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Strictly Confidential (FR)

Class I FOMC

May 14, 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)

May 14,

1976

CLASS I - FOMC

MONETARY AGGREGATES AND
MONEY MARKET CONDITIONS
Recent Developments
(1) M1 increased at a 15,7 per cent annual rate during April,
as both currency and demand deposits rose sharply.

Even though M1

expansion appears to be moderating in May, growth for April and May
combined is projected at around a 12¼ per cent annual rate, well above
the 8½ per cent upper bound of the Committee's range.

Growth in M2 over

the April-May period is projected at about 12 per cent, at the upper end
of the Committee's range.

Inflows to savings accounts at commercial banks

have remained strong, though continuing to decelerate from February's
extraordinary pace; growth in time deposits other than CD's has strengthened
somewhat.
Growth in Monetary Aggregates
over April-May period
Reserve and monetary aggregates
(Growth at SAAR, in per cent)

Ranges

Latest Estimates

M1

4½ to 8½

12.3

M2

8 to 12

12.1

Memo:
Federal funds rate
(per cent per annum)

4½ to 5½

Avg, for statement
week ending
4.78
April 21
28
4.93
May
5
5.03
12
5.02

(2)

Following the April 20 FOMC meeting, the Desk promptly

became somewhat less accommodative in the provision of reserves and sought
a funds rate around 4-7/8 per cent, a shade above the then prevailing rate
of 4¾ per cent and equal to the mid-point of the range that had been adopted
by the Committee.

Subsequently, with incoming data suggesting rates of

growth in M1 well above the Committee's desired range and M2 near the upper
end of the range, the Desk adopted successively higher funds rate objectives,
In moving to these higher rates the Desk took care in early May to avoid any
undue disruption of the Treasury's refunding operation.

Most recently,

the Desk has been in process of establishing a 5¼ per cent Federal funds
rate in the market, and as of this writing

funds were trading around

5-3/16--5¼ per cent.
(3)

Growth in nonborrowed reserves in the April-May period,

though quite modest, has been somewhat more rapid than contemplated at
the time of the previous FOMC meeting.

Such reserves increased at only a

1½per cent annual rate, on average, during April, as the sizable decline
in CD's outstanding freed reserves to support the expansion of other
deposits, but they show signs of increasing somewhat more rapidly in early
May.1/

Member bank borrowings averaged about $40 million in the interval

between Committee meetings, little changed from the previous intermeeting
period.
(4)

Since the last Committee meeting, short-term market yields

have risen 35 to 50 basis points in response to the rising funds rate, to

1/

A discussion of the expected and actual behavior of nonborrowed
reserves relative to the Committee's short-run targets for monetary
growth may be found in Appendix A.

indications of a significant pickup in growth in the key monetary aggregates,
and to further signs of vigorous economic recovery.

Rates on most long-term

securities have moved up by roughly 25 to 40 basis points.

Rates in the

secondary mortgage market have increased along with yields in other sectors
of the credit markets; however, primary mortgage rates have only halted
their downward trend as deposit growth continued strong at nonbank thrift

institutions.
(5)

The Treasury announced that its May refunding would include an

offering of three issues, with the following amounts available to the
public:

$2 billion of 1-year, 11½-month notes and $750 million of reopened

23¾-year bonds on an auction basis, as well as about $3½ billion of 10-year
notes on a fixed-price subscription basis.

The 10-year notes were sub-

stantially oversubscribed, and $4.7 billion of them were allotted.

As a

result, new cash raised in the refunding amounted to about $3½ billion.
The issues have been readily absorbed by the market despite the recent
rise in interest rates, and dealers have distributed nearly all of the
$1.4 billion of securities they received in the operation.

Most recently,

the two notes traded about ¼-½ of a point below their average issue
price, while the bond has been near issue price.
(6)

Total short-term business credit remained unchanged during

April as a $1 billion rise in outstanding commercial paper issued by nonfinancial firms offset a similar decline in bank loans to businesses.
Total loans at all commercial banks are estimated to have contracted slightly

during the month, but banks' net acquisitions of U.S. Government securities
were substantial.

Weekly reporting banks allowed another $3½ billion of CD's

to run-off in April, as inflows from other deposits were strong.
(7)

The table on the following page shows (in percentage annual

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

The data in this table and all subsequent tables except Table 2

in the back of the blue book incorporate benchmark revisions for the money
supply based on nonmember call reports for December 31, 1975.

These

revisions were relatively small in magnitude, and a comparison of the
unrevised and revised data may be found in Appendix table VI.

---

Calendar
Year
1975

Past
Twelve
Months
Apr. '76
over

-Apr.

Past
Six
Months
Apr. '76
over

'75 Oct. '75

Past
Three
Months
Apr. '76
over

Past
Month
Apr. '76
over

Jan. '75 Mar ,'7

Nonborrowed reserves

1.3

-1.1

-0.4

-2.1

1.3

Total reserves

-.4

-1.3

-1.2

-2.5

0.9

Monetary Base

5.8

6.6

7.4

7.8

12.2

4.1

5.9

5.7

9.1

15.3

8.5

10.4

11.1

13.1

15.3

11.3

12.7

12.2

13.6

14.8

M4 (M2 plus CD's)

6.4

6.8

7.2

7.5

10.8

M5

9.7

10.1

9.7

10.0

12.1

Total member bank deposits
(bank credit proxy adj.)

3.9

3.3

3.7

2.6

3.3

Loans and investments of
commercial banks 2/

4.3

4.8

5.0

7.1

4.9

-.6

-1.4

-1.6

-2.6

-1.8

Concepts of Money (Revised Series)
Ml (currency plus demand
deposits) 1/
M2 (M

plus time deposits
at commercial banks
other than large CD's)

M3 (12 plus deposits at thrift
institutions)

(M3 plus CD's)

Bank Credit

Short-term Market Paper
(Monthly average change in

billions)
Large CDs

Nnbank commercial paer
-. 2
-1
0.3
0,4
1.0
I/ 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
(8) Summarized below for the Committee's consideration are three
alternative sets of short-run specifications for the monetary aggregates
and the Federal funds rate.

(More detailed data, as well as longer-run

growth rates, are shown in the tables on pp.

6a

and 6b, while reserve

aggregates consistent with the specifications are presented in appendix
table V.
Alt, A

Alt. B

Alt. C

Ranges for May-June
M1

6-10

5¼-9¼

4½-8½

M2

7½ -11½

7-11

5½-9½

4¾-5¾

5¼-6¼

Federal funds rate
(intermeeting range)
(9)

4¼ -5¼

Alternative B assumes a Federal funds rate range centered

on 5-1/4 per cent, the most recent Desk objective, while alternative A
assumes some easing of the money market and alternative C some further
tightening. Under all three alternatives, the rate of growth in M1 over
the May-June period is expected to be considerably reduced from its April
pace, though remaining stronger than in the latter part of 1975 and early
1976.

For instance, under alternative B growth may be in a 5-1/4 to 9-1/4

per cent annual rate range.
(10)

The very rapid rate of expansion of M1 in April may have

been caused in part by a large decline in U.S. Treasury deposits.

However,

the underlying demand for money also appears strong, and a relatively

-6aAlternative Levels and Growth Rates for Key Monetary Aggregates
M1

M2

M3

Alt.

