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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) October 16, 1970. MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Prepared for the Federal Open Market Committee By the Staff BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM October 16, 1970. CONFIDENTIAL (FR) MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) Interest rates on short-term credit instruments and on Treasury notes and bonds have moved lower since the September 15 meeting of the Committee, while yields on corporate and municipal bonds have changed little on balance under the pressure of a very heavy volume of The latest yield on the 3-month Treasury bill was around new issues. 5.90 per cent, compared with 6.30 per cent at the time of the meeting. Other short-term rates, which tend to lag behind bill rates, have drifted steadily lower, as banks have continued to reduce their borrowings in the commercial paper market and the GM strike has lessened demands on the finance paper market. (2) The Federal funds rate has fluctuated widely since the last meeting. Immediately following the meeting, an unexpected bulge in reserve availability pushed the Federal funds rate into the 5-3/4--6 per cent range and helped give rise to market expectations that the discount rate was about to be reduced. Most recently, however, trading has taken place generally in the 6-1/8--6-1/2 per cent range specified in the last Blue Book. With large and unexpected shifts in market factors affecting reserves over the last four weeks, net reserves have fluctuated in a -$500 million to +$25 million range. At the same time, weekly average -2member bank borrowings have ranged from around $400 million to about $660 million. (3) The outstanding level of the money supply in September turned out to be higher than was estimated at the time of the last meeting mainly as a result of higher-than-expected weekly money supply figures in the first half of the month. At the moment, the third quarter rate of expansion in money is 5 per cent corrected for bias (and 5.3 per cent on a published basis). The adjusted bank credit proxy is estimated to have grown from August to September and also over the third quarter as a whole at rates in line with previous Blue Book indications. Banks continued to run off commercial paper in anticipation of the new reserve requirement, with the $2.0 billion September decline (September 2-September 30) bringing the total run-off from the August 17 reserve requirement announcement through September to /$3.1 billion. Bank liabilities to their foreign branches dropped by about $600 million over the four weeks ending September 30 as the widening spread between Euro-dollars and domestic rates caused banks to reduce their use of foreign funds, and, in some instances, to allow these deposits to fall below the reserve free base. These reductions in September in non- deposit sources of funds were only partially offset by a $1.5 billion increase in CD's over the month. But growth of other time and savings deposits was very strong in September--at a 14 per cent average annual rate, close to that in the two previous months taken together. (4) The following table shows recent developments in the money supply and the adjusted credit proxy. Recent Paths of Key Monetary Aggregates (Seasonally adjusted, billions of dollars) Adjusted Credit Proxy Indicated at . Last Meeting- Actual Results Money Supply Indicated at , Last Meeting- Actual Results 1970 Month August 322.0 321.9 206.2 (210.6)2/ 206.0 (210.5)2/ September 324.6 324.5 205.9 (209.9) 206.3 (210.8) 9 323.7 324.3 204.2 (208.2) 205.8 (210.2) 16 323.5 324. 