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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 23, 1969. MCNEY MARKET AND RESERVE RELATIO SHIPS Recent developments (1) Interest rates generally rose markedly during the past few weeks, reflecting the very tight conditions in the market for dayto-day finance, sizable corporate and municipal bond offerings on top of the Treasury refunding, and the dimming in near-term peace hopes. Since the last meeting of the Committee, yields on municipal bonds have jumped by around 25 basis points, while yields on corporate bonds and U.S. Government coupon issues have risen by 10 - 20 basis points. Short-term market rates, apart from Treasury bills, have adjusted up by as much as 50 basis points. In the first three weeks of May, Treasury bill rates rose from their recent lows at the time of the last Committee meeting, but in the last few days bill rates have dropped back. The latest quote on the 3-month bill was around 6 per cent bid, down 12 basis points from its high during the month, but still a few basis points above the April 29 level. The recent decline reflects a scarce market supply of short-bills in part growing out of the heavy foreign official purchases related to recent speculative flows into the German mark. (2) The very tight conditions in the money market have been expressed in a sharp further rise of the Federal funds rate in the past three statement weeks to trading levels frequently in an 8 - 9 per cent range, with an average effective rate over the past three weeks close to 8-1/2 per cent. Dealer finance rates have risen commensurately FINANCIAL MARKET RELATIONSHIPS (Mmit thl Period vnr im r -nfc hoes air Money rk IndicatorsBond Free Borrowings deral 3-month -month Federal rrowings Reserves Treasury Funds (In millBons of (In millions of Rat e dollars for weeks ending in) a 1 1.1 bl ... IN PERSPECTIVE 1.1.. Yields U.S. Corporate U.S.Municipal Government Issues (Aaa) (20 yr.) ......... . C -I--. |-- £ .. 2/ May June Tllv Aug. Sept Oct. Nov. Dec. 689 728 727 523 577 492 458 541 743 ".76 6.12 6.07 6.02 6.03 5.78 5.92 5.81 6.02 5.38 5.66 5.52 5.31 5.23 5.19 5.35 5.45 5.96 5.46 5.55 5.40 5.29 5.22 5.28 5.44 5.56 5.88 6.50' 6.64 6.65 6.51" 6.15 6.27 6.47 6.50 6.79 4.13 4.28 4.26 4.12 4.00 4.23 4.21 4.33 4.50 + + + + + + + (Revised 140 18 265 285 460 134 190 33 175 1969--Tan. Feb. Mar. Apr. - 491 580 635 844 715 836 837 1,031 6.30 6.64 6.79 7.41 6.14 6.12 6.02 6.11 5.99 6.11 6.22 6.03 6.92 6.91 7.35 7.22 4.58 4.74 4.97 5.01 - 31 142 167 217 16 23 30 615 963 -1,033 759 1,135 1,118 7.63 7.48 7.79 6.19 6.18 5.99 5.99 5.97 5.98 7.02 7.07 7.18 5.00 4.95 4.95 + + - 7 p 14 p 21 p -1,142 943 -1,295 1,603 1,170 1,358 8.23 8.30 8.91 5.97 6.02 6.10 5.94 5.97 6.09 7.10 7.08 7.28 4.95 5.10 5.30 + + - Averages 5.36 5.45 5.29 5.46 5.42 5.44 6.47 6.47 6.50 4.20 4.16 4.22 + 5.6 + 1.1 + 9.9 5.34 6.10 6.47 7.10 4.21 4.81 + 9.9 - 7.0 May Year 1968 First Half 1968 Second Half 1968 Recent variation in growth 7/3/68 - 12/18/68 12/18/68 - 5/21/69 - 210 - 201 - 218 - 203 694 516 955 5.90 6.99 5.40 6.07 ' I/ 1/ 3/ 4/ Bank Credit and Money Series) + + + + + + + + Money Supply Bank Credit Proxy (In of dollars) 341 374 386 192 240 146 192 255 327 1969--Apr. • Total Nonborrowed Reserves Reserves (In millons (Aaa) - 1968--Apr ... Flow of Reserves billions S.A. Time Deposits 3/ of dollars) 136 44 174 143 475 57 175 179 269 + + + + + + 1.1 0.4 1.5 2.1 5.0 2.0 3.0 2.7 + 3.1 + + + + + + + + 0.8 1.8 1.3 2.0 0.9 0.8 0.7 1.7 1.2 + + + + + + + + + 0.4 0.5 0.6 2.2 3.4 2.8 2.9 2.4 2.4 + - 109 105 93 134 + + + + + 0.6 0.1 0.2 