The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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 this document may contain occasional gaps in the text. These gaps are the result of a redaction process that removed information obtained on a confidential basis. 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 optimal 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. September 28, 1984 Strictly Confidential (FR) Class I FOMC MONETARY POLICY ALTERNATIVES Prepared for the Federal Open Market Committee By the staff Board of Governors of the Federal Reserve System STRICTLY CONFIDENTIAL (FR) September 28, 1984 CLASS I - FOMC MONETARY POLICY ALTERNATIVES Recent developments (1) Preliminary data for September suggest a moderate rebound in M1 to an annual growth rate of perhaps 7 percent after being about unchanged on average in the previous two months, but growth of this aggregate for the June-to-September period remains well below the path of 5 percent or slightly less specified at the last Committee meeting. The estimated level of M1 for September is at the center of its longerrun target range. On a quarterly average basis M1 increased at about a 4-3/4 percent annual rate in the third quarter, about in line with predictions of our quarterly model, given actual income (which turned out to be lower than assumed at the time of the last FOMC meeting) and interest rates. (2) Growth of M2 also appears to have strengthened in September, after expanding at a sluggish pace over the previous two months. For the June-to-September period, M2 expanded at almost a 6 percent annual rate, well below the 7-1/2 percent objective for that period set by the Committee, and drifted further below the midpoint of its longer-run range. Growth of M3 over the summer slowed to a 7 percent rate, also considerably below Committee expectations. Growth of large CDs outstanding at banks and thrift institutions alike has weakened appreciably since July, owing partly to diminished credit demands on depository institutions and to actual or potential difficulties in CD markets. In particular, a large amount of CDs ran off at the thrift subsidiary of FCA. A sharp runup in government deposits also reduced needs at commercial banks for issuance of large CDs KEY MONETARY POLICY AGGREGATES (Seasonally adjusted annual rates of growth) July Aug. Sept.pe June to Sept.pe QIV to Sept.pe Money and Credit Aggregates -1.3 1.8 7.0 2.5 6.0 4.4 8.3 5.9 6.8 8.4 4.6 7.9 7.0 9.1 12.8 13.7 Nonborrowed reserves 2 15.0 (1.5) 2.9 .7 6.2 (1.7) 6.9 Total reserves -1.5 4.7 -1.1 6.8 4.4 7.5 Domestic nonfinancial debt Bank credit Reserve Measures 1 Monetary base -6.4 7.6 -.1 Adjustment and seasonal borrowing 974 747 3/ Excess reserves 685 647 3/ Memo: (Millions of dollars) Figures in parentheses treat all discount window borrowing by Continental Illinois after May 9 as extended credit and therefore as nonborrowed reserves; such borrowings were formally classified as extended credit on June 7. 1. Growth rates of reserve measures are adjusted to remove the effects of discontinuities resulting from phased changes in reserve ratios under the Monetary Control Act. 2. Includes "other extended credit" from the Federal Reserve. 