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Strictly Confidential (FR)

Class I FOMC

January 16,

1976

MONETARY AGGREGATES AND
MONEY MARKET CONDITIONS

Prepared for the Federal Open Market Committee
By the staff

Board of Governors of the Federal Reserve System

STRICTLY CONFIDENTIAL (FR)
CLASS I - FOMC

January 16, 1976

MONETARY AGGREGATES AND
MONEY MARKET CONDITIONS
Recent developments
(1)

Both M1

and M 2 appear to be growing at rates below the low

ends of the two-month ranges of tolerance adopted by the Committee at the
last meeting.

M1 contracted at about a 2¾ per cent annual rate in December,

and data thus far available in early 1976 suggest that January will show
little net change.

After adjustment for the preliminary new seasonal factors

presented at the time of the last meeting, M1 appears likely to expand at
less than a one per cent annual rate over the two-month period.

Expansion

in time deposits other than money market CD's has, on balance, also been
somewhat slower than anticipated, and M2 is now projected to grow at about a
6 per cent annual rate during the December-January period.
Growth in Monetary Aggregates and RPD's
over December-January Period

Reserve and monetary aggregates
(Growth at SAAR in per cent)

Ranges of
Tolerance 1/

Latest Estimates - with
Old
Preliminary New
Seasonals
Seasonals 1/

M1

4 to 7

0.7

-1.6

M2

7 to 10

5.9

4.9

RPD

4 to 7

n.a.

0.2

Memo:
Federal funds rate

(per cent per annum)

2/
4½ to 5½

Avg.

for statement
week ending

Dec. 24
31

5.12
7
4.76
14
seasonal
new
the
of
estimates
Seasonal adjustments based on the preliminary
meeting.
last
the
of
factors that were available at the time
On January 12 a majority of the Committee concurred in the Chairman's
recommendation to instruct the Account Manager to hold the weekly average
Federal funds rate at approximately 4¾ per cent until the next FOMC meeting.
Jan.

1/
2/

5.18
5.18

-2(2)

Recent growth rates for both M1 and M2 continue to be

affected by increases in business savings accounts.

Although expansion

in these accounts at weekly reporting banks has slowed recently, shifts
to such accounts may have reduced the annual rate of growth in M1 over the
December-January period by about 2½ percentage points, or about 1-1½ percentage points more than assumed in the previous blue book.

Thus part of

the shortfall in M1 reflects greater-than-anticipated shifts out of demand
deposits to savings accounts.
(3)

Data received a few days after the last FOMC meeting suggested

that the monetary aggregates--particularly M1--were growing at a substantially
slower pace than anticipated at the time of the meeting.

However, since data

on the aggregates are typically volatile around year-end and because the
Committee had voted to give greater emphasis than usual to money market
conditions, the Desk continued to seek reserve conditions consistent with a
Federal funds rate centering around 5¼ per cent.

When subsequent data

suggested further weakening in the aggregates, the Desk adopted a more
accommodative reserve posture, and the funds rate
4¾ per cent.

On January 12,

moved down in stages to

a majority of the Committee concurred in the

Chairman's recommendation to instruct the Account Manager to hold the weekly
average Federal funds rate at approximately this level until the January
meeting.

In the statement week just ended the funds rate averaged 4¾ per

cent.
(4)

Inter-meeting changes in prices and yields in securities

markets have been substantial.

Interest rates on short-term market

-3instruments have declined 60-100 basis points, with the 3-month bill trading
most recently around 4.85 per cent.

Yields on bonds declined 20-65 basis

points, while stock prices--as measured by the comprehensive New York Stock
Exchange index--have advanced 9¼ per cent.

Short-term rates are currently

at their lowest levels since mid-1972, and corporate bond yields have
reached their lowest levels since the spring of 1974.

The ceiling rate on

FHA/VA single-family mortgages was also cut, from 9 to 8¾ per cent, on
January 5, as yields on mortgages traded in the secondary market continued
to decline.

However, rates on primary mortgages have, as usual, lagged

behind other long-term rates, dropping only about 5 basis points during the
inter-meeting period.
(5)

The Board's December 24 action reducing reserve requirements

on certain time deposits, and the subsequent decline in the funds rate,
contributed importantly to the general decline of interest rates.

At the

same time, year-end private economic forecasts tended to crystalize market
judgments on the longer-term economic outlook, encouraging the view that
moderate future economic growth and further progress on inflation were
likely to permit significant further reductions of the inflation premium
in long-term rates.
(6)

The table on the following page shows (in percentage annual

rates of change) selected monetary and financial flows over various time
periods.

Calendar

Calendar

Year

Year

1974

1975

Past
Six

Months
Dec. '75
over

June '75
Total reserves

Past
Three

Past

Months
Month
Dec. '75 Dec. '75
over

over

Sept.'75 Nov. '75

8.5

-.3

3.0

8.3

14.9

10.7

1.4

3.6

11.6

12.4

8.9

-.9

.3

3.2

6.4

4.8

4.2

2.3

2.3

-2.8

7.2

8.8

6.6

6.8

3.2

6.8

11.4

9.3

8.5

5.6

(M2 plus CD's)

10.6

6.7

5.7

8.4

5.9

M5 (M3 plus CD's)

9.0

9.8

8.5

9.4

7.2

10.2

4.2

3.0

7.4

4.2

9.2

4.2

3.1

2.6

-8.8

2.2

-.6

-.1

1.4

Nonborrowed reserves
Reserves available to support
private nonbank deposits

Concepts of Money
M1 (currency plus demand

deposits ) 1/
M2 (M1 plus time deposits
at commercial banks

other than large CD's)
M3

M4

(M2plus deposits at
thrift institutions)

Bank Credit
Total member bank deposits
(bank credit proxy adj.)
Loans and investments of
commercial banks 2/
Short-term Market Paper
(Monthly average change in
billions)

Large CD's

1.9

-.5
-.5
-.3
.4
-.2
Nonbank commercial paper
1/ Other than interbank and U.S. Government.
2/
Based on month-end figures. Includes loans sold to affiliates and branches.
NOTE: All items are based on averages of daily figures, except for data on total
loans and investments of commercial banks, commercial paper, and thrift institutions--which are derived from either end-of-month or last Wednesday-of-month

figures.

Growth rates for reserve measures in this and subsequent tables are

adjusted to remove the effect of discontinuities from breaks in the series when
reserve requirements are changed.

Prospective developments
(7)

Shown below are alternative longer-run growth ranges for

the monetary aggregates, together with the ranges adopted by the Committee
in October.

In keeping with past practice, the time period for the proposed

ranges has been shifted forward by one quarter; the alternatives apply to
the period from QIV 1975 to QIV 1976, whereas the current ranges relate to
the QIII '75-QIII '76 period. 1 /

Alt. A

Alt. B

Alt. C

Current

M1

6-8½

5-7½

4-6½

5-7½

M2

7½-10½

6½-9½

5-8

7½-10½

M3

8½-11½

7½-10½

6-9

9-12

3½-6½

3-6

6-9

Credit proxy

4-7

(8)

Of the three alternatives, B calls for retaining the current

range for M,

but reducing somewhat the growth ranges for the broader M's.

This is because growth in time and savings deposits (other than large CD's)
in the course of 1976 is likely to remain around the more moderate pace that
developed in the second half of last year.

The current longer-run ranges

for M 2 and M 3 assume a more rapid pace.

1/

Figures for selected subperiods of the QIV '75-QIV '76 period are shown
in the detailed tables on pages 5a and 5b . In addition, the table
includes the one-year growth rates measured from both of the quarterly
bases the Committee has employed in the past--i.e., the second and

third quarters of 1975--for each of the aggregates under each of the
alternatives.