Alt. C

1141.2

1141,2

1141.2

1152.3

1151.6

1150.6

700.8

1163.0

1161.2

1158.6

677.4
697.4
711.6
723.0

677.4
696.6
708.8
719.4

1116.1
1152.2
1178.5
1194.7

1116.1
1151.3
1177.7
1198.0

1116.1
1150.1
1172.7
1191.9

725.5

731.4

731.7

1200.5

1212.7

1213.8

7.2
5.9

10.1
9.1

9.5
8.3

8.3
6.7

11.7
11.1

10.9
10.0

9.9
8.3

9.7
6.3
3.5
3.0

9.4
5.0
3.3
4.8

12.0
8.4
5.3
2.1

11,8
8.1
6.4
4.6

11.3
7.0
6.0
6.8

12.9
9.1
5.5
1.9

12.6
9.2
6.9
4.9

12.2
7.9
6.5
7.3

8.4
2.9

8.1
3.2

7.3
4.0

10.3
3.7

10.1
5.6

9,3
6.5

11.2
3.7

11.0
5.9

10.1
7.0

5.7

5.7

5.7

7.1

8.0

8.0

7.6

8.7

8.8

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

April

301.8

301.8

301.8

692.1

692.1

692.1

May

304.0

303.8

303.6

697,9

697.6

696.9

June

305.9

305.5

305.1

703.2

702.4

1976

QI
QII
QIII
QIV

296,5
303.9
309,0
311.9

296,5
303.7
308,5
311.2

296.5
303,5
307.3
309.8

677,4
697.7
712.3
721.8

1977

QI

313.5

313.5

313.5

8.7
7.5

8.0
6.7

QII
QIII
QIV
QI

10.0
6.7
3.8
2.1

Seami-annual
QI '76-QIII '76
QIII '76-QI '77
Annual
QI '76-QI '77

1976

Alt

A

growth Rates
Nonthly:
1976

May
June

Quarterly Average:
1976

1977

FOMC longer-run range
QI '76-QI '77

44-7

74-10

9-12

-6bAlternative Levels and Growth Rates for Key Monetary Aggregates (cont'd)

Alt. A

Alt. B

Credit Proxy

M5

M4
Alt

C

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

1976

April
May
June

763.4
765.8
770.5

763.4
765.5
769.9

763.4
765.1
769.1

1212.5
1220.2
1230.3

1212.5
1219.5
1228.7

1212.5
1218.9
1226.9

517.4
516.6
519.1

517.4
516.4
518.7

517.4
516.3
518.5

1976

QI
QII
QIII
QIV

753.3
766.6
780.8
794.0

753.3
766,3
780.1
793.7

753.3
765.9
777.8
790.9

1192,0
1221.0
1247.0
1266.9

1192.0
1220.2
1246.3
1268.7

1192,0
1219.4
1241.8
1263.4

515.2
517.7
524.8
532.5

515.2
517.5
524.3
531.9

515.2
517.4
522.9
530.2

1977

QI

804.8

806.4

805,7

1279.7

1287.7

1287.9

538.9

538.5

537.7

3.8
7.4

3.3
6.9

2.7
6.3

7.6
9.9

6.9
9.1

6.3
7.9

-1.9
5.8

-2.3
5.3

-2.6
5.1

QII
QIII
QIV
QI

7.1
7.4
6.8
5.4

6.9
7.2
7.0
6.4

6.7
6.2
6.7
7.5

9.7
8.5
6.4
4,0

9.5
8.6
7.2
6.0

9.2
7.3
7.0
7.8

1.9
5.5
5.9
4.8

1.8
5.3
5.8
5.0

1.7
4.3
5.6
5.7

Semi-annual
QI '76-QIII '76
QIII '76-QI '77

7.3
6.1

7.1
6.7

6.5
7.2

9.2
5.2

9.1
6.6

8.4
7.4

3.7
5.4

3.5
5.4

3.0
5.7

Annual
QI '76-QI '77

6.8

7.0

7.0

7.4

8.0

8.0

4.6

4.5

4.4

Grath Rates
Monthly:
1976

May
June

Quarterly Averages:
1936

1977

rapid growth in M1 is likely to continue.

Perhaps indicative of the

strength of underlying money demand, there was no significant reversal

in late April and early May of the large build-up in private demand deposits
in the first half of April.
(11)

Growth in M2 over the May-June period is expected to

remain relatively rapid under alternatives A and B. Nevertheless, growth
under alternative B--as measured by the mid-point of a 7-11 per cent,
annual rate, range--is expected to be slower than during the first four
months of the year.

This reflects the higher level of market interest

rates that has developed as well as some shift of funds out of savings and
time deposits in payment for the $4.7 billion of new 10-year notes recently
offered by the Treasury.
(12)

Under alternative C, growth in M2 is expected to slow more

markedly over the May-June period. The further rise in the Federal funds
rate that is envisaged would lead to a continued rise in other short-term
rates, with the 3-month Treasury bill rate likely to move up to the 5-3/4-6
per cent area. This would probably lead to a considerable outflow from
savings deposits of those interest-sensitive funds that were shifted into
such accounts when short-term market rates first moved down to around 5 per
cent, the Regulation Q ceiling rate on commercial banks' savings deposits.
(13)

The firming of money market conditions associated with

alternative C would also exert upward pressure on longer-term interest
rates over the next few weeks.

Loan demands are still focused more on

-8-

securities markets than on banks.

The corporate bond calendar has built

up further in recent weeks, partly in anticipation of higher interest rates
later, and the municipal calendar remains sizable. Moreover, the Treasury
is likely to continue raising much of its new cash in the coupon area.
Even if the Federal funds rate stabilizes around 5-1/4 per cent between
now and the next Committee meeting--as is contemplated under alternative B-some further upward adjustment in longer-term, as well as short-term interest rates may still occur, since markets probably have not yet fully
adjusted to a 5-1/4 per cent funds rate.
(14)

Over the coming year, the staff expects interest rates

generally to be under considerable upward pressure, assuming M1 growth
from QI '76 to QI '77 is at a rate around the mid-point of the 4-1/2-7
per cent range adopted by the Committee.

Interest rates are projected to

reach higher levels than anticipated at the time of the last meeting for
three main reasons:

(a) the FOMC lowered its longer-run growth rates for

M1 and M2 slightly; (b) the staff has revised upward somewhat its projection for the rate of growth in nominal GNP; and (c) the much faster than
expected increase in the money stock apparently in store for the second
quarter probably reflects, at least in part, an increase in money demand
relative to GNP.

Because the annual rate of M1 growth in the second

quarter now seems likely to be in the area of 9½-10 per cent, annual rate,
over the next three quarters the growth rate would have to be held to
about 4-1/4 per cent (annual rate) if the 5-3/4 per cent growth of the
QI '76-QI '77 range is to be achieved.

(15)

The staff's longer-run projections of the Federal funds

rate under each of the three alternatives are shown in appendix table IV.

As may be seen, the staff expects that under alternative B the funds rate
would peak out at around 8-1/2 per cent early next year.

However, under

alternative C, which contemplates a prompt further move toward restraint,
the funds rate may peak out at a lower 7-3/4 per cent level by the winter
of this year.

A considerably higher ultimate level for the funds rate is

envisaged under alternative A, since it would be necessary to offset later
the effects of near-term easing in reserve conditions contemplated by that
alternative.

In view of these interest rate expectations, we have assumed

for all alternatives an increase in Regulation Q ceiling rates in the fall
of this year of 50 basis points for certificates maturing in 4 years or
more and 25 basis points for shorter-term certificates.

