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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) 1969. MONEY MARKET AND RESERVE RELATIONSHIPS Recent Developments (1) Since the last Committee meeting, most yields in money and credit markets have moved markedly higher, with short-term rates generally up 25 to 50 basis points. The yield increases reflected the interaction of monetary policy moves, seasonal strains in shortterm markets here and abroad, and shifts in market attitudes. The announcement of the discount rate increase, the accompanying tighter open market posture, the maintenance of Regulation Q ceilings, and two successive jumps in the prime loan rate all served to convince market participants that credit expansion was likely to be curtailed. (2) Under the circumstances, the 3-month Treasury bill rate rose sharply to a peak of around 6.29 per cent on December 24. However, bill market pressures subsequently moderated, and the 3-month bill closed on January 10 at 6.11 per cent. In the past several days, there has been sizable demand for bills from, among others, State and local governments and corporations--including investors who are switching funds out of CD's. The recent Treasury announcement of a $1-3/4 billion June tax bill to be auctioned January 14 and paid January 20 through 100 per cent tax and loan credit was taken in stride by the market. (3) The effective Federal funds rate fluctuated widely since the last Committee meeting, reflecting in part money market churning related to the aftermath of large mid-December tax payments and to year-end window-dressing activities. In general, the Federal -2funds rate was most frequently in a 6-1/4 - 6-5/8 per cent band, although an effective rate of 6-7/8 per cent, with trading as high as 7-1/8 per cent, was reported on the Friday preceding the year-end New loan rates to dealers reported in New York have statement date. largely followed the pattern of the Federal funds rate and have often been in a 6-3/4 - 7 per cent range, although even higher rates have been posted at times when reserve pressures have been particularly severe. (4) Member bank borrowings averaged about $815 million during the most recent four statement weeks, compared with $515 million in the preceding four weeks. The sharp rise in average borrowing over the past four statement weeks includes the exceptionally high borrowing levels in the week ending December 25 and particularly in the week ending January 1. In the latter week borrowing reached a 16 year high of $1.3 billion, influenced by year-end statement date maneuvering, large CD run-offs at the end of the month, and a sharp mainly seasonal drop in Euro-dollar availabilities. But much of the additional borrow- ing was offset by large accumulations of excess reserves, and average net borrowed reserves deepened by only around $90 million from the preceding four week period to around $380 million. (5) Given existing Regulation Q ceilings, banks have been unable to avoid substantial attrition of maturing large denomination CD's and there is also some evidence of diminished net inflows of consumer-type time and savings deposits. bank credit expansion is developing. Thus, a pronounced slowing in However, the bank credit proxy in December still showed an average annual rate of expansion of around -313 per cent; about 1-1/2 points would be subtracted when allowance is made for the reductions in the level of the banks' Euro-dollar borrowing. Growth in the money supply and in time deposits took place at rates of around 6 and 14-1/2 per cent, respectively, in December on average. (6) The CD run-off in December as a whole now appears to have been about $1.5 billion, or about $600 million more than seasonal. The CD attrition in December and, from early signs, the further attrition in January have been concentrated at large money market banks. But partial data covering the interest-crediting period suggest