-5aAlternative Levels and Growth Rates for Key Monetary Aggregates

I

I

I

I

I

I

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

1975
1976

December
January
February

296.4
296.4
298.8

296.4
296.3
298.5

296.4
296.2
298.2

667.5
671.1
676.9

667.5
671.1
676.4

667,5
670.9
675.4

1093.9
1101.3
1111.8

1093.9
1100.9
1110.3

1093.9
1100.4
1108.3

1975

QIV

295.9

295.9

295.9

663.9

663.9

663.9

1086.8

1086.8

1086.8

1976

QI

298.8
305.7
312,5

298.5
304.3

317.3

314.4

298.2
302.7
307.2
311.4

676.9
694.2
710.2
723.1

676.3
691.2
704.5
716.4

675.4
687.4
698.6
708.7

1111,8
1142.6
1171.0
1194.9

1110.2
1136.0
1159.3
1181.4

1108,2
1129.3
1149.2
1167.6

8.1
11.4

7.7
10.2

7.1
8.6

QII
QIII
QIV

309.8

Growth Rates
Monthly:
1976

January 1/
February I/

0.0(6.3)
9.7(6.7)

-0.4(5.9) -0.8(5.5) 6.5(9.7) 6.5(9.7) 6.1(9.3)
8.9(5.9)
8.1(5.1) 10.4(8.9) 9.5(8.0) 8.0(6,5)

Quarterly Average:
3.9
9.2
8.9
6.1

3.5
7.8
7.2
5.9

3.1
6.0
5.9
5.5

7.8
10.2
9.2
7.3

7.5
8.8
7.7
6.8

6.9
7.1
6.5
5.8

9.2
11.1
9.9
8.2

8.6
9.3
8.2
7.6

7.9
7.6
7.0
6.4

QIV '75-QII '76
QII '76-QIV '76

6.6
7.6

5.7
6.6

4.6
5.7

9.1
8.3

8.2
7.3

7.1
6.2

10.3
9.2

9.1
8.0

7.8
6.8

QII '75-QII '76
QIII '75-QIII '76
QIV '75-QIV '76

5.7
6.3
7.2

5.3
5.3
6.3

4,7
4.5
5.2

9.0
8.7
8.9

8.5
7.8
7.9

7.9
6.9
6.7

11.0
10.1
9.9

10.3
9.0
8.7

9.7
8.0
7.4

-970. QI
QII
QIII
QIV

/ Figures in parentheses represent rates of growth based on the new seasonal factors and are consistent
with 2-month growth rates shown in summary table in paragraph (6).

Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd)
M4

M5

Credit Proxy

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

1975
1976

December
January
February

750.8
751.3
757.5

750.8
751.3
757.1

750.8
751.1
756.5

1177.2
1181.5
1192.3

1177.2
1181.1
1191.0

1177.2
1180.6
1189.3

515.1
513.8
515.7

515.1
513.7
515.4

515.1
513.6
515.2

1975

QIV

745.9

745.9

745.9

1168.8

1168,8

1168.8

512.1

512.1

512.1

1976

QI
QII
QIII
QIV

757.5
775.9
793.0
807.3

757.1
773.8
788.9
802.6

756.5
771.4
785.1
797.9

1192.4
1224.3
1253.9
1279.1

1191.0
1218.6
1243.7
1267.6

1189.3
1213.3
1235.6
1256.7

516.2
526.0
534.6
540.7

515.9
524.8
532.2
538.2

515.7
523.6
530.3
536.0

0.8
9.9

0.8
9.3

0.5
8.6

4.4
11.0

4.0
10.1

3.5
8.8

-3.0
4.4

-3.3
4.0

-3.5
3.7

QI
QII
QIII
QIV

6,2
9.7
8.8
7.2

6.0
8.8
7.8
6.9

5.7
7.9
7.1
6.5

8.1
10.7
9.7
8.0

7.6
9.3
8.2
7.7

7.0
8.1
7.4
6.8

3.2
7.6
6.5
4.6

3.0
6.9
5.6
4.5

2.8
6.1
5.1
4.3

QIV '75-QII '76
QII '76-QIV '76

8.0
8.1

7.5
7.4

6.8
6.9

9.5
9.0

8.5
8.0

7.6
7.2

5.4
5.6

5.0
5.1

4.5
4.7

QII '75-QII '76
QIII '75-QIII '76
QIV '75-QIV '76

7.3
8.2
8.2

7.0
7.6
7.6

6.7
7.1
7.0

9.7
9.7
9.4

9.2
8.8
8.5

8.7
8.1
7.5

4.6
5.9
5.6

4.3
5.4
5.1

4.1
5.1
4.7

Growth Rates
Monthly:
1976

January
February

Quarterly Averages:
1976

-6(9) Alternative A encompasses higher growth rates for the monetary
aggregates over the next year than alternative B, while alternative C
presents lower rates.

The alternative A rates may be viewed as compensating,

in an arithmetic sense, for the shortfall in M1 growth relative to expectations in the fourth quarter.

That is to say, under alternative A the

level of M1 in the third quarter 1976(using mid-points of the ranges) would
be the same as that implied by a 6¼ per cent growth rate measured from the
third quarter of 1975.

To reach that level, M 1 would have to expand at

almost a 7½ per cent annual rate over the first three quarters of 1976.
(10)

The M1 level for QIII '76 that is implied by the Committee's

current longer-run growth range probably should be adjusted downward,
however, on economic grounds to allow for recent shifts of business funds
from demand deposits into savings accounts and for expected future growth
of such accounts at the expense of demand deposits.

The regulatory change

permitting businesses to hold savings accounts up to $150,000 in size
became effective in mid-November.

By early January such accounts aggregated

about $2 billion, of which the staff estimates that about $1½ billion would
otherwise have gone into demand deposits.

Growth in business savings

accounts has been slowing in recent weeks, and the staff expects it to slow
further as time goes on; by the third quarter of 1976, additional growth in
such accounts substituting for demand deposits might total $1 billion.

In

sum then, a $2½ billion downward adjustment in the target level of M1 for
the third quarter might be a reasonable allowance for corporate savings
accounts.

This would imply M1 growth over the next three quarters at close

to a 6¼ per cent annual rate, which is approximately the growth rate for
that period under alternative B.

For the one year QIII '75-QIII '76 period,

the path contained in alternative B involves M1 growth of 5.3 per cent.
(11)

Shorter-run alternative operating ranges corresponding

generally to the longer-run alternatives are summarized below (with more
detail presented in the tables on pp. 5a and 5b).
Alt. A

Alt. B

Alt. C

Ranges of tolerance
for January-February
M1
1/

4½-8½

4-8

3½-7½

M2 1/

7½-11½

7-11

6-10

RPD

-2½ to -6½

to -7

-3½ to -7½

Federal funds rate
(intermeeting range)
1/

3½-4½

-3

4¼-5¼

5-6

The growth rates for M1 and M2 are based on the new seasonal factors

that will soon be published. These differ somewhat from the preliminary revised factors employed in the previous blue book. Appendix
table V compares the new factors for M1 with the preliminary revised
and old factors. The new factors raise the Jan.-Feb. annual growth
rate for M 1 by about 1¾ percentage points relative to the old factors.
Other elements of money supply revision, including benchmark and certain
other adjustments, are not yet completed. The new series is expected
to be published shortly after the Committee meeting.
(12)

Alternative A involves a decline in the Federal funds rate

from the 4¾ per cent level recently prevailing to the mid-point of a 3½-4½

per cent range.

Under such circumstances, M1

would be expected to expand

in a 4½-8½ per cent annual rate range in the two-month Jan.-Feb. period,
and M2 in a 7½-11½ per cent range.