9 205.9 (209.9) 207.1 (211.6) 23 325.4 324.0 205.9 (209.9) 205.0 (209.6) 30 325.7 323.7 207.5 (211.5) 206.4 (210.9) 7 326.2 325.3 206.8 (210.8) 207.0 (211.5) 326.1 324.4 206.9 (210.9) 205.7 (210.2) Week ending September October 14 e / % Annual Rates of Change September over August Third Quarterl/ (Sept. over June) e/ 1/ 9.5 17.5 9.7 17.2 % Annual Rates of Change - 1.5 (- 4.0) 1.7 ( 1.7) 4.5 ( 5.0) 5.3 ( 5.0) partly estimates. Alternative A path of previous Blue Book. 2/ Figures in parentheses reflect estimated money supply levels and per cent annual rates of growth after correction for bias. 3/ The third quarter annual rates of increase for the money supply measured on a quarterly average over quarterly average basis were 3.7 per cent on a published basis and 4.6 per cent corrected for bias. (5) The following table summarizes seasonally adjusted annual rates of change in major financial aggregates for selected periods: Past Year (Sept. over First Half of 1970 (June over Sept.) December) Total Reserves 6.7 - 0.2 Nonborrowed Reserves 8.8 1.9 24.3 Money Supply 5.9 4.0 5.3 (5.2)1/ Large CD's (dollar amount)2/ (5.5)1/ Third Quarter (Sept. over June) 19.1 (5.0)1/ $9.5 $ 1.6 $ 8.7 7.3 5.7 15.3 5.0 4.5 7.8 3.3 24.1 6.7 3.5 17.2 Total loans and investments of all commercial banks 6.3 1.9 16.3 L&I plus loans sold outriiht to affiliates and foreign braaches 6.6 3.9 13.2 Nonbank commercial paper 8.1 14.2 Other time and savings deposits Savings account at nonbank thrift institutions 9.4 Member bank deposits and related sources of funds Total member bank deposits (Bank credit proxy) Proxy plus Euro-dollars and other nondeposit sources Commercial bank credit (Month end) NOTE: -17.7 1/ All items are averages of daily figures (with "other nondeposit sources" based on an average for the month of Wednesday data), except the commercial bank credit series, which are based on total outstanding on last Wednesday of month, and the nonbank commercial paper and thrift institutions series, which are end-of-month data. All additions to the total member bank deposit series are seasonally unadjusted numbers, since data have not been available for a long enough time to make seasonal adjustments. Figures in parentheses reflect estimated percentage annual rates of growth 2/ Actual dollar change over the period in billions. in money supply after correction of levels for bias. Prospective developments (6) If the Committee wishes to continue the policy stance adopted at the previous meeting, the language incorporated in the second paragraph of the directive at the last meeting could be continued, with an amendment to take account of the Treasury financing schedule, as follows: "To implement this policy, the Committee seeks to promote some easing of conditions in credit markets and moderate growth in money and attendant bank credit expansion over the months ahead. System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining bank reserves and money market conditions consistent with that objective, TAKING ACCOUNT OF THE FORTHCOMING TREASURY FINANCINGS." (7) "Moderate growth in money and attendant bank credit expansion over the months ahead" could be interpreted to encompass a 5 per cent annual rate of growth for the money stock over the fourth quarter. It would appear, at this point, that such a money growth