more widespread slackening in net inflows of consumer-type time and savings deposits. (7) The following table summarizes the rates of change in major reserve and deposit aggregates since late 1967. The recent policy actions will begin to show most of their impact on the magnitudes in data for January, as indicated in the succeeding paragraphs. Dec. '67June '68 Total reserves July '68Dec. '68 3.7 9.0 -0.1 8.1 Proxy 3.7 12.9 Proxy plus Euro-dollars 4.7 13.0 Money supply 6.1 6.0 Time and savings deposits 5.8 17.1 Savings accounts at thrift institutions 6.1 Nonborrowed reserves Bank credit, as measured by: NOTE: 1/ Dates are inclusive. July '68 - Nov. '68. For S&L's, the December annual rate of increase is estimated at 4.6 per cent. 6.41/ -4Prospective Developments (8) The specification of money and short-term market condi- tions over the coming three weeks is complicated by the combination of a heightened market sensitivity to indicators construed as reflecting policy, potentially very large CD run-off at banks, and a fairly sizable Treasury refunding operation in prospect possibly in combination with additional cash borrowing. The Treasury's recent announcement of addi- tional June tax bills still leaves $1-1/2 - $2 billion or so of new money to be raised before early March. This may be raised in connection with, or around the time of, the mid-February refunding of $5.4 billion of publicly-held maturing issues; the refunding will be announced around the end of January. Finally, market conditions generally will be in- fluenced, of course, by the forthcoming budgetary estimates in the Budget Document, and especially the handling of the surtax. (9) Money market conditions will also be affected by the extent to which banks attempt to moderate or postpone further loan and portfolio adjustments by short-term borrowing at the discount window or in the Federal funds and Euro-dollar markets, and by the extent to which dealers are willing to take positions in the forthcoming financings. On balance, it appears likely that money market conditions consistent with a market appraisal of an unchanged stance for open market operations might involve a Federal funds rate frequently around 6-3/8 - 6-1/2 per cent, member bank borrowings in a $550-$800 million range, and net borrowed reserves of $250 to $600 million. (10) The 3-month bill rate consistent with these conditions may be in a 6 to 6-1/4 per cent range, assuming a CD run-off of the order magnitude specified in paragraph (12) below. The technical position of the bill market is good, with dealer bill holdings relatively low, particularly shorter maturities. Thus, there is a possibility that the 3-month bill rate could drop below 6 per cent for "scarcity" reasons, especially if there should be sizable liquidity demands, including demands from investors temporarily out of the stock market or switching from CD's. However, the supply of new bills being offered by the Treasury will tend to replenish dealer total holdings of bills as banks quickly sell off the newly offered tax bills; and the System is likely to be a net seller to the market in the latter part of January. (11) Dealer holdings of coupon issues are also down, as they managed a further net reduction of around $280 million in such issues maturing in over a year (the great bulk in the 5-10 year area) during the past month of rising interest rates. Thus, the dealer market is in a fairly good position to participate in the forthcoming financings, but the ability and willingness of banks to acquire and hold U.S. Government securities is quite limited, given current Regulation Q ceilings. As a result, one might expect some upward interest rate pressures in the process of distributing securities to holders largely outside the banking system. However, the prospects of large net debt repayment in the spring--estimated at around $10-1/2 billion over the four months March through June (mainly maturing tax bills)--should at least moderate upward interest rate pressures, and could even lead to some interest rate decline, particularly in the bill market as time goes on. -6(12) Largely because of continued and contra-seasonal CD attrition likely under present interest rate relationships, expansion in the bank credit proxy in January may drop into a 0 to 3 per cent, annual rate, range, given the money and short-term market conditions and (10) noted above in paragraphs(9)/and no change in Regulation Q ceilings.