1.8 - 1.8 1.5 -0.2 179 81 160 + + - 3 444 82 - 0.5 + 0.1 - 1.3 - 1.5 1.8 1.2 - 0.3 - 0.3 - 0.3 59 14 344 + - 453 392 134 + 0.2 + 2.0 - 0.9 + 0.6 + 1.1 + 1.5 - 0.2 + 0.1 + 0.2 1.5** 0.3 2.5 1.3 Annual rates of increase + 7.1 + 8.6 + + 4.2 + 4.1 + + 9.8 +12.8 + +11.8 - 0.8 +14.1 - 2.3 4/ 6.5 6.7 6.1 +11.3 + 5.1 +17.1 + 2.3 + 4.8 +18.1 - 4.7 " p - Preliminary. Average of -cial number ,f days in period Includes issues cairln,' -year and 10-vear call protection, * - issues carry a 10-year call protection. Time deposits adju, ed a, all commercial banks. week shown. Base is change for month preceding specified period or in case of -eekly periods, the first S.A. - Seasonally adjusted. -2to an 8-1/2 - 9-1/2 per cent range. In each case, rates have ranged 50 - 100 basis points above levels in the few weeks just before the previous FOMC meeting. These taut conditions in money centers have reflected market churning, including constricted Euro-dollar availabilities connected with mark speculation; financing demands arising out of the Treasury refunding; and Desk action to maintain pressure on short-term markets in an environment in which the 3-month bill rate was otherwise tending to move toward or below the low end of recent ranges. Money market conditions were exacerbated as major banks, in the face of large and unpredicted fund flows, managed money positions rather conservatively and accumulated large reserve surpluses in a couple of weeks around mid-May. (3) The bank credit proxy is showing somewhat less weakness in May than anticipated earlier, mainly because of stronger interbank deposits, and is now projected to change little on average for the month. The money supply is also expected to change little on average from April to May, close to earlier projections, with an increase in currency offsetting a small decline on average in private demand deposits. Total time and savings deposit behavior has also been about as anticipated. These deposits are now projected to decline in May at around a 2 per cent annual rate, with outstanding CD's dropping $400 $500 million and with only a sluggish recovery in consumer-type time and savings deposits following sizable net outflows in the first half of April. -3(4) Net borrowed reserves at all member banks have averaged $1.1 billion in the last four statement weeks, up $300 million from the preceding four weeks. Member bank borrowings have shown a similar rise on average to $1.3 billion, with demands on the discount window increasing at both reserve city and country banks. Banks have turned increasingly to the discount window as they have encountered adverse fund flows and constrictions in the availability of day-to-day financing from other sources. (5) The following table summarizes changes in major reserve aggregates and deposits for several recent periods: July '68Dec. '68 Jan. '69Mar. '69 AprilMay '6 9 p Total reserves 9.8 -1.3 4.5 Nonborrowed reserves 9.9 -5.0 -5.5 Bank credit, as indicated by: Proxy 12.8 -5.4 2.9 Proxy plus Euro-dollars 13.0 -2.4 3.0 Total loans and investments (as of last Wednesday of month) 15.0 2.3 5.6 6.1 1.9 5.3 17.1 -6.5 Money supply Time and savings deposits -1.8 Savings accounts at thrift institutions NOTE: Dates are inclusive. p--partly projected. I/ April 1969. 