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Prefatory Note The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act. 1 In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing). 2 A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. Content last modified 6/05/2009. March 1, CONFIDENTIAL (FR) 1968. MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments The bank credit proxy rose on average in February at a 10 per cent annual rate, at the upper end of the range projected in the previous blue book. Most of the strengthening became evident in the latter part of the month, as banks experienced a sharp expansion in security loans and also held on to a relatively large proportion of the new 15-month note issued for cash by the Treasury (payable through full crediting to tax and loan accounts). In view of the rise in bank credit, open market operations became more restraining to the extent permitted by the progress of the Treasury financing, and banks were induced to increase borrowings from the Federal Reserve to obtain reserves required by deposit expansion. As a result, the net reserve position of member banks moved from average free reserves of $120 million in the first two statement weeks in February to average net borrowed reserves of $93 million in the last two statement weeks. Between those periods, average borrowings in- creased from $312 million to $424 million. With the reserve position of banks under increasing pressure, Federal funds traded around 4¾ per cent, and not infrequently at 4-7/8 per cent. Rates on such short-term instruments as Treasury bills, bankers' acceptances, and Agency issues generally have moved slightly higher than they were before the last Committee meeting, with the FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (Monthly averages and, where available, weekly averages of daily figures) Bond Yields Flow of Reserves. Bank Credit and Money Total Bank Corporate Munici- NonU.S. New pal borrowed ReCredit Money Desi Deposits Supply 2/ Proxy Reserves serves (Aaa) Issues Gov't. Money Market Indicators Free Borrow- Federal 3-month teserves ings Funds Treasury Rate (In millions Period of dollars) Bill (20 yr.) (I ionlars) -_ doILZl ll of dollars) (In billions (Seasonally Adjusted) (Aaa)l/ 42 172 199 275 257 311 270 252 212 225 148 366 196 150 94 88 132 86 82 141 124 185 4.99 4.50 4.03 3.94 3.97 3.78 3.88 3.99 3.87 4.14 4.49 4.56 4.26 3.84 3.60 3.53 4.20 4.26 4.42 4.55 4.72 4.96 4.61 4.56 4.64 4.90 4.99 5.01 5.12 5.16 5.36 5.66 5.59 5.18 5.31 5.38 5.62 5.79 5.78 5.86** 5.85** 6.08 6.50 6.51 3.38 3.47 3.50 3.71 3.80 3.86 3.78 3.81 3.88 3.99 4.15 +325 +555 + 92 + 96 + 95 +307 +291 + 96 +250 +223 -292 +218 +415 + 49 - 8 +164 +223 +269 +193 +311 +157 -145 + + + + + + + + + + - 136 15 275 368 4.60 4.68 4.99 4.98 5.39 5.37 6.24 n.a. 4.06 4.04 +344 +236 +393 +220 + 1.9 + 2.3 + 1.1 + 0.4 - 0.2 + 1.4 137 107 -43 -143 241 384 405 442 4.73 4.59 4.68 4.72 4.93 5.01 4.95 5.03 5.38 5.38 5.35 5.39 6.23 6.30 6.29 6.48 3.95 4.00 4.06 4.16 + + 4 + + - + + + + Year 1967 First Half 1967 Second Half 1967 195 153 238 173 222 123 4.19 4.36 4.02 Average 5.01 4.29 4.07 4.70 4.51 5.31 5.77 5.45 6.10 3.74 3.56 3.91 Recent variations in growth Mar. 29-June 28 June 28-Nov. 29 Nov. 29-Feb. 28 245 254 102 110 112 276 4.00 3.96 4.58 3.66 4.41 4.97 5.63 5.96 6.32 3.68 3.86 4.07 1"<7--Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1968--Jan. Feb. 1968--Feb. p p 7 14 21 28 4/ 4/ p p p p 4.83 5.25 5.46 +11.5 +15.0 + 7.4 3.3 3.0 2.1 1.2 2.0 3.2 3.7 2.3 2.7 1.9 0.1 2.3 1.4 0.2 3.1 1.2 1.6 0.3 1.6 1.7 1.7 1.2 0.1 1.1 0.9 0.3 1.2 1.0 1.6 0.1 + + + + + + + + + + + 2.6 2.6 2.0 1.9 2.5 2.2 2.5 1.7 2.0 1.7 1.3 0.1 0.2 0.6 0.6 Annual rates or increas~ei/ + 6.5 +15.8 + 9.8 +11.6 + 6.8 +17.3 +10.7 +12.1 +13.1 +10.5 + 6.0 + 8.5 +18.8 +12.5 + 9.1 Includes issues carrying 5-year and 10-year call protection; ** issues carry a 5-year call protection. Time deposits adjusted at all commercial banks. week shown. Base is change for month preceding specified period or in case of weekly periods, the first Reserve aggregate changes have been adjusted for change in reserve requirements held against net demand deposits effective at mid-month, January 1968. March 1, 1968. p - Preliminary. 