The pick-up in M1 growth relative to

recent behavior reflects mainly staff expectations that the projected
continuing rise in nominal GNP will be accompanied by resumed expansion
in money demand--given the unusual, and probably unsustainable, rise in the
velocity of money that has already occurred in the current cyclical expansion.

-8(13)

We would expect a further drop in the Federal funds rate

of that magnitude to be accompanied by a decline in the 3-month Treasury
bill rate to around the 4-4¼ per cent area.
market

Such an easing in the money

would,of course, lead to additional downward adjustments in inter-

mediate- and longer-term interest rates.

These rate declines might be

limited, however, to the extent that borrowers--particularly corporate
borrowers--took advantage of the more favorable market atmosphere to
accelerate security offerings.

The Treasury will announce terms of its

mid-February refunding on January 27.

It will refund $4.3 billion of

publicly-held maturing securities and will probably also raise $1-1½ billion
of new cash, with the exact amount depending in part on the market
environment.
(14)

The lower funds rate assumed under alternative A would be

expected to persist until late spring or early summer.

The funds rate

would then be expected to begin rising, given continued expansion in GNP.
The funds rate would be likely to be around 6 per cent by late 1976, assuming
money growth over the year is held to around 7¼ per cent under this
alternative.
(15)

A Federal funds rate centered around 4¾ per cent is con-

templated under alternative B, with M1

growth in a

rate range in the January-February period.

4-8

per cent annual

Given such a funds rate,

interest rates generally may show little net change over the next few
weeks.

If anything, short-term interest rates could drift up a little, as

expectations by some market participants of a further decline in the funds
rate, following the discount rate action announced today, are disappointed.

-9Longer-term market interest rates may remain around the recent reduced
levels, given the more moderate corporate bond calendar and the availability
of sizable funds for investment in longer-term markets from insurance
companies, savings banks, and pension funds.

With business loan demand

slack, banks may show increased interest in intermediate-term Treasury
offerings to increase earnings, particularly in view of the steep slope
of the yield curve.

Mortgage rates can be expected to decline somewhat

further since savings inflows to thrift institutions are expected to be
well maintained and since a more favorable yield spread of primary mortgage
rates over corporate bond rates has recently developed.
(16)

If the Committee seeks to attain a 6¼ per cent growth rate

from QIV '75 to QIV '76 for M1, the staff would expect interest rates to
begin rising by late winter.

A more gradual rise is now anticipated than

had been predicted earlier, with the funds rate reaching a level of around
6

per cent by summer.

As a result, inflows of time and savings deposits

(other than large CD's) are expected to slow as the year progresses, but
not so much as to require an upward adjustment in Regulation Q ceiling rates.
(17)

Alternative C assumes that the Federal funds rate is adjusted

upward over the next few weeks to the middle of a 5-6 per cent range.

This

approach is most consistent with a reduction in the longer-run growth
ranges.

If the FOMC were to seek one-year growth in the aggregates as

indexed by M1 expansion of about 5¼ per cent from QIV '75 to QIV '76, the
staff believes that the funds rate would have to rise further to around 7¼
per cent by summer.

-10(18)

Any significant near-term rise in the funds rate would

certainly be unexpected by the market.

Thus, a sharp upward re-adjustment

of interest rates could be anticipated with the 3-month bill rate possibly
rising as high as 6 per cent between now and the next meeting.

This would

again make thrift institutions uncertain about the strength of future
savings flows and might, therefore, bring the recent decline in mortgage
rates to a halt.

In bond markets, yields would back up, and the rise

might be especially large in the Treasury market in view of the size of
dealer positions and the imminent refunding.

-11Proposed directive
(19)

Presented below are four alternative formulations for the

operational paragraph of the directive.

The first three are couched in

terms of desired growth in monetary aggregates over the months ahead and
are intended to correspond to the similarly lettered policy alternatives
discussed in the preceding section.

The fourth alternative is proposed in

the event that the Committee wishes to continue to formulate its instructions
in terms of money market conditions and wishes to maintain the conditions
now prevailing.

No special reference to the Treasury's quarterly financing

to be announced on January 27 is proposed because Treasury financings have
been, and for some time will continue to be, frequent.
Alternative "Monetary Aggregate" Proposals
Alternative A
To implement this policy, while taking account of developments
in domestic and international financial markets,

the Committee

seeks to [DEL:
maintain prevailing] ACHIEVE bank reserve and money market

conditions CONSISTENT WITH SUBSTANTIAL GROWTH IN MONETARY AGGREGATES
ahead,
period immediately] MONTHS [DEL:
over the [DEL:
the
aggregates-appear-to-be-growing-at-about

provided that monetary
currently-expected.]
rates

Alternative B
To implement this policy, while taking account of developments

in domestic and international financial markets, the Committee
maintain prevailing] ACHIEVE bank reserve and money market
seeks to[DEL:
conditions CONSISTENT WITH MODERATE GROWTH IN MONETARY AGGREGATES
ahead, provided that monetary
period immediately] MONTHS [DEL:
over the [DEL:
aggregates appear to be growing at about the rate currently expected.]

-12Alternative C
To implement this policy, while taking account of developments
in domestic and international financial markets, the Committee
seeks to[DEL:
maintain prevailing]ACHIEVE bank reserve and money market
conditions CONSISTENT WITH MODEST GROWTH IN MONETARY AGGREGATES
over the[DEL:
period immediately]MONTHS [DEL:
ahead, provided that monetary
aggregates appear to
be

growing at aboutthe rates currently expected.]

"Money Market" Proposal
To implement this policy, while taking account of developments
in domestic and international financial markets, the Committee
seeks to maintain prevailing bank reserve and money market conditions
over the period immediately ahead, provided that monetary aggregates
appear to be growing at about the rates currently expected.

CONFIDENTIAL(FR)
CLASS II-FOMC
1/16/76

CHART 1

RESERVES AVAILABLE TO SUPPORT
PRIVATE NONBANK DEPOSITS
BILLIONS OF DOLLARS

37

7% growth

35

33
4% growth

S

31

S
1974

D

M

J
1975

S

D

M
1976

I

0

\

N
1975

I

D

J

RPD series has been adjusted to remove discontinuities associated with changes in reserve requirement ratios.

I

l

F

J
1976

CHART 2

CONFIDENTIAL (FR)
CLASS II-FOMC

MONETARY AGGREGATES
NARROW MONEY SUPPLY M1

1/16/76

BILLIONS OF DOLLARS
1 320

305

300

295

BROADER MONEY SUPPLY M2
290

1974

1975

1976

0

N
1975

D

F

J
1976

1/16/76

CHART 3

MONETARY AGGREGATES
ADJUSTED CREDIT PROXY

BILLIONS OF DOLLARS

-

540

- 520

-

500

- 480

I

I I

I I

I

I

I

RESERVES

I
BILLIONS OF DOLLARS

39

- 37

- 35

TOTAL

NONBORROWED

33

-v

31

I I
1974
1975
1976
Total and nonborrowed reserve series have been adjusted to remove discontinuities associated with changes in reserve requirement ratios

CHART 4

1/16/76

MONEY MARKET CONDITIONS AND INTEREST RATES
MONEY MARKET CONDITIONS
WEEKLY
AVERAGES

FEDERAL FUNDS

F.R. DISCOUNT
RATE

1974

1975

1874

1875

1974

IS75

CONFIDENTIAL (F.R.)
CLASS II-FOMC

TABLE 1

BANK RESERVES

JAN.