3. Through September 26. pe--preliminary estimate. Note: -3and other managed liabilities to fund credit growth. By September, M3 had fallen from a level well over its longer-run target range for the year to a point close to the upper limit. (4) Expansion of private credit demands is estimated to have eased a bit in July and August from the rapid pace of earlier in the year, but this was offset by a surge in federal debt-boosting growth in total domestic nonfinancial debt to a 13-1/4 percent average annual rate in July and August. In private credit markets, the pace of mortgage and consumer borrowing diminished somewhat, and merger financing abated. However, business borrowing remained relatively strong as the financing gap widened. Fragmentary data for September suggest no pickup in private credit flows and a substantial reduction in the pace of federal borrowing. Neverthe- less, growth in total debt through the third quarter remains about one-half percentage point above its monitoring range for 1984, after subtracting an estimate for merger-related financing. (5) Given the continuing shortfall in money growth relative to the Committee's objectives., against the background of data indicating a slowing in the pace of economic expansion in the third quarter, the Desk aimed at a somewhat more ample provision of nonborrowed reserves than would otherwise have been the case, with reserve paths assuming a gradually lower level of borrowing, most recently $750 million, rather than the $1 billion initially employed. Borrowing at the discount window during the two reserve maintenance periods ending in September in fact averaged about $750 million. Over the three month June-to-September period, nonborrowed reserves plus extended credit expanded by about 1-3/4 percent at an annual rate, while total reserves contracted by about one percent. -4(6) The easing in bank reserve positions has been reflected in a decline of the federal funds rate from the 11-1/2 to 11-3/4 percent area prevailing immediately following the August FOMC meeting to the area of 11 percent in the most recent reserve maintenance period, with trading on some recent days below 11 percent. It is possible that the extent of decline in the funds rate also has reflected some waning in the reluctance of institutions to borrow at the window or to lend in the funds market as perceptions about the condition of banks have improved. Rates on private money market obligations generally have declined about 40 to 60 basis points since the FOMC meeting, and spreads of such rates over Treasury bill rates have continued to narrow. The 3-month CD rate was recently quoted just under 11 percent; most major banks have lowered their prime rate to 12-3/4 percent. Treasury and corporate bond yields have declined 5 to 25 basis points further, bringing net declines in bond yields since their highs in late June to almost 1-1/2 percentage points. (7) Conditions in exchange markets have been quite volatile over much of the period since the last FOMC meeting. Despite some easing in U.S. money market conditions, the dollar rose sharply and by September 20 was up by 7 percent. Among the not altogether convincing reasons for the dollar's strength advanced by market participants have been factors weakening the mark in particular--including downward revisions in expectations for economic activity in Germany--the prospect for redenomination of some of Mexico's debt, and apparent lack of concern by official authorities as the dollar continued to rise beyond expectations. On Friday, September 21, the dollar spiked a further two percent, but then dipped upon release of a higher-than-expected CPI figure. The Bundesbank -5then surprised the market with very large and visible intervention and the dollar plunged 4 percent by the following Monday morning. The dollar has since recovered somewhat and is currently 5-1/2 percent above its value prior to the last FOMC meeting. . ntervention by the U.S. over this period totaled $185 