would be accompanied by around a 9 per cent rate of expansion in the adjusted bank credit proxy. Monthly paths for money and bank credit consistent with these growth rates are shown in the table below, along with the associated supply of bank reserves needed to sustain bank deposits. -6Adjusted Credit Proxy Money Supplyl/ Month (210.8) 206.3 Levels Total Reserves Annual Rate of change Levels (1.7) 1.7 324.5 9.7 29.2 (211.6) (proj.) 207.1 (4.5) 4.5 326.4 7.0 29.1 Sept. Oct. Levels Annual Rate of change Annual Rate of change 31.0 -16.5 Nov. " (212.7) 208.2 (6.0) 6.0 329.4 11.0 29.9 33.5 Dec. " (213.4) (4.0) 331.6 8 .5 30.0 5.5 Quarter 4th (Dec. over 5.0 Sept.) 9.0 7.5 1/ For the money supply, the figures in parenthesis represent the unpublished figures corrected for bias. The quarter-over-quarter money supply growth for the fourth quarter would be 5 per cent also. (8) To sustain a 5 per cent growth rate in the money supply over the fourth quarter may entail some declines in interest rates from current levels between now and year-end. The economy is expected to be generally sluggish in the current quarter, partly because of the auto strike and its ramifications, with a consequent slackening in the transactions needs for cash. Business loan demands at banks are likely to be sluggish, if the rate of inventory accumulation declines as expected and as corporations continue to finance heavily in capital markets partly for debt structure reasons. Under these circumstances, injections of bank reserves through open market operations to achieve the desired money growth are likely to be reflected, among other things, in relatively sizable bank purchases of U.S. Treasury and other market securities. rates may edge downwards on balance. As a result, interest (9) The actual movement of short- and long-term rates will depend in large part on bank liquidity preferences, Treasury financing strategy, the volume of new corporate and municipal issues, bank loan demands, and shifts in market expectations. Banks are still likely to have a general preference for more liquid, short-term instruments. However, there is some evidence that more banks are beginning to make longer-term investments in the municipal market; these banks have already restored some liquidity and may be attracted by wider spreads of longterm over short-term rates. Moreover, the drop in short-term market rates has come to make both large CD's and other time deposits be a more permanent source of funds. seem to Such considerations may encourage banks to be more willing buyers of a long option in the Treasury's forthcoming mid-November financing, to be announced on October 22, with books open in the last week of October. (10) While it is too early at this writing to be certain about the form of the forthcoming Treasury financing, it would appear that it may entail a rights offering of two note issues, plus a cash offering to cover attrition and whatever additional cash may be desired. portion would have to be settled on November 16. The rights The cash portion may be settled on that date, or possibly, if the attrition is low enough, at a later time; the cash portion could take the form of a bill auction or perhaps an auction of a short note. In any event, the Treasury will have to raise some additional cash by early December. During the fourth quarter, the Treasury is likely to have to raise about $7 billion of net new cash mainly in the bill area, including additions to the weekly and monthly bill