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(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