6.4 6.1 1/ 1.8- Prospective developments (6) The relationships among Treasury bill rates, marginal reserve measures, and day-to-day money rates will be subject to widely variable influencesin coming weeks. For example, potentially heavy tax period borrowing around mid-June will be shortly followed by Treasury cash debt repayment of $1 billion in maturing June 15 bonds not exchanged in the recent refinancing and an estimated $4 billion of June tax bills that may not be turned in for taxes. Meanwhile, the recent ebbing of tensions affecting foreign exchange and Euro-dollar markets may lead to an improved availability of Euro-dollars to U.S. banks during the next few weeks that could possibly moderate pressures in day-to-day money markets. On the other hand, mid-year window dressing by banks abroad may tend to withdraw some funds from the Euro-dollar market later in June. (7) Assuming no change in monetary policy, and recognizing the probability of large and varying money market flows apart from System operations, money market conditions may encompass a Federal funds rate continuing to average around 8-1/2 per cent, member bank borrowing in a $1 to $1-1/2 billion range, and net borrowed reserves generally a little over $1 billion. The 3-month Treasury bill rate could fluctuate widely, but may generally continue to be in a 5.90 - 6.20 per cent range. An increase in the bank prime loan rate would enhance the likelihood of the bill rate moving toward or above the upper end of this range. -5(8) The estimated $9.3 billion of corporate income tax payments due for payment in June--some three-fourths larger than payments in March and in April--together with increased Federal agency debt financing are expected to exert heavy general pressure on commercial banks and money and securities markets during the first part of June. These pressures are likely to be reflected in a large further run-off of large-denomination CD's at banks--running to perhaps $1 billion or a little more for the full month of June out of an estimated $4-1/2 $5 billion of maturities. Such a CD attrition, however, would be no worse than May, and probably somewhat better, after adjusting for seasonal factors. Nevertheless, with commercial bank liquidity already greatly reduced by the cumulative effects of continued monetary restraint, banks' resources are likely to be brought under severe pressure, particularly if the need to finance tax payments leads to another large bulge in loans. As a result, in addition to continuing to borrow abroad, major banks are likely to continue to press to expand the new domestic financial arrangements that have been developed recently to augment their flows of funds. In particular, bank holding company sales of commercial paper and other similar transactions should grow further and could become a significant source of upward interest rate pressure in short-term markets. (9) The large Treasury cash debt repayment noted earlier represents a potential offset to these various June short-term market pressures. Any reflows of foreign funds into Euro-dollars could have a similar effect. In terms of the technical condition of the bill -6market, the existing short supply of bills provides some short-run leeway for dealers to absorb bills during the tax period, although their willingness may be limited by the tightness in the market for dealer financing. Given the short-term market conditions noted in (10) paragraphs (6) and (7), the change in the bank credit proxy in June is expected to be in a -1 to +3 per cent, annual rate, range--with Euro-dollar borrowings possibly adding another percentage point or two on average. There is little basis for judging the likely increase in domestic nondeposit sources of funds to banks, through holding company affiliates or otherwise. Nor is it clear what proportion of funds raised through these devices should be considered to be "bank credit" in