Even so, as

indicated in the last two lines of the table on p. 6a, over the QI '76-QI '77
period, growth in M1 at a rate equal to the mid-point of the FOMC's range
is expected to be associated with growth in M2 and M3 at rates near the
bottom of their respective ranges.

-10-

Proposed directive
(16)

Given below is a proposed operational paragraph if the

Committee wishes to formulate its instructions in terms of desired growth
in monetary aggregates over the months ahead.

No alternatives are pre-

sented for this formulation, in the expectation that the reference to
desired growth will be taken to apply to the longer-term targets and that
at this meeting the Committee will not reconsider those targets.
'Monetary Aggregates" Proposal
To implement this policy, while taking account of developments in domestic and international financial markets, the Committee
seeks to achieve bank reserve and money market conditions consistent
with moderate growth in monetary aggregates over the period ahead.
(17)

Should the Committee desire to place main emphasis on bank

reserve and money market conditions, the language needed would depend on
the specific conditions sought.

Three alternative "money market" direc-

tives intended to correspond to the similarly lettered policy alternatives
are given below.
Alternative "Money Market" Proposals
Alternative A
To implement this policy, while taking account of developments in domestic and international financial markets, the Committee
seeks to achieve SOMEWHAT EASIER bank reserve and money market conditions

moderate
with
consistent

monetary
in
growth
aggregates over the

-11-

period IMMEDIATELY ahead, PROVIDED THAT MONETARY AGGREGATES APPEAR
TO BE GROWING AT ABOUT THE RATES CURRENTLY EXPECTED.
Alternative B
To implement this policy, while taking account of developments in domestic and international financial markets, the Committee
seeks to achieve MAINTAIN PREVAILING bank reserve and money market
conditions

with
consistent

in
monetary
growth
moderate

aggregates

over the period IMMEDIATELY ahead, PROVIDED THAT MONETARY AGGREGATES
APPEAR TO BE GROWING AT ABOUT THE RATES CURRENTLY EXPECTED,
Alternative C
To implement this policy, while taking account of developments in domestic and international financial markets, the Committee
seeks to achieve SOMEWHAT FIRMER bank reserve and money market condimoderate
with
tions consistent

in
growth

monetary aggregates over the

period IMMEDIATELY ahead, PROVIDED THAT MONETARY AGGREGATES APPEAR TO
BE GROWING AT ABOUT THE RATES CURRENTLY EXPECTED.

CHART 1

CONFIDENTIAL (FR)
CLASS II-FOMC
5/14/76

MONETARY AGGREGATES
NARROW MONEY SUPPLY M1

BILLIONS OF DOLLARS

S-320
305

300

295

BROADER MONEY SUPPLY M2
290

1974

1975

1976

CHART 2

5/14/76

MONETARY AGGREGATES
ADJUSTED CREDIT PROXY

BILLIONS

RESERVES

BILLIONS OF DOLLARS

39

37

TOTAL

35

NONBORROWED
33

31

1974

1975

1976

Total and nonborrowed reserve series have been adjusted to remove discontinuities associated with changes in reserve requirement ratios.

5/14/76

CHART 3

MONEY MARKET CONDITIONS AND INTEREST RATES
MONEY MARKET COINDITIONS

PERCENT
8

-

F.R. DISCOUNT
RATE

INTEREST RATES Short-term
-

PERCENT

INTEREST RATES

10

-

WEEKLY

WEEKLY
AVERAGES

-

- 7

9
FHA MORTGAGES
FNMA MONDAY AUCTIO!

EURO-DOLLARS
3-MONTH
-

FEDERAL FUNDS
RATE

8

8

PRIME COMMERCIAL
PAPER
/ 4-6 MONTH

5

S-

_I

I

Aaa UTILIT
NEW ISSUE

4

BILLIONS OF DOLLARS
1 2

1975

1976

1975

1976

1975

1976

I

CONFIDENTIAL (F.R.)
CLASS II-FOMC

TABLE 1

MAY 14,

BANK RESERVES

1976

ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED
BANK RESERVES
Period

Total
Reserves

Nonborrowed
Reserves

REQUIRED RESERVES
Monetary
Base

Total
Required

Private
Demand

111,537
112,191
113,335
(114,1141

33,833
33,780
33,862
(33,962)

19,715
19,659
19,783
420,0131

Total Time
Deposits

Gov't. and
Interbank

MONTHLY LEVELS-SMILLIONS
34,052
34,003
34,029
(34,162)

1976--FEB.
MAR.
APR.
MAY

33,971
33,949
33,985
(34,081)

11,915
11,869
11,931
(11,758)

4

2,203
2,252
2,148
2,193)

PERCENT ANNUAL GROWTH
QUARTERLY
1975--30 QTR.
4TH OTR.
1976--IST QTR.

-0.8
1.4
-6.2

-2.8
4.5
-5.3

4.1
7.3
4.5

-0.7
0.5
-5.7

3.4
-3.4
-2.0

-9.0
4.1
-11.1

0.1
0.6
-3.8

-1.9
2.7
-3.2

6.3
5.6
5.3

-0.1
-0.1
-3.6

6.2
-2.1
-1.0

-12.2
-0.6
-6.5

-6.1
-1.9
2.9
3.5)

-1.0

QUARTERLY-AV
1975--3R0 QTR.
4TH OTR.
1976--1ST QTR.
MONTHLY
-6.8
-1.7
0.9
S 4.7)

1976--FEB.
MAR.
APR.
MAY
APR.-MAY

WEEKLY

APR.

S 2.3)

(

10.3)

(

1

S 3.2)

-3.4
7.6
14.0)

(

-21.1
-4.6
6.3
-17.4)

10.8)

f

-5.6)

31

34,315

34,279

112,748

33,917

19,781

11,892

2,244

7
14
28

336,65
33,805
34,095
34,126

33,841
33,744
34,055
34,073

112,438
112,937
113,905
113,775

33,742
33,632
33,965
33,977

19,576
19,692
19,739
20,024

11,914
11,955
11,983
.11.910

2,253
1,985
2,243
2,042

5
12

34.815
33,662

34,785
33,606

114,334
113,258

34,329
33,725

20,140
19t922

11,792
11,779

2,397
2,024

21
MAY

I

2.8)

4.0
7.0
12.2
S 8.2)

LEVELS-$MILLIONS
1976--MAR.

NOTE:

(

(

-6.9
-0.8
1.3
3.4)

RESERVE SERIES HAVE BEEN ADJUSTED 10 REMOVE DISCONTINUITIES
DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS.

ASSOCIATED

WITH CHANGES

I
IN RESERVE REQUIREMENT RATIO.

Table 2

CONFIDENTIAL (FR)
CLASS II-FOMC

MONETARY AGGREGATES
ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED
Total

Broad

Credit

U.S. Govt.

(Ml)

(M2)

Proxy

Deposits1

Totall

Savings

Other

1

2

3

4

5

6

7

8

455.5
456.4
459.1
(458.61

380.1
383.2
387.8
(391.0)

170.2
173.5
176.6
1179.1)

210.0
209.8
211.1
(211.9)

Other Tan

Mmber

Nondeposit

Time and Savings Deposits

Adjusted

Narrow

Money Supply
Period

CD'S

C

d

o

Funds

U.S. Govt.

Deposits

10

9

11

MONTHLY LEVELS-SBIL
1976--FEB.
MAR.
APR.
MAY

296.9
298.4
302.3
(304.5)

677.0
681.7
690.1
(695.5)

515.6
516.0
517.4
(516.2)

1

10.9
11.0
7.2
7.1)

1

75.4
73.1
71.3
67.6)

I

8.0
8.2
7.5
7.5)

(

2.6
2.5
2.5
2.5)

X ANNUAL GROWTH
QUARTERLY
1975-3R0 QTR.
4TH OTR.
1976-1ST OTR.