auctions and the $2-1/2 billion tax bill financing currently in the market. This may cushion further declines in short- term rates. (11) A continuing large calendar of corporate and municipal issues will tend to inhibit declines in long-term rates. Nevertheless, investors have shown a desire to lock up high long-term yields--as indicated by the market absorption of a huge volume of long-term securities with little upward yield pressure. Thus, the absorption capacity of the market should tend to offset upward yield pressure from a continued very large supply of new offerings. And long-term market rates could work lower if weak loan demand leads to liberalization of bank lending terms and/or greater bank interest in longer-term securities. (12) Between now and the next meeting, day-to-day operating targets for money market conditions designed to lead to injection of sufficient bank reserves to promote the desired growth path for other monetary aggregates and lead to some easing of credit market conditions might include a Federal funds rate in a 6--6-1/2 per cent range, member bank borrowings averaging around $350-$450 million per week, and net borrowed reserves in a wide 0-$500 million range. The 3-month bill rate might be expected to be in a 5-3/4--6-1/8 per cent range. (13) With the bill rate at this level, banks will be in a position to obtain large CD's virtually throughout the whole maturity spectrum, although investor interest in longer-term CD's thus far seems -9quite modest, Also banks may not be as aggressive as in recent months in the CD area, and offering rates on short CD's have dropped while a few banks have even reduced offering rates on 3- and 6-month CD's below ceiling rates. Thus, the rate of increase in time deposits may still be at about a 22 per cent annual rate in the fourth quarter, although this is about 10 percentage points less rapid than in the third quarter. Some of the new bank deposit funds will be used to repay nondeposit sources, as banks have no further incentive to maintain a high level of borrowing through the round-about channel of the commercial paper market and as they react to the unfavorable yield spread of Euro-dollars over CD rates. It is not clear to what extent banks will take account of yield relationships in their behavior toward Euro-dollar borrowings, but we have estimated all outstanding non-deposit funds will drop by about$150 million per week through mid-November, and by lesser amounts thereafter, thus contributing to the slower expected growth rate in the adjusted credit proxy for the fourth quarter as compared with the third. (14) 7 In October the adjusted credit proxy may rise at about a per cent annual rate, down about 3 percentage points from September, as shown in the table in paragraph (7). On the other hand, money supply growth may rebound to around a 4-1/2 per cent annual rate from the 1-1/2 per cent growth rate of September. Both the credit proxy and the money supply are expected to rise a little more rapidly in November, as the Treasury financing stimulates some additional credit and money flows. -10Weekly paths for the monetary aggregates through mid-November that seem consistant with these developments are shown below. Money Supply1/ Credit Proxy adjusted Total Reserves Week ending October November 3/ 14t/ 205.7 (210.2) 324.4 28.4 21 207.9 (212.4) 325.7 29.5 28 207.7 (212.2) 329.1 29.5 4 206.9 (211.4) 329. 1 29.5 11 208.1 (212.6) 329.6 29.9 18 208.6 (213.1) 329.4 30.0 Estimated. 