million in sales of dollars against marks. Prospective developments (8) The table below provides three alternative specifications for growth in the monetary aggregates for the period from September to December, with associated federal funds rate ranges. (More detailed data, including implied growth for the QIV 1983 to QIV 1984 period, can be found in the table and charts on the following pages.) Alternative B--which is expected to involve continuation of roughly the current degree of pressure on bank reserve positions--calls for growth in M1 that would keep this aggregate at the midpoint of the Ccmmittee's long-run range, with M2 moving a little higher in its range, though remaining below the midpoint, and M3 continuing near the upper end of its range. Alternative A calls for somewhat faster money growth over the September-to-December period, consistent with an easing in reserve pressures, while alternative C contemplates somewhat slower money growth, associated with tighter reserve conditions. Given the proximity of the end of the year, under all the alternatives growth in M1 for the year would not be far from the 6 percent midpoint of the Committee's long-run range, M2 would be expected to remain around 7 percent--in the lower half of its long-run range-and M3 growth would stay close to the 9 percent upper end of its long-run range. Alt. A Alt. B Alt. C 7-1/2 8 9-1/4 6 7-1/2 9 4-1/2 7 8-3/4 Growth from September to December M1 M2 M3 Federal funds rate range 7-1/2 to 11-1/2 8 to 12 8-1/2 to 12-1/2 Alternative Levels and Growth Rates for Key Monetary Aggregates M1 Alt. A Monthly Levels-1984--July August September October November December M2 M3 Alt. B Alt. C Alt. A Alt. B ---- ---- -- - Alt. C Alt. A Alt. B Alt. C - -------- 545.6 546.4 549.6 545.6 546.4 549.6 545.6 546.4 549.6 2281.1 2289.5 2305.4 2281.1 2289.5 2305.4 2281.1 2289.5 2305.4 2856.8 2867.8 2886.6 2856.8 2867.8 2886.6 2856.8 2867.8 2886.6 553.0 556.4 559.9 552.3 555.1 557.9 551.6 553.7 555.8 2320.5 2335.9 2351.4 2319.7 2334.2 2348.7 2318.9 2332.5 2346.0 2908.7 2931.1 2953.7 2908.1 2930.0 2951.9 2907.6 2928.9 2950.1 -1.3 1.8 7.0 -1.3 1.8 7.0 -1.3 1.8 7.0 4.8 4.4 8.3 4.8 4.4 8.3 4.8 4.4 8.3 8.4 4.6 7.9 8.4 4.6 7.9 8.4 4.6 7.9 7.4 7.4 7.5 5.9 6.1 6.1 4.4 4.6 4.6 7.9 8.0 8.0 7.5 7.5 7.5 7.0 7.0 6.9 9.2 9.2 9.3 9.0 9.0 9.0 8.7 8.8 8.7 2.5 7.5 2.5 6.0 2.5 4.5 5.9 8.8 5.9 7.5 5.9 7.0 7.0 9.3 7.0 9.8 7.0 8.8 7.2 6.1 4.7 6.7 7.2 6.1 4.7 5.8 7.2 6.1 4.7 4.8 6.9 6.8 6.1 7.7 6.9 6.8 6.1 7.4 6.9 6.8 6.1 7.1 8.9 10.3 8.0 8.5 8.9 10.3 8.0 8.3 8.9 10.3 8.0 8.2 6.0 6.3 6.0 6.1 6.0 5.8 6.8 7.1 6.8 7.0 6.8 6.9 9.1 9.2 9.1 9.2 9.1 9.1 Growth Rates Monthly 1984--July August September October November December 1984 June to Sept. 1984 Sept. to Dec. Growth Rates Quarterly Average 1984--Ql Q2 Q3 Q4 Memo: '83 Q4 to Sept.'84 '83 Q4 to '84 Q4 Longer Run Targets: '83 Q4 to '84 Q4 4.0 to 8.0 6.0 to 9.0 6.0 to 9.0 Chart 1 CONFIDENTIAL CLASS Actual and Targeted M1 (FR) FOMC II Billions of dollars - g7n -ACTUAL LEVELS -ESTIMATED LEVELS SHORT RUN ALTERNATIVES - -1550 -1540 -1520 -1510 I 0 I N 1983 I D I I J F M A I I M 1 I J J 1984 1 I A S 0 15 1 N D Chart 2 CONFIDENTIAL (FR) II CLASS FOMC Actual and Targeted M2 Billions of dollars 2400 900 S -* ACTUAL LEVELS ESTIMATED LEVELS SHORT RUN ALTERNATIVES -2380 / / / - 2360 /A -C -2340 / / / 6/ 2320 / - 2300 S-2280 -2260 -/ - /-2220 - S- 2200 - 0 -- 2180 1I2160 8 N 1983 O J 2240 F M A M J J 1964 A S 0 N D CONFIDENTIAL (FR) Chart 3 CLASS FOMC Actual and Targeted M3 Billions of dollars 2960 A -c B C -- 2940 /9% ACTUAL LEVELS ESTIMATED LEVELS 0 SHORT RUN ALTERNATIVES/ 2 2920 /- 2900 / 