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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 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. 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September 30, 1983 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) CLASS I - FOMC September 30, 1983 MONETARY POLICY ALTERNATIVES Recent developments (I) Growth of M2 remained relatively low in August and September, averaging about 5-1/2 percent at an annual rate. Its growth over the 3-month June-to-September short-run target period was about 6 percent at an annual rate, well below the FOMC's 8 percent specification. Growth in the nontrans- actions component remained low throughout the summer relative to past experience and expansion in its MI component slowed markedly in August and September. On a quarterly average basis, M2 grew at about a 7-3/4 percent annual rate in the third quarter, implying an increase in its velocity of nearly 2-3/4 percent at an annual rate, a bit more than in the second quarter. (2) In some contrast to M2, growth of M3 picked up in August and September--to about an 8 percent annual rate on average--from its relatively modest July pace, as banks increased reliance on managed CD issuance by thrifts remained heavy. liabilities while M3 over June to September mated to have grown at a 7-1/4 percent annual is esti- rate, somewhat below the 8 percent pace anticipated by the FOMC at the August meeting. (3) The deceleration of M1 from the surge in the spring extended into August and, judging from available data, growth remained low in September--with this aggregate estimated to have expanded at an annual rate of just over 3 percent over the two months. In both months, demand deposits declined, following three months of substantial increases; currency growth, on the other hand, picked up in both August and September from the reduced July rate. Although M1 grew at only a 5 percent annual rate over the June-to-September period--about 2 points lower than the FOMC's short-run KEY MONETARY POLICY AGGREGATES (Seasonally adjusted annual rates of growth) Growth to September From Longer-run From June Basel July 1983 Aug. MI 8.9 2.8 3.5 5.1 7.7 M2 6.6 6.2 4.8 5.9 7.6 M3 5.5 8.7 7.3 7.2 9.0 10.4 8.9 Sept. Money and Credit Aggregates Domestic nonfinancial debt 9.7 11.2 -0.3 -9.3 4.1 -1.8 Total reserves 6.0 -3.4 -0.5 0.7 Monetary base 5.1 6.5 7.8 6.5 (Millions of dollars) Memo: Adjustment and seasonal borrowing 875 1,055 933 -- 507 446 480 Bank credit Reserve Measures 2 Nonborrowed reserves 3 Excess reserves I. The base for MI is QII '83, for M2 is February-March 1983, and for M3 is QIV'82. 2. 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. 3. Includes special borrowing and other extended credit from the Federal Reserve. -3path--quarterly average growth was at a 9-1/4 percent rate owing to strong growth in the latter part of the preceding quarter. M1 velocity rose at about a 1-1/2 percent annual rate, more than in the second quarter but still well below the pace that had been common in earlier postwar recoveries. (4) With the general slowing of growth in the monetary aggre- gates over the past two months, all of the aggregates are rather comfortably within their longer-run ranges. As shown in the last column of the table on the preceding page, growth through September would place M1 somewhat above the midpoint, M2 in the lower portion, and M3 in the upper portion of their respective longer-run ranges. (5) The growth in borrowing by domestic nonfinancial sectors is estimated to have moderated further in August--to about a 9 percent annual rate--reflecting an appreciable reduction in funds raised by non-federal sectors. annual Credit growth at commercial banks in August, at an 11 percent rate, was somewhat faster than that of total credit, as expansion of real estate, consumer and business loans remained strong. However, data available for September suggest that growth in both loans and securities at banks has decelerated; lending to consumers appears to have slowed somewhat from the very rapid pace of the spring and summer while business lending apparently was off sharply despite continued relatively light financing in long-term markets. business in September Commercial paper issuance by nonfinancial is estimated to have remained at about the August pace. (6) Total reserves of depository institutions contracted in both August and September. The August decline reflected a reduction in the demand for excess reserves and required reserves against large time and government deposits, while in September weakness of deposits in M1 reduced required reserves. Growth of the monetary base, by contrast, -4picked up a bit in August and September as currency growth accelerated. A contraction in nonborrowed reserves plus extended