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Content last modified 6/05/2009.
CONFIDENTIAL (FR)
January 9, 1970.
MONEY MARKET AND RESERVE RELATIONSHIPS
Recent developments
(1) Security yields showed somewhat varying patterns of
change in different markets during December, but since the turn of the
year most yields have declined somewhat. Yields on Treasury securities
reached new record highs at year-end due in part to special influences
associated with the new tax reform bill.
As bid quotes on both 3- and
6-month bills broke through the 8 per cent level, rates on most other
short-term securities were also carried upward to new highs.
Yields
on municipal and new corporate bonds, on the other hand, reached their
highs earlier in December when new issue volume was unusually heavy.
Subsequently as volume receded over the holiday period, underwriters
were able to trim back inventories, and yields turned down.
A special
factor contributing to the decline in yields recently has been the
large volume of small orders from individuals being financed partly by
withdrawals from depositary institutions.
(2) The 3-month Treasury bill reached a record 8.10 per cent
in the auction on December 29, somewhat above the upper end of the
7-1/2--8 per cent range projected in the last blue book.
Over most
of the period since the last meeting, however, the bill rate has
fluctuated
within the blue book range and most recently has dropped
to around 7.90 per cent--about the same level as that prevailing at the
FINANCIAL MARKET
RELATIONSHIPS IN PERSPECTIVE
1968--September
October
November
December
-
1969--January
February
March
April
May
June
lulv
August
September
Octooer
November
December p
-
1
9
6 9
-- Aug
Sept
146
192
255
327
-
492
458
541
743
5
5
5
6
78
92
81
02
5.19
5.35
5.45
5.96
5.28
5.44
5.56
5.88
6.27
6.47
6.61
6.79
4.23
4.21
4.33
4.50
+
+
+
+
2.1
3.2
2.8
3.2
+0.4
+0.4
+ 1.8
+ 1.2
+
+
+
+
6.30
6 64
6 79
7 41
8 67
8 40
8 61
9 19
9 15
9 00 r
6 14
6.12
6.02
6.11
6 04
6.44
7 00
6.98
7.09
7 00
5.99
6.11
6.22
6.03
6.11
6.28
6.27
6.22
6.55
6 50
6.74
6.91
6.92
6.91*
7.37
7.17
7.22
7.58
7.63
7.65*
7.98*
7 89
8.32*
8.75
4.58
4.74
4.97
5.00
5.19
5.58
5.61
5.74
5.83
5.80
5.88
6.50
+
+
+
-
1.2**
0.3
2.5
1.2
0.3
2.5
4.6
2.7
0.4
2.2
2.3
0.1
+
+
+
+
+
+
+
-
1.0
0.5
0.5
1.3
0.2
0.7
O.J
0.3
-+0.1
+ 0.2
+ 0.3
- 1.7
- 0.8
- 0.1
7.57*
7.53
7.61
7.82
7.90*
8.02*
6.04
8.13
5.70
5.73
5.73
5.80
5.80
5.85
5.85
5.82
-0.9
-0.3
-1.5
+0.7
-+ 0.4
-0.6
+0.6
-0.2
+ 0.3
-1.3
-+1.3
- 0.9
+1.2
- 1.4
- 1.1
- 0.7
- 0.5
- 0.5
+ 0.1
- 0.1
+ 0.3
- 0.2
+ 0.3
- 0.4
-0.3
- 0.3
+ 0.1
. 0.1
-0.2
+ 0.1
+ 0.3
491
580
635
844
-1,116
-1,078
-1,045
- 997
- 1/
-1,006
715
836
837
1,031
1,359
1,355
1,311
1,211
1,026
1.189
-
',
1,213
8 85
7.24
-
868
1,126
8.97
7.82
b
13
20
27
839
996
-1,162
992
1,090
1,329
1,221
1 204
9.57
9.18
8 79
8 82
6.99
7.04
6.86
7.04
1
In
838
886
901
1,240
740
1,018
1,105
9 57
8.S7
9 07
9 61
7.01
7.09
7.11
7.13
6.21
6.19
6.20
6.24
6.35
6.45
6 49
6.60
-19
17
24
-
+0.7
- 2.1
+ 3.4
- 2.1
2.6
3.0
2.7
2.8
- 0,6
- 0.9
-3.1
- 3.2
- 0.4
- 0.6
- 0.1
+ 0.8
Okt
I
8
15
22
29
-I
116
828
-1,129
857
-1,099
1,436
964
1,347
I 015
1,1,9
9 11
9 43
9.68
8 68
8 39
7.07
7.00
7 02
6.94
7 00
6.76
6.65
6.46
6.29
6.50
8.22
8.10
7.95
7.82
7.87
5.83
5.80
5.75
5.80
5.84
Nov.
5
12
19
26
-1,031
- 73
925
-1,0n2
1.328
1,244
1,071
1,210
9
9
8
8
07
32
79
32
7.01
7.14
7.16
7.44
6.59
6.66
6.78
6.83
8.13
8.27*
8 44
8.67
5 75
5.78
5.95
6.05
- 0.8
-0.5
- 1.8
+ 2.2
- 0.7
+2.6
- 0.1
- 0.2
- 0.2
Dec
3
10
17
24
31
8.85
8.70
8.76
---
6.34
6.48
6.57
6.57
6.52
+ 1.7
- 1.5
-0.3
S1.1
+2,0
+0.1
- 0.9
+0.3
- 0.9
+5.0
+
+
+
4
-
-1.7
+ 0.3
+0.2
+ 1.0
+ 0.4
- 0.9
-
988
944
987
1,191
1,199
1,043
8 91
8.75
9.14
7.55
7.75
7.88
-
819
1,094
9.1R
7.8'
-
604
1 104
8.71
8.00
6.84
6.80
6.90
6.95
7.04
7 p
-
648
854
8.45
7.92
6.93
n.a.
n.a.