-/ If Lhe 3-month bill rate were to move close to the lower end of its projected range--for expectational or other reasons--bank credit would be more likely to rise at around, or somewhat above, the upper end of the range projected for it, since banks might be able to moderate CD attrition. Assuming, however, a bill rate averaging near the middle of the 6 - 6-1/4 per cent range, the staff has projected a decline in outstanding CD's of around $1-1/4 to $1-1/2 billion for January. This would be about the same actual decline as in December, but, because outstanding CD's normally rise in January (and decline in December), it would be much more of a decline seasonally adjusted than in the previous month. (13) Net inflows of consumer-type time and savings deposits at banks are likely to be on the weak side in January, as consumers also take advantage of high market yields. This taken together with the expected CD attrition is likely to lead to some decline in the average level of outstanding time and savings deposits in January--perhaps by a 1 to 4 per cent annual rate. 1/ Euro-dollar borrowings usually rise slightly over the course of January, for seasonal reasons, and CD attrition is likely to put further pressure on that market. In the first week of January, Euro-dollar borrowings of major banks rose sharply, reversing all of recent declines;such borrowings would add 2 percentage points or so to the proxy if they remained near current levels. -7(14) The money supply, enigmatically, is expected to rise rather sharply in January, on average, possibly in a 7 - 10 per cent, annual rate range. A very substantial expansion in money supply developed at the end of December and in early January, and this acts to augment the average for the month of January, even though substantial declines in outstanding cash balances are projected over the remainder of the month. No obvious explanation is at hand for the very recent money supply growth, although it is possible that large transfers around year-end--e.g., corporate payments to pension funds, repatriation of liquid funds from abroad, and churning associated with switches from CD's to market securities--may have led to some temporary accumulations of cash in a period of uncertainty. (15) There is very little reason at this point to expect any significantly stronger bank credit performance in February than in January. The further Treasury financing may enhance credit demands on banks. But banks' ability to expand resources to accommodate Treasury and other demands is likely to remain constrained under existing Regulation Q ceilings. While there is a possibility that short-term market rates could decline somewhat in the course of February--perhaps after the financing period--further CD attrition at banks still appears a likely outcome for the month as a whole. Moreover, private demand deposits may well decline rather substantially for the month, on average, as the various new Treasury issues are sold off to the nonbank public. -8(16) The outlook presented in this Blue Book is, in a sense, sanguine in that a severe crunch on the banking system and credit markets is not forecast. The basic reason for this is a presumption that the market will be expecting a slowing in business activity, and that private demands for credit will be relatively moderate. However, it is possible that as a substantial CD run-off continues through January and into February banks may become less and less willing to hold onto the State and local government issues bought last year and to continue making real estate loans in size. It is also possible that savings withdrawals from nonbank institutions could be greater than industry expectations. Under these circumstances, debt markets could become severely strained at a time when a large Treasury refunding is in process. And the odds on such a development would be enhanced if business developments do not show signs of an economic slowing and moderation of inflationary pressures. Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) U Excess Member banks Period As I. Free borrowinas reserves revised __ to I reserves date As expected at conclusion of each week's open market operations I Monthly (reserves weeks ending in): As first published each week 1967--November December 349 333 124 185 225 148 1968--January February March April May June July August September October p November p December p 417 389 337 348 354 341 331 337 346 267 286 302 275 368 649 689 728 727 523 577 492 458 541 600 142 21 -312 -341 -374 -386 -192 -240 -146 -191 -255 -298 4 11 18 25 255 556 374 197 454 634 404 474 -199 -277 -323 -196 -141 -148 -347 Oct. 2 9 16 23 30 385 225 373 - 1 352 541 403 516 337 495 -156 -178 -143 -338 -143 -191 -245 -177 -368 -196 -230 -214 -141 -337 -230 Nov. 6 13 20 27 192 537 229 185 392 675 513 583 -200 -138 -284 -398 -240 -259 -368 -471 -170 -202 -347 -469 Dec. 4 11 18 25 457 24 340 388 532 435 574 859 - 75 -411 -234 -471 -114 -443 -274 -525 -203 -446 -256 -369 1 8 862 134 1,318 499 -456 -365 -488 -365 -473 -349 Weekly 1968-- Sept. 1969- -Jan. p - Preliminary - 78 - 30 , -239 -108 - 93 TABLE A-2 AGGREGATE RESERVES AND RELATED MEASURES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages of daily figures) Reserve Total Reserves Ag gre ates Required reserves Against Nonborrowed Total Demand Reserves r e Reserves Deposits Monetar Total Member Bank Deposits (credit) I/ ( ) 1/ Var Time Deposits (comm. banks) iab les Money Supply Private ^^ D ^ Total Demand __Deposits Annually: 1967 1968 + 9.9 + 7.2 +11.5 + 5.2 +10.2 + 7.1 + 7.0 + 6.3 +11.7 + 8.6 (+11.5) (+ 9.4) +16.1 +11.3 + 6.4 + 6.5 + 6,7 + 6.2 Monthly: 1967--July Aug. Sept. Oct. Nov. Dec. +11.8 +14.0 + 7.7 +16.2 + 7.4 - 5.8 +14.9 +15.2 + 6.6 +14.5 + 5.9 -14.0 +15.2 +13.7 +12.0 +16.4 + 6.6 - 1.6 +10.2 +18.7 + 5.7 +13.5 + 8.3 -10.5 +13.4 (+14.6) +16.9 (+19.0) +10.4 (+10.2) +10.7 (+12.3) + 9.3 (+10.5) + 1.3 ( -- +15.3 +16.5 +14.9 + 8.0 + 9.3 + 9.9 +12.3 + 7.4 + 1.3 + 7.4 + 5.3 + 2.0 +14.9 + 8.7 -+ 6.9 + 6.8 - 0.9 1968--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. p Dec. p +16.6 +12.5 + 2.2 - 8.8 + 4.1 + 4.9 + 5.0 +23.5 - 1.6 + 9.8 + 5.3 +11.1 +16.7 + 9.9 -12.6 - 9.4 + 2.2 + 6.6 +14.5 +23.3 + 1.3 +12.2 - 2.3 - 1.0 +11.4 +11.4 + 0.6 - 6.0 - 1.9 + 9.6 + 7.7 +21.2 + 4.8 + 8.5 + 8.2 + 7.3 +15.3 +19.2 + 0.1 -11.1 + 1.5 +12.2 + 0.1 +21.8 - 3.5 + 4.1 + 7.5 + 7.8 + 6.6 +10.0 + 4.3 - 4.7 + 1.7 + 6.5 + 9.0 +21.4 + 8.4 +12.5 +11.1 +13.1 + 3.9 + 7.2 + 9.7 + 2.6 + 3.2 + 3.8 +14.0 +21.4 +17.3 +17.7 +14.4 +14.3 + 6.6 + 2.6 + 4.6 + 5.9 +11.7 + 8.4 +12.8 + 5.7 - 5.0 + 4.4 +11.4 + 6.2 + 6.8 + 1.7 I 2.5 + 6.8 +12.6 + 7.5 +14.9 + 3.3 - 7.3 + 5.7 +10.6 + 7.3 1/ (+ 6.5) (+10.8) (+ 4.7) (- 3.8) (+ 5.1) (+ 9.3) (+10.1) (+22.1) (+ 9.4) (+11.8) (+11.3) (+11.6) Includes all deposits subject to reserve requirements. Movements in this aggregate correspond closely with Figures in parenthesis includeEuro-dollar member bank credit on a daily average basis. movements in total borrowings. p - Preliminary. Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES OF I I DAILY FIGURES I I I BILLIONS OF DOLLARS, SEASONALLY I [ ADJUSTED 26.0 -- TOTAL RESERVES 25 5 25.0 - - - - NONBORROWED 24 5- RESERVES REQUIRED 24 0 23 RESERVES - - 5 230 22.5 --- - 22.0 BILLIONS OF DOLLARS, 1.0 NOT SEASONALLY ADJUSTED -- -- EXCESS ._ --- MEMBER BANK BORROWINGS - RESERVES S..