2880 / - / 6% 2860 S/ 2840 / - 2820 -2800 S2780 - 2760 "2740 2720 S2700 2680 -2660 I O J N 1983 S I I D J I II I F I r I I M A I I M I I 1 J J 1984 I I A I I S I I 0 I Ae L~qy I N 0 (9) All the alternatives specify more rapid M1 growth over the next three months relative to its sluggish behavior over the June-toSeptember period. Transactions demands are expected to strengthen in association with the projected pickup in nominal GNP growth in the fourth quarter, while the dampening effects on money demand of earlier increases in short-term interest rates should diminish over the quarter and begin to be reversed by the recent moderate declines in short rates. On a quarterly average basis, M1 in the fourth quarter would increase at a 5-3/4 percent annual rate under alternative B, implying an increase in velocity of around 2-3/4 percent, given the staff's GNP forecast. (10) Alternative B, and the other alternatives as well, also call for somewhat more rapid growth of M2 over the September-to-December period than in the summer. Spurred by faster income growth and a more favorable alignment of rates on deposits relative to rates on market instruments, the nontransactions component, along with M1, is expected to contribute to the pickup in M2 expansion in the fourth quarter. growth also is expected to quicken. M3 Despite slower credit expansion at thrifts projected for the fourth quarter, the recent weakness in thrift CDs and associated rapid rise in FHLB advances is unlikely to continue, assuming the condition of FCA stabilizes and repercussions on the access of other thrifts to wholesale money markets remain minor. Commercial bank CD issuance is likely to pick up as Treasury deposits decline. (11) Growth in debt of nonfinancial sectors is projected to moderate over the fourth quarter to around a 10-1/2 percent annual rate, reflecting mainly a slowing in borrowing by private sectors. Households' mortgage and consumer credit usage is expected to weaken a bit further. The financing gap of business is not expected to widen further in the -9fourth quarter, and total borrowing by businesses may decrease if merger and related activity continues to moderate as expected. Despite the slowing of credit growth over coming months, for 1984 the debt of nonfinancial sectors is projected to increase around 12-1/2 percent, compared to the Committee's range of 8 to 11 percent, with about one percentage point of this total attributable to credit associated with merger and related activity. (12) The specifications of alternative B assume borrowing at the discount window remains around the recent $750 million level. This degree of pressure on reserve positions is likely to involve federal funds trading in the neighborhood of 11 percent, with trading on the low side more likely if rates on alternative sources of funds, such as CDs, remain relatively low, and if a calmer atmosphere in money markets encourages banks to tap these sources more aggressively and to be less reticent about use of the discount window. Nonborrowed and total reserves would each increase at close to a one percent rate over October and November. (13) With federal funds averaging close to 11 percent, other interest rates are likely to fluctuate around current levels. Rates in short-term markets already appear to have adjusted to federal funds trading in that area, and 3-month Treasury bill rates should remain around 10-1/4 percent, with slightly lower rates developing should funds trade persistently below 11 percent. Further improvement, if any, in long-term markets is expected to be quite limited, given the