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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. CONFIDENTIAL (FR) May 19, 1967 MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments Since the May 2 meeting of the Committee, money market conditions have remained comfortable while capital markets have been subject to intensified pressure. Federal funds have continued to trade at or close to the discount rate, with trades more frequently below than above it. Dealer loan rates posted by major New York banks have averaged just under 4-3/8 per cent, about the same as in the second half of April. Yields on Treasury bills and on commercial and finance company paper have continued to decline. With demand for bills, especially the shorter maturities, remaining strong, the 3-month bill rate has fallen from around 3.75 per cent in early May to 3.55 per cent most recently. Yields on CD's, on the other hand, have risen, especially on the longest maturities, as some major banks increased their efforts to attract longer-term CD's. Reportedly, a number of banks are paying rates as high as 4-3/4 to 5 per cent for 1-year money. Yields in long-term debt markets continued to move higher in the first three weeks of May under the weight of heavy current and prospective new offerings and other factors affecting investor expectations. Average yields on long-term Treasury bonds are now within 15 basis points, and prime grade corporate and municipal obligations within 30 basis points, of their 1966 peaks. With yields in most sectors of the short-term debt markets declining further, the spread between FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (Monthly averages and, where available, weekly averages of daily figures) arket Indicators Bond Yields Flow of Reserves. Bank Credit and Money Money Period Free Borrow- eserves ings (In millions Federal 3-month Funds Rate of dollars) Treas- ury Bill Corporate MuniciU.S. Gov't. New Issues (20 y.) (Aaa)l/ Non- Total pal borrowed (Aaa) Reserves (I Re- serves Credit Mpy Proxy s/ (In mil T Bank Tme billions of dollars) (Seasonally Adjusted) 'n66--Apr. May June July Aug. Sept. Oct. Nov. Dec. -277 -339 -352 -359 -374 -390 -425 -235 -196 638 653 722 439 740 765 766 605 529 4.64 4.83 5.13 5.18 5.45 5.30 5.46 5.75 5.39 4.61 4.63 4.50 4.78 4.95 5.36 5.33 5.31 4.96 4.65 4.69 4.73 4.84 4.95 4.94 4.83 4.88 4.76 5.03 5.16 5.35 5.48 5.64 5.82 5.70 5.I7** 5.73** 3.46 3.53 3.60 3.77 3.91 3.93 3.82 3.78 3.79 +206 + 1 - 16* +135* -302 + 5 -134 +108 + 21 +256 + 6 + 3* +224* -400 +129 -195 - 35 + 21 +3.1 +1.0 +0.9* +2.1* -0.7 -0.1 -0.7 -1.1 +0.9 + + - 1.6 0.7 0.9 1.5 -+ 0.9 - 0.9 - 0.4 + 1.1 + + + + + + + + 1967--Jan. Feb. Mar. Apr. p - 60 + 42 +172 +196 476 366 196 150 4.87 4.99 4.50 4.05 4.72 4.56 4.26 3.84 4.51 4.61 4.56 4.64 5.43** 5.18** 5.31** 5.38** 3.50 3.38 3.47 3.50 +492 +359 +541 +130 +331 +272 +451 + 39 +3.3 +3.1 +3.2 - 0.7 + 0.8 + 2.4 + 2.4 + 2.6 + 2.1 +2.9 - 0.7 + 2.1 1967--Apr. 19 p 26 p +292 +142 178 98 3.90 4.00 3.87 3.74 4.63 4.72 5.50** 5.39** 3.50 3.55 +0.8 - 1.5 0.5 + 0.4 + 0.2 May +265 +299 +261 134 63 123 4.00 3.78 4.03 3.73 3.67 3.63 4.80 4.87 4.92 5.58 5.58** 5.62** Averages 3.65 3.65 3.75 +0.1 -0.1 Year 1966 First Half 1966 Second Half 196f -283 -228 -338 672 581 763 5.06 4.69 5.39 4.85 4.59 5.12 4.77 4.67 4.87 5.41** 5.12 5.74** 3.67 3.51 3.83 Recent Variatio s in growth July 6-Aug. 10 Aug. 10-Nov. 16 Nov. 16-May 17 -345 -320 + 46 738 638 325 5.32 5.46 4.79 4.81 5.27 4.49 4.85 4.91 4.67 5.55 5.78** 5.38** 3.80 3.87 3.55 1/ 2/ 3/ * p - 3 p 10 p 17 p + 1.4 + 0.1 + 1.9 Annual rates of increase 3/ 1-+ 0.8* + 3.0* - 1.5* + 1.2* + 4.6* - 2.2* 1.9 1.6 1.5* 1.9* 1.4 0.4 0.3 0.1 1.2 + 0.4 + 0.4 + 0.6 + 3.7* + 7.1* + 0.3* + 1.9 + 4.7 - 0.9 + 8.4* +10.3* + 6.1* - 4.2 - 2.7 +11,5 -13.4 + 0.4 + 6,4 +12.7 + 1.4 +15.4 Issues carry a 5-year call protection; ** includes issues