1/ For the money supply, corrected for bias. the figures in parenthesis represent the figures SELECTED MONETARY AGGREGATES SEASONALLY ADJUSTED MONEY AND GOVERNMENT DEPOSITS BANK CREDIT PROXY BILLIONS OF DOLLARS BILLIONS OF DOLLARS WEEKLY AVERAGES I -210 TOTAL MONEY SUPPLY -200 PRIVATE DEMAND DEPOSITS -1280 I I II II GOVT DEPOSITS MEMBER BANKS I I I 1969 I I 1970 1969 1970 1969 1970 SELECTED MONETARY AGGREGATES - Cont. COMMERCIAL BANK TIME DEPOSITS BILLIONS OF DOLLARS MEMBER BANK RESERVES WEEKLY AVERAGES BIL TIME AND SAVINGS 1969 1970 1969 1970 MONEY MARKET CONDITIONS AND INTEREST RATES INTEREST RATES Short-term 1969 1970 INTEREST RATES Long-term Table 1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Member Period Free reserves Excess reserves Total Banks Borrowin Re s e r v e C i t Other Major banks 8 N.Y. Outside N.Y. s Country Monthly (reserves weeks ending in): 1969--January February March April May June July August 477 580 635 - 844 -1,116 -1,078 -1,045 - 997 359 256 202 187 243 277 266 214 836 836 837 1,031 1,359 1,355 1,311 1,211 131 62 58 85 123 57 89 81 302 255 233 411 346 459 250 253 149 215 254 260 397 288 364 256 253 304 293 275 493 550 608 621 September - 744 282 1,026 83 236 222 485 October - 995 195 1,190 106 327 293 464 November December - 975 849 238 278 1,213 1,127 120 268 387 310 250 220 456 329 - 759 169 928 148 287 232 261 February March April May - 916 751 687 765 210 129 178 159 1,126 880 865 924 106 90 227 165 317 225 331 241 289 287 119 228 414 278 188 290 June - 736 171 907 140 289 217 261 July -1,134 183 1,317 218 460 348 291 August - 706 175 881 143 278 273 187 September p - 379 230 609 101 117 272 119 I 8 15 22 29 - 610 317 915 811 783 339 179 102 158 111 949 496 1,017 969 894 232 -322 517 63 264 269 509 252 361 161 49 47 81 259 292 178 139 119 211 May 6 13 20 27 - 424 782 965 889 350 28 214 44 774 810 1,179 933 93 150 332 86 248 254 310 150 220 202 243 247 213 204 7q4 450 June 3 10 -1,029 - 721 195 136 1,224 857 269 195 354 238 262 169 339 255 17 24 - 390 799 268 88 658 887 -97 251 313 188 248 219 229 July 1 8 15 22 29 - 718 -1,219 -1,451 -1,201 -1,078 273 75 230 185 153 991 1,294 1,681 1,386 1,231 93 360 467 139 29 260 412 569 531 528 304 283 371 395 388 333 240 274 321 286 Aug. 5 12 19 26 - 822 894 589 522 188 280 92 138 1,010 1,174 681 660 114 382 21 56 362 362 243 144 303 300 229 262 231 130 188 198 Sept. 2 9 16 23 30 p - 482 348 144 507 413 178 415 356 -47 250 660 763 500 460 663 79 160 89 75 103 181 143 93 77 93 221 343 224 259 312 179 117 94 49 155 Oct. 7 p 14 p - 27 421 423 32 396 453 -21 4 21 303 338 89 73 1970--January 1970--.Apr. p - Preliminary. Table 2 (In Reserve A AGGREGATE RESERVES AND MONETARY VARIABLES Retrospective Changes, Seasonally Adjusted per cent, annual rates based on monthly averages of daily figures) ere a tes Variables_ ___Monetary S up p 1 y Private Demand Currencypi M o n e y Period Total Reserves Nonborrowed Reserves Required Reserves MTota eTotal Deposits Annually 1968 1969 + 7.8 - Semi-annually 1st Half 1969 2nd Half 1969 1st Half 1970 Quarterly 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1969 1969 1969 1969 1st Quarter 1970 2nd Quarter 1970 3rd Quarter 1970 Monthly 1969--January February March April May June July August September October November December 1970--January February March April May June July August September p p - Preliminary. 