anticipated strengthening of incoming economic data and the expectation that M1 growth will not fall well below the midpoint of its long-run range. Moreover, during the intermeeting period, note and bond markets will have to absorb a very substantial volume of Treasury issues-including both -10- the large end-of-quarter note and bond auctions that had to be postponed from late September due to debt ceiling constraints, and the regular mid-quarter .refunding scheduled for the first week of November. (14) The somewhat more rapid money growth specifications of alternative A would be expected to involve a further reduction in pressures on bank reserve positions, with discount window borrowing declining to around $500 million. Nonborrowed reserves would increase at about a 6 percent annual rate over October and November. The federal funds rate would drop to 10-1/4 to 10-1/2 percent, or possibly a little lower if the pattern of discount window borrowing evident before last May reemerges. (15) Such an easing in bank reserve positions, which is not now expected by market participants, would probably set off a considerable rally in short- and longer-term markets. The Treasury bill rate might decline into the 9-1/2 percent area, and CD rates would drop to around 10-1/2 percent, exerting further downward pressure on the prime rate. Yields on long-term Treasury bonds might decrease initially by at least 1/2 percentage point on expectations that a sustained easing in credit markets might be underway. A portion of the gains in bond markets could later be reversed, however, should incoming data on the economy and money and credit show strength, and as bond issuance by corporations and state and local governments rises further. The dollar would tend to decline on foreign exchange markets, although any declines might be limited should market participants anticipate a subsequent firming of interest rates. (16) Alternative C, which involves some tightening of money market conditions over the intermeeting period, would be expected to restrain M1 growth over the balance of the year to a rate below the -11- midpoint of its long-run range and to exert particular restraint on credit growth. Borrowing at the discount window under this alternative would return to around the $1 billion level prevailing over most of the spring and summer, with nonborrowed reserves declining by around 4 percent over October and November. The federal funds rate would be expected to return to the 11-1/2 to 11-3/4 percent area, or possibly a bit higher. The Treasury bill rate would rise to around 10-3/4 percent, CD rates would increase by 1/2 percentage point or perhaps more, and the dollar would probably rise, at least for a while, on foreign exchange markets. With upward pressures reemerging in short-term markets, longer-term yields can be expected to retrace some of the declines since early summer, leading to further reductions in demands for mortgage credit as well as to shifts in borrowing by businesses back toward short-term markets--and also possibly to reconsideration of over-all borrowing and spending programs. -12- Directive language (17) Proposed language for the operational paragraph, with alternatives, is shown below. OPERATIONAL PARAGRAPH In the implementation of policy in the short run, the Committee seeks to DECREASE SOMEWHAT (ALT. (ALT. A)/ maintain (ALT. B)/ C) existing pressures on reserve positions. to be consistent with growth in M1, [DEL: at an or in] and less, slightly INCREASE SOMEWHAT This action is expected annual rate of around 5 percent M2, and M3 at annual rates of around [DEL: 