+0.6
Year 1969
First Half 1969
Second Half 1969
-
862
779
943
1,110
1,034
1,183
8.22
7.46
8.96
6.67
6.15
7.19
6.32
6.12
6.53
7.62
7.20
8.04
5.45
5.01
5.89
Annual rates of increase 4/
- 1.7
- 4.1
+ 2.5
+ 0.7
- 3.5
+ 4.3
- 4.1
- 4.7
+ 0.6
Recent variation
in growth
12/18/69-5/21/69
5/21/69-1/7/70
-
690
988
955
1.235
6.97
8 94
6.10
7.05
6.07
6.50
7.09
7.75
4.83
5.84
+ 0.6
- 2.3
1970--Jan.
p
p
o
p
r - Revised,
1/
2/
Average
Includes
of total number
,,r
of days in period
,
and 10-year call protection,
commercial banks
5-year
*
-
carry a
issue
p -
10-year
protection.
l0-year calll protection.
3/ Time deposits adjusted at all
weekly periods, the first week shown.
Base is change for month preceding specificperiod or In case of
1
ai depo. r resun rectng n witlIdrawai I. a large cuuntrv bank
neber Iu
i
il
</Ol' ill1
flect
*
Percentage annual rlt. are al usted tn eliminate this break in beries.
te- lembership
tr,, 'v,
Iam,.
1),lt70.
reliminary
- 2.3
- 4.4
+ 5.7
+ 1.3
0.3
0.1
0.3
0.1
0.4
- 5.2
- 4.0
- 6.6
+ 3.9
- 5.9
S.A. - Seasonally adjusted.
-2last Committee meeting.
In addition to the high cost of dealer financing,
factors exerting upward pressure on bill yields in December included
sizable further foreign sales, and smaller than expected demands from
year-end bank window dressing and from reinvestment of the proceeds
of maturing Treasury 2-1/2 per cent bonds and December tax bills.
(3)
Seasonal pressures caused the basic reserve deficits of
money market banks to deepen substantially over most of December.
This,
and the general churning typical of the year-end, contributed to a
substantially enlarged average volume of daily trading in the Federal
funds market, and carried the daily effective rate on Federal funds most
frequently into a 9-1/4--9-3/4 per cent range, somewhat above that in
the previous inter-meeting period.
(4)
Preliminary estimates of December changes in the monetary
aggregates show that the money supply increased on average at about a
2 per cent annual rate, and the bank credit proxy declined at about an
0.5 per cent rate.
These estimates contrast with declines of 3 to 6 per
cent and 1 to 4 per cent,respectively, projected for these aggregates
in the last blue book.
Over a part of the period between Committee
meetings, however, current projections on which the Account Manager
was operating showed a money supply decline deeper than the blue.book
projection, and the credit proxy was projected to decline at a rate
near the low end of the blue book range.
A very large ($5.2 billion)
bulge in private demand deposits in the last week of December was
responsible for the stronger than expected performance of both the money
-3supply and the bank credit proxy.
This bulge appears partly to
represent the temporary effect of repatriation of corporate funds from
abroad to conform to the Commerce Department's foreign investment guidelines, and partly some increase in transactions balances that developed
in the process of savers' switching out of intermediary claims into
market instruments.
In addition, it should be noted that there was a
sharp, and as yet unexplainable, drop of cash items in process of
collection at New York City banks in the last week of December, which
is expected to be reversed.
(5) After adjustment for the change in Euro-dollar borrowings
the bank credit proxy for December is estimated to have declined at
roughly a 1 per cent annual rate.
But with commercial paper continuing
to expand, the bank credit proxy adjusted to include all nondeposit
sources of funds including Euro-dollars shows an increase at about a
1-1/2 per cent annual rate.
Total time and savings deposits grew at
about a 5 per cent annual rate on average in December, as expected.
(6) The tendency around the turn of the year for the Federal
funds and other short-term rates.to advance to levels above the blue
book range, and earlier indications that the monetary aggregates were
at or below the bottom end of the range projected in the blue book,
influenced the Account Manager to supply reserves even though member bank
borrowings and net borrowed reserves were running somewhat shallower on
a day-to-day basis than in earlier weeks.
In addition, there were
-4unusual complications in projecting reserve factors, particularly
float, that led to sharp variations in projections of net reserve
availability.
At the same time, there was the usual seasonal rise in
excess reserves at year end.
As a result, net borrowed reserves averaged
around $690 million in the three most recent statement weeks--substantially
less than the $900 million to $1.2 billion blue book range, and member
bank borrowings averaged about $1 billion, at the low end of the
projected range.