light of the similarity of various of the instruments to conventianal commercial or finance company paper. However that may be, it might be noted that each $250 million of such instruments issued during the month, on average, would be the equivilent of about 1percentage point annual rate of increase in the bank credit proxy. (11) Total demand deposits are expected to be an enlarged source of funds to banks in June, and time and savings deposits are also likely to be stronger on average than in May. A sharp rise in the average level of private demand deposits is anticipated partly in consequence of a decline in the average level of U.S. Government deposits as Treasury debt is repaid. In addition, however, strong loan demand, enhanced by tax payment needs, will probably lead to further private deposit expansion. With currency outstanding also continuing to rise, the money supply is expected to expand in a -77 - 10 per cent, annual rate, range in June. This would represent an experience similar to April, when large tax payments also caused credit demand and money to rise temporarily. Time deposits are likely to rise in a 2 - 5 per cent, annual rate, range, as some recovery in consumer-type time deposits continues, at least until the mid-year interest-crediting period. (12) Despite the projected rise in bank credit and money for June, long-term interest rates are still likely to move up further, particularly if concern about a credit crunch should spread. Banks will be very limited in their ability to buy municipal securities, and they, as well as insurance companies, now appear to be cutting back on real estate loans. But so long as prospects for a cooling in economic activity remain and investors and borrowers look toward a tapering of interest rate pressures later in the year, a further upward movement in long-term rates could be of limited proportions. Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES OF DAILY FIGURES 28.5 28.0 27.5 TOTAL RESERVES 27.0 26.5 26 0 25.5 INONBORROWED RESERVES 25.0 e REQUIRED RESERVES 4 24.5 IA n 23.5 BILLIONS OF DOLLARS, NOT SEASONALLY ADJUSTED -- 1.0 MEMBER BANK BORROWINGS I .5 0 "--- "i"' 1 l 1 I 1 EXCESS 1 1 RESERVES, _ I7 S 1967 1968 1969 Char 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS TOTAL MEMBER BANK DEPOSITS [CREDIT PROXY) SEAS ADJ WEEKLY AVERAGES OF DAILY FIGURES 302 298 32 ----------------------------------- - 294 290 286 282 - __ 278 274 270 14 LIABILITIES TO OVERSEAS BRANCHES [WEEKLY REPORTING BANKS) 12 -NOT SEAS ADJ, 10 8 6 4 1968 1969 --- Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILL' 'NS OF DOLLARS 198 TIME DEPOSITS ADJUSTED (All Commercial Banks) NEGOTIABLE CD'S NOT SEAS ADJ, WEDNESDAYS 1 J 1968 1969 Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLJNS OF DOLLARS MONEY SUPPLY COMPONENTS: 48 CURRENCY OUTSIDE BANKS 44 - _--- 40 2A M J 1968 - S D M J 1969 S D Table 1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Member Free reserves Period Excess reserves Total Banks Borrowings City Re s e r v e Major banks Other 8 N.Y. Outside N.Y.1 Country Monthly (reserves weeks ending in): 1968--April May June - 341 374 386 192 240 146 192 255 327 348 354 341 331 337 346 267 286 330 689 728 727 523 577 492 458 541 743 56 65 72 13 195 125 81 65 134 262 155 168 140 65 158 88 171 223 148 186 141 102 101 73 117 93 67 223 322 346 268 215 136 172 212 177 1969--January February March April - 491 580 635 844 359 256 202 187 715 836 837 1,031 131 62 58 85 302 280 233 411 149 215 254 260 253 304 293 275 1969--Mar. 5 12 19 26 - 527 627 691 696 207 248 85 268 734 875 776 964 104 84 43 112 