3.6
1.9
4.6

6.5
6.4
11.1

-0.8
7.0
1.2

2.6
11.8
4.6

8.9
10.1
16.2

14.5
17.1
32.1

4.9
4.7
4.0

-23.8
19.2
-47.3

7.1
2.5
3.0

10.1
6.1
9.5

1.4
6.0
2.3

4.7
9.1
6.8

12.7
9.1
14.8

18.4
14.7
28.6

8.6
4.9
4.4

-27.5
9.5
-29.3

(

6.5
6.1
15.7
8.7)

(

14.3
8.3
14.8
9.4)

3.5
0.9
3,3
-2,8)

6.9
2.4
7.1
-1.3)

(

20.6
9.8
14.4
9.9)

(

43.8
23.3
21.4
17.0)

(

2.9
-1.1
7.4
4.5)

(

-57.6
-36.6
-29.5
-62.3)

I

12.3)

(

12.1)

2.9)

(

12.2)

(

19.4)

(

6.01

(

-45.1)

QUARTERLY-AV
1975-3RD QTR.
4TH QTR.
1976-1ST QTR.
MONTHLY
1976--FEB.
MAR.
APR.
MAY.
APR.-MAY

(

I

0.21

(

WEEKLY LEVELS-SBIL
1976-NAR.

31

298.6

683.2

515.3

9.0

457.8

384.5

73.3

8.2

1.9

APR.

7
14
21
28

300.0
30.3
303.7
302.3

686.6
691.1
691.0
691.2

517.3
517.9
519.6
515.2

7.3
5.6
9.6
6.2

459.9
459.8
458.0
458,5

386.6
387.8
387.2
388.8

73.2
72.0
70.8
69.7

7.2
7.2
8.0
7.6

2.4
2.5
3.6
1.9

303.1

692.4

515.8

6.8

458.4

389.3

69.1

7.3

1.7

MAY

NOTEt
I/

3 P

DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS.
INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS.

CONFIDENTIAL (FR)
CLASS II - FOMC

MAY 14, 1976
TABLE 3
RESERVE EFFECTS OF

OPEN MARKET OPERATIONS AND OTHER RESERVE FACTORS
(Millions of dollars, not seasonally adjusted)

BilU
& Accept.

Period

)

Open Market Operations /
Agency
RPT'a
Coupon
aIssu Issues
Net 3/
(2)
(3)
(4)

Total
(5)

Daily Average Reserve Effects 2~
Other 4/
Open Market
A Member
Operations
Bank Borrowing
Factors
(6)
(7)
(8)

A In Reserve Categories
Req. res. against
Available res. 5/
U.S.G. and interb.
(6)+(7)+(8)-(9)
(9)
(10)

1975--Oct.
Nov.
Dec.

147
-608
1,799

709
297

284
-1
--

15
-2,637
1,219

445
-2,537
3,315

1,276
521
1,165

-205
-130
66

-1,150
-387
-813

15
1
79

-94
3
339

1976--Jan.
Feb.
Mar,

-1,590
1,205
-180

321
528
203

240
295
--

3,597
-3,129
788

2,567
-1,101
812

942
1,631
128

-48
-3
-18

-308
-3,250
-96

137
-76
-22

449
-1,546
36

Apr.

464

294

--

1,261

2,019

-1,769

-14

1,888p

-116p

221

3
10
17

110
-711
401

-107
310

297
---

-3,314
-8,835
4,115

-2,907
-9,653
4,826

-93
-4,051
429

-63
-38
-7

588
3,380
-91

144
-50
-112

288
-659
443

24
31

376
-147

--

--

3,143
1,142

3,519
995

3,541
-1,002

38
-42

-3,727
1,718

-159
184

-70

--

-7,764

-4,396

-12

3,759

-64

--

--

5,064

4,543

-1,273

37

1,492

-225

364

--

5,206

6,372

4,845

-21

-4,139

310

--

-1,002

-13

138

13

1976-Mar.

Apr.

7

-1,608

14

-521

21

801

28
May

5
12

-

988
242
-634

--

--

-2,077
522

-9,442

-1,835
-12

2,600
-4,089

-23
26

-195p
-1,677p
2,454p

11
490

-585
482

375

2

-297
444
-349

19
26

1/ Represents change in System's portfolio from end-of-period to end-of-period; includes redemptions in regular bill auctions.

2/ Represents change in daily average level for preceding period.

i/Includes

53p

456p
-1,26Op

matched sale-purchase transactions as well as RP's.
4/ Sum of changes in vault cash, currency in circulation, Treasury operations, F.R. float, gold and foreign accounts, and other F.R. accounts.
5/ Reserves to support private nonbank deposits.
P - Preliminary.

CONFIDENTIAL (FR)
CLASS II - FOMC
MAY 14, 1976
TABLE 4
NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES 1/
($ millions, not seasonally adjusted)

Treasury Bills
Net Change 2/

Period

-490
7,232
1,280
-468

1972
1973
1974
1975

Within
1-year

Treasury Coupons
Net Purchases 3/
Over
10
5 - 10
1 - 5

Total

Within
1-year

1,582
1,415
1,747
6,202

46
120
439
191

592
400
1,665
824

87
207
320
337

789
579
797
3,284

539
500
434
1,510

167
129
196
1,070

Federal Agencies
Net Purchases 4/
Over
10

Total

253
244
659
460

168
101
318
138

1,059
864
3,082
1,613

285

5 - 10

1 - 5

Net Change
Outright
Holdings
Total 5/

Net
RP's 6/
-1,358
-46
-154
1,272

1,631
9,273
6,303
7,267

-2,093

33

1,054

625

312

2,024

69

169

61

584

508

53

Qtr. II

1,086

218

1,135

454

273

2,079

-

--

-2

--

-2

3,076

230

Qtr. III
Qtr. IV

-757
1,294

13
74

712
385

201
234

171
315

1,096
1,006

64
58

514
141

106
71

63
14

747
284

1,060
2,626

2,392
-1,403

-363

115

554

226

156

1,052

102

288

108

38

535

1,022

1,256

1975--Nov.
Dec.

-588
1,784

43
31

267
118

156
78

244
71

709
297

-

--

--

--

--

99
2,096

-2,637
1,219

1976--Jan.
Feb.

-1,596
1,275

37
40

110
366

100
63

73
59

321
528

26
76

139
149

47
61

27
11

-1,030
2,029

3,597
-3,129

Mar,

-42

38

78

63

24

203

-

--

--

-

23

788

Apr.