(7)
The following table summarizes the rates of growth in
major deposit, reserve, and credit aggregates in 1968 and in 1969:
Year
1968
Year
1969
July '69Sept. '69
Oct.-Dec. '69
Total reserves
7.8
-1.7
- 9.3
1.1
Nonborrowed reserves
6.0
-3.1
- 4.8
-0.4
0.0
Money supply
11.5
Time and savings deposits
Savings accounts at non-bank
thrift institutions
1.2
-5.2
-13.3
0.2
0.0
6.3
Member bank deposits and
related sources of funds
Total member bank deposits
(bank credit proxy)
9.0
-4.1
- 9.4
Proxy plus Euro-dollars
9.8
-1.6
- 6.2
Proxy plus Euro-dollars and
other nondeposit sources
n.a.
n.a.
- 4.3
ll.u
2.3
- 0.8
n.a.
n.a.
0.8
2.1
Commercial bank credit
(month end)
Total loans and investments
of all commercial banks
L&I plus loans sold
outright to affiliates
and foreign branches
NOTE:
Dates are inclusive.
2.0
All items are average of daily figures (with
"other nondeposit sources" based on an average for the month of
Wednesday data), except the commercial bank credit series which are
based on total outstanding on last Wednesday of month. All additions
to the total member bank deposit series and the last Wednesday total
loans and investments series are seasonally unadjusted numbers,
since data have not been available for a long enough time to make
seasonal adjustments.
Prospective developments
(8)
If the Committee decides to maintain unchanged conditions
in the money market over the next four weeks, it may wish to consider
the following second paragraph for the directive (alternative A):
To implement this policy, WHILE TAKING ACCOUNT OF
THE FORTHCOMING TREASURY REFUNDING, System open market
operations until the next meeting of the Committee shall
be conducted with a view to maintaining the prevailing
firm conditions in the money market; provided, however,
that operations shall be modified if bank credit appears
to be deviating significantly from current projections
unusual
if
or
[DEL:
(9)
liquidity pressures should develop.]
The fluctuations in net borrowed reserves and the
Federal funds rate over the past several weeks make it difficult to
define prevailing money market conditions.
Some of the recent
pressures on the Federal funds market have been seasonal, and these
are likely to abate over the next few weeks if the basic reserve
deficits of major money market banks improve seasonally.
But part
of the recent funds market pressure appears to reflect the cumulative
effects of monetary restraint on bank liquidity.
If the latter
influence continues, then maintenance of an unchanged over-all tone
of the money market--with the Federal funds rate in an 8-1/2--9-1/2
per cent range--might require that net borrowed reserves be shaded
toward the shallower end of the $900 million - $1.2 billion range
specified in recent Blue books.
In any case, as the seasonal bulge
in excess reserves that developed in the second half of December
disappears, maintenance of firm money market conditions will entail
a rise in net borrowed reserves from the $630 million average of the
past two statement weeks.
Member bank borrowings may continue to be
expected to average in a $1--$1.2 billion range.
(10)
The 3-month Treasury bill rate will probably continue
to fluctuate generally in a 7-1/2--8 per cent range.
Continuation of
relatively high dealer financing costs--with marginal dealer borrowing from major New York banks remaining mainly in a 9-1/2--10-1/4 per
cent range--may limit dealers' willingness to position bills.
Down-
ward pressure on bill rates could be generated as a result of seasonally strong investment demand for bills in January, including disintermediation flows;
borrowing;
and perhaps reinvestment demands associated with the mid-
February refunding.
institutions
the absence of the usual seasonal Treasury cash
On the other hand,
it
is
expected that thrift
and Federal Home Loan Banks will have to liquidate part
of existing bill holdings to finance savings withdrawals.
If with-
drawals are large enough, the FHLB's may have to call on their credit
line with the Treasury.
If this occurs before the Treasury's cash
balance is seasonally rebuilt after mid-January, the balance may run
so low as to necessitate temporary direct Treasury borrowing from
the System.
The reserve effect of such borrowing would be offset by
roughly equivalent System bill sales in the market.
Moreover, over
the next four weeks the System will generally be
on the selling side
of the market mainly to absorb the seasonal return flow of currency.
(11)
The high dealer financing costs, the sizable corporate
calendar, an expected large volume of Federal Home Loan Bank and other
Federal agency issues, and the forthcoming Treasury refunding are
likely, in combination, to counter, and perhaps reverse, current
tendencies for intermediate- and longer-term interest rates to decline
--barring a major shift in market expectations.
The Treasury refund-
ing will be announced on January 28, and will include at least $4
billion of publicly held issues maturing in mid-February and probably
another $1-1/2 billion of coupon issues that mature in March.
The
nature of the issues to be offered in the refunding as well as the
prospective market reception of the offering are highly uncertain at
this point, given high dealer financing costs, the constraints on
banks' ability to absorb new issues, changes in the tax treatment of
capital gains and losses for banks which may reduce the relative
attractiveness of new acquisitions of U.S. Government securities,
and the prospect at this point of a crowded calendar of other issues.
(12)
The constraint on banks' ability to acquire securities
is indicated by the anticipated decline in a 2-5 per cent, annual
rate, range of total member bank deposits that is projected for
January.
A larger decline may develop in February when U.S. Govern-
ment deposits are projected to decline sharply.
The January and
February projections also assume a weaker performance of time deposits
than has been evident during the past few months.
For all commercial
banks, time deposits are expected to decline in a 3-6 per cent, annual
rate, range from December to January, with the weakness mostly
attributable to sizable outflows of consumer-type deposits following
interest-crediting as savers move into high-yielding market instruments.