7-1/2 and 9] June to] ____, ____, AND ____ percent respectively during the period from[DEL: September TO DECEMBER. Somewhat greater reserve restraint would be accept- able in the event of more substantial growth of the monetary aggregates, while somewhat lesser restraint would be acceptable in the event of significantly slower growth. In either case, such a change would be considered only in the context of appraisals of the continuing strength of the business expansion, inflationary pressures, financial market conditions, and the rate of credit growth. The Chairman may call for Ccmmittee consulta- tion if it appears to the Manager for Domestic Operations that pursuit of the monetary objectives and related reserve paths during the period before the next meeting is likely to be associated with a federal funds rate 12] to 8 ____ persistently outside a range of [DEL: TO ____ percent. Selected Interest Rates October 1, 1984 Percent 19113--1iah Low 10.21 8.42 9.49 7.63 9.64 7.72 9.79 7.82 9.93 8.15 9.85 8.01 8.79 7.11 11.50 10.50 11.57 9.40 1984--High LoA 11.77 9.41 10.65 8.64 10.76 8.94 11.09 9.01 11.71 9.35 11.35 9.16 10.72 8.70 13.00 11.00 13.44 10.87 1983--Aug. Sept. 9.56 9.45 9.34 9.00 9.51 9.15 9.60 9.27 9.77 9.39 9.41 9.19 8.69 8.77 10.89 11.00 9.48 9.34 9.47 8.64 8.76 9.00 8.83 8.93 9.17 8.98 9.08 9.24 9.18 9.36 9.69 9.03 9.10 9.56 8.67 8.55 8.69 9.56 9.59 9.91 8.90 9.09 9.52 9.02 9.18 9.66 9.07 9.20 9.67 9.42 9.54 10.08 9.23 9.35 9.81 Apr. May June 10.29 10.32 11.06 9.69 9.83 9.87 9.84 10.31 10.51 9.95 10.57 10.93 10.41 11.11 11.34 July 11.23 11.64 10.12 10.47 10.52 10.61 10.89 10.71 10.91 11.25 11.21 11.19 9.87 10.03 10.06 10.20 10.45 10.48 10.52 10.56 11.50 10.34 10.49 10.36 10.37 10.58 5 12 19 26 11.68 11.52 11.46 10.73 21 27 28 10.89 11.00 11.04p Oct. Nov. Dec. 1984-Jan. Peb. Mar. Aug. 984--July August 4 11 18 25 I 8 15 22 29 September Daily--Sept. 11.53 11.59 11.63 11.77 12.11 10.32 13.42 11.64 10.56 9.21 13.89 12.55 13.50 11.50 12.50 10.49 13.84 11.62 13.81 11.69 15.30 12.83 11.44 9.86 14.68 13.19 14.00 12.50 13.70 11.25 11.30 11.07 11.85 11.65 11.82 11.63 13.16 12.98 10.25 10.20 13.81 13.73 13.38 13.00 12.16 11I.8 11.00 11.00 11.00 10.87 10.96 11.13 11.54 11.69 11.83 11.58 11.75 11.88 12.89 13.14 13.29 10.14 10.22 10.40 13.54 13.44 13.42 13.00 12.50 12.50 11.40 11.40 11.56 8.80 6.72 8.91 11.00 11.00 11.21 10.93 11.05 11.59 11.67 11.64 12.32 11.75 11.95 12.38 12.99 13.05 13.63 10.03 10.00 10.37 13.37 13.23 13.39 12.50 12.50 12.70 11.45 11.38 11.91 10.17 10.38 10.82 9.29 9.52 9.92 11.93 12.39 12.60 11.98 12.75 13.18 12.63 13.41 13.56 12.65 13.43 13.44 13.96 14.79 15.00 10.26 10.88 11.07 13.65 13.94 14.42 13.00 13.94 14.00 12.30 12.83 13.45 11.56 11.47 11.06 11.19 10.30 10.58 13.00 13.00 13.08 13.36 12.50 12.72 13.21 12.54 14.93 14.12 10.84 10.40 14.67 14.47 14.00 13.70 13.59 13.27 11.08 10.97 10.91 10.85 11.71 11.69 11.54 11.53 11.11 11.15 11.05 11.02 10.05 10.21 10.33 10.39 13.00 13.00 13.00 13.00 13.44 13.29 13.10 12.99 13.83 13.62 13.35 13.27 13.59 13.40 13.15 13.17 15.30 14.88 14.85 14.54 11.11 10.88 10.75 10.62 14.66 14.00 14.00 13.70 13.60 14.66 14.67 14.00 13.55 14.00 13.50 10.60 10.63 10.53 10.54 10.68 10.73 10.72 10.64 10.65 10.78 11.38 11.41 11.43 11.51 11.50 10.99 11.06 11.15 11.26 11.27 10.44 10.55 10.55 10.62 10.60 13.00 13.00 13.00 13.00 13.00 12.72 12.48 12.44 12.45 12.54 12.92 12.69 12.69 12.67 12.76 12.89 12.65 12.51 12.43 12.53 14.10 14.08 14.16 14.13r 14.15 10.39 10.29 10.47 10.38 10.45 14.68 14.54 14.39 14.36 14.38 14.00 14.00 13.50 13.50 13.50 13.35 13.25 13.25 13.20 13.30 10.65 10.47 10.33 10.26 10.76 10.60 10.41 10.34 10.85 