carrying 5-year and 10-year call protection. Time deposits adjusted at all commercial banks. Base is average for month preceding specified period or in case of weekly periods, the first week shown. Changes have been adjusted for redefinition of time deposits effective June 9, 1966. Preliminary. May 19, 1967. CONFIDENTIAL (FR) -2 May 19, 1967. short and long-term rates has continued to widen, evidencing market expectations of continued upward pressure on interest rates in the months ahead. In the first three statement weeks ending in May, net free reserves and member bank borrowings have averaged about $275 million and $110 million, respectively. In the four statement weeks ending in April, free reserves had averaged about $80 million less and member bank borrowings about $40 million higher. Growth in total member bank deposits, which had been at an annual rate of 15 per cent in the first four months of the year, fell off sharply in the first half of May and for the month as a whole the bank credit proxy is now expected to increase at a 3-4 per cent annual rate. Allowing for further repayments of Euro-dollar borrowings by major banks would reduce the implied credit expansion by about 1 percentage point. For the December-May period expansion in the bank credit proxy is estimated at an 11-1/2 per cent annual rate (and at 10 per cent including the decline in Euro-dollar balances). The slower growth in total member bank deposits this month has reflected a sharp decline in U.S. Government deposits, only partly offset by an increase in private demand deposits, as well as somewhat slower expansion in total time and savings deposits. Treasury deposits have been reduced by continued acceleration in Federal Government spending, by somewhat larger than expected attrition in the May refunding, and by market purchases by the Treasury of coupon issues for CONFIDENTIAL (FR) -3- the trust funds during the course of the refunding. May 19, 1967. Also, tax receipts are being cut back this month as a result of the new pattern of corporate payments of withheld taxes. Although shifts out of U.S. Government balances have given strong impetus to the growth in private demand deposits, sizable loan repayments following the mid-April tax period have tended to curb the expansion somewhat. On the basis of data through mid-month, private demand deposits and the money supply are expected to increase at annual rates of 15 per cent and 14 per cent, respectively, in May. This expansion would result in a December-May growth rate in money supply of just under 6 per cent. Despite recent increases in posted CD rates, commercial banks have as yet replaced little of the CD run-off they experienced in the April tax period. Banks have concentrated their efforts mainly in attracting longer-term CD funds, presumably in anticipation of both higher loan demands in the fall and further upward pressures on market interest rates. Investors apparently have shown some resistance to placing funds in longer CD maturities and, in the case of shorter CD's, banks have not been willing to bid aggressively for new funds. On the other hand, consumer CD's and passbook savings balances have continued to grow rapidly and, therefore, total time and savings deposits appear to be expanding at a rate of about 13 per cent this month. This is about 4-1/2 percentage points CONFIDENTIAL (FR) -4- May 19, 1967. less than in the first four months of the year, with the drop reflecting entirely the cessation in growth of large negotiable CD's. With the combined total of private and Government demand deposits projected to decline, total required reserves are expected to increase very little in May. Nonborrowed reserves are likely to show a seasonally adjusted increase of perhaps 6 per cent (annual rate), however, reflecting higher excess reserves and lower member bank