- 1 M - M J S D M J S I M J S D M j S D 1967 1968 D Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS i I I 1 I I I1 i I TOTAL MEMBER BANK DEPOSITS [CREDIT PROXY) SEAS ADJ WEEKLY AVERAGE OF DAILY FIGURES - 294 290 286 282 278 274 - 270 266 262 258 254 8 LIABILITIES TO OVERSEAS BRANCHES [WEEKLY REPORTING BANKS] NOT SEAS ADJ, WEDNESDAYS 6 4 2 D SS 1967 M J 1968 S D M 1969 Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS BILLIONS OF DOLLARS 190 MONEY SUPPLY 186 182 204 178 200 174 - -196 170 192 - 188 TIME DEPOSITS ADJUSTED (All Commercial Banks) 184 180 176 172 168 NEGOTIABLE 24 NOT SEAS CD'S ADJ, WEDNESDAYS 20______ 16 S J 1967 D M J 1968 S D M 1969 Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES I I I BILLIONS OF DOLLARS I I I I I II 48 MONEY SUPPLY COMPONENTS: 44 CURRENCY OUTSIDE BANKS 40-- 36 DEMAND DEPOSITS 146 142 138 134 130 12 U.S. GOVT. DEMAND DEPOSITS (Member Banks) 8 4 0 A D J 1967 M J 1968 S M D 1969 Table B-1 MAJOR SOURCES AND USES OF RESERVES Retrospective and Prospective (Dollar amounts in millions, based on weekly averages of daily figures) Factors affecting supply of reserves Federal Reserve Gold Currency Technical Gold credit (excl. s outside factors stock Period Period float) Year: 1967 (12/28/66 - 1/ banks net 2/ = Change in total reserves = Bank use of reserves Required Excess Excess reserves reserves 3/ +4,718 - 725 -2,305 - 165 +1,522 +1,517 + 5 +3,757 -2,067 -3,221 +3,039 +1,508 +1,563 - 55 + + 40 761 - 451 -- + + - 45 486 + + 224 733 + + 102 986 + - 122 253 + + + 116 664 424 489 284 910 258 450 -------- 188 -367 580 58 229 199 282 - 185 63 + 419 + 897 + 179 + 190 + 705 +1,160 130 + + + + 366 716 110 366 246 399 621 133 + + + + + 206 371 198 322 26 34 305 86 + + + + 160 345 308 44 272 433 316 47 +1,228 467 --- + + 84 374 - 213 273 +1,100 367 + + 625 361 + - 475 728 15 22 29 + - 65 400 65 ---- +1,015 150 + 270 + - 395 260 600 + - 555 290 395 + - 555 290 395 -- 5 12 + - 240 15 --- - + 300 80 - 115 35 - 115 35 -- 12/27/67) 1968 (12/27/67 - 12/25/68) 5/ Year-to-date: (12/27/67 (12/25/68 - 1/10/68) 1/8/69) 679 458 Weekly: 1968--Nov. Dec. 1969--Jan. 6 13 20 27 4 11 p 18 p 25 p 1 p 8p p- PROJECTED 1969--Jan. Feb. / 55 100 For retrospective details, see B-4. For factors included, see Table B-3. For required reserves by type of deposits, see Table B-2. See reverse side for explanation. Includes increase in reserve requirements of $360 million effective Jan. 11, Jan. 18, 1968. -- p - Preliminary. 1968 and $190 million effective Table B-2 CHANGES IN REQUIRED RESERVE COMPONENTS Retrospective and Prospective Seasonal and Nonseasonal Changes (Dollar amounts in millions, based on weekly averages of daily figures) Supporting S. Gov't. demand demand deposits Total required Period U. tv reserves Supporting private deposits Other than chanes seasonal Seasonal changes seasonal changes Time Demand Time Demand l T Total Year: 1967 (12/28/66 1968 (12/27/67 - 12/27/67) 12/25/68) 1) 1) +1,517 +1,563 + 261 - 558 +1,256 +2,121 + - 59 382 - + + 239 334 +1,023 +1,647 168 831 Year-to-date: (12/27/67 (12/25/68 Weekly: 1968--Nov. - 1/10/68) 1/8/69) 6 Dec. 1969--Jan. Feb. 348 473 39 212 159 101 227 87 85 24 245 159 357 221 201 53 390 110 196 277 429 84 + 555 - - 48 + + 27 148 + - 2 64 115 + + 288 113 + 332 + 2 + 178 182 62 6 + 29 3 - 20 25 20 233 105 200 235 254 22 74 29 7 91 91 I + 730 + 480 290 395 175 130 255 - 160 140 - 175 85 115 35 225 360 - 340 395 - 290 305 .5. 1/ 450 345 1 PROJECTED 1969--Jan. - + Reflects reserve requirement changes in March .5. 1967 and January 1968. 245 20 + + - U 50 55 100 L ___________________ p - Preliminary. S 15 - 10 ___________________ Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Period Technical factors Treasury (net) operations ACTUAL - 12/27/67) 12/25/68) Other nonmember Foreign deposits t deposits and F. R. accounts and gold loans (Sign indicates effect on reserves) I I Year: 1967 (12/28/66 1968 (12/27/67 F 7 67 316 869 -11 347 3 165 - 85 +3,039 + 928 +1,309 - - 327 138 - 54 351 30 63 426 32 + + 58 371 647 398 47 2 153 673 23 346 755 339 24 375 151 48 281 95 120 123 - - 389 Year-to-date: (12/27/67 (12/25/68 - 1/10/68) 1/8/69) Weekly: 1968--Nov. 6 45 486 - 63 + + + 419 897 179 + 190 + 705 +1,160 Dec. 1969--Jan. -I- 130 213 273 - 395 + 260 - .. 