513

27

179

51

38

294

-

-

-

-

--63
--

24
---

--107
310
--

76
--

149
---

61
---

11
--

--

-70
--

-

--

-

--

--

-

-

1975--Qtr. I

1976--Qtr. I

1976-Mar. 3
10
17
24
31

150
-688
438
431
-156

-38
-

-107
185
--

Apr. 7
14

-1,593
-501

-

-70
-

--

21

800

27

249

51

38

364

-

--

28

1,008

-

--

--

--

-

-

-

5
12

240

--

--

--

--

-

-626

-

-

-

-

May

19
26
1/
/
/
4/
5/
6/

-

-

-

240
297
--

1,261

-758

297
----

407
-88
711
376
-147

-3,314
-8,835
4,115
3.143
1,142

-

-1,678
-521

-

-

1,166

5,206

-

-

988

-1,002

--

242

-2,077

-

-634

522

-

-

-

-7,764
5,064

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

CONFIDENTIAL (FR)
CLASS II - FOMC
May 14, 1976

TABLE

5

SECURITY DEALER POSITIONS AND BANK POSITIONS
(millions of dollars)

I

SU.S. Govt. Security
Dealer Positions
_

Underwriting
Syndicate Positions
Corporate
Municipal
Bonds
Bonds
(3)
(4)

Period _

Bills
(1)

Coupon Issues
(2)

1975--High
Low

7,029
1,586

2,845
253

464
0

389
48

1976--High
Low

*6,821
*4,100

1,684
349

167
0

239
34

1975--Apr.
May
June

2,737
4,744
5,201

1,617
1,752
1,351

35
91
89

115
170
118

July
Aug.
Sept.

4,231
4,020
5,008

1,246
1,204
588

60
44
31

Oct.
Nov.
Dec.

5,766
4,751
4,822

1,480
2,073
1,075

4,959
5,214
5,910

May

NOTE:

Total

8 New York
(8)

804
-42

74
5

-7,387
-1,757

-11,632

570
-106

11
8

-6,736
-2,367

-12,603

110
66
227

6
9
11

-4,079
-3,965
-5,821

-10,426
-

9,567
9,344

135
181
122

259
211
397

17
37
58

-5,546
-3,964
-3,551

-

9,896
9,966
9,015

14
156
95

123
173
103

189
60
130

65
29
14

-2,644
-3,812
-2,811

-

9,202

1,220
1,051
778

34
66
43

97
181
151

79
81
54

9
10
8

-3,581
-4,138
-4,726

-

*5,750

*605

69

133

43p

10p

-5,248p

-10,675p

3
10
17
24
31

4,530
5,984
6,107
6,106
.6,032

581
911
349
809
1,184

155
187
169
93
134

84
48
40
78
36

-4,415
-6,510
-4,980
-3,681
-4,226

-

7
14
21
28

6,725
6,821
*6,190
*4,100

669
773
*611
*405

158
97
139
136

24
61
39
53p

-5,819
-6,686
-5,016

-10,533
-12,660
-11,856

-3,533

-

9,215

5
12
1.9
26

*4,309
*4,620

*548
*949

137
2
00p

30p

-4,270p

-

7,145p

-6,198p

-9,23 p

Apr.

Apr.

Excess**
Reserves
(5)

Member Bank Reserve Positions
Borrowin& at FRB**
Basic Reserve Deficit
Seasonal
(7)

1976--Jan.
Feb.
Mar.

1976--Mar.

_

6

5 p

38 Others
(9)
-

-

7,207

7,997

-10,159
-10,418
9,746

-10,015
-

9,640

9,390

-10,252
-

9,914

-10,095
-

8,824

2

Government security dealer trading positions are on a commitment basis.
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

MAY 14, 1976
TABLE 6
SELECTED INTEREST RATES
(Per Cent)
Long-Term

Short-Term

Treasury Bills
1-year
(3)

1975--High
Low

90-Day
(2)
6.68
5.02

90-119 Day
Commercial
Paper
(4)

7.31
5.46

8.43
5.38

1976--High
Low

5.17
4.73

5.92
5.35

5.44

1975--Apr.
May
June

5.61

6.40
5.91

6.11
5.70
5.67

5.34

July
Aug.

6.13

6.64
7.16

6.32

6.05

6.59

7.20

6.79

6.31
6.44

5.96
5.48
5.44

6.48

6.35
5.78
5.88

6.08

6.07
6.16
5.44
5.53
5.82

5.15
5.13
5.25

4.91

Mar.

4.87
4.88
5.00

Apr.

4.86

5.54

5.08

Federal
Funds

Period

5.23
5.34
6.44
6.42

Sept.
I)Ct.

Nov.
Dec.

1976--Jan.
Feb.

1976--Mar.

Apr.

May

Daily--May

5.86

5.00

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

90-119 Day
(6)

U.S. Govt. (20yr. Constant
Maturity)
(10)

FNMA
Auction
Yield
(11)

GNMA
Guaranteed
Securities

7.75
5.38

9.71
9.06

7.67
6.27

8.63
7.63

9.95
8.78

5.13
4.75

5.38
4.88

8.94
8.44

7.13
6.54

8.15p
7.80

9.13

5.85
5.44

6.03
5.63
5.51

9.66
9.33

6.94
6.97
6.94

8.36
8.22
8.04

9.06
9.27
9.09

6.25
6.63
6.81

9.43
9.49
9.57

7.06
7.17
7.44

8.17
8.50
8.57

9.14
9.41
9.78

6.45
6.03
5.83

9.43
9.23

7.39
7.43
7.31

8.35
8.28
8.23

9.80
9.80
9.31

4.84

5.03
5.06

5.05

5.20

8.79
8.63
8.61

7.07
6.94
6.92

8.01
8.03
7.97

9,10
9.06
9.05

8.37
8.29
8.30

4.81

4.94

8.52

6.60

7.86

8.89

8.22

5.13

5.38

8.72
8.64
8.60
8.50
8.54

7.04

5.25
5.25

6.98
6.92
6.72
6.69

8.07
7.99
7.97
7.89
7.90

9.06

8.31
8.31

8.50

6.65
6.54
6.55
6.55
6.71

7.88

5.69
5.65

4.95
4.86
4.77

5.87
5.92
5.86

5.13
5.13

4.79

4.84

5.71
5.71

5.00
4.88

5.13
5.00

7
14
21
28

4.73
4.77
4.78
4.93

5.69
5.42
5.40
5.57

4.88
4.75

5.00

5
12
19
26

5.03
5.02

5.65
5.79

5.00

6
13

4.94
5.12p

5.69
5.91

Municipal
Bond
Buyer
(9)

5.25

3
10
17
24
31

4.92
5.10

Aaa Utility
New
Recently
Offered
Issue
(8)

4.75
4.88

5.13

9.65

9.26

8.72
8.63
8.61
8.53
8.60
-

4.88
4.88
5.00

8.42
8.38
8.58

8.44
8.54
8.57

5.13
5.25

8.68
8.82p

8.62
8.78p

6.83

8.83

8.31

9.03

8.31
8.28

7.84
7.80
7.84r
7.94

8.94

8.27
8.12
8.27
8.23

8.03
8.15p

8.94

8.83

8.31
8.31

8.02
8.17(5/12)

NOTE: Weekly data for columns 1 to 4 are statement week averages of daily data. Columns 5 and 6 are S1-day Wednesday quotes. For columns 7 and 10, the
weekly date is the mid-point of the calendar week over which data are averaged. Columns 8 and 9 are 1-day quotes for Friday and Thursday, respectively,
following the end of the statement week. Column 11 gives FNMA auction data for the Monday preceding the end of the statement week. Column 12 is a 1-day
quote for the Monday preceding the end of the statement week. The FNMA auction yield is the average yield in bi-weekly auction for short-term forward
commitments for Government underwritten mortgages. GNMA 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.

Appendix A
Comparison of "Targeted" and Actual Reserves
The table below compares the actual average level of reserves
for the 4 week period ending May 19 with the "targeted" level that had
been thought to be consistent with the mid-points of the short-run ranges
for the monetary aggregates adopted at the last FOMC meeting.
Actual 1/
Nonborrowed reserves
Total reserves
Monetary base

34,136
34,190
113,870

"Targeted"

Difference

33,886
33,964
113,234

Memorandum:
Member bank borrowing
Excess reserves
1/

250
226
636
-24
27

Includes week of May 19, which is partly projected.
As can be seen, nonborrowed reserves during the intermeeting

period turned out to be $250 million higher than "targeted."