1/ 2/ 3/ 4/ + + + + + + + + + + + 6.9 + 6.3 + 5.1 +14.3 +14.1 + 5.6 CONFIDENTIAL (FR) March 1, 1968. 3-month bill rate rising about 10 basis points to around 5 per cent. short-term These / yield increases were relatively small partly because business loan demands were not especially strong, so that banks were under little pressure to compete actively in the short-term market through issuance of negotiable CD's. In addition, major reporting banks continued to run only a relatively small basic reserve deficit-one considerably less deep than a year ago--as they remained cautious in managing their money positions and as Euro-dollar funds continued generally available at relatively favorable rates. Moreover, with the wider spread of the Federal funds rate over the discount rate in February as compared with January, some banks preferred to use the discount window to help finance their basic reserve deficits. In consequence, dealer new loan rates in New York have thus far changed little from the 5 -- 5-1/8 per cent range reached in early February; and, with financing outside New York fairly readily available, there has not been much additional pressure from financing costs on dealers' still-large inventories of bills, not to mention their moderate-sized holdings of notes and bonds. Dealers did not acquire an exceptionally large position in either the 5¾ per cent 7-year note issued in the mid-February refinancing or the 5-5/8 per cent 15-month note issued in the February 21 cash financing. In the case of the longer note, this was partly because the volume acquired in exchange was on the conservative side; in the CONFIDENTIAL (FR) Match 1, 1968. case of the shorter note, it was partly because banks have been quite willing to hold on to their acquisitions as an investment. Since the new issues have held up very well in price, dealers have been under little compulsion to effect sharp reductions in their holdings. Their positions in securities maturing in more than one year were $407 million on February 29, down only about $100 million from peak holdings during the month. With short-term interest rates rising only moderately, bank time deposits rose, on average, in February at a 9 per cent annual rate--at the upper end of the range of expectations--following a small decline in January on average. deposits. Most of the rise was in consumer-type As noted above, major banks showed little inclination to solicit funds aggressively through CD's. Toward the end of the period, however, an uptick of bank interest appeared, perhaps representing the beginning of preparation for the March and April tax periods. Money supply growth in February was relatively small, at an annual rate of about 2½ per cent. This represented a substantial reduction from the January rate of growth, consistent with staff expectations. Growth in private demand deposits in February was somewhat above anticipations, however, partly offsetting a smaller than projected rise in U.S. Government deposits. Over the period since the shift in policy late last fall, key monetary variables have shown annual rates of increase as shown below, in comparison with increases over the