16,

1976

(ACTUAL AND CURRENT PROJECTIONS)
RSERVES AVAILABLE
RSFOR
PAVATE
FOR PRIVATE
NONBANK DEPOSITS
S
S

Period

SA

NSA

1

2

REQUIRED RESERVES
SEASONALLY ADJUSTED

AGGREGATE RESERVES
Total
Reserves

Nonborrowed
Reserves

Total
Required

Private
Demand

Total Time
Deposits

Gov't. and
interbank

3

4

5

6

7

8

MONTHLY LEVFLS-SMILLIONS
1975--OCT.
NOV.
DEC.
1976--JAN.
PERCENT

ANNUAL

32,137
32,302
32,474
(32,315)

32,048
32,322
32,693
(33,277)

34.055
34,403
34,829
(35,069)

33,865
34,342
34,698
(35,0101

33,848
34,119
34,539
(34,851)

19,737
19,871
19,922
(19,702)

GROWTH
-------------

QUARTERLY
0.5
-2.6
3.2

1.2
-2.2
8.3

-0.2
-4.2
11.6

1.2
-2.1
7.2

11.7
1.4
-1.2

-2.5
-1.1
0.5

-3.7
-0.8
2.9

-2.8
-2.8
5.0

-3.7
-1.1
2.1

8.0
5.7
-2.1

(

-2.9
6.2
6.4
-5.9)

(

-2.2
12.3
14.9
8.3)

(

5.1
16.9
12.4
10.8)

(

-2.8
9.6
14.8
10.8)

-14.7
8.1
3.1
( -13.3)

(

0.2)

(

11.6)

(

11.7)

(

12.9)

(

1975--2ND OTR.
3RD QTR.
4TH QTR.

N
0
T

N
0
T

A
V
A
I
L
A
B
L
E

A
V
A
I
L
A
B
L
E

QUARTERLY-AV
1975--2ND QTR.
3RD OTR.
4TH QTR.
MONTHLY
1975--OCT.
NOV.
DEC.
1976--JAN.
DEC.-JAN.

-5.1)

WEEKLY LEVELS-SMILLIONS

1975--DEC.

1976--JAN.

NOTE:

3
10
17
24
31

32,470
32,359

7
14

32,339
32,530

32,590
32,225
32,819
32,612
33,162

34,718
34,423
35,001
34,678
35,260

34,651
34,393
34,956
34,458
35,003

34,389
34,257
34,754
34,418
34,790

19,972
19,976
20,179
19,758
19,755

32,122
32,573

32,838
33,624

34,833
35,117

34,762
35,074

34,534
34,936

29,535
19,798

32,671

RESERVE SERIES HAVE BEEN ADJUSTED TO REMOVE DISCONTINUITIES
ASSOCIATED WITH CHANGES
DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS.
AT THE FOMC MEETING OF DEC.
16,
RANGE OF 4.0 TO 7.0 PERCENT FOR THE DEC.-JAN. PERIOD.

IN RESERVE REQUIREMENT RATIO.
1975 THE COMMITTEE AGREED ON A RPD

Table 2

CONFIDENTIAL (F.

MONETARY AGGREGATES

CLASS
FOMC
II

ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED
MONEY SUPPLY
Narrow
Broad

Period

MONTHLY

U.S.
Govt.

TIME AND SAVINGS DEPOSITS
Other

(M1)

(M2)

Proxy

Deposits

Total

Than CD's

CD's

1

2

3

4

5

6

7

Nondeposit
Sources of
Funds

8

LEVELS-$BILLIONS
197-OCT.
NOV.
DEC.
1976--JAN.

PERCENT

Adjusted
Credit

294.1
297.1
296.4
(296.3)

658.6
665.7
667.S
(671.1)

507.9
513.3
515.1
(513.7)

(

2.9
3.6
3.1
2.5)

445.8
450.0
454.5
(454.9)

364.6
368.6
371.2
(374.8)

(

81.3
81.4
83.3
80.2)

(

7.9
8.2
8.4
7.9)

ANNUAL GROWTH
QUARTERLY
1975--2ND QTR.
3RO QTR.
4TH QTR.

11.2
2.3
2.3

13.4
6.3
6.8

7.5
-1.3
7.4

6.7
3.3
12.5

15.3
9.7
10.5

-25.4
-23.8
21.2

8.6
6.9
2.4

11.2
10.4
6.4

5.2
1.4
5.9

5.2
4.9
10.0

13.3
13.2
9.7

-24.0
-29.3
11.5

13.9
11.3
12.0
1.1y

(

9.6
13.2
8.5
11.63

(

33.4
1.5
28.0
-44.7)

6.5)

(

10.1

(

-8.8)

QUARTERLY-AV
1975--2ND QTR.
3RD QTR.
4TH QTR.
MONTHLY
1975--0CT.
NOV.
DEC.
1976--JAN.

OEC.-JAN.

(

-2.4
12.2
-2.8
-0.4)

(

-1.6)

[

C

4.2
12.9
3.2
6.51

(

5.0
12.8
4.2
-3.3)

(

4.9)

(

0.5)

[

5.9]

0.7]

WEEKLY LEVELS-$BILLIONS
1975--NOV.

19
26

296.2
296.7

664.8
666.8

513.5
514.1

3.9
3.3

449.9
451.6

368.6
370.1

81.2
81.5

8.6
8.5

DEC.

3
10
17
24
31

299.0
296.4
295.3
295.1
297.3

669.1
667.6
666.2
666.4
668.9

516.1
514.9
515.7
514.4
514.5

3.4
3.2
4.7
2.9
2.0

452.5
454.4
454.2
454.8
455.1

370.1
371.2
370.9
371.3
371.6

82.4
83.2
83.3
83.4
83.5

8.0
7.8
8.0
9.2
8.5

296.1

669.3

515.4

2.3

455.4

373.2

82.2

8.3

1976--JAN.

7 P

1

.

NOTE: DATA SHOWN

I

I

d

IN PARENTHESES ARE CURRENT PROJECTIONS.

S

I

P

-

PRELIMINARY

I

CONFIDENTIAL (FR)
CLASS II - FOMC
JANUARY 16, 1976
TABLE 3
RESERVE EFFECTS OF
OPEN MARKET OPERATIONS AND OTHER RESERVE FACTORS
(Millions of dollars, not seasonally adjusted)

Bills
& Accept.

Period

(1)
1975--June
July
Aug.
Sept.
Oct.
Nov.
Dec.

Open Market Operations 1/
Coupon
Agency
RP's
Issues
Issues
Net 3/

(2)

(3)

Total

(4)

(5)

Daily Average Reserve Effects /
I
A In Reserve Categories
A Target
Open Market A
Member
Other 4/ Req. res. against available res. 5, available
Factors
U.S.G. and interb.
(6)+(7)+(8)-(9 reserves 5/
Operations Bank Borrowing

-

(6)

(7)

(8)

(9)

(1)

-413

958

-6

-1,855

-1,317

-3,165

211

3,438

-96

580

215

-2,302
-371
1,932

-274
822

-2
313
393

-623
1,007
2,008

-2,926
1,222
5,155

-832
-1,332
2,458

-10
-50
186

553
1,210
-2,432

167
-124
98

-456
-48
114

-325
-45
10

147
-608
1,799

-709
297

284
-1
--

15
-2,637
1,219

445
-2,537
3,315

1,276
521
1,165

-205
-129
67p

-1,150
-312
-777p

15
0
56p

-94p
80
399p

265
280
355
960

Jan.
Feb.
1975--Nov.

5
12
19
26

-85
-910
23
689

-355
354

-1
----

-7,526
6,114
670
3,216

-7,612
5,204
1,048
4,259

407
-4,580
2,243
2,995

-28
-27
19
15

-208
3,475
-1,275
-3,067

Dec.