68 415 125 391 119 19 + + + + I , , PROJECTED 1969--Jan. Feb. p - pPreliminary. Preliminary. - 400 + 175 600 - 600 - 300 + 80 + 300 80 5 70 + 10 Table B-4 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) Total Federal Reserve credit Period _(Excl. Year: 1967 (12/28/66 1968 (12/27/67 - 12/27/67) 12/25/68 float) U.S. Government securities Total Bills Other Repurchase agreements iholdings__ +4,718 +3,757 +5,009 +3,298 40 761 + 253 +1,086 +4,433 +2,143 +1,153 +1,176 - Federal Bankers' Agencyacceptances Member banks borrowings Securities 19 3 577 21 - 69 52 - 203 + 514 - 165 360 Year-to-date: (12/27/67 (12/25/68 Weekly: 1968--Oct. Nov. Dec. 1969--Jan. 1/10/68) 1/8/69) 7 - 41 + 112 + 12 + 23 + 63 + 1 + 5 - 63 - 1 - 1 + 96 + + 3 4 + 53 - 7 + + 7 6 - 96 152 +1,048 + 171 + 430 + + + 889 82 334 - 165 113 + 46 7 - 51 + 31 + 261 + - 84 172 2 9 16 23 30 +1,121 + 31 6 13 20 27 - 116 - 20 664 + 345 - 424 489 - 225 557 - 53 557 + 284 + 335 + 307 - 910 258 - 812* 396* - 797 722 + 450 + 156* + 435 + 60 +L,228 + + 742 344 + + 576 398 + 166 - 54 4 11 18 25 1 8 + 599 - 433 - 211 + 268 + 120 + - 467 - 7 + - - + - 13 28 + 1 28 - 1 - * - Includes effect of change in special certificates of $13 million of the week of December 11, of the week of December 18, 1968, and -$339 million of the week of December 25, 1968. 47 3 30 24 - 1 2 1968, +$326 million Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures) o Nonborrowed Periodreserves reserves reserves reserves Total Total Required reserves Against private deposits Total Demand 1966--Jan. Feb. Mar. Apr. May June 1/ July Aug. Sept. Oct. Nov. Dec. 22.785 22.857 22,888 23,118 23,192 23,149 23,293 23,029 23,065 22,954 22,915 22,895 22,325 22,376 22,331 22,490 22,486 22,472 22,552 22,336 22,319 22,243 22,303 22,286 22,456 22,507 22,512 22,714 22,773 22,780 22,864 22,687 22,712 22,629 22,593 22,600 21,936 21,996 22,115 22,283 22,331 22,361 22,344 22,320 22,349 22,229 22,198 22,262 16,822 16,877 16,957 17,043 17,030 17,043 16,963 16,908 16,922 16,827 16,810 16,825 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 23,217 23,471 23.869 23,910 23,952 24,105 24,342 24,627 24,786 25,121 25,275 25,153 22,770 23,107 23,668 23,775 23,874 23,982 24,279 24.586 24,721 25,020 25,142 24,848 22,875 23,134 23,383 23,529 23,531 23,660 23,960 24,234 24,476 24,810 24,947 24,914 22,298 22,559 22,785 22,779 23,071 23,387 23,578 23,776 23,850 23,995 24,122 24,157 16,774 16,959 17,101 17,015 17,244 17,472 17,582 17,701 17,704 17,805 17,879 17,860 1968--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. p Dec. p 25,500 25,765 25,812 25,623 25,711 25,816 75,923 26,431 26,395 26,610 26,728 26,976 25,193 25,401 25,135 24,938 24,984 25,121 25,425 25,918 25,947 26,211 26,160 26,139 25,151 25,389 25.402 25,276 25,236 25,438 25,601 26,053 26,158 26,344 26,525 26,686 24,270 24,333 24,431 24,487 24,751 24,925 25,188 25,340 25,294 25,528 25,759 26,068 17,974 18,025 18,082 18,133 18,387 18,550 18,727 18,765 18,621 18,746 18,893 19,106 p - Preliminary. 1/ Break in series due to redefinition of time deposits effective June 9, 1966, which reduced required reserves by $34 million. Table C-2 DEPOSITS "SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally Adjusted (Dollar amounts in billions based on monthly averages of daily figures) Private Total member Period bank deposits ___(credit) 1/ Time deposits demand, deposits 2/ U.S. Gov't. demand deposits 1966--Jan. Feb. Mar. Apr. May June3/ July Aug. Sept. Oct. Nov. Dec. 238.0 239.0 239.8 241.9 243.9 244.4 245.8 245.6 245.5 244.4 244.0 244.6 121.8 121.9 122.8 124.8 126.2 126.6 128.1 128.8 129.2 128.6 128.3 129.4 111.7 112.1 112.6 113.2 113.1 113.2 112.6 