1.6 + 0.7 - 3.9 - 0.2 + 0.1 + 1.2 - 9.3 + 1.4 - 2.9 + 2.6 +19.1 + 7.5 - 3.4 - 3.8 - 8.5 +19.9 - 7.6 -22.5 - 5.6 -11.7 + 9.7 + 6.3 + 3.1 -12.0 +21.3 -13.9 + 0.5 + 6.0 +23.3 +31.0 Deposits C Commercial bank time deposits adjusted Credit Proxy + Euro-dollars + other nondep. Addendum: Nonbank commercial sources of funds paper + 6.0 - 3.0 + 7.9 - 1.2 + 9.0 - 4.0 + 7.2 + 2.5 + 7.4 + 5.8 + 7.1 + 1.5 +11.5 - 5.3 n.a. n.a. - 3.7 - 2.4 + 1.9 + 1.0 -3.3 - 3.5 - 4.6 + 3.3 + 4.3 + 0.6 + 4.0 + 6.5 + 4.9 + 8.3 + 3.7 - 0.6 + 2.9 - 4.0 - 6.7 + 7.1 n.a. - 1.2 + 3.5 +27.6 +14.0 - + + + - 4.8 - 2.2 + 4.1 + 4.5 - 9.4 + 0.1 + 3.2 + 4.2 - 1.3 - 5.1 - 3.0 -13.3 + 1.2 n.a. - 4.3 + 2.0 +31.0 +22.4 + 2.9 + 2.8 + 5.4 + 0.4 +13.8 +31.6 + 7.1 + 1.6 -10.0 - 4.7 - 0.6 2.8 4.7 4.8 0.1 1.7 0.2 8.6 2.0 - 0.4 + 4.1 +24.3 - 2.5 + 2.6 +18.9 + 0.6 + 6.0 + 3.8 +24.1 + 5.3 + 4.5 -4.9 - 8.0 -12.0 + 6.0 - 8.2 -19.3 - 2.8 + 7.7 -17.9 + 5.5 +12.1 +12.7 - 3.0 - 4.4 - 5.0 +14.3 - 8.6 -17.6 - 7.6 - 0.8 -10.4 + 9.3 + 6.9 - 3.2 - 1.2 -10.1 + 4.9 - 1.2 -10.2 -18.9 -11.3 + 1.7 - 9.2 + 9.7 + + + + + + + 7.2 -15.6 + 7.5 +25.4 -19.0 + 6.2 -16.1 +48.8 +39.8 + 5.0 -12.9 + 0.6 +22.2 -15.1 + 0.9 + 7.9 +22.0 +26.0 - 4.2 - 8.0 +14.0 +16.8 - 4.5 + 5.8 +22.7 +29.2 +19.0 + 9.0 -10.7 +13.2 +10.7 + 3.5 - 1.8 + 4.1 +10.0 + 1.7 + 4.2 6.2 3.1 3.1 7.9 1.2 4.2 + 1.8 - 1.8 + + + + + + + + 2.8 8.3 8.2 2.7 8.1 8.1 5.4 8.0 - 2.6 + 0.6 + 1.2 + 1.8 +10.6 + 7.9 + 5.2 + 7.8 + 7.8 + 7.7 +15.3 + 5.0 + 7.5 + 2.5 + 2.5 + 0.8 +11.0 - 1.6 + 3.1 + 1.6 - 4.7 - 0.8 - 0.8 - 1.6 + 2.3 +10.1 -15.5 +14.1 +10.9 - 2.3 + 2.3 +12.3 + 1.5 - 3.6 - 5.4 -18.5 -19.4 - 2.5 - 3.7 - 0.6 + 4.3 -12.4 - 0.6 +14.4 +22.2 +10.3 + 8.4 +35.2 +28.4 +28.9 + 0.5 + 6.5 +17.2 + - 7.0 7.5 1.6 7.9 +13.1 + 0.8 - 3.5 - 5.5 +10.7 +13.7 - 1.2 + 7.0 +18.1 +23.2 + 9.7 +13.2 +14.3 -17.7 +26.4 +23.8 +40.7 +20.0 +11.7 +34.2 + 3.6 +35.7 + 0.4 +71.3 +10.7 -37.3 -88.4 -14.1 +53.0 Table 3 AGGREGATE RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based on monthly averages of daily figures) Money Supply Monthl: 1969--January February March April May June July August September October November December 1970--January February March April May June July August September p 1/ 2/ 3/ Commercal bank time deposits adjusted 4/ Member Bank Deposits Supported by Required Reserves Time Private U.S. Gov't. demand demand e i bank memTber reer reere reserve reservesm a deposits ps depots s sdeposits deposits 1/ (In millions of dollars) ( In b i ll i on s o f 28,139 28,060 27,972 27,775 28,235 28,056 27,530 27,401 27,402 27, 354 27,783 27,928 27,318 27,206 27,024 26,754 26,888 26,705 26,275 26,214 26,383 26, 210 26,538 26,806 27,902 27,832 27,729 27,614 27,942 27,742 27,334 27,161 27,144 27,129 27,548 27,707 297.0 296.7 294.2 295.4 295.1 292.6 288.0 285.3 285.7 283.5 285.8 285.8 163.2 161.0 160.5 160.1 159.3 158.1 155.1 152.5 152.1 151.5 151.1 151.5 128.4 129.1 128.9 129.4 130.0 130.5 130.5 129.9 129.2 128.9 129.1 129.4 5.4 6.7 4.8 5.9 5.9 4.0 2.4 2.9 4.4 3.1 5.6 4.9 195.8 196.3 196.8 198.1 198.3 199.0 199.3 199.0 L99.0 199.1 199.3. 199.6 43.5 43.8 44.1 44.2 44.5 44.8 45.0 45.3 45.2 45.6 45.9 45.9 152.3 152.5 152.6 154.0 153.8 154.2 154.4 153.8 153.7 153.6 153.4 153.7 203.2 202.4 202.3 202.3 201.7 200.8 197.7 194.5 194.1 193.5 193.4 194.1 28,001 27,722 27,723 28,216 27,890 27,902 28,041 28,585 29,234 26,966 26,615 26,782 27,350 26,916 27,056 26,694 27,780 28,702 27,823 27,523 27,536 28,046 27,692 27,713 27,896 28,408 29,023 284.8 282.9 286.2 290.2 289.1 290.5 296.0 303.2 308.0 149.4 148.8 150.6 153.5 154.6 155.7 160.7 164.9 169.5 130.1 128.5 129.8 131.4 131.4 130.0 130.9 131.9 132.3 5.3 5.6 5.9 5.2 3.0 4.8 4.4 6.4 6.2 