In evaluat-

ing the relationship between "targeted" and actual reserves during the
period just past, it needs to be recognized that the FOMC adopted a
Federal funds rate range--4-1/2 to 5-1/4 per cent--that was somewhat

lower than the range the staff had believed consistent with the chosen
monetary and reserve aggregates--which was 4-3/4 to 5-3/4 per cent.

Thus,

the chances of hitting the nonborrowed "target" were reduced by the
particular Federal funds rate constraint adopted.
Given the actual Federal funds rate, about $50 million more
in nonborrowed reserves had to be supplied to accomodate larger
bank demands for free reserves (excess reserves minus borrowings) than the

A - 2
have had to rise sufficiently in the short run to limit expansion in

deposits and required reserves.

Upward rate pressures would have been

most pronounced in pursuing a monetary base target, given the need to
reduce total reserves in order to offset the very rapid expansion in
currency that took place.

Astaff had assumed.

3

In addition, reserve demands were considerably

strengthened as required reserves turned out to be $200 million higher
than originally expected at the time of the last FOMC meeting.
reflected stronger deposits than earlier anticipated.

This

However, the

multiplier relationship between lagged deposits and current required
reserves turned out to be higher than anticipated, and therefore held
down the increase in required reserves that would otherwise have been
associated with deposit growth.
If the Desk had restrained nonborrowed reserves further, banks
would have been forced to borrow their required reserves and/or to reduce
deposit expansion.

However, given the sgrength in deposit demand, and

assuming an orderly upward adjustment in the funds rate, the nonborrowed
reserve "target" (within a $50 million range) probably would not have
been achieved even if the upper limit of the funds rate constraint had
been as high as 5-3/4 per cent.
Actual total reserves differed from "target" by about the same
magnitude as nonborrowed reserves.

The monetary base showed a much larger

overshoot, reflecting the considerably greater than anticipated rise in
currency.
In sum, if the Desk had adhered to a nonborrowed target, upward
interest rate pressures would have been stronger over the intermeeting
period.

Such pressures would have been even stronger if attempts had

been made to achieve the total reserve target, since interest rates would

APPENDIX TABLE 1-A

MONEY AND CREDIT AGGREGATE MEASURES

Period

Tol

Nonborrowed

Monetary
Base

1

2

3

Total
Loans
and
Invest-

Adj.
Credit
proxy

14,

1976

MONEY STOCK
MEASURES

BANK CREDIT
MEASURES

BANK RESERVES V

MAY

M1

M2

M3

M4

M5

M6

M7

8

9

10

11

12

ments

5
6
7
4
(Per cent annual rates of growth)

ANNUALLY:

I

II

REVISED SERIES
8.8
7.2
8.5

6.7
7.1
-0.4

6.0
9.2
1.3

7.7
9.2
5.8

10.5
10.2
3.9

1974

4.2

19.3

8.0

6.1

3.1

3.9

1ST HALF 1975
2ND HALF 1975

-1.2
0.3

1.7
0.9

5.6
5.7

4.5
3.1

5.1
3.4

5.6

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

1.3
-0.8
1.4

-0.1
-2.8
4.5

7.2
4.1
7.3

5.3
-0.8
7.0

4.6
3.6
3.1

9.7

1ST QTR. 1976
QUARTERLY-AV:

-6.2

-5.3

4.6

1.2

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

1975
1975
1975

-1.4
0.1
0.6

-0.4
-1.9
2.7

5.2
6.3
5.6

1ST QTR.

1976

-3.8

-3.2

1975--APR.
MAY
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.

3.5
-11.6
12.2
-3.2
-3.1
3.9
-6.3
9.7
0.8

1976--JAN.
FEB.
MAR.
APR. P

-10.2
-6.8
-1.7
1.2

1973
1974
1975

8.8
6.8
11.3

11.6
10.6
6.4

10.6
9.0

11.9

9.7

9.e

6.1

6.2

7.8

7.4

7.0

9.8
6.8

11.9
10.1

6.9
5.7

9.9
9.2

9.4
9.4

1.6

12.5
6.5
7.0

14.5
10.7
9.3

7.7
3.0
8.4

11.3
8.1
10.0

10.1
7.5
11.2

7.3

4.3

11.5

12.6

5.0

8.4

8.0

3.6
1.4
6.0

5.1
4.1
4.7

7.4
7.1
2.3

10.2
10.1
6.4

12.6
13.3
9.4

5.6
5.7
6.7

9.4
10.1
9.4

8.7
9.5
9.7

5.3

2.3

4.0

2.6

10.1

11.4

5.8

8.6

8.6

3.4
-10.1
6.5
-5.8
0.0
-2.6
0.8
14.3
-1.6

4.5
3.6
13.3
4.7
4.9
2.8
3.6
11.1
7.0

2.2
1.0
12.7
-3.3
-4.3
5.2
5.9
14.4
0.7

3.4
5.1
5.1
2.0
6.6
2.0
6.0
10.5
-7.3

7.1

3.9
6.2
12.9
5.1
-0.5
4.3
7.9
11.7
5.3

8.3
10.1
15.0
10.0
5.9
8.2
9.9
12.1
7.7

7.8
8.6
13.5
10.6
6.0
5.7
10.5
14.7
8.0

-8.4
-6.9
-0.8
1.6

2.6
4.0
7.0
12.3

-0.7
3.5
0.9
3.3

'5.3
8.1
8.2
4.9

3.5
7.0
4.5
10.8

7.2
9.8
7.8
12.1

6.7
9.2
7.8
11.4

13.5
9.2
4.3

8.9

SEMI-ANNUALLY:
2ND HALF

2.6

QUARTERLY:

3.6

MONTHLY:

NOTESt
1/

*

~-

a-

11.4
14.2
3.7
5.3
1.6
-0.8
9.0
-3.2

13.4
16.5
9.5
5.7
4.2
5.3
11.5
4.0

10.8
14.9
17.4
13.2
10.3
8.5
8.7
11.9
7.1

1.2

10.7
14.9
8.7
15.3

11.9
14.7
10.8
14.8

3.4

5.7

6.1
15.3
u

ADJUSTED CREDIT PROXY INCLUDES MAINLY TOTAL MEMBER BANK DEPOSITS
RELATED INSTITUTIONS, AND EURODOLLAR BORROWINGS OF U.S.BANKS.
BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS.

-s

&

a

i-

&

L

SUBJECT 70 RESERVE REQUIREMENTS, LOANS SOLD TO BANK-

APPENDIX TABLE 1-B

MONEY AND CREDIT AGGREGATE MEASURES

MAY 14,

SEASONALLY ADJUSTED, BILLIONS OF DOLLARS
MONEY STOCK
MEASURES

BANK CREDIT
MEASURES

BANK RESERVES 1

1976

STotal

Period

Adj.

TNonborrowed
1

2

Loans

Monetary
Base

Credit
proxy

and
Invest-

MI1

M

M3

3

4

5

6

7

8

Sments

M4

M5

M6

M

9

10

11

12

REVISED SERIES

ANNUALLY9
1973
1974
1975

32,390
34,693
34,539

31,092
33,966
34,409

96,051
1048,92
110,930

449.4
495.3
514.4

634.6
691.9
721.6

270.5
283.1
294.8

571.4
612.4
664.3

919.5
981.6
1092.9

634.9
702.2
747.2

982.9
1073.4
1175.8

1093.7
1191.0
1311.1

1132.0
132.7
1351.