112.3 112.4 111.7 111.6 111.7 4.5 5.0 4.4 4.0 4.6 4.6 5.1 4.5 4.0 4.0 4.1 3.5 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 247.7 251.0 254.0 255.8 257.2 259.5 262.4 266.1 268.4 270.8 272.9 273.2 131.5 133.3 135.3 137.2 138.7 140.8 142.8 144.6 146.3 147.4 148.6 149.9 111.4 112.6 113.6 113.0 114.5 116.0 116.7 117.5 117.6 118.2 118.7 118.6 4.8 5.1 5.1 5.6 4.0 2.6 2.9 4.0 4.5 5.2 5.6 4.6 1968--Jan. Feb. Mar. Apr. May June July Aug Sept. Oct. Nov. Dec. p 274.7 277.0 278.0 276.9 277.3 278.8 280.9 285.9 287.9 290.9 293.6 :n.8 149.9 150.2 151.2 151.3 151.5 151.8 153.8 156.5 119.4 119.7 120.1 120.4 122.1 123.2 124.3 124.6 5.4 7.1 6.7 5.2 3.7 3.9 2.7 4.8 158.9 161.5 163.5 165.8 123.6 124.5 125.4 126.9 5.3 5.0 4.7 4.1 p - Preliminary. 1/ 2/ 3/ Includes all deposits subject to reserve requirements--i.e., the total of time, private demand,and U.S. Government demand deposits. Movements in this aggregate correspond closely with movements in total member bank credit. Private demand deposits include demand deposits of individuals, partnerships and corporations and net interbank balances. Break in series due to redefinition of time deposits effective June 9, 1966, which reduced total member bank deposits and time deposits by $850 million. TABLE C-2a DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts in millions, based on weekly averages of daily figures) Total member bank deposits Week ending: (credit Time deposits 1/ Private demand U. S. Gov't. demand deposits 2/ deposits 1968-- *June 5 12 19 26 278.2 278.4 277.9 280.2 151.6 151.8 151.8 151.7 123.4 122.2 122.2 123.0 3.2 4.4 3.9 5.5 July 3 10 17 24 31 278.8 278.0 230.6 282.4 283.6 152.2 152.7 153.6 154.4 155.1 125.123.8 124.4 123.9 124.5 1.4 1.5 2.7 4.1 4.0 Aug. 7 14 21 28 284.7 285.0 286.4 287.0 155.5 156.0 156.8 157.4 125.0 123.9 124.9 124.7 4.2 5.2 4.7 4.9 Sept. 4 11 18 25 286.7 287.0 287.8 288.8 157.9 158.3 158.9 159.4 124.7 124.1 123.5 123.4 4.1 4.6 5.4 6.0 Oct. 2 9 16 23 30 290.3 290.4 289.9 289.5 292.7 160.1 160.8 161.1 161.9 162.2 124.0 123.9 125.1 123.7 124.3 6.2 5.7 3.7 3.9 6.2 Nov. 6 13 20 27 293.9 293.6 292.9 294.1 162. 6 163.0 163.6 164.7 125.5 124.2 126.1 5.8 6.3 3.4 3.4 Dec. 4 11 18 25 294.8 296.4 296.9 296.7 165.3 165.9 166.1 166.1 126.3 126.3 126.4 126.9 3.2 4.2 4.4 3.7 1969-- -Jan. 1 297.3 297.8 165.5 164.9 128.0 128.7 3.8 4.2 8 125.9 p - Preliminary. 1/ Includes all deposits subject to reserve requirements--i.e., the total of time, private demand, and U.S. Government demand deposits. Move- ments in this aggregate correspond closely with movements in total member bank credit. 2/ Private demand deposits include demand deposits on individuals, partnerships and corporations and net interbank balances. TABLE C-3 MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally adjusted (Dollar amounts in billions, based on monthly averages of daily figures) Private Time Deposits Demand Adjusted Deosits __________________________________Deposits 2/1_jAdjusted 1966--July 169.9 37.6 132.3 155.9 Aug. 170.0 37.8 132.2 156.9 Sept. 170.5 37.9 132.6 157.7 Oct. 170.2 38.0 132.1 157.3 Nov. 170.2 38.2 132.0 156.9 Dec. 170.4 38.3 132.1 158.1 Currency 1/ Monthly Money Supply 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 170.3 171.8 173.2 172.5 174.4 176.0 177.8 178.9 179.1 180.2 181.0 181.3 38.5 38.7 38.9 39.0 39.1 39.3 39.4 39.5 39.7 39.9 40.1 40.4 131.8 133.0 134.3 133.5 135.3 136.7 138.4 139.4 139.4 140.2 141.0 140.9 161.0 163.5 165.9 168.1 170.1 172.6 174.8 177.2 179.4 180.6 182.0 183.5 1968--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. p 182.3 182.7 183.4 184.3 186.1 187.4 189.4 190.3 189.5 190.2 192.0 193.0 40.6 40.7 41.1 41.4 41.6 42.0 42.2 42.6 42.7 42.8 43.2 43.4 141.7 141.9 142.2 143.0 144.5 145.4 147.2 147.6 146.7 147.4 148.7 149.6 184.1 185.2 186.7 187.1 187.6 188.2 190.4 193.8 196.6 199.5 201.9 204.3 2/ IIncludes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. Includes (1) demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S. Government, less cash items in process of collection and Federal Reserve float; and (2) foreign demand balances at Federal Reserve Banks. p - Preliminary. 