201.1 199.3 201.5 203.3 203.9 203.6 204.3 206.0 206.3 46.1 46.4 46.7 47.0 47.6 47.8 48.1 48.2 48.3 155.0 153.0 154.8 156.2 156.2 155.9 156.2 157.8 158.0 192.1 192.0 194.3 197.9 199.6 201.0 206.9 211.8 216.9 / SA Required Reserve Aggregates Period Total Nonborrowed Total I Currency 2/ d o 1 a r s Total Private demand deposits 3 Credit Prcxy + Euro-dollars + Addendum: other nondep. Nonbank commercial sources of pper paper 307.5 305.7 303.8 304 302 =05.5 25.5 26.1 26.6 27.5 27.9 28.2 305.7 29.0 304.8 303.4 306.1 309.6 309.3 311.1 315.8 321.9 324.5 29.1 30.0 30.0 31.8 32.0 31.0 28.8 28.4 29.7* Private demand deposits include demand deposits of individuals, partnerships, and corporations and net interbank deposits. Includes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. Includes (1) demand deposits at all commercial banks, other than those due to 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. 4/ Excludes interbank and U.S. Government time deposits. * - Last Wednesday figure. 5/ Includes increases in required reserves due to changes in Regulations M and D of approximately $400 million since October 16. 1969. Table 4 AGGREGATE RESERVES AND MONETARY VARIABLES Seasonally Adjusted Member Bank Deposits Supported by Required Reserves Reserve Aggregates er i od reserves reserves onborrowed Required Total reserves reserves reserves reserves member bank Ti demep deposits U.S. Gov't. demand Private demand deposits deposits Money Supply I/ Total deposits 1 8 15 22 29 (In millions of dollars) 27,954 27,005 27,605 27,745 27,229 27,566 28,390 27,363 28,290 28,448 27,516 28,330 28,282 27,288 28,051 290.5 291.6 289.9 290.7 288.4 152.0 152.9 153.2 153.8 154.2 May 6 13 20 27 28,481 27,696 27,965 27,504 27,710 26,876 26,754 26,559 28,101 27,652 27,702 27,424 288.9 287.8 289.3 290.2 154.3 154.3 154.7 154.7 131.4 131.2 132.4 131.3 3.2 2.3 2.2 4.2 203.9 203.5 205.1 203.8 June 3 10 17 24 27,888 27,917 28,002 27,645 26,702 27,028 27,419 26,870 27,602 27,714 27,744 27,659 290.1 289.9 290.3 289.9 155.0 155.3 155.4 155.6 132.1 130.5 129.8 128.8 3.0 4.1 5.1 5.5 July 1 8 15 22 29 28,077 27,698 27,985 28,321 28,151 27,061 26,415 26,414 26,850 26,941 27,794 27,664 27,907 28,059 27,973 291.5 294.3 294.3 294.9 299.3 156.7 158.6 159.8 161.3 162.7 129.5 131.8 130.6 130.3 131.0 Aug. 5 12 19 26 28,052 28,684 28,612 28,689 27,052 27,610 27,916 28,064 27,879 28,440 28,510 28,502 300.6 301.4 302.4 305.5 163.7 164.1 164.6 165.7 Sept. 2 9 16 23 30 p 28,801 29,402 29,482 28,878 29,298 28,160 28,741 28,996 28,518 28,708 28,623 29,068 29,126 28,985 29,028 306.8 307.1 308.3 307.9 308.2 Oct. 7 p 14 p 28,551 28,189 28,198 27,784 28,138 28,131 310.5 309.9 1970--Apr. ( In b i 1 1 o n s 132.6 5.9 132.8 5.9 132.1 4.6 130.3 6.6 129.8 4.4 Currency Private demand 2/ deposits 3. o f d o 1 1 a r s ) 206.8 46.9 204.7 46.9 203.7 47.1 202.5 47.1 201.7 47.3 4/ funds funds paper paper 159.9 157.8 156.6 155.4 154.5 196.0 197.2 197.5 198.2 198.8 310.1 311.0 309.4 309.9 308.0 47.5 47.6 47.6 47.6 156.4 155.9 157.5 156.2 199.1 199.2 199.7 199.9 309.0 307.9 309.5 310.6 31.7 32.1 32.0 32.3 204.0 203.4 203.9 202.1 47.6 47.7 47.8 47.8 156.4 155.7 156.0 154.3 200.0 200.5 200.7 201.0 310.8 310.6 311.1 310.5 32.1 ?2.4 31.7 32.0 5.3 4.0 3.9 3.4 5.6 204.5 205.6 204.3 202.8 204.3 47.8 48.1 48.0 48.1 48.0 156.6 157.5 156.2 154.8 156.2 202.3 204.5 206.0 207.6 209.1 312.2 314.2 314.2 315,0 318.9 29.7 29.8 29.0 29.3 29.8 131.4 131.6 132.2 132.4 5.6 5.7 5.6 7.4 204.5 206.1 206.7 206.2 48.1 48.2 48.2 48.1 156.4 157.9 