3
10
17
24

-202
-204
613
1,195

297

-----

-5,793
-1,482
515
3,328

-5,994
-1,686
1,128
4,820

-1,064
-2,536
1,050
3,643

-7
-37
15
175

1,204
2,186
-363
4
- ,103p

31

193

--

--

-373

-179

454

37

310p

7
14

-404
-1,386

---

-2,022
803

-2,426
-583

-257
-3,515

-186
-27

316p
3,819p

1976--Jan.

(11)

-

-36
-999
766
-52

207
-133
221
-5

190
-323
586p
08
-2 p

-57
-64
116
-77p
2

50p

551p

87p
-194p

-214p
471p

uc
A
epresen s ac
ge n ystem s port o o rom en -o -fer 0 Lo en -- perJo
Represents change in daly average level for preceeding period.
Includes matched sale-purchase transactions as well as RP's
Sum of changes in vault cash, currency in circulation, Treasury operations, F.R. float, gold and foreign accounts, and other F.R. accounts.
Reserves to support private nonbank deposits. Target change for December and January reflects the target adopted at the December 16, 1975 FOMC meeting.
Target change for previous months reflects the bluebook patterns that are consistent with target ranges that were adopted during the month.
P - Preliminary,
n

cludes

redempt

.

CONFIDENTIAL (FR)
CLASS II -- FOMC
JANUARY 16, 1976
TABLE 4
NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES 1/
($ millions, not seasonally adjusted)
Treasury Coupons
Net Purchases 3/
Period

Treasury Bills

Within

Net Change 2/

1-year

1 - 5

Federal Agencies
Net Purchases 4/

Over
5 - 10

Within

10

Total

-1-year

Net Change
Outright

Over
1 - 5

5 - 10

Holdings

RP's

0

Total

Total
tal 5/

Net 6/

1972
1973
1974

-490
7,232
1,280

87
207
320

789
579
797

539
500
434

167
129
196

1,582
1,415
1,747

46
120
439

592
400
1,665

253
244
659

168
101
318

1,059
864
3,082

1,631
9,273
6,303

1975

-468

337

3,284

1,510

1,070

6,202

191

824

460

138

1,613

7,267

1,272

-43

102

215

131

45

492

138

371

130

53

691

1,402

-238

-2,093

33

1,054

625

312

2,024

69

169

285

61

584

508

53

1,086

218

1,135

454

273

2,079

-

--

-2

-2

3,076

230

-757
1,294

13
74

712
385

201
234

171
315

1,096
1,006

64
58

514
141

106
71

747
284

1,060
2,626

2,392
-1,403

--

1974--Qtr. IV
1975--Qtr. 1
Qtr.

I

Qtr. III
Qtr. IV

63
14

--

--

--

-

-

--

Aug.
Sept.

-369
1,917

13
--

150
562

64
137

47
124

274
822

41
23

229
285

49
57

34
29

353
394

216
3,148

1,007
2,008

Oct.
Nov.
Dec.

97
-588
1,784

43
31

-267
118

-156
78

-244
71

709
297

58
--

141
--

71
--

14
--

284
--

430
99
2,096

15
-2,637
1,219

1975--Nov. 5
12
19
26

-93
-882
19
683

-32
11

-136
131

74
82

--

---

---

-

-

---

---

-85
910

-7,526
6,114

114
130

355
354

---

--

-

--

---

378
1,043

670
3,216

Dec. 3

-200

--

--

-

--

-

-

-

--

--

-

-202

-5,793

10
17
24
31

-200
612
1,175
197

--31
--

-118
--

-78
-

71
--

297
--

----

--

-

---

-----

-204
613
1,492
193

-1,482
515
3,328
-373

1976--Jan. 7
14

-404
-1,380

--

--

--

--

--

--

--

-

-

-

-404

-2,022

-

-

--

-

-

--

-

-1,386

803

1975--July

-2,305

-

--

-1,358
-46
-154

-

-

-

-2,304

-623

21
28
17 Change from end-of-period to end-of-period.
2/ Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions.
3/ Outright transactions in market and with foreign accounts and short-term notes acquired in exchange for maturing bills.
Excludes maturity shifts,
rollovers of maturing coupon issues, and direct Treasury borrowings from the System.
4/ Outright transactions in market and with foreign accounts only. Excludes redemptions and maturity shifts.
5/
In addition to net purchases of securities, also reflects changes in System holdings of bankers' acceptances, direct Treasury borrowings from the
System, and redemptions (-) of Agency and Treasury coupon issues.
6/
Includes changes in both RP's (+) and matched sale-purchase transactions(-).

CONFIDENTIAL (FR)
CLASS II - FOMC
JANUARY 16, 1976
TABLE 5
SECURITY DEALER POSITIONS AND BANK POSITIONS
(millions of dollars)

U.S. Govt. Security
Dealer Positions
Period

Bills

(1)
3,678

1974--High

-289

Low

Member Bank Reserve Positions
Basic Reserve Deficit
Borrowing at FRB**

Dealer Positions

Corporate

Municipal

Excess**

Coupon Issues

Bonds

Bonds

Reserves

Total

(2)

(3)

(5)

(6)

2,203
-309

253

577

0

-168

3,906
647

176
13

Seasonal

(7)

8 New York

38 Others

(8)
-7,870

(9)
-12,826

-2,447

- 6,046

1975--High
Low

7,029
1,586

2,845

464
0

864
-50

871
18

74
5

-7,387
-1,757

-11,632

253

1974--Dec.

2,985

1,836

175

258

727

32

-5,960

-10,169

1975--Jan.
Feb.
Mar.

2,501
3,329
3,143

2,050
2,121
2,521

147
198
195

398
147
96

14

11
7

-5,378
-6,318
-5,732

- 9,744
- 9,533

35

115
170
118

143
155
201

110
66
227

6

-4,079

-10,426

9

-3,965

11

-5,821

- 9,567
- 9,344

60

135
181
122

188
195
191

259
211

17

37

-5,546
-3,964

- 9,896
- 9,966

397

58

-3,551

- 9,015

189

65
29p
14p

-2,644
-3,812

- 9,202

60p
131p

- ,9 1p

-

-2,497
-5,045
-3,746

- 8,868

-3,340

- 9,626

144
307

-10,302

Apr.

2,737

May

4,744

June

5,201

1,617
1,752
1,351

July
Aug.
Sept.

4,231
4,020
5,008

1,246
1,204
588

Oct.

5,766
4,571

*4,822

1,480
2,073
*1,075

156
95

123
173
103

161
2
59p
289p

4,928
4,050
4,765
4,616

2,751
2,585
2,022
1,534

48
172
268
135

194
122
214
163

804

67

43

-37

39
58
73

27
26
26
22
15
14p
12p
12p

-3,409
-3,948

- 9,611

-3.179

-11,011

-2,039

-10,179

-2,034

- 9,020

10p

-3,232p
-5,612p

-

Nov.

Dec.
1975--Nov.

5

12
19
26
Dec.

3
10

4,748
4,620
5,835
*4,546
*4,296

17
24
31
1976--Ja.

*4,607
*6.173

7
14
21
28
4

NOTE:

97

- 7,207

91
89

44
31
14

174
184

O

110
121
123
97
63

313
166
247p
260p
470p

66
30
45p
2 20
p
257p

0

34

299p

71

5p

120p

181p

1,281
875
710
*1,256
*1,437

105
84
0
0

*1,144
*1,208

_______________________ ,., _____________ -,

Government security dealer trading positions are on a commitment basis.