10.66 10.42 10.38 11.57 11.49 11.32 11.09 11.35 11.31 11.18 10.66 13.00 10.68 10.72 13.00 13.00 10.86 10.51 13.00 12.65 12.46 12.21 12.26 12.86 12.64 12.37 12.45 12.56 12.39 12.17 12.24 14.01 13.70 13.76 13.84 10.56 10.47 10.47 10.65 14.42 14.43 14.29 14.26 13.50 13.50 13.50 13.50 13.45r 13.25 13.00 12.90 10.25 10.16 10.22 10.34 10.26 10.34 10.40 10.30 10.38 11.12 10.89 10.94 10.88 10.68 10.74 12,21 12.13 12.26p 12.45 12.31 2 46 1 . p 12.22 12.12 12.39p 13.00 - NOTE: Weekly data lor columns 1 through 11 re statement week avsrages Data In column 7 ae taken from Donoghue' Money Fund Report. Columns 12 and 13 are 1 day quoits lor Friday and Thursday. respectively. followmg the and ol the statement week Column 131s the Bond Buyer revenue ndex Column 14 is averaOg of contract Inlterest tes on new commitments tor conventional frst nmortgages with 80 plrcenl Iloano-vrilu 12.75 12.75 12.14 10.18 14.68 --- ratioes at a smpl of savings and loa associallons on the Friday following the end of the stalement week. Afr Noveer 30. 1893. columnit refers only to VA-guaranleed loans Column 16 is the initial gross yiem postedby FNMA. on the Friday following the end of the stalmnent weeki In ils purchuasprogram or adjutebl rale home mortgage having fate nd payment adjustments once a year. FRi367|444 Security Dealer Positions October 1, 1984 Millions of dollars P.erod eriod t Total Treasury bills Cash Positionso Treasury coupon under over year federal privte Tresury 1 year agency short-term bills 14 -95 1,516 -3,270 -907 -8.001 15,566* 11,263 8,272 -13,048 22 327* 3,368 -933 -7,223 -10.622 8,093 9,205 10,361 13,138 -1,861 -7,309 -3 -2 -2,706 -2,613 -3,634 -5,018 -5,899 -5.090 3,390 325 -831 10,255 9,451 11,568 14,242 15,302 15,449 -9,132 -7,993 -5,549 -12 -2 -2 -1,667 -1,022 669 -5,909 -5,445 -7,354 -6,798 -6,331 -5,596 1,083 949 811 677 -1,541 -2,626 11,398 12,532 16,151 12.788 13.345 12,764 -10,846 -8.784 -1,027 -15 -38 -10 -116 23 1,042 -7,474 -8,192 -9,073* -5,829 2,929 -7,093 -2.628 -32 -291 -596 -1,643 -1,754 -3.248 16,649 16,849 15.996 13,065 12,525 14.457 -2,136 5.511 2,208 -13 -10 -21 476 351 1,453 -9,422 -9,676 -9.937 -5,462 -2,236 -1,191 12,523 11.549 -2,362 4,546 -604 -89 -3,245 -1,186 16,040 16,098 14,751 15,558 -2,516 -7.293 -89 -240 2,797 2,527 -9.650 -9.030 -2,598 -9,300 10,982 11,150 12,467 13,537 -5,310 -4,371 -2,912 -223 -5,533 -2,979 -3,560 -3,849 15,961 16,889 16,230 15,190 14,834 15,208 15,124 13.933 651 -2.333 -2.586 -3,393 -14 -10 -96 -144 3,127 2,314 2,532 3,041 -10,485 -10.622 -9,756 -8.617 -1,212 -2,275 -1,961 -147 -174 -225 -264 -327 3,368 2,875 2,051 1,910 3,060 -9,071 -9.858 -8,407 -8,483 -9,265 -5,454 -8.190 -9,337 -11,273 -209* -202* -77* -75* 2,557* 2,173* 2,397* 2,179* -9,334* -9.333* -7,875* -7,480* -13,295* -14,570* -9,193* -5,442* 20,858 -296 13.273 -3.461 1.579 -687 8,778 -3,148 12,088 4,013 17,005 8,839 1984--Hiigh Low 19,038 5,047 6,765 -12.140 1,296 -1,038 2,477 -5,533 17,495 11,086 1983--Aug. Sept. 13,669 16,971 5.929 8,011 748 223 2.639 6,344 Oct. Nov. Dec. 14,672 15,981 18,172 9,694 10.762 8.653 609 934 1.165 1984--Jan. Feb. Mar. 12,472 9,275 15,933 10.815 9,658 4.619 Apr. May June 14,412 14,177 16,493 July Aug. 4 11 18 25 Aug. 1 8 15 Sept. ** 29 14,424 15,163 12,583 7,612 10,062 2,696 4,487 5,258 5,282 5 12 19 26 12,781* 11,255* 6,566* 21,963* 8,459* 9,664* 1,010* 9,921* 21 pitwo Ihort4 1,654 -11,307 1983--1Righ Low 1984--July Forward and Future PoelUton TrMiu coupons under over federal 1 ye 1 year Iaency -1,038 -670 -547 -615 -275 18 -101 -252 -42 173* 492* -1,337* 81* -1,331 -2,758 153 -1,423 -948 15,791 17,338 15,841 14,497 