158.4 158.0 210.2 210.9 211.6 212.7 319.4 320.3 321.3 324.2 29.5 29.6 1 29.6 1 30.0 166.8 168.1 169.2 170.2 171.1 132.9 131.9 133.2 131.5 131.9 7.1 7.1 5.9 6.2 5.1 206.2 205.8 207.1 205.0 206.4 48.1 48.4 48.3 48.3 48.1 158.1 157.4 158.8 156.7 158.3 213.8 215.4 216.6 217.7 218.8 325.0 324.3 324.9 324.0 323.7 i 29.5 29.7 30.1 30.4 29.3 172.0 172.9 133.1 132.1 5.4 4.9 207.0 205.7 48.2 48.3 158.8 157.4 219.7 221.2 325.3 324.2 30.0 n.a. Private demand deposits include demand deposits of individuals, partnerships, and corporations and net interbank deposits. Includes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. Includes (1) demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S. Government, process of collection and Federal Reserve float; and (2) foreign demand balances at Federal Reserve Banks. 4/ Excludes interbank and U.S. Government time deposits. 5/ Weekly nonbank commercial paper are not seasonally adjusted. i.a. - Not available. 1/ 2/ 3/ Commercial Credit Proxy+ bank time Euro-dollars + Addendun:5 deposits other nondep. Nonbank commercia sources of adjusted less cash items in Table 5 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in Period Total Federal Reserve credit (Excl. Year: 1968 (12/27/67 - 12/25/68) 1969 (12/25/68 - 12/31/69) millions of dollars, based on weekly averages of daily figures) U.S. Government securities Total float) holdings Bills I/ +3,298 +5,192 +3,757 +5,539 Other ( -- ) +4,279 ( -- ) +2,143 Repurchase agreements +1,176 + 707 + 21 206 Federal Agency Securities + 3 r,7 Bankers' acceptances + 52 35 + + + 18 8 32 28 16 Weekly: 1970--Apr. May June July 1 8 + 179 - 720 15 22 29 + + 947 222 6 13 20 27 +1,047 +1,154 + + - 131 512 664 + - 397 50 221 3 10 17 24 + - b39 213 + 224 + + + 255 143 539 - 449 - 678 1 8 + 544 + 445 + 231 15 22 29 Aug. 5 12 19 26 Sept. Oct. 71) 40 -- ) + 156 -- ) 225 182 214 + - 2 72 -- ) 134 - ) 108 -- ) ) ) ) 36 202 138 138 --- ) ) -- ) 71 15 86 - 17 73 +1,181 + + 362 591 + + + + 293 266 644 209 + + 31 193 - ) -- ) - 236 358 + 222 - 165 231 343 + 189 + + 473 248 982 691 7 p 14 p - 486 II - - , 638 + 632 444 ) + - + ) 185 460 + - 145) - - + 145) - 2 9 16 23 30 p ____________________________I 1/ - 111 - 29) 42) 42 188 247 196 9 452 71) - ) - ) -- ) 133 123 250 506 196 90) 256) 346) -- ) -- ) 18 56 I Figures in parenthesis reflect reserve effect of match sale-purchase agreement. p - Preliminary. 4 ______________ 6 38 19 23 2 14 Member banks borrowings + + 514 245 Table 6 Pe d Year: 1968 (12/27/67-12/25/68) 1969 (12/25/68-12/31/69) MAJOR SOURCES AND USES OF RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) r e s e r v e s of u p p 1 y a f f e c t i F a c t o r s Other nonmember Foreign Currency Gold and Federal Reserve deposits and deposits Float Treasury outside spec. dr. credit (excl. accounts F.R. loans gold bansand rhts / float) banks and gold loans F.R. accounts serves) s e t c t on r Sc a t i (S ign +3,757 +5,539 -2,067 -3,221 -2,676 + 928 - 813 +1,309 + 241 + S67 54 Weekly: 1970--Apr. May June July Aug. Sept. Oct. 1 8 15 22 29 + 179 - 720 +- + 947 + - 222 - 17 + 6 13 20 27 +1,047 + 131 + 512 - 664 3 10 17 24 + 639 - 213 + 224 - 449 1 8 15 22 29 + 544 + 231 +1,181 - 185 460 5 12 19 26 + + + 362 591 231 - 343 2 9 16 23 30 + + 189 473 - 248 982 7 14 + 691 - 486 1/ For retrospective details, see TaLle 5. p - Pralimimary. + + + + + + + + + + 51 9A + - 869 898 = Change in total = Bank use of reserves Re d Exces Required reserve reserves reserves r +1,508 +1,448 +1,563 +1,340 + 55 108