--

____________ -

p
4
4p

_____________ .

9

p

2

-10,159

8

- __________________

1 0 5 08

,

p

-11,632
-10,635

-11,600

8

,686p

-10,76 4p

I

_________________

Trading positions, which exclude Treasury bills financed by repurchase

agreements maturing in 16 days or more, are indicators of dealer holdings for sale over the near-term. Other security dealer positions issues
still in syndicate, excluding trading positions. The basic reserve deficit is excess reserves less borrowing at Federal Reserve less net Federal
funds purchases. Weekly data are daily averages for statement weeks, except for corporate and municipal issues in syndicate which are Friday figures.
*STRICTLY CONFIDENTIAL

** Monthly averages for excess reserves and borrowings are weighted averages of statement week figures.

STRICTLY CONFIDENTIAL (FR)
CLASS II - FOMC
TABLE 6
SELECTED INTEREST RATES
(Per Cent)

_Long-Term

Short-Term

1-year
(3)

90-119 Day
Commercial
Paper
(4)

Teasury Bills
Federal
Funds
(1)

Period

90-Day

Aaa Utility
Recently
New
Issue
Offered
(7)
(8)

CD's New Issue-NYC
60-89 Day
(5)

90-119 Day
(6)

Municipal
Bond
Buyer
(9)

U.S. Government
(20-yr. Constant
Maturity)
(10)

FNMA
Auction
Yield
(11)

GNMA
Guaranteed
Securities
(12)

1974--High
Low

13.55
8.45

9.54
6.39

12.25
7.88

12.25
8.00

12.00
7.88

10.61
8.05

10.52
8.14

7.15
5.16

8.68
7.40

10.59
8.43

9.98
7.79

1975--High
Low

7.70
5.13

7.31
5.46

8.43
5.38

7.88
5.25

7.75
5.38

9.80
8.89

9.71
9.06

7.67
6.27

8.63
7.63

9.95
8.78

9.10
7.93

1974--Dec.

8.53

6.79

9.18

8.84

9.53

9.56

7.05

7.91

9.53

8.62

1975--Jan.
Feb.
Mar.

7.13
6.24
5.54

6.27
5.56
5.70

7.39
6.36
6.06

7.45
6.25
6.03

9.36
8.97
9.35

9.45
9.09
9.38

6.82
6.39
6.74

7.88
7.71
7.99

9.25
8.93
8.82

8.48
8.03
8.09

Apr.
May
June

5.49
5.22
5.55

6.40
5.91
5.86

6.11
5.70
5.67

6.03
5.63
5.51

9.67
9.63
9.20

9.66
9.65
9.33

6.94
6.97
6.94

8.36
8.22
8.04

9.06
9.27
9.09

8.48
8.51
8.34

July
Aug.
Sept.

6.10
6.14
6.24

6.64
7.16
7.20

6.32
6.59
6.79

6.25
6.63
6.81

9.42
9.45
9.68

9.43
9.49
9.57

7.06
7.17
7.44

8.17
8.50
8.57

9.14
9.41
9.78

8.50
8.75
8.97

6.48
6.07
6.16

6.35
5.78
5.88

6.45
6.03
5.83

9.45
9.20
9.36

9.43
9.26
9.23

7.39
7.43
7.31

8.35
8.28
8.23

8.87
8.50
8.56

5
12
19
26

5.87
5.86
6.10
6.23

5.88
5.81
5.75
5.75

6.13
6.00
6.00
6.00

9.10
9.11
9.40

9.24
9.24
9.30

7.52
7.43
7.39
7.39

8.19
8.22
8.34
8.35

8.40
8.40
8.52
8.66

3
10
17
24
31

6.24
6.44
6.30
6.02
5.76

5.81
5.93
5.98
5.90
5.72

6.13
6.00
5.88
5.63
5.50

9.46
9.37
9.24

7.31
7.34
7.30
7.30
7.29

8.34
8.37
8.20
8.08
8.04

8.57
8.61
8.63
8.59
8.40

7
14
21
28

5.69
5.42

5.44
5.15

5.25
5.00

8.88
8.58p

7.13
7.09

7.99
7.95p

8.45

Oct.
Nov.
Dec.
1975-Nov.

Dec.

1976--Jan.

Daily--Jan.

9
15

4.73
4.80p

-

9.25

9.34
9.25
9.19
-

9.13
9.10

8.94
8.66p

8.34

5.25
5.13
"

NOTE:

Weekly data for columns 1 to 4 are statement week averages of daily data. Columns 5 and 6 are one-day Wednesday quotes. For columns 7,8, and 10,
the weekly date is the mid-point of the calendar week over which data are averaged. Column 9 is a one-day quote for Thursday following the end of
the statement wedk. Column 11 gives FNMA auction data for the Monday preceding the end of the statement week. Column 12 is a one-day quote for
the Monday preceding the end of the statement week. The PNHA auction yield is the average yield in bi-weekly auction for short-term forward
commitments for Government underwritten mortgages.
GNKA yields are average net yields to investors on mortgage-backed securities for immediate
delivery, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying the prevailing ceiling rate.
c--Corrected

1-A
MONEY AND CREDIT AGGREGATE MEASURES
APPENDIX

i
Total
i. .

1

i i I

i ii .

i .n

2

t

Available
to
Support
oi
Deposits3
I

Adj.
Credit
proxy

Total
Loans
and
Investments

4

5

JAN. 16, 1976

MONEY STOCK
MEASURES

CREDIT
MEASURES

iBANK

RESERVES9

Period

TABLE

M

M2

M3

M5

M6

M

9

10

11

1I

11.6
10.6
6.7

10.6
9.0
9.8

11.9
8.9
8.7

4

I

6

(Per cent annual rates of growth)

ANNUALLY:

7.9
8.5
-0.3

7.3
10.7
1.4

9.1
8.9
-0.9

10.4
10.2
4.2

13.5
9.2
4.2

6.1
4.8
4.2

1974

5.9

21.2

5.0

5.4

3.1

3.1

5.4

7.5

6.7

6.5

1ST HALF 1975
2ND HALF 1975

-3.6
3.0

-0.7
3.6

-2.1
0.3

5.3
3.0

5.1
3.1

6.0
2.3

13.0
9.3

7.5
5.7

10.7
8.5

9.9
7.2

-8.4
1.2
-2.2
8.3

-1.3
-0.2
-4.2
11.6

-4.7
0.5
-2.6
3.2

3.1
7.5
-1.3
7.4

5.7
4.6
3.6
2.6

0.8
11.2
2.3
2.3

9.9
15.7
8.5

6.3
8.6
2.9
8.4

8.8
12.3
7.4
9.4

7.6
11.9
6.2
8.1

-0.9

11.6
-2.8
-2.8
5.0

-1.3
-2.5
-1.1
0.5

4.1
5.2
1.4
5.9

1.0
5.1
4.1
4.5

-0.3
8.6
6.9
2.4

7.8
13.8
13.2
8.7

7.4
6.6
5.6
6.9

8.8
10.6
9.9
8.9

7.0

-3.7
-0.8
2.9

15.4

34.9

6.6

7.6

3.4

5.9

11.4

10.8

7.3

19.5

0.0
-8.6
-5.5
2.9
-10.3
9.1
-2.1
-6.2
0.6
-2.9
6.2
6.4

3.6
-0.2
5.8
5.1
2.4
15.1
-5.2
-5.5
6.7
5.0
12.8
4.2

5.6
9.9
13.9
11.7
14.9
19.8
12.2
9.4
7.8
7.4
12.4
5.6

6.7
6.1
6.1
4.2
7.0
14.3
4.1
-1.5
6.1
7.3
11.7
5.9

7.9
8.2
10.2
9.2
10.7
16.7
9.1

7.5
6.9
8.5
9.5
9.8
15.9
8.8
2.9
6.9
7.4
10.2
6.4

1973

1974
1975

8.8
6.8
11.4

SEMI-ANNUALLYI
2ND HALF

QUARTERLY:
1ST
2ND
3RD
4TH

QTR.
QTR.
QTR.
QTR.