preceding seven months of relatively stable money market conditions. CONFIDENTIAL (FR) -4- March 1, 1968. May '67Nov.'67 1/ Total reserves Dec. '67Feb. '68 1/ 9.6 7.5 Nonborrowed reserves 10.0 4.7 Bank credit proxy 11.3 6.0 Time deposits 14.7 5.4 8.4 4.0 Money supply 1/ Dates are inclusive. Prospective developments Relationships among money market and monetary variables with no policy shift. Given prevailing money market conditions, the bank credit proxy is likely to show a smaller annual rate of increase in March than in February--perhaps in a 5 to 7 per cent range, and the figure would be this large only because of the carry-over effect in the monthly average comparison of the sharp late February credit expansion associated with the $4 billion Treasury cash financing. From the end of February to the end of March, the proxy is likely to show little growth. Prevailing money market conditions might be taken to include a net borrowed reserve position for banks in a zero to $150 million range, member bank borrowings generally in a $350 - $450 million range, the Federal funds most frequently trading in/ 4-3/4 -- 4-7/8 per cent area, and new dealer loan rates in New York around 5 -- 5-1/8 per cent. The CONFIDENTIAL (FR) -5- March 1, 1968. 3-month bill rate is likely to remain in a 4-7/8 -- 5-1/4 per cent range. The rate could be near the lower end of the range because of seasonal downward pressures stemming in part from anticipation of reinvestment demand from maturing March and April tax bills. An offset to such seasonal forces could develop if rising Federal expenditures lead the market to anticipate sizable Federal Government new cash needs during the months immediately ahead, or if the persistence of net borrowed reserve figures alters market attitudes further. Some upward pressure could also develop out of the cumulative impact of the current $100 million additions to the weekly bill auctions. The slower rate of growth anticipated for the bank credit proxy in March reflects mainly the absence of sizable Treasury cash financings, such as there were in January and February. And an even more moderate growth rate is in prospect for April unless the Treasury accelerates its financing schedule or unless business loan demand strengthens considerably further. Banks have responded to the gradual tightening of policy since late fall mainly through reducing the rate of acquisitions of state and local government issues, and, at times, by selling Treasury bills rather than bidding aggressively for CD money. In part, bank reluctance to compete for high-cost funds reflects the still relatively moderate pace of business loan demand. Growth in outstanding business loans at banks thus far in 1968 appears to have been somewhat faster than in late summer and early fall of 1967, though well below the unusually rapid December rate. Reports CONFIDENTIAL (FR) -6- March 1, 1968. of a build-up in loan commitments, and continued inventory expansion, suggest that such loans could grow at a faster pace in coming months. However, corporate income tax payments in March and April, though sizable, are not expected to be quite as large as in the spring of last year. Unless business loan demands strengthen considerably further, or unless expectations of an even tighter monetary policy became more widespread, it is not expected that banks will be highly aggressive in the CD market--though probably evincing more interest than in recent weeks in view of the large maturities in prospect with the approach of the March and April tax periods. A maximum likelihood estimate of the change in outstanding CD's in March would be for a small decline of $200 - $300 million, or about in line with seasonal