1/ TABLE C-3a MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally Adjusted (Dollar amounts in billions, based on weekly averages of daily figures) Week Ending Currency 1/ Money Supply Private Demand Deposits Time Deposits 2/ adjusted 1968- -June 5 12 19 26 187.7 186.4 186.8 187.6 41.8 42.0 42.0 42.0 145.9 144.3 144.8 145.6 188.0 188.1 188.1 188.0 July 3 10 17 24 31 189.7 188.8 190.0 188.6 189.5 42.1 42.2 42.2 42.2 42.2 147.6 146.6 147.8 146.4 147.3 188.6 189.2 190.2 191.1 191.8 Aug. 7 14 21 28 190.4 189.7 190.4 190.2 42.2 42.5 42.6 42.7 148.1 147.1 147.8 147.5 192.5 193.3 194.0 194.6 Sept. 4 11 18 25 190.3 190.2 188.7 188.5 42.7 42.6 42.7 42.6 147.5 147.5 146.0 145.9 195.2 195.8 196.6 197.2 Oct. 2 9 16 23 30 190.0 189.9 191.0 189.4 189.9 42.7 42.9 42.8 42.8 42.9 147.3 147.0 148.1 146.5 147.0 198.1 198.7 199.1 200.0 200.4 Nov. 6 13 20 27 191.9 190.6 192.2 193.3 42.9 43.2 43.2 43.4 149.0 147.3 149.0 149.9 200.8 201.4 201.7 202.9 Dec. 4 11 18 25 193.0 193.1 192.7 193.1 43.5 43.5 43.4 43.4 149.5 149.6 149.2 149.6 203.7 204.1 204.4 204.6 1 8 193.7 43.4 150.3 43.4 151.8 204.1 203.7 1969-- -Jan. 1/ 2/ 195.2 , Includes currency outside the Tresury, the Federal Reserve and the vaults of all commercial banks. Includes (1) demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S. Government, less cash items in process of collection and Federal Reserve float; and (2) foreign demand balances of Federal Reserve Banks. p - Preliminary. FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (Monthlv averages and, Period I where available, weekly averages of daily figures) .7f Resrve~ Bank Credit Bond Yields Flo Money Market Indicators Federal 3-month Corporate Munici- NonTotal Bank Free BorrowMoney Credit Funds TreasU.S. New borrowed pal ReZeserves ings Supply Proxy ury Gov' t. Rate Issues Reserves serves (Aaa) (In millions Proxy(In billions of (20 yr.) (In mllions Bill (Aaa)1/ of dollars) 4/ rTnf rn 1I ar-c (In billions of II 1967--Nov. Dec. 225 143 124 4.12 4.51 4.72 4.96 5.66 5.59 6.50 1968--Jan. Feb. Mar. Apr. May June 142 21 -312 -3L1 -374 -386 -192 -240 -146 -192 -255 -298 275 368 649 689 728 727 523 577 492 458 541 600 4.60 4.72 5.05 5.76 6.12 6.07 5.00 4.98 5.17 5.38 5.66 5.52 5.31 5.23 5.19 5.39 5.38 5.59 5.46 5.55 5.40 5.29 5.22 6.22* 6.25* 6.57* 6.50* 6.64 6.65 6.50* 5.28 5.44 5.81 5.35 5.45 6.05 5.96 5.88 6.27 6.47 6.57 6.79 - 75 -411 -234 -471 -456 532 435 574 859 1,318 5.71 5.82 6.00 6.21 5.95 5.62 5.74 5.76 5.83 6.04 6.02 6.81 6.92 6.86 4.40 4.40 4.57 4.57 4.57 -365 499 .43 4.58 -210 -201 -218 548 567 529 5.58 5.39 5.77 5.99 es 5.45 5.46 5.44 .90 Year 1968 First Half 1968 Second Half 1968 6.18 Avera 5.36 5.29 5.42 6.47 6.47 6.50 4.20 4.16 4.22 Recent variation in growth 11/29/67-7/3/68 7/3/68-12/18/68 12/18/68-1/8/69 -159 -203 -431 515 516 892 5.25 5.90 6.15 5.24 5.34 6.13 5.48 5.40 5.97 6.47 6.47 6.88 4.15 4.21 4.57 July Aug. Sept. Oct. Nov. Dec. 1968--Dec. 1969--Jan. S p 185 6.02 6.03 5.78 5.92 5.75 5.93 6.21 6.21 5.56 6.51 6.16 3.99 4.15 +122 -294 +154 -122 4.06 4.01 4.28 4.13 4.28 4.26 4.12 4.00 4.23 4.21 4.33 4.50 +345 +208 -266 -197 + 46 +137 +304 +493 + 29 +264 +347 +265 + 47 -189 - 51 - 21 MnnPV ... Time Deposits doars) dollars) + 88 +105 +107 +508 - 36 +215 +118 +248 + + 5.2 + 2.2 + 8.1 nd + 7.2 + 5.3 + 9.0 .5 + 1.5 - 0.4 + 8.6 + 4.1 +12.9 + 6.5 + 6.7 + 6.0 +11.3 + 5.1 +17.1 + 3.5 +14.1 + 5.3 + 8.0 + 3.4 +22.5 + 5.2 +18.1 - 5.9 Includes issues carrying 5-year and 10-year call protection, * - issues carry a 10-year call protection. Time deposits adjusted at all commercial banks. Base is change for month preceding specified period or in case of weekly periods, the first week shown. Average of total number of days in period. n.a. - Not available. p - Preliminary. January 10, 1969.
@FedFRASER