And given interest rate relationships, attrition of domestic
large denomination CD's is expected to persist, although it will continue to be limited by the greatly reduced level of outstandings.
In
February, a somewhat similar decline in time deposits is expected.Including an expected increase in foreign and domestic nondeposit sources of funds, the adjusted bank credit proxy is anticipated
to decline in a 1-4 per cent annual rate range in January and a 4-7
per cent range in February.
With a sharp recovery in U.S. Government
deposits projected for March, for the first quarter as a whole the
adjusted bank credit proxy is projected to decline by about a couple
of percentage points at an annual rate.
These projections are based
on the assumption of no change in Regulation Q ceilings.
(13)
The money supply in January is expected to show little
change on average from December, as the extraordinary end-of-December
bulge in the money supply disappears.
Over the somewhat longer-run
of the first quarter, the money supply seems unlikely to show much,
if any, net growth (measured from the December average level to the
March average level), given current money market conditions and the
outlook for a relatively small increase in GNP in nominal terms.
a projection is consistent with behavior of the money supply over
the past two quarters under the current policy directive, and with
Such
-10Board staff economic projections for the first quarter.
In February,
however, the money supply may show some temporary rise as U.S. Government deposits are drawn down.
(14)
Policy alternative B. If the Committee should decide
to move toward achieving slightly less firm money market conditions,
it might wish to consider the following second paragraph for the
directive:
To implement this policy, WHILE TAKING ACCOUNT OF THE
FORTHCOMING TREASURY REFUNDING, System open market operations
until the next meeting of the Committee shall be conducted with
maintaining the prevailing]ACHIEVING SLIGHTLY LESS
a view to [DEL:
firm conditions in the money market; provided, however, that
operations shall be modified FURTHER if bank credit appears
deviating significantly WEAKER THAN CURRENTLY PROJECTED
to be [DEL:
if
or
frem current projections unusual
liquidity
pressures
should develop.]
(15)
Slightly less firm money market conditions might
encompass a Federal funds rate averaging consistently below 9 per cent,
perhaps in an 8-1/2--9 per cent, net borrowed reserves averaging around
$800 million, and member bank borrowing generally a little below
$1 billion.
The 3-month bill rate under these conditions may drop
to or somewhat below 7-1/2 per cent, although dealer financing costs
are likely to remain relatively high and still be a constraint on dealers'
-11willingness to add to positions.
Longer-term interest rates, too, might
come under less upward pressure--and the recent declines could even be
extended--should the market become aware of the shift and interpret it
as the first step in a progressive easing of policy.
(16)
Little effect on the monetary and banking aggregates
may be expected from such a shading in
money market conditions
January since the month is already about half over.
in
In February,
banks' time deposit experience might improve by a percentage point or
so relative to what it would be under prevailing conditions as a decline
in market interest rates may reduce the outflow of consumer-type deposits
in some small degree.
Moreover, private demand deposits, and the money
supply, may also show a shade more strength in February than otherwise
as a lower Federal funds rate makes bank slightly more willing to
accommodate borrowing demands.
(17)
Policy alternative C.
If the Committee wishes to place
more emphasis on monetary and banking aggregates in the directive, it
may wish to consider the following language for the second paragraph.
To implement this policy]ACCORDINGLY, WHILE TAKING
{DEL:
ACCOUNT OF THE FORTHCOMING TREASUSY REFUNDING,
System open
market operations until the next meeti.g of the Connittee shall
be conducted with a view to maintaining [DEL:
the prevailing] firm con[DEL:
ditions in the money market, provided, however; that
shall be modified if bankcredi t appears
be
to
operations
deviating signi f -
-12cantly
from
current projections
orif
unusual liquidity pressures
should develop] CONSISTENT WITH A POLICY OF MONETARY RESTRAINT
AND CONDUCIVE TO MODEST AND ORDERLY EXPANSION IN THE MONETARY
AND BANKING AGGREGATES.
(18)
A modest and orderly expansion in
the monetary and banking
aggregates might encompass about a 2 per cent annual rate of increase
in the money supply over the first quarter (from the December
average to the March average), but, given current Regulation Q
ceilings, this might not be accompanied by an expansion in total
bank credit much, if any, greater than the small fourth quarter
rate.
How much expansion in bank credit develope would depend in
large part on the extent of any accompanying decline in bill rates.
Given the current GNP projection, it is not expected that a 2 per
cent growth in money supply would lead to a sharp drop in bill
rates, although the 3-month rate may decline to around 7 per cent
on average in the first quarter,
On this assumption, total member
bank deposits may show little net change over the first quarter,
although a modest rise in bank credit--perhaps in a 0-2 per cent
range (as measured on a daily average basis by member bank deposits
plus domestic and foreign nondeposit sources)--would result from
expansion in Euro-dollar borrowings and continued net new issues of
commercial paper.
If the Committee wished to encourage a larger
expansion in outstanding bank credit, this would appear to require
a rise in Regulation Q ceilings or a large drop in market interest
rates.
-13-
(19)
Over the quarter,
the money market conditions that
would appear to be consistent with this pattern of change in
the
aggregates might encompass a Federal funds rate in an 8--8-1/2 per
cent range, net borrowed reserves averaging around $700 million,
and member bank borrowings around $800 million.