expectations. With such CD developments, and consumer-type time deposits growing at near their February rate, the total of time and savings deposits in March is expected to rise in a 9 - 11 per cent range. Private demand deposits are expected to rise further in March, largely reflecting a decline during the month in U.S. Government deposits. The money supply may increase in a range of 4 - 6 per cent, annual rate. With a somewhat slower rate of growth projected for bank credit and total bank deposits, and with the bulk of deposit expansion in the form of time deposits, total member bank reserves in March are likely to rise in a range of 2 - 5 per cent, annual rate, well below the February pace. CONFIDENTIAL (FR) March 1, 1968. Long-term rates may change little from current levels in the weeks immediately ahead, though some updrift is possible. Municipal yields have already adjusted substantially upwards in light of the reduced bank interest and the large calendar of new issues, and could come under further upward pressure from a surge of industrial revenue bond issues; however, any further rise in municipal yields could be moderated by postponements of prospective new issues. Market participants have not yet begun to focus on the possible magnitude of remaining Treasury cash needs, which may be financed in part through PC issues. In the corporate market, the calendar appears relatively light. Interest rates would be most likely to rise if the market sensed a renewed upsurge in defense spending--and one not likely to be offset by a tax increase--a further tightening in monetary policy, and re-appearance of anticipatory borrowings at banks and in the security market. Further restraint through open market operations. If the Committee wishes to add further to pressure on bank reserve positions and the money market, it may want to consider conditions including net borrowed reserves in a $100 - $250 million range and member bank borrowings generally in a $450 - $550 million range. Federal funds would be likely to trade most frequently around 5 per cent, although bank preferences for meeting reserve needs through the discount window could tend to moderate upward pressures on the funds rate. Along with an associated rise in dealer new loan rates to around 5¼ - 5 per cent, CONFIDENTIAL (FR) March 1, 1968. the 3-month bill rate may move into a 5-1/8 -- 5-3/8 per cent range-moving more toward the upper end if expectations of a discount rate increase became more prevalent. Such a tightening of money market conditions may have relatively little effect on bank credit and deposit expansion in March, although the additional restraint would force banks to rely more on borrowed reserves in meeting their reserve requirements. It is possible that the most immediate effect of the tightening would be a sharp burst of bank interest in expanding outstanding CD's funds in advance of large maturities in the weeks ahead. to secure But in so doing, banks would place further upward pressures on market interest rates, and their capacity to continue acquiring new CD funds, except in the very shortest maturities, would quickly become severely constrained. Apart from any temporary spurt, bank credit growth is likely to moderate further in the wake of the tighter policy posture, as higher market interest rates lead to a further slowdown in time deposit growth following the spring quarterly interest-crediting period--as With would also be true for deposit accounts in thrift institutions. the cumulative effect of the further tightening action coinciding with an expected lull in major Treasury cash financing demands, bank credit and deposit expansion in April would probably be quite small. And as banks become even less willing buyers of U.S. Government and municipal securities, and perhaps reappraise their over-all lending policies, upward pressures on long-term interest rates would become more marked. Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Excess reserves Period As rev Member banks I I borrowings ised t o Free reserves date Monthly (reserves weeks ending in): 1967--February March April May June July August September October November December 408 1968--January p February p Weekly: 4 1967--Oct. 11 18 25 Nov. 1 8 15 22 29 Dec. 1968--Jan. Feb. 366 196 150 94 expected at conclusion of each As first published each week 132 86 82 141 124 185 42 172 199 275 257 317 270 252 212 225 148 411 383 275 368 i36 15 413 249 561 190 144 145 216 269 104 345 132 298 151 164 271 186 379 106 132 162 127 119 211 198 356 94 265 295 262 348 92 204 312 233 375 131 240 368 349 369 345 449 356 334 353 349 333 291 330 518 221 384 88 58 80 week's open market operations _____________________ 378 .1 6 13 20 27 288 333 267 442 87 121 185 345 201 214 82 97 228 187 47 100 257 2]6 56 110 3 10 17 24 p 31 p 654 564 157 359 322 495 180 224 233 241 159 384 71 398 -67 -55 126 133 44 45 363 -28 73 35 7 14 21 28 378 491 362 299 241 384 405 442 137 107 -43 -143 p - Preliminary 81 85 75 -44 -143 88 89 -57 -148 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 Total Reserves Ag gregates Required reserves onborrowed Against Total Reserves Demand Deposits Moneta Total Member Bank Deposits y Var Time iab le s Money Supply Private Deposits Total (credit)1 / 2 (comm. banks)2/ Demand Deposits Annually: 1966 1967 + 1.2 + 9.8 + 0.8 +11,5 + 1.4 +10.2 + 0.9 + 7.0 + 3.7 +11.6 + 8.8 +15.8 + 2.2 + 6.5 + 1.2 + 6.8 Monthly: 1966--Sept. Oct. + 4.5 - 6.9 - 2.0 - 6.4 - 1.0 - 3.0 - 4.5 - 7.2 - 0.5 - 4.4 + 3.8 + 1.5 + 2.8 - 2.8 + 1.8 - 4.5 Nov. - 3.1 + 8.3 - - 3.4 - 2.3 -- Dec. - 0.9 - 0.7 + 1.8 - 6.7 + 2.0 + 9.8 + 2.1 + 0.9 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. +19.2 +11.5 +21.6 + 2.5 - 0.4 + 8.4 +11.3 +13.5 + 9.6 +15.3 + 7.6 - 7.0 +26.0 +17.4 +29.4 + 4.7 + 4.9 + 4.9 +15.2 +14.7 + 4.8 +12.4 +10.9 -14.2 +14.4 +12.0 +15.3 + 8.1 - 1.2 + 4.8 +16.0 +15.6 + 9.0 +18.0 + 5.5 - 0.3 +14.0 +11.6 + 9.8 + 5.0 - 2.1 - 2.8 +15.8 +14.4 + 7.2 +16.1 + 2.8 -10.2 +16.1 +15.9 +14.3 + 9.9 + 5.6 + 8.8 +15.2 +16.9 +10.3 +12.0 + 7.9 - 0.4 +16.5 +19.3 +19.0 +14.4 +13.5 +17.5 +15.2 +17.1 +11.4 +13.3 +11.2 + 8.5 - 0.7 + 8.5 +11.2 - 2.8 +12.5 +11.7 +11.6 + 8.1 + 0.7 + 7.4 + 6.0 + 2.0 - 2.7 + 9.1 +12.7 - 5.4 +15.3 +13.3 +14.0 +10.4 - 0.9 + 6.9 + 7.7 - 0.9 1968--Jan. p 3/ Feb. p 3/ +19.1 +10.5 +16.9 +11.4 +14.3 + 7.6 +18.5 +16.5 + 8.3 +10.0 - 1.3 + 9.1 + 7.3 + 2.6 + 8.5 + 1.7 1/ 3.1 0.5 - - 0.9 2/ Includes all deposits subject to reserve requirements. Movements in this aggregate correspond closely with movements in total member bank credit. Changes in reserves, total deposits and time deposits have been adjusted for redefinition of time deposits 3/ effective June 9, 1966. Reserve aggregate changes have been adjusted for change in reserve requirements held against net demand deposits effective at mid-month, January 1968. p - Preliminary. Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES OF DAILY FIGURES I 1 I I I I I i I I I I BILLIONS OF DOLLARS, SEASONALLY ADJUSTED 25.0 24.5 24.0 -g/. 23.5 TOTAL 23.0 V RESERVES REQUIRED 22.5 RESERVES NONBORROWED 22.0 - * - NET B ERVES 21.5 M J 1966 S D M J 1967 S D Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES DOLLARS BILLIONS OF 2 86 1 I I I 1 1 TOTAL MEMBER SEAS ADJ WEEKLY 1 1 1 1 1 1 1 BANK DEPOSITS (CREDIT 1 1 1 1 1 1 | PROXYJ AVERAGE OF DAILY FIGURES 282 278 A.