - PRELIMINIRY 875.0 876.2 873.9 975.8 ARE DAILY AVERAGES FOR STATEMENT WEEKS. MONTHLY DATA ARE DAILY AVERAGES. WEEKLY M7, TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS. DATA SHOWN IN MILLIONS OF DOLLARS. ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS. DATA ARE NOT AVAILABLE FOR FEB. APPENDIX TABLE 2-A 2, 1979 COMPONENTS OF MONEY STOCK AND RELATED MEASURES III Period (Per cent annual rates of growth) 2/ ANNUALLY: 25.0 11.1 1.8 15.0 11.2 9.4 9.5 9.3 10.0 1976 1977 1978 7.5 11.4 16.1 32.8 15.4 14.0 10.3 17.8 19.5 15.3 7.1 12.6 7.7 11.9 13,4 34.4 -23.3 12.8 2/ SEMI-ANNUALLY: 6.4 12.9 25.6 13.6 20.1 22.3 10.1 2.9 0.7 11.7 19.3 42.6 19.0 8.5 11.5 17.0 12.4 12.0 3.2 51.9 13.5 7.4 8.9 12.2 7.7 2.2 4.7 3.6 -6.2 12.0 12.5 19.5 18.9 42.3 25.5 8.3 36.6 8.3 8.3 12.1 10.9 17.2 15.6 13.5 7.7 11.3 9.5 9.3 -4.3 55,4 39.3 9.1 7.8 12.5 11.5 11.3 12.4 7.2 7.9 11.1 10.2 2.0 3.8 2.3 -0.9 11.7 11.4 18.5 19.2 47.7 33.5 17.4 15.9 13.7 25.0 8.9 7.8 10.9 11.8 10.q 16.2 7.5 1.0 5.4 52.3 45,6 18.7 7.8 10.7 5.1 1.6 8.2 47.4 9.8 18.3 7.8 12.9 12.8 9.8 10.7 11.0 15.5 21.6 21.2 14.8 19.3 24.5 12.0 35.8 47.4 2ND HALF 1977 10.0 7.3 11.7 1ST HALF 1978 2ND HALF 1978 9.3 10.2 7.6 4.9 12.2 12.0 7.6 10.8 9.5 7.9 11.7 9.7 3.8 11.9 9.1 -2.7 12.1 11.4 11.7 11.9 10.5 8.0 9.6 10.6 5.5 9.7 7.6 2.1 10.9 6.8 9.8 QUARTERLY: 1ST 2ND 3RD 4TH OTR. QTR. QTR. QTR. 1978 1978 1978 1978 QUARTERLY-AVt 1ST 2ND 3RD 4TH QTR. QTR. QTR. QTR. 1978 1979 1978 1978 12.2 MONTHLY: 1977--DEC. 8.7 12.3 10.8 11.5 7.3 12.9 -1.0 10.7 6.0 10.6 6.7 1.0 10.9 7.8 7.9 19.5 13.4 8.7 10.3 9.2 9.6 10.1 5.6 6.5 9.8 11.2 9.1 6.0 14.1 10.9 9.0 7.8 12.7 12.5 16.6 13.2 8.5 10.0 7.6 -0.5 9.4 21.9 -6.3 10.0 3.5 5.1 11.2 -1.4 I a t I I IJ 1/ GROWTH RATES ARE BASED ON ESTIMATED MONTHLY AVERAGE PREVIOUS MONTH REPORTED DATA. 2/ BASED ON QUARTERLY AVERAGE DATA. P - PRELIMINARY. 1978--JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. ~ 3.8 1.1 1.6 4.3 6.0 3.8 -3.8 4.8 9.7 -1.6 -9.6 -7.5 39.5 28.0 40.3 7.0 18.0 -5.5 12.3 1.4 92.1 15.1 9.0 7.8 7.8 7.5 7.2 10.1 11.1 11.2 13.5 12.5 10.0 9.7 LEVELS DERIVED BY AVERAGING END OF 15.5 17.8 17.5 14.8 14.6 16.9 9.5 14.1 16.3 9.2 4.6 9.1 CURRENT MONTH 29.4 9.1 -4.5 13.5 13.4 1.5 -23.5 9.0 43. 