342 168 309 184 265 247 320 334 268 277 292 2 9 16 23 30 - 886 722 615 963 309 225 144 172 85 1,195 947 759 1,135 1,118 75 84 201 63 489 486 361 428 290 335 144 140 281 401 371 242 174 225 364 7 14 21 -1,142 461 227 63 1,603 1,170 1,158 146 121 165 463 243 378 486 421 359 507 385 456 July August September October November December Apr. May p - Preliminary. -1,033 - 943 -1,295 Table 2 AGGREGATE RESERVES AND MONETARY VARIABIES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages of daily figures) R e s Total Reserves Period (REVISE Annually 1967 1968 r v e Ag g r e Nonborrowed Reserves D g ' a t e Required Reserves M o n e t a r y V a i ab Total e S u p p 1 y IPrivate Demand Deposits Currency M o n e y oL al MNmbr Bank Dposits s Commercial bank time deposits adjusted Credit Proxy (Incl. Eurodollar borrowings) SERIES) +10 2 + 7 1 +11.8 + 5.6 +10 2 + 7.1 +11.7 + 8.6 + 6 4 + 6.5 + 5.5 + 7.4 + 6.7 + 6.2 +16.1 +11.3 +11.6 + 9.5 1968 1968 1968 1968 + 7 2 + 1.2 +10.2 + 9.2 + 0.6 + 1.7 +13.6 + 6.0 + 7 1 + 1.4 +10.4 + 8.8 + 7.0 + 1.2 +13.1 +12.2 + + + + + + + + + + + + 3.7 9.0 3.6 7.9 + 7.0 + 3.2 +17.9 +15.7 + 7.4 + 3.5 +14.0 +11.7 1st Quarter 1969 - 1.3 - 5.0 + 0.6 - 5.4 + 1.9 + 7.4 + 0 5 - 6.5 - 2.4 - 6.2 + 2.0 + 8.0 + 6.5 +21 4 + 2.5 + 7 7 + 7.9 +11.8 - 6.5 - 0.8 +12.5 +13.3 +21.2 + 6.1 + 8.6 + 1.5 + 7.8 - 5 6 - 0.6 +10.4 + 8 3 +21 4 + 1.4 + 9 6 + 7 5 + 9 2 - + 5.9 + 8.8 + 6.8 + 2.6 - + 1.7 + 6.5 + 9.0 +21.4 + 8.4 +12.5 +11.1 +12.7 +11.7 + 8.4 +12.8 + 5.7 - 5.0 + 4.4 +10.7 + 7.5 + 5.8 +11.5 + 5.7 +11.4 + 2.8 + 2.8 +11.2 + 5.6 +12 6 + 7.5 +14.9 + 3.3 - 7.3 + 5.7 +10.6 + 7.3 + 3.2 + 3.8 +14.0 +21.4 +17.3 +17.7 +14.4 +14 3 + 5.1 + 9.3 +10.1 +22.1 + 9.4 +11.8 +11.3 +11.6 + 4.7 - 4.5 - 4.0 - 5.8 +14.5 - +11 3 - 4.6 - 4 7 - 3.1 +10.4 - 4 9 - 1.2 -10.2 + 5.3 + 0.4 + 3.7 + 0.6 + 1.2 +10.5 -- + 5.5 + 8.3 + 8.2 -+ 8.1 + 4.0 - 1.6 - 0.8 +13.6 - 2.4 -10.6 - 8.9 -- 1.2 - 2.4 + + Quarterly: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Monthly: 1968--April May June July August September October November December 1969--January February March April May p p - Partly projected 1.4 6.3 7.5 9.7 1.3 4.7 4.6 8.7 4.5 7.6 6.9 8.8 6.7 6.6 3.8 2.0 2.0 7.1 6.0 Table AGGREGATE 3 RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based on monthly averages of daily figures) Member Bank Deposits Supported by Required Reserves Total im( PIiv ite JU.S. Gov't. member bank ,sits demald I demand deosits sI deposits ( In Monthly 1968--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1969--Jan. Feb. Mar. Apr. May p (R E V ISE 26,053 26,283 26,349 26,213 26,257 26,431 26,574 27,049 27,106 27,281 27,460 27,729 25,529 25,511 25,776 26,061 26,521 26,655 26,845 26,878 27,053 27,838 27,733 27,640 27.506 27,838 27,022 26,880 26,713 26,496 26,467 D S E 25,741 25,891 25,669 E S) 25,704 25,910 25,990 25,868 25,856 26,080 26,261 26,729 26,761 26,974 27,142 27,350 27,608 27,502 27,394 27,324 27,560 274.7 277.0 278.0 276.9 277.3 278.8 280.9 285.9 287.9 290.9 293.6 296.7 149.9 150.2 151.2 151.3 151.5 151.8 153.8 156.5 158.9 161.5 163.5 165.8 119.4 119.7 120.1 120.4 122.1 123.2 124.3 124.6 123.6 124.5 125.4 126.7 295.1 294.8 292.3 293.6 293.7 163.2 161.0 160.5 160.1 159.5 126.6 127.2 126.9 127.6 128.3 1/ h i Money Supply lions 5.4 7.1 6.7 5.2 3.7 3.9 2.7 4.8 5.3 of 1 do i turrency I Total deposits 2/ a r s Proxy (Incl. Euro dollar borrowins I 182.3 182.7 183.4 184.3 186.1 187.4 189.4 190.3 189.5 190.2 191.9 193.1 40.6 40.7 41.1 41.4 41.6 42.0 42.2 42.6 42.7 42.8 43.2 43.4 141.7 141.9 142.2 143.0 144.5 145.4 147.2 147.6 146.7 147.4 148.7 149.6 184.1 185.2 186.7 187.1 187.6 188.2 190.4 