-/ 274 270 266 262 258 254 250 246 242 6 I I LIABILITIES TO OVERSEAS NOT SEAS ADJ, BRANCHES (WEEKLY REPORTING BANKS) WEDNESDAYS 4 2 0 1966 1967 1968 \ Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES I--I-I-I-I-I-I-I-I-I-I-I---F BILLIONS OF DOLLARS 190 190 I 186 186 182 192 178 188 174 184 170 180 176 172 TIME DEPOSITS ADJUSTED (All Commercial Banks) 168 160 24 NEGOTIABLE (Unadjusted) CD'S 20 16 D 1966 M J 1967 S D J M 1968 S Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES I BILLIONS OF DOLLARS 48 MONEY SUPPLY COMPONENTS: 44 CURRENCY OUTSIDE BANKS 40 36 146 142 DEMAND DEPOSITS 138 134 130 12 U.S. GOVT. DEMAND DEPOSITS (Member Banks) 8 4 1 L D 1966 M I 1 I o J 1967 S D I J M 1968 S 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 d Currency Technical credit (excl. o outside factors float) 1/ stock f banks = Change in total net 2/ reserves +1,085 +1,522 = Bank use of reserves Required Excess reserves 3/ reserves r: 1 o6 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) +3,149 +4,718 -627 -725 -2,243 -2,305 +805 -165 +1,302 +1,552 -1,820 -910 +1,111 +1,517 - 26 + 5 Year-to-date: (12/28/66 - 3/1/67) (12/27/67 - 2/28/68) - 172 172 - Weekly: 1968--Jan. + 554 658 21 393 279 404 - 45 -353 -328 -479 441 109 168 179 +387 -278 +350 -164 Feb. 3 10 17 5/ 24 p 5/ - 514 380 + 404 31 p - 159 -452 + 1 + 1 - 2 + 1 7 14 21 28 + + 346 35 - 29 - 72 - 773 + 314 p p p p Apr. + 1 - - 464 + 61 -278 -143 761 537 340 353 232 + 549 +212 - 447 - 90 + + 67 151 -407 +202 - 195 - 37 261 424 254 330 + 205 - 537 125 + 56 +113 -129 + 393 - 63 + + - 35 180 150 75 + 35 - 180 + 150 - 75 + 105 30 - 105 + 30 - 742 82 I PROJECTED 1968--Mar. 51 -551 6 13 20 27 + + + 385 5 370 45 - 275 215 + + 150 130 - 75 + 30 +370 -250 3 10 + + 170 240 - 75 260 -200 + 50 For retrospective details see Table 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. effective January 18, 1968. p - Preliminary. 11, 1968, and $190 million 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) F~ - Total required reserves Period Year: 1966 (12/29/65 - 12/ 28/66) 1967 (12/28/66 - 12/ 27/67) V- - Supporting private aeposits Supporting U. S. Gov't. demand +1,111 +1,517 +261 - 464 - 20 + 61 +303 3 10 17 2/ 24 p 2/ 31 p + 549 - 447 + + 67 151 -230 -118 -192 +396 - 195 - 7 p 14 p 21 p + 205 - 537 125 +188 -161 28 D + 393 +533 6 13 20 27 + + - 35 180 150 75 -105 -235 - 75 +165 3 10 + 105 30 -330 -165 - 87 Seasonal changes +1,198 +1,256 - 14 + 59 Other than isonal changes I - 4 + 6 1,023 + 95 + 80 +125 +592 - 5 I/ +1,221+ 168-' Year-to-date: (12/28/66 - 3/1/67) (12/27/67 - 2/28/68) - 444 242 -926 -1,012 779 329 259 245 173 +380 -160 -147 -338 -103 +388 -191 +368 + 80 -108 17 376 34 140 -190 -175 -221 +201 -218 +171 - 58 - 99 + + + - 140 55 225 240 +130 + 60 +145 -305 + 5 + 10 - 10 + 10 + + 10 15 75 45 + + + 15 10 + + 225 195 +130 +160 + - + 75 + 30 + + 15 10 Weekly: 1968--Jan. Feb. 22 - 91 PROJECTED 1968--Mar. Apr. 1/ 2/ 5 5 Reflects reserves requirements changes in July, September 1966, and March 1967. Includes increase in reserve requirements of $360 million effective Jan. 11, 1968, and $190 million effective January 18 p - Preliminary. 1968. 15 -- Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Foreign Technical factors (net) Period ACTUAL Treasury Float deposits and gold loans (Sign indicates effect on reserves) operations Other nonmember deposits and F. R. accounts Year: +805 -165 +673 - 85 + 64 -389 - 30 - 7 + 98 +316 -1,820 -910 -153 -214 -1,101 -843 + 16 + 3 -582 +144 3 10 17 24 p 31 p -- 45 -353 -328 -479 -229 - 98 + 23 + 90 -161 - 53 1 -347 -261 -277 + 3 - 14 + 5 + 7 - 12 +279 + 68 - 34 -164 - 29 7 14 21 28 +387 -278 +350 -164 +221 -141 + 34 + 47 + 2 -184 +467 -189 + 19 + 5 - 3 - 7 +145 + 42 -148 - 15 - 75 - 65 - 25 - 10 + 25 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) Year-to-date: (12/28/66 - 3/1/67) (12/27/67 - 2/28/68) Weekly: 1968--Jan. Feb. p p p p PROJECTED 1968--Mar. Apr. 6 13 + 30 + 85 -105 -- 20 27 +370 -250 --- +250 -250 -- 3 -200 -- -200 -- 10 + 50 -- + 50 + 50 +120 -- 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 (Excl. float) Period Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) Year-to-date: (12/28/66 - 3/1/67) (12/27/67 -2/28/68) Weekly: 1968--Jan. Feb. +3,149 +4,718 - 172 173 + 243 + 679 -436 206 - 224 - - 514 380 404 159 346 35 773 314 369 133 763 281 11 110 372 259 7 14 21 -. +437 -577 +2,158 +4,433 195 65 409 339 180 554 + 474 +1,153 +3,069 +5,009 328 75 426 348 135 3 10 17 24 31 28 U.S. Government securities Total Bill th Repurchase agreements holdings 99 Federal Agency Securities + 26 - 19 3 7 81 +133 -140 + + 66 - 17 - 57 11 + 34 +380 Bankers' acceptances Member banks borrowings + 52 - 69 + 2 -203 - 31 - 57 -381 + 97 +150 -315 + 44 + 9 + 8 + +143 + 21 + 37 - 23 -391 22 4. . - CHart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES 1/ Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures) Period Total reserves reserves Nonborrowed reeres reserves Tot Total Required reserves Required reserves Against private deposits Total - Demand 21,857 21,923 21,356 21,417 21,488 21,533 20,626 20,719 15,921 15,943 Sept. Oct. Nov. Dec. 21,869 21,986 21,976 22,186 21,318 21,533 21,589 21,722 21,494 21,645 21,671 21,861 20.904 21,073 21,170 21,285 16,065 16,147 16,196 16,266 1966--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 22,358 22,401 22,452 22,679 22,703 22,707 22,861 22,571 22,655 22,524 22,465 22,449 21,899 21,943 21,873 22,027 22,020 22,030 22,140 21,900 21,864 21,748 21,898 21,885 22,007 22,028 22,077 22,252 22,308 22,339 22,431 22,274 22,256 22,200 22,142 22,175 21,411 21,464 21,600 21,771 21,782 21,883 21,841 21,842 21,860 21,741 21,716 21,772 16,375 16,413 16,506 16,605 16,562 16,606 16,512 16,473 16,475 16,365 16,364 16,378 1967--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 22,808 23,026 23,441 23,490 23,482 23,646 23,869 24,138 24,331 24,642 24,799 24,654 22,360 22,685 23,240 23,332 23,428 23,523 23,830 24,121 24,217 24,467 24,690 24,398 22,442 22,666 22,955 23,110 23,086 23,178 23,488 23,794 23 972 24,332 24,444 24,437 21,803 22,044 22,297 22,293 22,559 22,890 23,049 23,275 23.330 23,453 23,605 23,628 16,328 16,478 16,647 16,578 16,786 17,024 17.115 17,246 17,237 17,316 17,404 17,386 25,047 25,267 24,742 24,978 24,729 24,885 23,766 23,824 17,524 17,557 1965--Jul. Aug. 1968 -- Jan. p 2/ Feb. p 2/ p - Preliminary. 1/ 2/ deposits effective June 9, 1966. Reserves have been adjusted for redefinition of time in reserve requirements Reserve aggregates have been adjusted for change January 1968. held against net demand deposits effective at mid-month. Table C-2 DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL .MEMBER BANKS Seasonally Adjusted (Dollar amounts in billions Period based on monthly averages of daily figures) Total member bank deposits (credit) 1/2/ Private demand Time de depositsdepost U.S. Gov't. demand deposits 1966--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 238.0 239.0 239.8 242.2 243.9 244.8 246.7 246.5 246.4 245.5 244.8 245.2 121.7 122.0 123.0 124.8 126.1 127.5 128.7 129.7 130.1 129.9 129.3 130.3 111.7 112.0 112.6 113.3 113.0 113.3 112.6 112.4 112.4 111.6 111.6 111.7 4.7 5.0 4.2 4.1 4.8 4.0 5.3 4.4 3.9 4.0 4.0 3.2 1967--Jan Feb. Mar. Apr. May June Jul. Aug. Sept. O t. Nov. Dec. 248.5 251.8 254.8 256.9 258.1 260.0 263.3 267.0 269.3 272.0 273.8 273.7 132.2 134.4 136.5 138.0 139.4 141.7 143.3 145.6 147.2 148.2 149.8 150.8 111.4 112.4 113.6 113.1 114.5 116.1 116.7 117.6 117.6 118.1 118.7 118.6 4.9 4.0 4.8 5.8 4.1 2.2 3.2 3.7 4.5 5.6 5.3 4.4 1968--Jan. Feb. 275.6 277.9 150.8 151.4 119.5 119.8 5.3 6.8 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. Deposits have been adjusted for redefinition of time deposits effective June 9. 