Marginal reserve
measures of these proportions were experienced around year-end but,
for reasons explained in paragraph (9), they are unlikely to persist
if
the Federal funds rate is
kept in
an 8-1/2--9-1/2
and as excess reserves decline seasonally.
per cent range
A step toward achiev-
ing the first quarter money market conditions specified in the first
sentence would be to accommodate a decline in the Federal funds rate
to an 8-1/2--9 per cent range over the next four weeks, with net
borrowed resevves probably in a $700-$900 million range, member bank
borrowings a little
less than $1 billion, and the 3-month bill rate
falling to or somewhat below 7-1/2 per cent.
If projections of the
interrelation between the monetary aggregates and money market conditions are accurate, a further modest lessening of restraint in
money market conditions would appear to be required as the quarter
progresses.
(20)
The initial small decline in
the Federal funds rate
might alter market expectations, and thereby take pressure off of
intermediate- and long-term markets.
The move is so modest, however,
and the calendar of securities so large, that sharp declines in
short- and long-term interest rates are not likely to develop over
-14-
the next few weeks unless GNP turns out to be substantially weaker
than projected
(and if GNP is weaker than projected, it may take
sharp declines in interest rates to achieve a 2 per cent growth in
money supply).
(21)
Within the quarter, money supply and bank credit are
likely to fluctuate fairly widely.
For the money stock, little net
change would be anticipated for January; an increase in a 5-7 per
cent annual rate range might develop in February when Treasury
deposits drop sharply, and little net change again would be expected
in March as transactions demands remain quite modest and some rebuilding of the Treasury balance is undertaken through a Treasury bill
offering for cash.
Outstanding bank credit, as measured by the
adjusted proxy, would still show declines in January, because of
time deposit outflows.
There would also likely be a decline in
February, as Government deposits drop, with the decline in a 1-4 per
cent annual rate range.
Experience in March is likely to improve
substantially, with a moderate growth in outstanding bank credit
expected as declines in Market interest rates reduce the relative
attractiveness of market securities and as Government deposits are
rebuilt.
Table 1
MARGINAL RESERVE MEASURES
(Dollar amounts in millions, based on period averages of dally figures)
Member
Fret
reserves
Period
Excess
reserves
Total
Banks
Borrowi
ngs
C 1
y
R e s e r v e
Major banks
Other
8 N.Y.
Outside N Y.
Country
Monthly (reserves weeks
ending in):
1969--September
October
November
DeLember
-
146
192
255
270
346
267
286
330
492
458
541
600
125
81
65
134
158
88
171
223
73
117
93
66
136
172
212
177
1969--Januarv
February
larch
April
May
lune
Tulv
August
September
October
November
December p
477
580
635
844
-1,116
-1,078
-1,045
997
- 744
995
975
868
359
256
202
187
243
277
266
214
282
195
238
258
836
836
837
1,031
1,359
1,355
1,311
1,211
1,026
1,190
1.213
1,126
131
62
58
85
123
57
89
81
83
106
120
268
302
255
233
411
346
459
250
253
236
327
387
309
149
215
254
260
397
288
364
256
222
293
250
220
253
30293
275
493
550
608
621
48
464
656
329
2
9
16
23
30
-1,138
891
-1,103
972
-1,123
496
124
176
382
146
1,634
1,020
1,279
1,354
1,269
125
-88
86
146
416
165
302
214
152
396
334
390
393
308
697
521
Aug.
6
13
20
27
839
996
-1.162
992
251
333
S9
212
1,090
1.329
1,221
1.204
18
118
136
53
183
365
267
196
251
256
19L
322
638
53'
6263'
Sept.
3
10
17
24
-
838
349
886
901
402
391
132
20
1,240
740
1,018
1.105
57
64
128
83
286
39
331
306
233
172
136
328
6'-o
38
1
8
15
-1.116
828
-1 129
320
139
218
1,436
967
1.347
9
170
210
531
112
396
257
267
302
553
L1
-39
22
-
8'7
I-8
1,01.
--
275
344
30t
29
-1,099
S0
1,170
53
322
293
511
5
12
19
26
-1.032
- 873
92'
-1.072
296
371
1-6
138
1,328
1,244
1,071
1,210
121
350
-8
422
296
390
438
295
189
260
260
490
p
p
p
p
-
988
944
987
819
604
203
255
56
275
500
1,191
1,199
1,043
1,094
1,104
266
293
164
296
319
307
264
283
356
334
241
262
301
150
153
7 p
-
648
206
854
196
327
87
1969--July
Ot.
Nov.
Dec.
1970--Jan.
3
10
17
24
31
-
p - Preliminary.
1'9
661
66"
-
21
O0-
i
7c
380
295
292
298
3
244
Table 2
(In
Reserve
AGGREGATE RESERVES AND MONETARY VARIABLES
Retrospective Changes, Seasonally Adjusted
per cent, annual rates based on monthly averagLs of daily rigur-,)
I
Aggregates
Monetary
Mo n e y
To al
Total
Reserves
Period
Nonborrowed
Required
Reser ves
Reserves
I
4
Annually
C mmercial
bank time
deposits
adjusted
Credit Proxy
(Incl. Eurodollar
borrowings)
+ 9.8
- 1.7
+ 6.0
- ). 1
+ 7."
- 1.2
+ 9.0
- 4.1
+ 1.2
+ 2.5
+ 7.4
+ 6.0
+ 7.1
+ I.