borrowings. Prospective developments A continuation of prevailing conditions in the money market would imply: Federal funds trading mostly around 4 per cent, with the effective rate averaging slightly below the discount rate; free reserves fluctuating generally within a $200 - $300 million range; member bank borrowings continuing to average somewhat above $100 million; and dealer loan rates at New York banks ranging below 4.50 per cent. Some temporarily greater reserve availability might be needed, however, to cushion churning around the mid-June tax and dividend period. Even assuming unchanged money market conditions, Treasury bill rates probably will continue under downward pressure as a result of seasonal influences in the period ahead. The System will be on the buying side of the market for much of the period until the next Committee meeting; a wide range of investor demands for seasonal and temporary investment and reinvestment purposes should continue strong; CONFIDENTIAL (FR) May 19, 1967. -5- in June a record $5.5 billion of tax anticipation bills would mature. With continuing heavy inflows, the Federal Home Loan Banks will probably continue to offer strength to the short-term market either by buying Treasury bills direct or by redeeming debt, thus freeing private funds for investment in bills. The 3-month bill rate may thus move towards the lower end of a 3.40 - 3.60 per cent range. As this downdrift progresses, however, some offsetting factors should come into play. In particular, the widening spreads between short and intermediate-term yields and between rates on bills and those on CD's and other money market paper may tend to limit the bill rate decline. Also, projections of reserve factors indicate that the System will be shifting from the buying to the selling side of the market around mid-June. Moreover, if the Treasury is forced to draw down its balance with the Reserve Banks in the days immediately preceding the tax date, as seems quite possible, larger System sales to absorb reserves may be needed. Even with further declines in bill rates, however, yields in capital markets may well remain under upward pressure, given the present very uncertain market atmosphere. Despite the appearance of some less optimistic current business statistics, the weight of the new issue calendar and expectations of economic resurgence later on continues to dominate investor attitudes. The market is also beginning to focus on the Treasury's potentially large deficit and the resulting likelihood of heavy second half financing. This could include some CONFIDENTIAL (FR) May 19, 1967. flotations of over-5-year issues in the event that Congress allows some flexibility outside the 4-1/4 per cent ceiling. Also, another issue of FNMA participations is expected shortly. On the other hand, a technical rally in the bond market is possible, especially in U.S. Governments. Some market observers feel that the recent bond yield increases may have outrun current economic developments. And in the Treasury market recent sizable purchases by official accounts have helped to lighten dealer holdings of longer-term issues. On balance, however, we would expect that in the absence of further official actions, underlying market forces would be likely to continue to work toward higher rates. Market expectations, which have played an important role in generating upward pressures on bond yields, have not been associated with any particular signs of strength in bank loan demands in recent weeks. In fact, continued heavy capital market flotations may result in further loan repayments by major corporations. A temporary bulge in bank loans is likely around the mid-June tax date, since projected corporate income tax payments then are very large--even larger than last year. But the improved liquidity position of corporations, including large holdings of