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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 e
r
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

I
1

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 chanes
seasonal than
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)

+

261

-

+1,517
+1,563

558

+1,256
+2,121

+
-

-

+
+

+1,023
+1,647

59
382

239
334

168
831

Year-to-date:
(12/27/67
(12/25/68

Weekly:
1968--Nov.

-

-

6

245
159
357
221
201
53
390
110
429
84

1

PROJECTED

+

555

-

-

288
113

+

332

+

+

29
3

-

20
25
20

233
105
200
235
254
22
74
29

7

2
64
115

+
+

178
182

62
6

27
148

+
-

+

48

+
+

2

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

196
277

1969--Jan.

Feb.

473
39
212
159
101
227
87
85
24

Dec.

1969--Jan.

348

+

1/10/68)
1/8/69)

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)

Technical
factors

Treasury

(net)

Period

ACTUAL
-

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

Other
nonmember

Foreign
deposits

operations

F

7
67

316
869

1
-1

347
3

165

-

85

+3,039

+

928

+1,309

-

12/27/67)
12/25/68)

-

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.

45
486

-

63

+
+
+

6

419
897
179

+ 190
+ 705
+1,160

Dec.

I-

395

+

260

-

1969--Jan.

130
213
273

..

68
415
125
391
119
19

+

+
+

+

I

,

,

PROJECTED

p -

Preliminary.
p
Preliminary.

400

+

175

600

-

600

-

Feb.

-

300

+

1969--Jan.

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

-

7

+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

-

-

+
-

13

28

+

-

+

1

28

-

47
3

30
24
- 1

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.

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

1/

Private
demand

U. S. Gov't.
demand

deposits 2/

Time
deposits

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 2/1_jAdjusted
__________________________________Deposits
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

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

MnnPV
...

Time
Deposits

doars)
dollars)

4.40
4.40
4.57
4.57
4.57

-365

nd

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

+ 88

+105
+107
+508
- 36

+215
+118
+248

+
+ 5.2
+ 2.2
+ 8.1

+ 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.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102