1975
1975
1975
1975

9.9

QUARTERLY-AV:
1ST
2ND
3RD
4TH

QTR.
OTR.
QTR.
QTR.

1975
1975
1975
1975

9.9
9.0
7.4

MONTHLY:
1974--DEC.
1975--JAN.
FEB.
MAR.
APR.
MAY
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEC. P

NOTES:

1/
P -

7.8
-27.3
-5.6

8.2
-14.7
10.3
4.1
-14.5
3.9
-2.2
12.3
14.9

-19.0
-4.1
8.1
-13.2
4.6
1.5
-11.5
-2.6
5.1
16.9
12.4

-9.4
4.7
4.3
7.9
3.4
5.1
5.1
2.0
6.8

2.0
6.0
10.5
-8.8

-11.8
3.4
11.0
3.4
11.3
18.7
2.0
2.9
2.0
-2.4
12.2
-2.8

4.4
8.4
9.1
11.7
7.2

ADJUSTED CREDIT PROXY INCLUDES MAINLY TOTAL MEMBER BANK DEPOSITS SUBJECT TO RESERVE REQUIREMENTS,
LOANS SOLD TO BANKRELATED INSTITUTIONS, AND EURODOLLAR BORROWINGS OF U.S.BANKS.
WEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS.
MONTHLY
DATA ARE DAILY AVERAGES.
WEEKLY DATA ARE NOT AVAILABLE FOR M3, MS. M6, M7, TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUt M7,TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS.
BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS.
PRELIMINARV

APPENDIX TABLE 1-B
MONEY AND CREDIT AGGREGATE MEASURES

JAN.

16, 1976

SEASONALLY ADJUSTED, BILLIONS OF DOLLARS
.
Period
Total

Non
No
borrowed

Available
to
Support
pvt.

Adj.
Credit
proxy

Deposits
1

2

MONEY STOCK
MEASURES

BANK CREDIT
MEASURES

RESERVES!

3

Total
Loans
and

Ml

Invest-

M2

ments
4

3

M3
I

0
7

0
8

9

MS

M

LU

L

10

11

M7

12

720.7

271.5
284.4
296.4

572.2
613.5
667.5

919.6
981.7
1093.9

636.0
703.7
750.8

983.4
1072.0
1177.2

1095.4
1195.1
1305.3

1133.6
1234.7
1342.3

494.3

691.9

284.4

613.5

981.7

703.7

1072.0

1195.1

1234.7

32,761
32,527
32,378

495.8
495.7
498.1

694.6
697.1
701.7

281.6
282.4
285.0

614.8
619.1
625.1

986.3
994.4
1005.9

707.6
711.2
714.8

1079.1
1086.5
1095.7

1203.3
1210.3
1218.6

1242.4
1249.5
1258.3

34,325
33,Q48
34,079

32,457
32,178
32,422

500.2
501.2
507.5

703.7
706.7
709.7

280 .8
288,5
293.0

628.9
635.9
646.1

1015.7
1028.3
1045.3

717.3
721.
730.1

1104.1
1113.9
1129.4

1228.3
1238.5
1255.3

1268.3
1278.7
1295.6

34,423
34,006
34,117

34,122
33,794
33.72]

32,365
32,199
32,215

505.3
503.0
505.8

710.9
714.9
716.1

293.5
294.2
294.7

650.5
653.7
656.3

1055.9
1064.2
1071.1

732.6
731.7
735.4

1138.0
1142.2
1150.2

1264.9
1268.8
1277.4

1305.1
1308.3
1315.8

34,055
34,403
34,829

33 865
34,342
34,698

32,137
32,302
32,474

507.9
513.3
515.1

719.7
726.0
720.7

294.1
297.1
296.4

658.6
665.7
667.5

1077.7
1088.8
1093.9

739.9
747.1
750.8

1158.9
1170.2
1177.2

1286.1
1297.8
1305.3

1323.9
1335.2
1342.3

33,641
34,502
34,625

33,601
34,443
34.551

31,787
32.298
32,436

513.2
514.1

298.3
296.2
296,7

666.1
664.8
666.8

747.1
746.0
748.3

32,191
34,933
34,829

30,892
34,205
34.698

30,077
32,762
32,474

448.7
494.3
515.1

634.6
691.9

1974--DEC.

34,933

34,205

32,762

1975--JAN.
FEB.
MAR.

35,160
34,361
34,201

34.762
34.213
34,096

APR.
MAY
JUNE

34,436
34,014
34,306

JULY
AUG.
SEPT.
OCT.
NOV.
DEC. P

1973
1974
1975

M4

MONTHLY:

WEEKLY:
1975--NOV. 12
19
26

513.5

DEC.

3
lOP
17P
24P
31P

34,718
34,423
35,001
34,678
35,260

34,651
34,393
34,956
34,458
35,003

32,470
32,359
32,671
32,339
32,530

516.1
514.9
515.7
514.4
514.5

299.0
296.4
295.3
295.1
297.3

669.1
667.6
666.2
666.4
668.9

751.6
750.8
749.5
749.9
752.5

1976--JAN.

7P

34.833

34,762

32,122

515.4

296.1

669.3

751.5

NOTES:

ADJUSTED CREDIT PROXY INCLUDES MAINLY TOTAL MEMBER BANK DEPOSITS SUBJECT TO RESERVE REQUIREMENTS, LOANS SOLD TO BANKRELATED INSTITUTIONS,
AND EURODOLLAR BORROWINGS OF U.S.BANKS.
WEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS.
MONTHLY
DATA ARE DAILY AVERAGES.
WEEKLY DATA ARE NOT AVAILABLE FOR M3, MS, M6, M7, TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS.
1/ ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA.
P - PRELIMINARY

APPENDIX TABLE 2-A

COMPONENTS OF MONEY

TOCK AND RELATED MEASURES

JAN. 16,

1976

Period

(Per cent annual rates of growth)
ANNUALLY:

I

8.3
10.2
8.7

1973
1974
1975

I

8.5
5.6
15.3

I

13.9
11.8
21.1

38.8
3.4
-6.3

45.3
41.5
-7.8

SEMI-ANNUALLYt
2NO HALF 1974

10.2

1.0

10.5

7.6

5.1

9.9

1ST HALF 1975
2ND HALF 1975

9.4
7.6

5.0
0.6

8.5
8.0

14.6
10.3

16.3
13.3

22.5
17.6

-13.7
-1.9

8.8
9.8
5.1
10.0

-1.7
11.7
1.4
-0.2

10.1
6.7
3.3
12.5

13.4
15.3
9.7
10.5

13.1
18.9
15.5
10.7

20.4
23.5
17.0
17.6

-2.2
-25.4
-23.8
21.2

-7.3
13.5
1.3

8.9
8.7
8.5
7.8

-3.3
8.6
6.6
0.4

12.7
5.2
4.9
10.0

11.0
13.3
13.2
9.7

10.8
17.6
17.6
11.8

17.6
22.5
20.0
16.5

19.2
-24.0
-29.3
11.5

-3.3
2.0
6.6

8.9

1.7

16.6

4.0

9.2

13.2

67.4

5.3
8.8
12.2
1.7
12.1
15.4
5.1
8.4
1.7
8.3
14.9
6.5

-17.2
1.7
10.7
3.9
11-1
19.8
1.1
1.1
2.2

19.2
7.9
3.1
4.5
3.9
11.6
5.5

14.9
12.6
12.1
10.6
15.0
19.7
13.3
8.1
7.7
9.6
13.2
8.5

9.9
11.5
17.6
18.4
17.1
20.2
18.9
14.7
12.3
11.6
11.2
8.9

17.5
17.2
25.4
20.8
20.4
28.1
15.7
19.4
15.2
18.8
14.8
18.3

22.1

11.2
3.0
-0.3

-5.4
3.5
-15.9

QUARTERLY:
1ST
2ND
3RD
4TH

QTR.
QTR.
QTR.
QTR.