1967. Private demand deposits include demand deposits of individual, partnerships and corporations and net interbank balances. TABLE C-2a DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts in Total member bank deposits (credit)1/ 2 / Week ending: 1967-- Sept. Oct. Dec. 1968-- Jan. Feb. Time deposits 2/ Private demand deposits 3/ U. S. Gov't. demand deposits 6 13 20 27 269.3 269.6 268.8 269.1 146.9 147.0 147.2 147.3 118.3 118.3 116.1 117.4 4.1 4.3 4 11 25 269.7 271.0 273.1 272.3 147.6 148.0 148.4 148.4 118.6 118.9 118.4 117.6 3.6 4.1 6.3 6.4 1 8 15 22 29 273.1 273.6 273.5 274.2 273.7 148.9 149.0 149.6 150.1 150.4 117.6 118.9 118.5 118.7 118.6 6.7 6 13 20 27 274.3 273.6 273.2 273.6 150.6 150.9 150.8 150.7 119.1 118.5 117.9 118.3 4.5 4.1 3 10 17 24 31 274.9 274.7 275.5 276.5 275.7 150.5 150.6 150.6 150.6 151.2 120.4 119.6 119.9 119.4 118.8 3.9 4.5 5.0 6.4 5.7 7 14 21 28 278.0 276.6 276.8 279.9 151.0 151.2 151.7 151.9 120.0 119.1 120.3 119.6 7.0 6.3 4.9 18 Nov. billions based on weekly averages of daily figures) 5.5 4.5 5.7 5.5 5.5 4.7 4.5 4.4 8.4 p - Preliminary. 1/ 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. / Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. 3/ Private demand deposits include demand deposits of 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) Monthly Money Supply Currency 1/ Private Demand __ 2/ _Deposits Time Deposits Adjusted 3/ 1966--Jan. Feb. Mar. Apr. May June Jul Aug. Sept. Oct. Nov. Dec. 167.9 168.3 169.2 170.5 170.2 170.6 169.9 170.1 170.5 170.1 170.1 170.4 36.6 36.7 36.9 37.1 37.3 37.4 37.7 37.8 37.9 38.0 38.1 38.3 131.4 131.6 132.3 133.4 132.9 133.2 132.3 132.4 132.6 132.1 132.0 132.1 147.5 148.3 149.8 151.8 153.4 154.8 156.9 158.1 158.6 158.8 158.5 159.8 1967--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 170.3 171.5 173.1 172.7 174.5 176.2 177.9 179.1 179.2 180.3 181.2 181.5 38.5 38.7 38.9 39.1 39.2 39.3 39.5 39.6 39.8 39.9 40.0 40.4 131.8 132.8 134.2 133.6 135." 136.8 138.4 139.6 139.5 140.3 141.2 141.1 162.0 164.6 167.2 169.2 171.1 173.6 175.8 178.3 180.0 182.0 183.7 185.0 1968--Jan. p Feb. p 182.6 183.0 40.5 40.7 142.1 142.3 184.8 186.2 1/ 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 2/ domestic commercial banks and the U.S. Government, less cash items in process of collection of Federal Reserve float; and (2) foreign demand balances at Federal Reserve Banks. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966 p - Preliminary. 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) Money Supply SEnding Currency 1/ Private Demand _Deposits 1967-- Sept. Time Depc 2/ adust 6 13 20 27 179.7 180.0 178.0 179.3 39.7 39.8 39.7 39.7 139.9 140.2 138.2 139.5 179.6 179.8 180.2 180.3 4 11 18 180.3 180.9 180.5 39.8 39.9 40.0 140.5 140.9 140.5 180.7 181.2 182.0 25 179.6 39.9 139.7 182.3 Nov. 1 8 15 22 29 180.3 181.3 181.3 181.2 181.1 39.8 40.0 40.0 40.1 40.1 140.5 141.3 141.4 141.1 141.0 182.8 182.8 183.5 184.1 184.3 Dec. 6 13 181.5 181.0 40.1 40.3 141.4 140.8 184.9 185.2 20 27 180.8 181.8 40.3 40.5 140.5 141.3 185.1 184.7 3 10 17 24 p 31 p 183.1 182.5 183.1 182.4 181.7 40.4 40.5 40.5 40.6 142.7 142.0 142.6 141.8 141.3 184.4 184.6 184.7 184.6 185.4 7 14 21 28 182.9 181.9 183.5 183.4 40.6 40.7 40.7 40.7 142.3 185.5 185.7 186.3 Oct. 1968--Jan. Feb. p p p p 40.5 141.1 142.8 142.7 186.9 Includes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. 2/ 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. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary 1/
@FedFRASER