193.8 196.6 199.5 201.9 204.3 279.0 281.5 282.6 281.7 282.9 285.1 287.5 292.8 295.1 298.0 300.8 303.7 193.7 193.8 194.0 195.7 195.7 43.6 43.9 44.2 44.2 44.5 150.1 149.9 149.8 151.5 151.2 202.5 201.0 201.0 200.8 200.4 303.0 303.5 301.7 303.2 303.2 Private demand deposits include demand deposits of individuals, partnerships, and corporations and net interbank deposits. commercial banks. Includes currency outside the Treasury, the Federal Reserve, and the vaults of all Includes (1) demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S. Government, and (2) foreign demand balances at Federal Reserve Banks. process of collection and Federal Reserve float; 4/ Excludes interbank and U.S. Government time deposits. p - Partly projected. 1/ 2/ 3/ Credit Commercial bank time Private deposits demand adjusted deposits 3 4/ less cash items in Table 4 AGGRFGATE RESERVES AND MONETARY VARIABLES Seasonally Ad lusted (Based on weekly averages of daily figures) Period Total 'cscive /ii ( ates (Ncw S' ries p) jNonboi owed Rquired Member Bank Deposits Suippo ted by Required Reserves Tot a, I im Pi ivate IU.S. demand deposits 1/ b i l ( I n member hank depos reserves reserves t Money Supply Gov't demand deposits o n s Currency 2/ a r s ) d o l Total o Commercial Credit bank time Proxy Private deposits (Incl. Euro dollar adjusted demand deposits 3 4/ borrowings 1 8 15 22 29 (In milll 28,178 i 27,685 28,027 27,962 27,678 ol 27,163 27,072 27,221 27,09S 26,716 Ill 1 -) 27,620 27,536 27,802 27,697 27,454 297.4 297.2 294.9 294 4 293 8 165 5 164 4 163.9 162 8 162.1 127 9 128 2 126.7 126.0 124 9 4.0 4 5 4.3 5.6 6 8 193.7 195 4 193.8 193.6 191 6 43.4 43.5 43.5 43.6 43.5 150.3 151.9 150.2 150.0 148.1 204.1 203.3 202.8 202.1 201 5 304.1 303.9 302.8 302.7 302 4 Feb. 5 12 19 26 27,666 27,593 27,707 27,886 26,837 26,813 26,656 27,130 27,407 27,412 27,439 27,684 294.1 295.5 295.3 294.4 161 4 161.1 160 8 160.6 126.2 126.3 127.7 128.0 6.5 8 0 6.8 5.8 192.8 192.9 194.8 194.3 43.7 43.9 44.0 43.8 149.1 149.0 150.9 150.5 201 0 201.0 201.0 200 9 302.5 304.2 303 8 303.2 Mar. 5 12 19 26 27,947 27,710 27,451 27,597 27,124 26,835 26 670 26,586 27,637 27,410 27,366 27,353 293 6 293.8 292.1 291.2 160.4 160.6 160.5 160.7 127 126 126 126 6 7 6 9 5.6 6.5 5.1 3 6 193 8 193.6 194.0 194.6 43.8 44.1 44.2 44 3 149.9 149.5 149.9 150.3 200.7 200.9 200.7 200 9 302.6 303.1 301.6 300.8 2 9 16 23 30 27,558 27,298 27,301 27,745 27,663 26,371 26,370 26,549 26,630 26,470 27,226 27,084 27,196 27,560 27,483 291.8 294.1 293.6 293.7 292 4 160 7 160.6 160.2 160.1 159.8 128 1 128.7 128 1 126 9 126.0 3.0 4.9 5.3 6.7 6.6 195.2 197.9 196.4 194.6 193.4 44 3 44.4 44.2 44.3 44.2 150.8 153.5 152.1 150.3 149.2 201.1 201.2 200.9 200.6 200.3 301.2 303.4 303.2 303.4 302.4 Weekly 1969--Jan. Apr. May I 7 p 28,116 26,529 27,611 292 6 159.6 126.6 6.5 194.0 44.3 149.7 200.1 302.3 304 0 7.3 195.1 44.5 150.6 200.2 26,543 27,484 294 6 159 4 127.8 14 p 27,724 303.1 152.1 200.4 44.5 5.1 196.6 159.5 129.1 293.7 26,199 27,477 21 p 27,590 Private demand deposits include demand deposirs of inaividuals, partnersnips, and corporations ana net inte ruan.K eposits. Includes currency outside the Tieasury, the Federal Reserve, and the vaults of all commercial banks. demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S Government, less cash items in Includes (1) apd (2) foreign demand balances at Federal Reserve Banks. process of collection and Federal Reserve float; Excludes interbank and U.S. Government time deposits. Preliminary. Table 5 (Dollar amounts F a c t ors Federal Reserve Gold credit (excl. stock float) 1/ Period ( 9 lear 1967 (12/28/66-12/27/67) 1968 (12/27/67-12/25/68) Weekly1969-- -Mar. +4,718 +3,757 - 725 -2,067 a MAJOR SOURCES AND USES OF RESFRVES Retrospective and Prospective Changes in millions, based on weekly averages of daily figures) f e ct Currency outsde banks e n i i n g 1 a t Float es ff -2,305 -3,221 + 928 170 + 85 - 300 200 160 270 70 - 55 5 --- + + 100 50 200 -- 85 s r e s e r ve Foreign Other nonmember deposits deposits and and gold loans F.R. accounts of supply Ireasury operations - s r v e = Change total reserves = Bank use of Required reserves reserves Excess reserves ) 389 + 316 +1,309 + 869 +1,522 +1,508 +1,517 +1,563 - 180 - 35 - 35 + - --205 5 + 245 125 80 30 + - 245 125 80 30 + - 5 55 5 12 19 26 Apr. 2 9 16 23 30 May 7 14 11 PROJECTED 2 (69--May June 1/ 2/ 28 + 4 11 18 25 + - 195 -- + 110 10 55 95 ---- + For retrospective details, see Table 6. See reverse side for explanation. p - Preliminary. - 5 ----- -- Table (Dollar amounts Period Total Federal 1 Reserve credit Weekly 1969--Feb. Mar. Apr. May +4,718 +3,757 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes in millions of dollars, based on weekly averages U.S. Government securities Total (Excl. float) Year1967 (12/28/66-12/27/67) 1968 (12/27/67-12/26/68) 6 [ holdings Bills 1/ +4,433 +2,143 +5,009 +3,298 5 12 19 26 77 146 306 292 5 12 19 26 63 87 105 109 2 9 16 23 30 7p p 21p ( ( Other --- +1,153 +1,176 - 69 + 55 S 69 307) 50) 68) 54) S 69 --- ) - -- ) -- ) + 51 -- + - 57 559 + + 819 280 345 118 39 + 41 + 66 + 190 - 577 S 21 figures) Federal Agency Securities Bankers' acceptances - 19 - 3 S 69 S 52 ) S 89 123 109 103 146* 143* 319* 284 14 + _ Repurchase agreements of daily I + + 1 28 + + 85 + + + 74 82 11 65 S 39 S 36 ) 7) 533) 460) 80) S 13 + - + 13 2 34 58 24 + + - -- ) 156) 156) 30 11 + + 27 11 3 8 1 1/ Figures in parenthesis reflect reserve effect of match sale-purchase agreement. * - Includes effect of changes in special certificates of $+96 million of the week of April 9, $+627 million of the week of April 16, and $-723 million of the week of April 23. p - Preliminary. Member banks borrowings - 203 + 514 Explanation of Projections in Table 5 1. Changes in Federal Reserve credit indicate reserves needed to offset projected changes in required reserves and factors affecting the supply of reserves. 2. Projected changes in currency outside banks reflect seasonal movements plus an allowance for growth of about $50 million per week. 3. Projected effects of Treasury operations, included in "technical factors," reflect scheduled and assumed calls in current two weeks and maintenance of Treasury balances with Federal Reserve at $0.5 billion, thereafter. 4. Projected changes in required reserves assume the existing net reserve position of banks and the structure of interest rates in the market, as well as the current economic outlook. On the basis of these assumptions, projections reflect expected movements in bank credit and money in the period ahead, including the effects of such elements as the public's loan demand, repayments of previous loans, banks' investment preferences and willingness to supply loans, banks' desires and abilities to obtain time and savings deposits, and the Government's financing needs. The projections thus encompass normal seasonal developments, temporary bursts of loans demand and expected associated repayments not currently reflected by the seasonals, and are expected in the projection period. whatever cyclical and growth demands for money and credit Assumed Treasury financing operations include: $-3.6 billion, June 16; $-4.2 billion, June 23.
@FedFRASER