1975
1975
1975
1975

-2.0

1.0
6.0
-18.9
-13.5

QUARTERLY-AV:
1ST
2ND
3RD
4TH

OTR.
QTR.
QTR.
QTR.

1975
1975
1975
1975

-2.6

-20.2
8.1
-9.0
-19.3

-9.9

-52.2

MONTHLY:
1974-DEC.
1975--JAN.
FEB.
MAR.
APR.
MAY
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.
P

NOTES:
1/
P -

-6.5

11.9
-5.9

-4.6

9.1
13.9
11.3
12.0

31.9
-7.8
-30.0
-18.7
-39.4
-19.6
-28.5
-59.9
16.9
33.4
1.5
28.0

15.9
-15.7
-21.9
20.3
0.0
19.9
11.8
-11.7
3.9
-7.8

2.0
0.0

-15.2

6.1
12.2
9.1
6.0
3.0
-3.0
-23.9
-30.5
-18.8
-12-7
-9.6

RESERVE REQUIREMENTS ON EURODOLLAR BORROWINGS ARE INCLUDED BEGINNING OCTOBER 16, 1969, AND REQUIREMENTS ON BANK-RELATED
1970.
COMMERCIAL PAPER ARE INCLUDED BEGINNING OCTOBER 1,
GROWTH RATES ARE BASED ON ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF
PREVIOUS MONTH REPORTED DATA.
PRELIMINARY.

JAN.

16,

1976

APPENDIX TABLE 2-B

COMPONENTS OF MONEY STOCK AND RELATED MEASURES
otal
TCurrency
ime

Demand
Deposits

Period

3

2

1

Time
Other
Than
4

Mutual
Savings
Bank

Credit
Union

SShares
5

6

Short
Term

CD's

Savings
ds
Bonds

Commercal

US. Gov't

Commercial
Papery

Nondpoit
Funds

7

8

9

10

11

Gov't
Demand
Demand
12

ANNUALLY:
1973
1974
1975

61.6
67.9
73.8

209.9
216.5
222.6

364.5
419.3
454.5

300.7
329.1
371.2

322.8
340.8
393.1

24.6
27.5
33.3

59.9
62.8
66.9

52.1
60.3
61.1

38.3
39.6
37.1

1974--NOV.
DEC.

67.4
67.9

216.2
216.5

413.5
419.3

328.0
329.1

338.2
340.8

27.2
27.5

62.6
62.8

60.8
60.3

41.4
39.6

1975--JAN.
FEB.
MAR.

68.2
68.7
69.4

213.4
213.7
215.6

426.0
428.8
429.9

333.2
336.7
340.1

343.6
346.9
352.0

27.9
28.3
28.9

63.2
63.5
63.8

61.1
60.3
59.2

39.1
39.3
39.7

APR.
MAY
JUNE

69.5
70.2
71.1

216.3
218.3
221.9

431.5
432.9
437.1

343.1
347.4
353.1

357.4
362.5
368.6

29.4
29.9
30.6

64.1
64.4
64.7

60.2
60.2
61.2

40.0
40.2
40.3

JULY
AUG.
SEPT.

71.4
71.9
72.0

222.1
222.3
222.7

439.1
437.4
440.7

357.0
359.4
361.7

374.4
379.0
382.9

31.0
31.5
31.9

65.1
65.4
65.8

61.8
61.2
61.4

40.2
39.4
38.4

OCT.
NOV.
DEC. F

72.5
73.4
73.8

221.5
223.7
222.6

445.8
450.0
454.5

364.6
368.6
371.2

386.6
390.2
393.1

32.4
32.8
33.3

66.2
66.5
66.9

61.0
61.1
61.1

37.8
37.4
37.1

]

73.3
73.4
73.4

225.1
222.8
223.3

448.7
449.9
451.6

367.8
368.6
370.1

DEC.

3
10P
17P
24P
31P

73.9
73.8
73.9
73.7
73.7

225.1
222.6
221.5
221.4
223.6

452.5
454.4
454.2
454.8
455.1

370.1
371.2
370.9
371.3
371.6

1976-JAN.

7P

73.7

222.3

455.4

373.2

MONTHLY:

WEEKLY:
1975--NOV.

J

NOTES:
1/
P -

I

_I

-,--

J........

.l.J

--

I-~-

______

RESERVE REQUIREMENTS ON EURODOLLAR BORROWINGS ARE INCLUDED BEGINNING OCTOBER 16, 1969, AND REQUIREMENTS ON BANK-RELATED
COMMERCIAL PAPER ARE INCLUDED BEGGINNING OCTOBER 1,
1970.
ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA.
DATA.
PRELIMINARY

Appendix Table III

Growth Rate in Money Supply
(Per cent change in an annual rate)
M

M3

M2

M

Q

M

Q

M

q

I

3.4

6.8

7.3

9.1

8.8

10.4

II

11.3

7.3

10.6

8.6

10.5

9.1

III

0.6

5.5

5.6

7.8

5.2

7.5

IV

8.7

5.0

10.8

8.9

9.8

7.9

QIV '72-QIV '73

6.1

6.3

8.8

8.9

8.8

9.0

1974

5.5

5.8

9.3

9.6

8.9

9.1

II

7.0

7.3

7.9

8.3

6.8

7.6

III

1.D

3.5

4.2

6.0

3.8

5.2

5.3

3.9

6.7

6.2

6.9

5.8

QIV '73-QIV '74

4.8

5.2

7.2

7.7

6.8

7.1

1975

I

0.8

-0.3

7.6

5.8

9.9

7.8

II

11.2

8.6

1973

I

IV

III
IV
QIV '74-QIV '75

13.4

11.2

2.3

6.9

6.3

2.3

2.4

6.8

6.4

4.2

4.5

8.8

8.7

10,4

15.7
9.9
8.5
11.4

13.8
13.2
8.7
11.3

M = Annual rates of growth calculated from average levels in the final
months of the quarters.
Q = Annual rate calculated from average levels in all three months of
the quarters.

Appendix Table IV
Projected Federal Funds Rates

Alt. A
1976

Alt. B

Alt. C

QI

4t

5

5k

QII

4k

6-1/8

6k

QrII

5k

6k

7k

QIV

6

6k

7k

Appendix Table V

Preliminary Revised Seasonal Factors on Demand Deposits
and Effects on M1 Growth Rates
Preliminary factors
Old factors

available on
Dec. 12, 1975

January
February
March

103.5
99.0
99.0

103.1

April
May
June

100.9
97.9

100.9

99.1

99.5

99.55
98.4
99.2

99.8
98.4
99.2

99.8

99.6
100.6
103.3

July
August
September
October
November
December

1/

100.5
103.1

98.7
99.0

97.9

New factors

Effect on M1
growth (at
annual rate)-

102.9
98.8
99.0

6.3
-3.0

100.9
97.9
99.6

0.4
0

99.85
98.45
99.2
99.6
100.6
103.2

-2.5

-5.0

2.1
2.4
0.4
2.0
-2.8

-0.4

The difference is calculated from the old seasonal factors to the
new seasonal factors and includes effect of currency seasonals.