1 -7.2 -14.4 8.8 AND END OF 51.1 51.2 55.2 52.8 43.1 34.3 36.9 15.3 5.0 6.7 8.3 8.3 6.6 APPENDIX TABLE 2-B FEB. 2, 1979 COMPONENTS OF MONEY STOCK AND RELATED MEASURES U a Short- Mutual Savings Bank & SL Shares Shrs Period Credit Union Savings Shares Bonds I/ S 4 --- 8 9 10 Term U.S. Gov't Sec / Se11 -- Other Total NonGov't Deposit Funds Demand Deposits 31 1V A/ Private Shortterm Assets -- 11 - 13 -- 14 ANNUALLY: 88.6 97.5 233.0 250.1 264.1 489.2 544.4 611.4 426.7 470.7 514.8 202.1 219.7 222.0 224.7 251.0 292.8 62.4 73.7 96.6 456.1 518.3 571.4 39.0 46.6 53.2 71.9 76.6 80.6 66.5 77.6 82.7 47.8 56.3 73.4 51.0 62.0 76.8 11.4 11.7 15.4 MONTHLY: 1977--DEC. 88.6 250.1 544.4 470.7 219.7 251.0 73.7 518.3 46.6 76.6 77.6 56.3 62.0 11.7 1978--JAN FEB. MAR. 89.4 90.2 90.7 252.5 252.3 252.5 550.0 555.9 560.8 474.1 477.0 479.4 220.4 1 220.6 220.9 253.7 256.4 258.5 75.9 78.9 81.5 522.2 525.6 529.0 47.2 47.9 48.6 77.0 77.4 77.8 79.5 80.1 79.8 58.7 61.4 64.1 64.9 65.5 65.4 11.3 8.7 9.3 APR, MAY JUNE 91.3 92.0 92.5 256.6 258.8 260.0 565.9 572.2 576.8 482.5 486.0 490.1 221.7 222.8 223.5 260.8 263.2 266.6 83.4 86.2 86.7 532.3 535.5 540.0 49.2 49.8 50.5 78.2 78.6 78.9 80.7 81.6 81.7 66.4 68.3 70.4 65.7 66.2 66.4 10.2 8.3 13.4 JULY AUG. SEPT. 93.2 93.9 95.2 261.3 263.0 265.9 582.2 587.5 593.7 494.1 499.9 505.1 222.8 223.7 225.5 271.4 276.2 279.6 88.0 87.6 88.5 545.0 550.1 556.3 50.9 51.5 52.2 79.3 79.5 79.8 80.1 80.7 83.6 71.3 71.6 14.7 16.9 72.0 66.7 68.8 69.8 OCT. NOV. DEC. 95.8 96.6 97.5 265.8 264.4 264.1 597.9 608.8 611.4 509.3 513.3 514.8 225.2 223.4 222.0 284.1 289.9 292.8 88.6 95.4 96.6 562.1 52.6 52.8 53.2 80.1 80.4 80.6 83.1 82.1 82.7 72.5 73.0 73.4 74.9 73.0 76.8 20.1 80.8 1976 1977 1978 566.8 571.4 16.8 21.0 15.4 WEEKLY: 1978-NOV. 29 96.8 263.5 610.4 514.2 222.9 291. 3 96.2 76.3 21.8 DEC. 6 13 20 27 97.1 97.2 97.2 97.6 264.3 264.0 264.2 263.5 610.6 611.4 611.6 611.3 514.3 514.6 514.6 514.8 222.5 222.3 221.9 221.6 291.9 292.3 292.7 293.3 96.3 96.8 97.0 96.5 77.0 77.7 76.9 75.6 16.6 12.2 14.9 15.8 3 o0P 17P 24P 97.8 98.0 98.0 98.4 264.6 262.6 262.8 259.6 612.2 613.3 615.8 617.9 515.5 514.4 515,3 515.9 221.7 221.0 219.7 218.9 293.8 293.4 295.7 297.1 96.7 98.9 100.5 102.0 1979-JAN. 1/ 21 3/ 4/ P - ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA. INCLUDES PRIVATE DOMESTIC NONFINANCIAL INVESTORS' HOLDINGS OF COMMERCIAL PAPER, BANKERS ACCEPTANCES, SECURITY RP'S AND MONEY MARKET MUTUAL FUND SHARES. BORROWINGS BY BANKS FROM OTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE, AND OTHER LIABILITIES FOR BORROWED MONEYr PLUS GROSS LIABILITIES TO OWN FOREIGN BRANCHES (EURODOLLAR BORROWINGS), LOANS SOLD TO AFFILIATES, LOAN RPS, AND OTHER MINOR ITEMS. INCLUDES TREASURY DEMAND DEPOSITS AT COMMERCIAL BANKS AND FEDERAL RESERVE BANKS AND TREASURY NOTE BALANCES. PRELIMINARY 16.9 13.6 14.1 15.0
@FedFRASER