+11.5
- 5.2
+ 1.1
+ 2.1
+15.0
+ 5,3
+ 7.5
+ 1.8
+11.5
+ 9.8
+ 7.3
+ 1.4
+13.6
+12.7
+ 5.5
+ 8.7
1968
1968
+ 7.9
+ 1..)
+11.5
+ 9.6
+ 7.1
+ 6.9
+7.8
+ 7.6
+ 6.6
+
+
+
+
5.4
8.7
6.8
7.0
+ 7.6
+ 3.0
+16.5
+17.3
1961)
1969
1969
9 69
p
1
+ 0.1
+ 1.2
- 9.3
+11 1
+ 1
-
2.8
4.7
- 4.8
- 0.4
+ 1.7
+ 0.2
- 4.8
- 2.2
- 9.4
+ 4.1
+ 4.5
+ 6.5
+ 6.3
3.4
3.9
1.3
0.3
- 5.1
- 3.0
-13.3
+ 0.2
- 1.8
+ 1.4
+ 7.1
+
+
-
-
-
+ 5.9
+11.0
+ 9.0
+ 8.9
+ 8.9
+ 2.5
+ 2.5
+11.3
+ 7.4
+ 5.8
+ 8.7
+ 8.7
+ 5.7
+ 8.6
+ 8.5
+ 2.8
+11.2
- 5.6
+ 5.0
+12.5
+ 8.3
+ 9.8
+ 8.9
+ 1.6
+ 2.4
+11.3
+ 7.2
+ 3.2
+ 3.2
+ 2.6
+15.9
+17.0
+16.1
+18.3
+16.2
+16.6
-4.7
+ 6.0
+ 9.7
+10.5
+22.5
+10.6
+12.1
+11.6
+11.5
+
+
+
+
+
+
+
-
t
+
+
+
+
+
+
+
-
+ 7.1
+ 1.6
F 1.6
+10.2
-10.0
- 4.7
- 0.6
+
+
-
- 3.6
- 5.4
-18.5
-19.4
- 2.5
- 3.7
- 0.6
+ 5.0
p
Quarterly
Ist Quarter 1968
2nd Quarter 1968
3rd Quart(i
4th Quarter
1st
2nd
3rd
4tb
Currency
ureys__s
Private Demand
Deposits
I_________
+ 7.8
.7
1968
196)
Nembet Bank
DeposTotal
DeI
Variables
S u p p 1 y
Qua ter
Quarter
Quarter
Quarter
-
8.6
+ 6.8
+ 3.6
+ 1.2
+ 2.0
|
+ 7.6
+ 3.7
+14.7
+11.9
- 0.3
Montlily'
1968--April
Ma v
June
hrl v
Augus t
September
Oc tober
November
De ember
9
1 69--Januarv
February
Marcli
-
6.9
6.9
5.2
0.6
+ 2.5
+ 8.8
+ 7.6
+22.4
+ 4.3
+ 8.5
+ 7.9
+12.1
+ 0.9
+12.3
+13.8
+22.4
+ 8,3
+ 9,2
+ 1.3
+ 5.3
+11.3
+ 9.4
+22.3
+ 2.6
+10.4
+ 8.4
+10.2
+ 7.5
+ 4.5
+12.7
-
-
-
3.4
3.8
8.5
4.9
8,0
April
Ma y
+19.9
-12.0
+ 6,0
June
-
-
July
August
September
October
November
December p
-22.5
7.6
5.6
-
.1
.7
+ 9.3
+ 5.3
8,2
3.0
4.4
5.0
+14.3
-
8.6
-19.3
-17.6
-
-
2.8
+ 7.7
-17.9
+ 5.5
+11.1
7.6
0.8
-10.4
+ 9.3
+ 6.9
-
5.2
+ 2.2
+ 7.3
+ 9.4
+22.2
+ 8.8
+13.3
+11.5
+13.0
-
3.2
1.2
-10. t
+ 4,9
-
1.2
-10.2
-18.9
-11.3
+ 1.7
- 9.1
+ ".7
- 0.4
6.2
3.1
3.1
7.9
1.2
4.2
1.8
1.8
+10.6
+ 0.6
+ 1,2
+ 1.8
1.6
+ 3.1
+ 1.6
-
4.7
0.8
+ 7.9
- 0.8
- 1.6
+ 2.6
-
p - Preliminary.
2.8
8.3
8.2
2.7
8.1
8.1
5.4
8.0
2.6
+ 1.6
2-___________________
0.8
2.0
6.7
5.5
- 1.2
-11.4
- 9.5
+ 2.4
-10.0
+10.1
- 0.8
Table 3
AGGREGATE RESERVES AND MONETARY VARIABLES
Seasonally Adjusted
(Based
Ht
P ri d
otI
bivi
iusrves
Monthly.