1975--APR.
MAY
JUNE

34,477
34,143
34,490

34,367
34,077
349263

106,331
106,647
107,833

500.8
501.2
506.5

703.7
706.7
709.7

284.9
267.6
291.0

626.7
633.7
642.4

1012.7
1025.3
1040.2

715.1
718.8
726.5

1101.1
1110.4
1124.3

1222.8
1232.4
1247.7

1267.k
1276.3
1290.7

JULY
AUG.
SEPT.

34,399
34,310
34,421

34,098
34,099
34,024

108,254
108,694
108,949

505.1
503.3
505.5

710.9
714.9
716.1

291.9
293.2
293.6

647.5
650.6
652.9

1051.6
1060.6
1068.1

729.6
729.3
731.9

1133.7
1139.3
1147.1

1260.1
1267.5
1274.4

1302.1
1368.6
1314.6

OCT.
NOV.
DEC.

34,239
34,515
34,539

34,046
34,455
34,409

109,279
110,287
110,930

508.0
514.1
514.4

719.7
726.0
721.6

293.4
295.6
294.8

655.8
662.1
664.3

1075.8
1086.5
1092.9

736.7
743.9
747.2

1156.6
1168.3
1175.8

1286.2
1302.2
1311.1

1326.3
1342.6
1351.5

1976--JAN.
FEB.
MAR.

34,245
34,052
34,003

34,167
33,971
33,949

111,171
111,538
112,192

514.1
515.6
516.0

724.8
729.7
734.7

295.1
296.5
298.0

670.2
678.5
663.4

1103.7
1117.2
1127.3

749.4
753.8
756.6

1182.9
1192.6
1200.4

1318.7
1329.3
1336.2

1359.1
1369.5
1378.4

34,037

33,993

113,344

517.4

737.7

301.8

692.1

1141.2

763.4

1212.5

1351.4

1391.6

33,834
33,843
33,876
34,315

33,786
33,803
33,798
34,279

111,863
112,025
112,212
112,749

515.7
516.7
515.9
515.3

298.9
298.3
296.9
298.2

683.7
683.5
682.8
685.1

756.7
756.5
755.8
758.4

7
14
21
28P

33,865
33,805
34,130
34,126

338,41
33,744
34,091
34,073

312,438
112,937
113,940
113,777

517.3
517.9
519.6
515.2

299.6
302.8
303.3
301.9

688.6
693.1
693.0
693.4

761.8
765.1
763.8
763.1

5P

34,813

34,773

114,333

515.8

302.6

694.6

763.7

MONTHLY:

APR.

P

WEEKLYt

1976-MAR. 10
17
24
31
APR.

MAY

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.
MEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS.
MONTHLY
DATA ARE DAILY AVERAGES.
WEEKLY DATA ARE NOT AVAILABLE FOR M3, M5S M6, NM, TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS.
1/ BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS.
P - PRELIMINARY

NOTESt

APPENDIX TABLE 2-A

MAY 14,

COMPONENTS OF MONEY STOCK AND RELATED MEASURES
Currency

Period

1

Demand

D

posit
2

Total
Time

Deposits
3

REVISED SERIES

ANNUALLY:
1973
1974
1975

8.1
10.2
8.7

5.3
3.0
2.6

16.2
15.0
7.9

1974

9.9

2.1

10.6

1ST HALF 1975
2ND HALF 1975

9.4
7.6

4.4
0.9

7.8
7.8

Time

Mutual

Other
h

Savings
Bank

Tha

CD's

and S L
Sharesj
Shares!i

4

5

I
Credit
Union

Short
CD's

ShareBonds

Savings
_

"1

6
7
(Per cent annual rates of growth)

11.4
9.4
32.2

8.5
5.6
15.8

13.8
12.1
20.2

8.0

6.1

13.4
10.4

15.2
15.2

8

Term

U.S. Gov't

Commercial
er

Per

Securitie_

,

1

9

10

45.6
41.4
-7.7

4.9
4.8
6.3

31.3
11.9
21.0

39.3
9.1
-3.3

11.5

20.9

5.2

4.4

4.4

20.9
17.6

-12.7
-2.9

5.7
6.8

6.7
34.0

5.7
-12.1

-9.1
-24.2
0.0

SEMI-ANNUALLY:
2ND HALF

QUARTERLYt
2ND OTR.
3RD OTR.
4TH QTR.

1975
1975
1975

9.2
5.6
9.4

9.9
2.9
-1.1

6.3
2.6
12.9

14.6
8.9
11.6

17.7
17.4
12.5

20.6
17.0
17.6

-25.4
-23.8
19.2

5.6
6.8
6.6

7.0
19.2
46.6

1ST QTI.

1976

10.9

2.4

5.4

17.1

14.3

14.4

-47.3

5.9

8.2

-2.0

QUARTERLY-AV:
2ND QTR.
3RDO TR.
4TH QTR.

1975
1975
1975

8.1
8.5
8.4

6.9
6.6
0.2

4.5
4.7
9.7

12.5
12.7
9.8

16.2
18.2
14.0

21.0
18.6
16.5

-24.5
-27.5
9.5

5.6
6.8
6.7

-2.8
26.4
30.7

9.3
-23.7
-8.7

1ST OTR.

1976

9.8

0.4

7.8

15.9

13.4

15.9

-29.3

5.4

17.0

0.0

1975--APR.
MAY
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.

1.7
12.1
13.7
5.1
10.1
1.7
10.0
13.2
4.9

3.9
11.1
14.4
3.3
3.8
1.6
-4.3
7.1
-5.9

3.9
3.1
12.0
5.8
-3.8
5.8
13.7
13.5
11.0

9.9
15.1
18.4
14.0
6.4
6.0
10.7
13.6
10.1

16.4
17.2
18.9
18.9
17.7
14.9
13.5
12.4
11.3

20.6
20.3
19.9
15.7
19.4
15.2
18.8
14.8
18.3

-18.7
-44.8
-14.1
-28.5
-48.2
4.6
27.3
13.4
16.1

5.6
5.6
5.6
9.2
5.5
5.5
7.3
7.2
5.4

0.0
-2.1
23.1
53.6
27.6
-23.2
37.4
78.2
19.7

10.9
-13.5
-24.6
-25.1
-28.5
-20.4
-5.9
6.0
0.0

1976-JAN.
FEB.
MAR.
APR.

8.1
14.6
9.6
17.4

-1.1
3.8
4.3
15.1

5.3
7.7
3.1
8.1

18.2
21.4
11.0
15.3

13.4
14.7
14.2
14.1

18.0
10.7
14.1
10.4

-53.6
-57.6
-36.6
-29.5

5.3
5.3
7.1
5.3

1.8
10.6
12.2
13.8

0.0
-3.0
-3.0
-3.0

MONTHLY

1/
P -

P

GROWTH RATES ARE BASED ON ESTIMATED
PREVIOUS MONTH REPORTED DATA.
PRELIMINARY.