16,423 14,673 15,526 15,466 15,566 15,503 -3,131 -2.760 -8.492 -9,862 -8.350 -209* -227* -1,144* 3,054* 16,626* 16,030* 13,879* 12,148* 16,682* 17,345* 18,760* 17,443* -8.669* -10,117* -9,854* -9,866* NOTE: Government securities dealer cash positions consist of securities already delivered, comitmnents to buy (ell) securities on an outright basis for Immediate delivery (5 business days or less), and certain "when-Issued" securities for delayed delivery (more than 5 business days). Futures end forward positions include all other commitments Involving delayed delivery; futures contracts are arranged on organized exchanges. 1. Cash plus forward plus futures positions In Treasury, federal agency, and private short-term securities. 2. Adjusted for reverses to maturity and related transactions. * Strictly confidential. ** Irt. than $50U.000.00. -4,411 -9,564 5 11,273* -8,677 -6,239 -1,788 -7.739 STRICTLY CONFIDENTIAL (FR) CLASS II-FOMC Net Changes in System Holdings of Securities 1 Millions of dollars, not seasonally adjusted Treasury bills net change Period Treasury coupons net purchases 11-year 1-year 15 1.5 510 &10 3 over over 10 10 October 1, 1984 Federal agencies net purchases total total 1-year 510 5-10 1-5 4 over 10 total Net change_ outright h tota' s Net RPs 1979 1980 1981 6,243 -3,052 5,337 603 912 294 3,456 2,138 1,702 523 703 393 454 811 379 5,035 4,564 2,768 131 217 133 317 298 360 5 29 - -24 -- 454 668 494 10,290 2,035 8,491 -2,597 2,462 684 1982 1983 5,698 13,068 312 484 1,794 1,896 388 890 307 383 2,803 3,653 -- -- --- -- - 8,312 16,342 1,461 -5,445 5,116 4,617 4,738 173 156 155 595 481 820 326 215 349 108 124 151 1,203 975 1,474 --- ---- --- -- -- 6,208 5,439 6,120 -793 9,412 -10,739 -1,168 491 -198 808 -300 200 -277 -300 1,484 --- -- --- -1,555 1,918 -286 70 - - 3,149 6,807 1983--QTR. 11 III IV 1984--QTR. I II 1984--Mar. Apr. May June 3,159 - 3,283 198 -3,593 - 801 - - --- - -- --- - - - -- 808 200 277 -- - - -- - 4,764 7,286 -- -- -- - - - -- -- -- -3,633 -3,643 - -- -- - - -- - - - 1,484 - 786 -3,572 July -1,497 -- - -- -- -- - -- -1,499 -656 Aug. -2,104 - - -- -- - -- - - -- -- -2,110 4,951 - - - - - -- -- -- -- -- -- - - -- -- -- -- -- -- -- -- -- -- -- --- --- -1 -- -- -- -- - - - -- -- -152 -- JULY AUG. SEPT. EVVRI.--Snt. 4 11 -- 18 -- - -- 25 -152 - - - - - -- - -- - -- - - - -- - - - - - -- - - -- -- - - - -- -- - -- - -- - - -- - -- -- -- 1 -1,346 8 -1,194 15 -272 22 -125 29 -700 5 12 1,950 19 26 27 -- -- - - - - -- -- - - - 328 -- - -- - - 569 600 -- -- 600 70.1 18.4 589 - 34.0 14.8 19.4 86.5 904 1,978 8 -5,477 -- -1,351 -- -1,194 2,530 502 -- -- -272 -5,699 - -- -- -125 5,828 - -- -- -700 -638 -- -- -- 1,950 114 - - -- -- 588 2,228 - - -- -- -- 328 2,915 -- - - -- -- 1,169 -4.573 2 ._ 1 - a 1A5 -70 1 5 In addition to the net purchases of securities, also reflects changes in System holdings of bankers' 1 Change from end-of-period to end of period acceptances, direct Treasury borrowing from the System and redemptions (-I of agency and Trea2 Outright transactions in market and with foreign accounts, and redemptions I- in bill auctions. sury coupon issues. 3 Outlight transactions in market and with foreign accounts, and short term notes acquired in ex6 Includes changes in RPs (+), matched sale-purchase transactions I-), and matched purchase-sale change for maturing bills. Excludes redemptions, maturty shifts, rollovers of maturing coupon transactions (+). issues, and direct Treasury borrowing from the System. 4 Outright transactions in market and with foreign accounts only. Excludes redemptions and maturity shifts. FR 1368 (781)
@FedFRASER