1968--Jantarv
February
March
April
May
June
July
August
September
ctober
November
December
96
1
9--January
February
March
Apriv
May
June
July
Aug Is
Stitmher
t
0 t her
November
December p
Aggregites
Noiirow
1/
on monthly averages of daily figures)
Member BHnk Jepos i s
by Rtuired Reserve,
PI lvate
U .S. (Gov't
' esudthl binkl d
I
demand
d mtand
L it
deposits /I depoIs
(
n
b I ll 1
o n s
rs
rseer
I r(er0r
(In millions of dollit )
,
t
26,134
26,352
26,451
26,298
26,353
26,547
26 715
27,213
27,311
27,504
27,685
27,964
25,818
25,961
25,755
25,606
25,626
25.889
26,186
26,675
26,860
27,066
27,095
27,215
25,774
25,989
26,078
25,964
25,952
26.196
26,402
26,893
26,951
27,185
27,376
27,609
275.1
277.4
278.5
277.3
277.8
279.5
281.7
286.9
289.0
292.2
295.0
298.2
28,139
28,060
27,972
27,775
28,235
28,056
27,530
27,401
27,402
"7, 354
27,733
27,905
27,318
27,206
27,024
26,754
26,888
26,705
26 275
26,2)4
26,j)
"6.210
26,538
26,784
27,902
27,832
27,729
27,614
27,942
27,742
27,334
27,161
27,1L4
27,129
21,548
27,707
1 297.0
296.7
294.2
295.4
295.1
292.6
289.0
285.
28).7
283.5
28 .
285.7
i _ji---i _ - -. i^ _ _ -. 1 1;
_
-_
demalnd
udepo
li
IUlu
tl
i_ - - -
S
diemdnu deposits.
_
-^ i . ^ - * _
of
i
dioVluudLS,
i
lotal
o I
149.9
150.2
151.2
151.3
151.5
151.8
I1 1.8
156.,
158.9
161.5
163.5
165.8
119.7
120.1
120.6
120.8
122.7
123.8
125.2
125.6
124.8
125.7
126.8
128.2
5.4
7.1
b.7
5.2
3.7
3,9
2.7
4.8
5.3
5.0
4.7
4.2
182.6
ld1.3
184.2
185.1
I 186.8
188.2
189.6
191.0
191.4
191.8
193.6
194.8
163.2
161.0
160.5
160.1
159.3
158.1
155.1
152.5
152.1
151.5
151,1
151.5
128.4
129.1
128.9
129.4
130.0
130.5
130.5
129.9
129.2
128.9
129.1
5.4
6.7
4.8
5.9
5.9
4.0
2.4
2.9
4.4
3.1
6
129.3
4.9
I^. .
.--
--. _
-
Currency
2/
d o 1 1 a s )
40.6
40.7
41.,
41.3
41.6
'11.9
Commercial
Credit
bank time
Proxy
Private
deposits ](Incl. Euro
demand
adjusted
dollar
deposits 3
4/
borrowings
42.4
42.7
42.8
43.2
43.4
142.0
142.6
143.2
143.8
145.3
146.3
147.5
148.6
148.8
149.1
150.5
151.4
184.1
185.8
187.2
187.7
188.2
188.6
191.1
193,8
196.4
199.4
202.1
204.9
279.4
281.9
283.2
282.1
283.5
285.8
288.3
293.7
296.3
299.3
302.2
305.1
195.8
196.3
196.8
198.1
198.3
199.0
199.3
199.0
19.0
199.1
1,9.3
4J.5
43.8
44.1
44.2
44.5
44.8
45.0
45.3
4.
45.6
4,.9
152.3
152.5
152.7
154.0
153.8
154.2
154.4
153.8
157
15?.6
1 3.
203.2
202.4
202.3
202,3
201.7
200.8
197.7
194.5
194.1
193.
.9^.4
304.8
305.3
303.6
305.0
305.0
304.7
301.8
299.4
199.
46.0
153.6
194.2
299.8
4'2.1
* .
1 .
net interoanK deposits.
Includes 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
process of collection and Federal Reserve float,
and (2) foreign demand balances at Federal Reserve Banks.
Excludes interbank and U S. Government time deposit,
Includes increases in required reserves due to changes in Regulations M and D of approximately $400 million since
October 16, 1969.
rrivdae
.- -_.
Mone S
Money Supp
SStipported
Ruird
T T
parLneirsinps,
inu
300.0
-i
corporaicon a ana
cash items
in
Table 4
AGGREGATE RESERVES AND MONETARYVARIABLES
Seasonally Adjusted
t
Resr
Agg
Reserv AggregatLe
5/
Nonborrowed Required
Semember
reset es
rtserves
ieserveh
erTotal
I__________
Weekly
S
(In millions of dollars)
.
I
Deposits
Member rBnk
Supported by Reuire d Revr
Toal
Private
. Gv'
hank
T
t
demand
d mind
e
deposits I
deposits 1/i deposts
I n
b i I i o n a
o.y
Supply
Currency
2/
d o 1
a r s
Total
o f
Credit
Comnierciall
bank time
Proxy
Private
deposits
(Inl
Eur
demand
adjusted
dollar
deposits 3
4/
borrowings
Apr
2
9
16
23
30
27,879
27,611
27,590
27,848
28 021
26,689
26,634
26,838
26,733
26,830
27,570
27,431
27,515
27,698
27,823
293.6
294.9
295.6
295.9
294.7
160.7
160.6
160.2
160.1
159.8
130.0
129.5
130.0
129,1
128.3
3.0
4.9
5.1
6.8
6.6
197.6
199.0
198.7
197.4
196.9
44.2
44.2
44.2
44.2
44.2
153.4
154.7
154.5
153.2
152.7
202.6
202.6
202.4
202.3
202.0
303.0
304.2
305.1
305.7
304.7
May
7
14
21
28
28,501
28 162
28,020
28.219
27,048
26,980
26,629
26,920
27.993
27.888
27,844
28,091
294.7
296.5
295.2
294.9
159.6
159.4
159.3
159.1
128.7
129.8
131.0
110.6
6.4
7.3
5.0
,.3
197.2
197.8
199.5
199.1
44.3
44.4
44.4
44.6
152.9
153.4
155.1
154.6
202.0
201.8
201.7
201.7
304.5
306.2
305.0
305.1
Ihne
4
11
18
25
28,320
28,308
27 833
27 761
26.829
27,028
26,543
26,588
27,826
27.800
27,698
27,701
293.7
293.9
293.1
291.3
158.8
158.7
158.2
157.6
130.6
130.6
130.6
130.3
4.)