June tax bills and of sizable amounts of maturing CD's, and the projected liquidation of business inventories should operate to hold down both bank loan demand and total bank credit expansion May 19, 1967. CONFIDENTIAL (FR) We therefore anticipate that, with money market conditions unchanged, the average increase in the bank credit proxy during June will be at an annual rate in a range of 4-7 per cent, somewhat higher than May's 3-4 per cent but still substantially slower than earlier in the year. Such an increase would bring the annual growth rate in total member bank deposits for the December-June period to 10 - 11 per cent (9 - 10 per cent after allowing for reductions in Euro-dollar borrowings). Deposit movements in June on average should continue the May pattern of large shifts from U.S. Government to private balances. With currency continuing its steady growth of around 6 per cent, the projected increase in private demand deposits would result in money supply expansion in June at an 8 - 11 per cent rate. Such an increase in June would produce a growth rate for the recent expansion period (December-June) of 6 - 7 per cent. Over the entire recent interval of contraction and expansion of the money supply (June 1966-June 1967) the growth rate would be 2.5 per cent. Expansion in total time and savings deposits in June is projected to continue at about the 13 per cent annual rate now expected for May, with consumer-type CD's and passbook savings accounting for all the growth. Favoring continued rapid growth in consumer time and savings deposits are the lower returns available on competing shortterm market instruments and the continuing large volume of personal savings being generated in the economy. The outlook for CD's in June is for some decline around the mid-month tax and dividend dates, although CONFIDENTIAL (FR) -8- May 19, 1967. these declines may be offset in part by stepped-up bank efforts to attract longer-term CD's. With only moderate expansion in bank credit projected for June and with most of the net expansion concentrated in time deposits, only a small increase in required reserves--on the order of 2 per cent, annual rate-- is expected. Effects of greater emphasis on coupon operations If there is sufficient concern about present and immediately prospective bond market conditions, a substantial portion of the System's reserve supplying operations in the weeks ahead could be conducted in coupon operations rather than bills, as was done in the last week. Staff projections indicate a net need for expanded reserves amounting to roughly half a billion dollars over the next four weeks. The possible impact of such operations on longer-term bond yields is most difficult to gauge in the current market environment. In large measure, the level of bond yields will continue to be dominated by market expectations, by the extent to which such expectations are sustained by basic economic developments, and by the flow of new capital issues. Use of System coupon operations to supply part of the projected reserve needs over the next few weeks might have only limited effects on market trends; indeed, developments strengthening market expectations of an economic upturn could overwhelm even substantial System purchases. But in the present state of expectations, which still shows some evidence of indecision, CONFIDENTIAL (FR) May 19, 1967. official account purchases could be positive factors in helping to clear away supplies of Government securities overhanging in the market. In addition, such operations might be followed by a somewhat better bond price performance if the upward rate movement to date has tended to over-discount the near-term economic prospects and market pressures. The configuration of interest rates and reserve relationships delineated on pages 4 to 8 might be altered marginally by a program of