MONTHLY

AVERAGE

LEVELS DERIVED

BY AVERAGING

END

OF CURRENT

MONTH

AND END OF

1976

APPENDIX TABLE 2-B

MAY 14,

1976

COMPONENTS OF MONEY STOCK AND RELATED MEASURES
Period

Currency

Demand
Ped

Time

Mutual

Total

Other

Savings

Credit

Time
Deposits

r
TCDn

Bank
and S & L

Union
Shares

CD's

_ Di

1

2

3

Short

Savings

Shares

4

5

6

7

Commercial

Non-

U.S.

ommerca
Paper y

deposit
Funds

Gov't
Demand

Scurities
9

10

11

12

Term

dsais
Ter
yB U.S. Gvt

8

REVISED SERIES
ANNUALLY:
61.5
67.8
73.7

209.0
215.3
221.0

364.4
419.1
452.4

300.9
329.3
369.6

323.5
341.6
395.5

24.7
27.7
33.3

63.5
89.8
82.9

50.3
56.3
68.1

38.3
41.8
40.4

6.6
8.4
8.4

5.0
3.4
3.0

69.5
70.2
71.0

215.4
217,4
220.0

430.1
431.2
435.5

341.8
346.1
351.4

356.7
361.8
367.5

29.6
30.1
30.6

81.4
85.1
84.1

57.2
57.1
58.2

44.4
43.9
43.0

6.7
7.4
7.0

2.7
2.5
3.2

JULY
AUG,
SEPT.

71.3
71.9
72.0

220.6
221.3
221.6

437.6
436.2
438.3

355.5
357.4
359.2

373.3
378.8
383.5

31.0
31.5
31.9

82.1
78.8
79.1

60.8
62.2
61.0

42.1
41.1
40.4

6.8
7.0
7.0

2.6
2.8
3.0

OCT.
NOV.
DEC.

72.6
73.4
73.7

220.8
222.1
221.0

443.3
448.3
452.4

362.4
366.5
369.6

387.8
391.8
395.5

32.4
32.8
33.3

80.9
81.8
82.9

62.9
67.0
68.1

40.2
40.4
40.4

7.9
8.2
8.4

3.0
3.9
3.0

74.2
75.1
75.7

220.8
221.5
222.3

454.4
457.3
458.5

375.2
381.9
385.4

399.9
404.8
409.6

33.8
34.1
34.5

79.2
75.4
73.1

68.2
69.5

40.4
40.3
40.2

7.9
8.0
8.2

2.6
2.6
2.5

P

76.8

225.1

461.6

390.3

414.4

34.8

71.3

70.3

40.1

7.5

2.5

10
17
24
31

75.8

75.9

223.1
222.6
221.0
222.4

457.8
458.2
458.9
460.1

384.8
385.2
386.0
386.9

73.0
73.0
73.0
73.3

8.3
8.5
8.2

2.9
2.8
2.8
1.9

APR.

7
14
21
28P

76.3
76.6
77.2
76.9

223.3
226.1
226.0
224.9

462.3
462.3
460.6
461.2

389.0
390.3
389.8
391.5

73.2
72.0
70.8
69.7

7.2
7.2
8.0
7.6

2.4
2.5
3.6
1.9

MAY

SP

77.0

225.5

461.2

392.1

69.1

7.3

1.7

1973
1974
1975

MONTHLY
3975--APR.
MAY
JUNE

1976--JAN.
FEB.
MAR.
APR.

68.8

WEEKLY:
1976--MAR.

-

I/
P -

~~ ~ I

75.8
75.9

1

~

_ .--... -~_._
.-_;- N
-.-^
ESTIMATED MONTHLY AVERAGE LEVELS DEKVtED BY AVERAbNlb
DATA.
PRELIMINARY

=.-END OU

__CURRENT

.-.
UPNTH AND

-~__.
END UP

-;
PREVIOUS

-i_
*-.-_.
'h
MOUNH REPORTED DAIA.

I

-~.

Appendix Table III
Growth Rate in Money Supply
(Per cent change in an annual rate)

(Revised Series)

14,

13

M2

M

Q

M

Q

M

Q

I

3.6

7.4

7.3

9.2

8.4

10.3

II

10.1

6.4

9.9

8.2

9.8

8.5

III

1.8

5.5

6.3

7.9

6.1

7.8

IV

7.8

5.1

9.0

9.9

8.4

QIV '72-QIV '73

6.0

6.2

8.8

8.8

8.8

9.0

1974

I

5.3

6.0

9.0

9.6

8.4

8.9

II

5.3

5.6

6.9

7.4

5.7

6.5

III

3.0

4.2

5.5

6.4

5.2

5.6

IV

4.7

4.0

6.6

6.4

7.2

6.5

QIV '73-QIV '74

4.7

5.0

7.2

7.7

6.8

7.1

1975

I

1.4

0.6

6.9

5.6

9.0

7.5

II

9.7

7.4

III

3.6

7.1

IV

1.6

QIV '74-QIV '75
1976

1973

I

10.5

12.5

10.2

14.5

12.6

6.5

10.1

10.7

13.3

2.3

7,0

6.4

4.1

4.4

8.5

8.3

4.3

2.6

11.5

10.1

9.3

9.4

11.3

11.1

12.6

11.4

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

1976

1977

QII

Alt. A

Alt. B

Alt. C

4-7/8

5-1/8

5-3/8

QIII

6

6k

7

QIV

8k

71

7%

QI

9

8k

7%

Appendix Table V

Reserve Measures Consistent With Short-run Alternatives
(seasonally adjusted)

Nonborrowed reserves

Member-bank borrowing
Excess reserves

previous 4-week period
($ million)

Alt. C

Alt. A

2

-218

4.1

4.1

3

40

219

-36

-49

-62

34,219

143

43

1

6.1

5.1

4.2

Alt. A

Alt. A

Alt. B

Alt. C

34,246

34,164

33,944

84

96

275

175

162

59
188

2-month Annual Percentage
Growth Rate for May-June

Change from average of

Average of 5 weeks
May 26 to June 23
($ million)

Alt. B

Alt. B

Alt. C
-0.7

Other reserve aggregates:
Total reserves

34,305

34,261

Monetary base

114,765

114,721 114,679

866

822

780

9.0

8.7

8.4

Nonborrowed monetary
base

114,706

114,625

114,404

863

782

561

8.9

8.4

6.9

l

i

1/ Total reserves plus currency held outside the Treasury, the Federal Reserve, and member banks.

Appendix Table VI
Comparison of Old and Revised Money Stock Growth Rates
(Per cent annual rate)
M1

1975

1976

M2

M3

Old

Revised

Old

Revised

Old

Revised

Oct.

-0.8

-0.8

5.1

5.3

8.4

8.7

Nov.

9.4

9.0

10.8

11.5

11.6

Dec.

-2.8

-3.2

3.1

4.0

6.5

Jan.

1.2

1.2

10.3

10.7

11.6

11.9

Feb.

6.5

5.7

14.3

14.9

14.4

14.7

Mar.

6.1

6,1

8.3

8.7

10.5

10.8

April

15.7

15.3

14.6

15.3

14.5

14.8

11.9
7.1

Quarterly:1975

IV

1.9

1.6

6.4

7.0

8.9

1976

I

4.6

4.3

11.1

11.5

12.3

9.3
12.6

Quarterly average:
1975

IV

2.5

2.3

6.1

6.4

9.2

1976

I

3.0

2.6

9.5

10.0

11.1

II

I

1/ End-month-of-quarter to end-month-of-quarter.

9.4
11.4

May 17, 1976

CORRECTION
Monetary Aggregates and Money Market Conditions
(Blue book)

In appendix A (which follows charts 1-3 and tables 1-6),
the numbering of pages A-2 and A-3 should be reversed.