4.6
4.3
1.4
198.8
198.8
198.2
199.1
44.7
44.7
44.8
44.8
154.0
154.0
153.5
154.2
201.6
201.5
200.9
200.1
303.6
304.9
305.6
304.5
July
2
9
16
23
30
28,217
27,506
27,568
27,703
27,151
26,543
26,461
26,370
26,274
25,927
27,711
27,462
27,492
27,307
26,980
290.6
289.4
286.7
288.0
287.1
157.0
156.1
155.3
154.6
154.1
130.7
130.2
130.5
130.5
130.0
2.9
3.0
.9
3.0
3.0
199.2
199.4
199.3
199.1
199.1
44.9
44.9
45.0
45.0
45.0
154.3
154.5
154.3
154.2
154.1
199.3
198.8
197.9
197.2
196.7
303.8
302.5
300.7
302.2
301.3
Aug
6
13
26,411
26,309
25,91'
26.259
27,258
27,216
27,164
27,135
286.2
285.9
284.4
285.1
153.4
152.9
152.4
152.1
129.9
129.9
130.3
129.9
2.9
3.1
1.7
3.1
199.1
199.1
199.5
198.9
45.1
45.2
45.2
45.3
153.9
154.0
154.3
153.6
195.6
194.9
194.4
193.9
300.2
299.8
298.6
299.4
96,194
26,687
26,364
26,199
26,957
27,059
27,238
26,982
285.8
283.7
287.1
285.0
151.9
151.9
152.0
152.2
130.7
129.7
129.8
128.6
3.2
2.2
5.2
4.1
199.5
199.3
199.6
198.3
45.5
45.1
45.3
45.3
154.0
154.2
154.3
153.0
194.0
193.9
194.2
194.0
300.0
298.1
301.6
299.2
27,717
27,231
27,260
27,547
27,218
26,362
16,291
2i,975
7k 520
25,989
27,417
27,044
27,059
27,263
27,041
284.2
283.7
281.9
284.1
283.4
152.3
151.9
151.4
151.3
151.2
128.1
128.8
127.8
129.7
129.1
3.8
3.0
2.7
3.1
3.2
198.3
1996
198.7
199.9
198.5
45.2
45.4
45.6
45.7
45.7
153.1
154.3
153.0
154.3
152.8
194.3
193.9
193.6
193.3
193.4
298.2
297.5
296.1
298.5
297.1
27, 655
27, 565
27,9 1
27,897
26, 359
26 339
2 ,829
26,347
27, 360
27, 354
2',732
2' 63'
286.0
285.9
28'.'
285.'
151. 3
151.0
1I .0
151.1
129.3
129.0
129.2
129.1
5.5
5.9
,.
.1
198. 7
199.7
200.1
190.2
45. 7
45.8
4:.9
4*.9
153.0
153.Q
1-4,2
1-1.2
193.3
193. 1
19?.2
193.5
299.5
299,9
e
239.
300.2
p
p
p
p
27,839
27,99q
27.978
27.805
27,866
26,588
26,600
26,819
26,735
27,067
27,646
27 619
27,946
27,580
27,709
287.2
285.7
285.4
284.3
286.3
1 I 3
151.5
151.7
151.8
151.3
12l .4
12n.7
128.5
127.6
131.2
6.1
'.5
5.2
4.9
3.8
199.'
198.4
198.7
197.8
202.8
45.9
46.0
46.1
46.1
45.9
153.4
152.4
152.6
151.6
156.8
193.8
193.9
194.2
194.3
193.9
301::
300.1
299.4
298.5
300.1
7 p
28 028
27,059
27.784
286.9
151.4
131.4
4.2
201.1
45.9
155.2
194.2
299.8
27
27,491
27,538
27,151
27,433
Sept
3
10
17
24
27,409
27,325
27,370
27,236
Oct.
1
8
IS
22
29
70
Ni,
5
12
19
26
Dec.
3
10
17
24
31
1970--Jan.
1/
2/
3/
4/
5/
I
Private demand deposits includ
demand deposits of individuals, partnerships,
and corporations and net interbank deposits.
Includes currency outside the Treasury, the Fderal Reserve, and the vaults of all
commercial banks.
Includes (1) demand deposits at all commerial
banks,
other than those due todomestic
commercial banks and the U S Government, less cash items in
process of collection and Federal Reserve I at, and (2) ioitin
demand balances at Federal Reserve Banks.
Excludes interbank and U S Government time deposit,
Includes increases in required reserves due to changes in Regulations M and D at approximately $400 million since October
16, 1969.
@FedFRASER