System coupon operations. In particular, Treasury bill rates would tend to decline less than specified earlier, and there could be minor sympathetic responses in other short-term rates. There might also be some narrowing in the spread between short- and long-term yields. But Federal funds and dealer loan rates would not likely be affected by the shift in the pattern of System buying, and net marginal reserve availability would, in the context of no change in monetary policy, necessarily remain unchanged. Therefore, we would anticipate no difference in the behavior of the monetary aggregates from those projected above. Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) I Period Excess reserves -- As Monthly (reserves weeks ending in): Member banks borrowings revised to Free reserves date As first published each week As expected at conclusion of each week's 1966--April May June July August September October November December 361 315 370 380 366 375 341 370 333 638 653 722 739 740 765 766 605 529 -277 -339 -352 -359 -374 -390 -425 -235 -196 1967--January February March April p 417 408 368 346 476 366 196 150 + 42 +172 4 11 18 25 395 628 127 516 565 585 217 538 -170 + 43 - 90 - 22 + 67 - 39 - 47 1 8 15 22 340 289 418 583 176 353 456 477 +164 +154* - 64 - 38 - 45 - 50 - 91 - 7 +101 + 2 +117 1 8 15 22 29 159 359 372 566 385 167 202 173 302 135 - 8 +157 +199 +264 +250 +204 5 12 19 26 447 226 470 240 180 145 178 98 +267 +339 + 81 +154 +312 +169 3 10 17 399 362 384 134 63 123 +265 open market opeations ____________________________________________ 4 - 59 +196 Weekly: 1967--Jan. Feb. Mar. Apr. May p - Preliminary +106 +292 +142 +299 +261 -188 + 4 +165 +277 +235 +345 +260 +261 -175 + 61 - 53 - 62 - 17 +216 +217 +290 +253 +300 +184 +305 +171 +343 +262 +291 * - Reflects end of week statistical adjustments increasing F.R. float due to snow storms in the midwest. TABLE A-2 AGGREGATE RESERVES AND RELATED MEASURES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages of daily figures) Re s e r v e Total Reserves r e gate s Required reserves Against Nonborrowed eere Total Demand Reserves Deposits A Monet Total ember Bank Deposits (eit (ced) 1 a v Var i ab le s Time Money Supply Deposits Private (comm. Total Demand banks) __ Deposits Annually: 1965 1966 + 5.3 + 1.2 + 4.3 + 0.8 + 5.3 + 1.5 + 2.3 - 0.2 + 9.1 + 3.7 +16.0 + 8.4 + 4.7 + 1.9 + 4.4 + 0.9 Monthly: 1966--January February March April + 6.7 + 4.0 + 2.9 +13.2 + 9.5 + 3.1 - 4.6 +10.9 + 6.9 + 2.9 + 2.7 +11.9 +11.3 + 3.8 + 4.0 +11.7 + 8.1 + 3.5 + 5.5 +15.5 + 7.4 + 5.7 + 8.1 +15.3 + 5.7 + 1.4 + 7.8 +11.3 + 4.6 -+ 8,2 +12.7 May + 0.3 + 0.1 + 2.1 - 4.8 + 4.9 +12.7 - 4.9 - June 2/ July 2/ + 0.2 +11.4 - 0.8 + 7.1 + 1.6 + 8.4 + 1.3 + 2.9 + 4.4 +10.3 +11.8 +14.8 + 6.3 -10.5 + 7.2 -16.2 August 2/ September 2/ October 2/ November 2/ -20.2 + 6.6 -10.0 - 1.8 -15.8 - 0.3 - 7.1 + 5.7 -14.8 - 0.2 - 1.1 - 7.6 -16.9 - 3.2 - 2.0 - 8.2 - 3.4 - 0.5 - 2.9 - 5.4 +10.7 + 3.0 - 2.3 + 0.8 -+ 6.4 - 6.3 - 2.8 + - December 2/ + 1.1 + 1.1 + 4.9 - 1.6 + 3.9 + 9.1 + 7.8 + 8.2 +17.1 +13.8 +22.7 +26.0 +18.6 +27.6 +13.5 +14.3 +15.3 +12.7 + 9.0 +17.0 +16.1 +15.0 +15.3 +18.1 +19.3 +15.3 - 4.9 + 5.7 +16.9 - 9.1 + 5.5 +20.0 + 1.9 + 6.5 + 9.1 +10.4 +13.7 +15.1 - 4.9 - 1967--January 2/ February 2/ March 2/ April 2/ p S - nclues all ueposis subject tO reserve requirements. movements in total member bank credit. movements 7.2 0.9 7.3 8.1 4.6 6.3 in this aggregate correspond closely with p - Preliminary. 2/ Changes in reserves, total deposits, and time deposits have been adjusted for redefinition of time deposits effective June 9, 1966. Changes in reserves have been adjusted for increases in reserve requirements in July and September 1966, and reduction in reserve requirements in March 1967. Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS, SEASONALLY ADJUSTED 24.0 TOTi 23.5 REQUIRED RESERVES 23.0 22.5 - 22.0 NET BORROWED NON RESERVES 21.5 21.0 BILLIONS OF DOLLARS 1.5 1.0 MEMBER .5 go aI 0 0 T EXCESS 0 T 1 1965 i I I BANK BORROWINGS 1 RESERVES I 1966 l i l -- I T 1967 l Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS 260 TOTAL MEMBER BANK DEPOSITS (CREDIT PROXY) SEAS ADJ WEEKLY AVERAGE OF DAILY FIGURES 256 252 248 244 240 236 6 LIABILITIES TO OVERSEAS BRANCHES (WEEKLY REPORTING BANKS] 4 NOT SEAS ADJ, WEDNESDAYS 2 0 I I I I 1966 I 1967 Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS BILLIONS OF DOLLARS 180 175 MONEY SUPPLY-- 170 165 TIME (All 160 DEPOSITS ADJUSTED Commercial Banks)-- - 155 150 145 (- 140 135 130 125 NEGOTIABLE CD'S _(Unadjusted) 2__ 20 10 S 1965 D M J 1966 S D M J 1967 *CHANGE IN SERIES Chart 4 DEMAND SEASONALLY DEPOSITS ADJUSTED WEEKLY AND CURRENCY AVERAGES OF DAILY FIGURES BILLIONNS OF DOLLARS MONEY SUPPLY COMPONENTS: CURRENCY OUTSIDE BANKS 140 DEMAND DEPOSITS 135 130 125 120 15 10 5 0 S 1965 D M J 1966 S D M 1967 J Idule fl-i MAJOR SOURCES AND USES OF RESERVES (Dollar amounts in Retrospective and Prospective millions, based on weekly averages of daily figures) Factors affecting supply of reserves Period Federal Reserve credit (excl. float) 1/ Gold stock = Currency outside banks Technical factors net 2/ Change = Bank use of reserves in total reserves Required reserves 3/ +1,089 +1,085 +1,188 +1,111 - 99 26 Excess reserves ACTUAL 'ear: 1965 (12/30/64 1966 (12/29/65 - 12/29/65) 12/28/66) +4,035 +3,149 -1,602 627 -2,143 -2,243 + + + 194 +1,111 - 254 51 + + 193 498 - 740 -2,333 - 605 775 - 461 722 - 144 53 + + - 533 256 368 + 1 + 137 485 133 + + 153 35 193 + - 245 197 41 + - 85 159 63 + + 160 38 22 24 31 + 60 220 --- + + 105 5 - 145 345 - 100 120 - 100 120 June 7 14 21 28 + - 590 200 40 250 ----- + + 500 15 80 210 + + + - 50 125 575 240 + + - 140 90 615 280 + + - 140 90 615 280 July 5 + 60 -- + 100 - 150 + 10 + 10 Year-to-date: (12/29/65 - 5/18/66) (12/28/66 - 5/17/67) Weekly: 1967--May 3p 10p 17p -- 1 798 805 PROJECTED/ 1967--May 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 of projections. p - Preliminary. --- 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) Total Period required reserves Supporting U. S. Gov't. demand demand deposits private deposits _Supporting Total Total Seasonal changes Demand Time Other than chanes seasonal changes Demand Time season ACTUAL Year: 4 4 +499 5 + 677 +1,221 1/ + 96 +100 +169 -304 + - 177 369 5 +177 - 51 +246 + + + 20 18 13 5 +180 + 15 + 15 + 15 - 10 + 45 + + 15 15 -280 +375 + + 10 10 - + 20 - +1,277 +1,194 + - +243 +191 - 704 913 -1,146 340 85 159 63 + 85 +147 -149 + 306 86 - 197 273 178 + - 100 - 30 - 70 - 270 + - 120 -130 + 10 - 20 -- 7 14 + - 140 90 -110 -355 + + 250 265 + + 245 205 --- 21 28 + - 615 280 +610 -210 + - 5 70 + - 280 460 5 + 10 -135 + 145 + 140 +1,188 +1,111 - - 461 722 + - 24 31 1965 (12/30/64 1966 (12/29/65 - 12/29/65) 12/28/66) 89 87 115 14 Year-to-date: (12/29/65 - 5/18/66) (12/28/66 - 5/17/67) Weekly: 1967--May 3 p 10 p 17 p -- --- PROJECTED 1967--May June July l/ Reflects reserve requirements changes in July and September iLto. p - Preliminary. + 5 5 -- 15 Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Perid Period Technical fac s factors (net) ACTUAL Foreign deposits Float and gold loans (Sign indicates effect on reserves) t Treasury operations Other nonmember deposits and F. R. accounts Year: + + 798 805 +294 +673 + 171 64 + 77 - 30 +598 + 98 (12/29/65 - 5/18/66) - 740 +195 - 688 - 2 -245 (12/28/66 - 5/17/67) -2,333 -531 -1,265 + 47 -584 3 p 10 p + 153 35 -109 +146 - 52 57 - 8 16 + 16 - 38 17 p + 193 +102 + 128 + 22 - 59 24 31 - 145 345 - 55 + 5 + - 120 350 + 7 14 21 28 + + + - 50 125 575 240 ----- + 50 -- + + - 60 500 240 --- 5 - 150 -- - 150 1965 (12/30/64 1966 (12/29/65 - 12/29/65) 12/28/66) Year-to-date: Weekly: 1967--May PROJECTED 1967--May June July 5 -215 -- + 65 + 75 -- 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 U.S. Government securities Total O Repurchase Other Bills agreements holdings Federal Agency Securities Bankers' acceptances acceptances Member banks borrowings borrowings Year: 1V"5 (12/30/64 - 12/29/65) L ,6 (12/29/65 - 12/28/66) +4,035 +3,149 +3,916 +3,069 +3,145 +2,158 +916 +474 -145 +437 -+ 26 + 77 + 52 + 42 2 + Year-to-date: (12/29/65 - 5/18/66) (12/28/66 - 5/17/67) + 194 +1,111 95 + +1,622 8 + +1,763 +173 +217 - 86 -358 -- 26 - 18 - 60 +117 -425 5 12 19 26 + + 402 22 67 156 + + + 343 11 79 211 + + + 209 14 48 210 + 21 + 95 --- +113 - 70 -127 + 1 + 10 - 10 - 5 + 2 + 4 + 12 - 16 + 23 + + - 3 10 17 + + - 533 256 368 + + - 450 337 383 + + - 197 174 226 +253 +163 -157 + - 5 5 3 + 42 -5 - 42 + 36 -71 + 60 Weekly: 1967--Apr. May ---- I --- 45 35 33 80 _____________ Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures) Period Total reserves Nonborroweduired reserves Total reserves Against private deposits Total Demand 1965--January February March April May June July August September October November December 21,960 22,157 22,279 22,449 22,436 22,612 22,682 22,689 22,667 22,737 22,748 23,010 21,625 21,771 21,814 21,953 21,994 22,082 22,158 22,186 22,114 22,248 22,341 22,523 21,563 21,713 21,868 22,036 22,109 22,243 22,332 22,299 22,259 22,439 22,402 22,657 20,702 20,765 20,881 20,985 20,962 21,138 21,247 21,331 21,553 21,720 21,803 21,970 15,730 15,717 15,789 15,831 15,750 15,877 15,912 15,916 16,071 16,151 16,168 16,285 1966--January February March April May June 1/ July 1/ August 1/ September 1/ October 1/ November 1/ December 1/ 23,139 23,217 23,274 23,530 23,536 23,539 23,763 23,363 23,492 23,297 23,262 23,283 22,701 22,759 22,671 22,877 22,878 22,862 22,997 22,695 22,700 22,566 22,674 22,695 22,788 22,844 22,896 23,123 23,163 23,193 23,355 23,067 23,064 23,042 22,896 22,990 22,075 22,084 22,269 22,477 22,453 22,582 22,515 22,517 22,597 22,430 22,383 22,522 16,364 16,356 16,510 16,625 15,534 16,626 16,472 16,428 16,497 16,352 16,321 16,411 1967--January 1/ February 1/ March 1/ April 1/ p 23,614 23,886 24,337 24,376 23,187 23,546 24,0 24,217 23,248 23,526 23,825 24,006 22,525 22,733 23,069 23,062 16,317 16,421 16,682 16,587 p - Preliminary. 1/ Reserves have been adjusted for redefinition of time deposits effective June 9, 1966. Table C-2 DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts in Monthly billions, based on monthly averages of daily figures) Total member bank deposits (credit) 1965--January February I/ Private demand Time deposits sits U.S. Gov't. demand 2/ deposits 218.4 220.4 106.0 107.6 107.4 107.3 5.0 5.5 March 222.5 108.6 107.8 6.1 April 224.6 109.9 108.1 6.7 May 225.8 111.1 107.5 7.2 June July August September 227.7 229.1 230.4 231.1 112.2 113.8 115.5 116.9 108.4 108.6 108.6 109.7 7.1 6.7 6.3 4.6 October 233.5 118.7 110.2 4.5 November December 234.5 236.4 120.2 121.2 110.4 111.2 4.0 4.0 1966--January February March April May June 3/ July 3/ August 3/ Sept. 3/ Oct. 3/ Nov. 3/ Dec. 3/ 238.0 238.7 239.8 242.9 243.9 244.8 246.9 246.2 246.1 245.5 244.4 245.2 121.8 122.1 122.8 124.8 126.2 127.0 128.9 129.8 130.1 129.6 129.3 130.3 111.7 111.6 112.7 113.5 112.9 113.5 112.4 112.1 112.6 111.6 111.4 112.0 4.5 5.0 4.3 4.7 4.8 4.3 5.6 4.2 3.5 4.3 3.7 2.9 3/ 3/ 3/ 3/ p 248.5 251.6 254.8 257.7 132.4 134.6 136.2 138.1 111.4 112.1 113.9 113.2 4.8 4.9 4.8 6.4 1967--Jan. Feb. Mar. Apr. 1/ 2/ 3/ Includes all deposits subject to reserve requirements--i.e., the total of time, private demand, and U.S. Government demand deposits. Movements in this aggregate correspond closely with movements in total member bank credit. Private demand deposits include demand deposits of individuals, partnerships and corporations and net interbank balances. Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary. TABLE C-2a DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MBMBEx BANKS Seasonally adjusted (Dollar amounts in billions, based on weekly averages of daily figures) Week ending: Total member bank deposits (creditn1/ 2/ Time deposits 2/ Private demand deposits 3/ U. S. Gov't. demand deposits 129.5 129.3 129.3 129.3 129.2 111.2 111.1 111.2 111.5 111.3 5.4 30 246.1 245.8 244.5 243.0 243.2 Dec. 7 14 21 28 244.5 244.5 245.5 245.7 129.5 129.8 130.2 131.0 111.9 111.2 113.1 111.5 3.2 3.5 2.2 3.2 1967--Jan. 4 11 18 25 247.3 247.7 247.8 249.2 131.4 131.7 132.1 132.9 112.6 111.6 111.4 110.5 3.3 4.4 4.3 5.8 Feb. 1 250.3 8 15 251.4 251.4 251.6 133.7 134.0 134.5 134.9 111.1 111.7 111.5 113.0 5.5 5.7 5.5 3.8 254.0 256.2 256.5 134.9 135.5 136.2 136.5 136.8 112.6 112.9 113.9 113.9 114.2 4.5 4.1 3.9 5.8 5.6 19 26 256.4 257.6 257.6 258.4 137.1 137.7 138.1 138.2 114.7 114.0 112.9 112.0 4.6 5.8 6.5 8.2 3 10 17 258.5 258.4 258.4 138.7 139.1 139.4 113.0 112.8 114.5 6.9 6.4 4.5 1966--Nov. 2 9 16 23 22 Mar. 1 8 15 22 29 Apr. 5 12 May 252.0 252.5 5.3 4.0 2.2 2.7 p - Preliminary. / 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. 2/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. 3/ Private demand deposits include demand deposits on individuals, partnerships and corporations and net interbank balances. TABLE C-3 MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally adjusted (Dollar amounts in billions, based on monthly averages of daily figures) Money Supply Monthly 1965--January February March April May June July August September October November December 159.7 159.8 160.3 161.0 160.7 161.7 162.4 163.0 164.1 165.2 165.6 167.2 35.3 35.5 35.7 36.0 36.1 36.3 1966--January February March April May June 3/ July 3/ August 3/ September 3, October 3/ November 3/ December 3/ 168.0 168.2 169.3 170.9 170.2 171.1 169.6 169.6 170.5 169.6 169.2 170.3 36.6 36.8 36.9 37.2 37.3 37.4 37.7 37.8 37.9 38.0 38.0 38.3 1967--January 3/ February 3/ March 3/ April 3/ p 169.6 170.4 172.8 172.1 38.5 38.7 38.9 39.0 ________________ 1. Private Demand Currency I/ 34.5 34.6 34.7 34.8 34.9 35.0 Time Deposits Deposits 2/ Adjusted 125.3 125.2 125.6 126.2 125.8 126.7 127.2 127.5 128.5 129.3 129.5 130.9 128.7 130.7 132.0 133.3 134.6 136.2 137.9 140.0 141.6 143.7 145.5 146.9 131.4 131.4 132.3 147.8 148.5 149.5 151.4 153.0 154.5 156.5 167.8 158.2 157.9 133.7 132.9 133.7 131.9 131.8 132.6 131.7 I 131.2 132.1 158.0 131.1 131.7 133.9 133.2 161.7 164.3 166.4 159.2 168.5 41 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 at Federal Reserve Banks. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. 1/ 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) I Private Money Supply Week Ending Currency 1/ Demand __Deposits 168.9 168.8 169.0 169.3 169.3 37.8 38.0 38.1 38.0 38.1 131.1 130.9 130.9 131.3 131.2 157.8 157.9 7 14 21 28 169.7 169.1 171.9 170.3 38.1 38.2 38.2 38.4 131.7 130.9 133.7 131.9 158.2 4 11 18 25 170.8 170.2 170.3 168.9 38.4 38.6 38.5 38.4 132.4 131.6 131.8 130.5 160.5 160.9 161.3 162.2 Feb. 1 8 15 22 168.7 169.6 169.9 171.8 38.5 38.7 38.8 38.8 130.2 130.9 131.1 133.1 163.1 163.5 164.2 164.8 Mar. 1 8 15 22 29 171.0 172.0 173.1 172.6 173.6 38.7 38.9 39.0 39.0 39.1 132.3 133.0 134.1 133.6 134.5 165.0 165.5 166.3 166.7 167.1 Apr. 5 12 19 26 173.4 173.0 171.5 171.0 38.9 39.1 39.1 39.0 167.6 168.2 168.6 168.8 May 3 10 172.4 172.5 17 174.4 39.1 39.1 39.1 134.6 134.0 132.5 132.0 133.3 133.3 135.3 Dec. 1967--Jan. 2/ 3/ adjusted 3/ 2 9 16 23 30 1966--Nov. 1/ 2/ Time Deposits 158.0 158.0 157.9 158.6 159.2 160.0 169.2 169.6 170.2 r, _,, -- - Includes currency outside the Treasury, the Federal Reserve, and te vaults or all commercial banks. Includes (1) demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S. Government, less cash items in process of collection and Federal Reserve float; and (2) foreign demand balances of Federal Reserve Banks. Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary.
@FedFRASER