credit in August was retraced only partially in September. (7) The level of borrowing assumed in constructing reserve paths has been decreased in stages from $800 to $700 and then to $650 million since the last FOMC meeting. Nonetheless, borrowing has fluctuated widely within a range of about $650 million to the $1.6 billion figure reached in the statement week of September 21. In that week and also in the week just past bank reserve management and to a degree System reserve management were complicated greatly by huge flows of funds related to the unusual and unexpectedly large build-up in Treasury cash balances at both banks and the Federal Reserve in the latter part of the month. Despite the fluctuations in borrowing, the federal funds rate averaged close to 9-1/2 percent for the first five weeks of the intermeeting period before dropping to an average of just over 9 percent in the reserve settlement week just past. week large money center banks were experiencing In that less than usual strain on reserve positions owing in part to the availability of Treasury funds, thereby contributing to lessened pressure on the federal funds market. The federal funds rate rose substantially in the past two days, reflecting usual end-of-quarter statement date positioning. (8) Short-term interest rates generally have declined about 25 to 50 basis points over the intermeeting period as evidence of slower money growth and moderation of economic activity continued to mount, and, the period, as perceptions of some easing in monetary policy spread. the long-term markets, late in In rates have come down about 10 to 20 basis points and mortgage rates have decline around one-quarter of a percentage point. -5- (9) The dollar on a weighted average basis has shown little net change since the last Committee meeting, . The dollar advanced in late August, but moved lower during September as dollar interest rates declined. Over the period, the interest differential between U.S. and key foreign shortterm interest rates narrowed slightly. Prospective developments (10) The table below shows alternative specifications for the monetary aggregates over the September-to-December period, associated federal together with funds rate ranges for the upcoming intermeeting period. All the alternatives keep the monetary aggregates within their long-run target ranges through the fourth quarter, though differing money market conditions are implied. The lower panels give the implied growth rates for each aggregate from the base period established by the Committee for its longer-term ranges to the fourth quarter. (More detailed data for the alternatives are shown in the charts and table on the following pages.) Alt. A Alt. B Alt. C 9-1/2 9-1/4 9 8-1/2 8-3/4 7 7-1/2 8-1/4 5 Longerrun range Growth from Sept. to Dec. M2 M3 MI Federal funds rate range 6 to 9-1/2 6 to 10 7 to II 8 9 7-1/2 7-3/4 9 7 Implied growth from base period to QIV 1/ 8-1/4 9-1/4 8 M2 M3 MI 1/ 7 to 10 6-1/2 to 9-1/2 5 to 9 Base for M2 is February/March 1983, for M3 is QIV 1982, and for M1 QII 1983. (II) is Money growth rates between now and year-end under alternative B would be expected to accelerate from the relatively slow pace of recent months, but even so M1 and M2 in the fourth quarter on average would be, respectively, just above and just below the midpoints of their longer-run Chart 1 CONFIDENTIAL (FR) Class II FOMC 10 3 83 Actual and Targeted M2 M2 10% 2220 LEVEL -ACTUAL *** SHORT-RUN ALTERNATIVES 2180 2140 2100 2060 2020 1980 1940 1900 1860 N D 1982 J F M A M J J 1983 A S O N D J F 1984 M Chart2 CONFIDENTIAL (FR) Class II - FOMC 10 3 83 Actual and Targeted M3 MV. Billions of dollars 2650 - ACTUAL LEVEL .... SHORT-RUN ALTERNATIVES 9'/2% 0 /.:: 2600 -- 2550 6'/,% 2500 2450 I N I I I D 1982 J F M I I A M J I J 1983 I A I S I O I N I D J F 1984 --- 2400 --- 2350 I 2300 M Chart 3 CONFIDENTIAL (FR) Actual and Targeted M1 Class II FOMC 10 3 83 Billions of dollars 550 M1 -- ACTUAL LEVEL * SHORT-RUN . ALTERNATIVES -- 530 510 490 -- I I N D 1982 I I I I J mI F I I M m A M I""'I J 1983 I J I I A S O I'~'~' I I I N D J I F 1984 M 470 Alternative Levels and Growth Rates for Key Monetary Aggregates M2 Alt. B Alt. C Alt. A M3 Alt. B Alt. C 2126.0 2136.9 2145.4 2126.0 2136.9 2145.4 2126.0 2136.9 2145.4 2510.2 2528.5 2543.9 2510.2 2528.5 2543.9 2510.2 2528.5 2543.9 2163.3 2179.9 2196.4 2162.0 2177.0 2191.0 2160.8 2174.1 2185.6 2564.5 2583.8 2602.6 2564.0 2582.5 2599.2 2563.5 2581.0 2595.8 Alt. 1983--July August September October November December A MI Alt. B Alt. C 515.5 516.7 518.2 515.5 516.7 518.2 515.5 516.7 518.2 521.4 525.1 529.9 521.0 523.8 527.3 520.6 522.6 524.7 Alt. A Growth Rates Monthly 1983--July August September October November December September-December 8.9 2.8 3.5 8.9 2.8 3.5 8.6 7.4 6.3 7.5 8.5 II.0 6.5 6.5 8.0 8.5 7.5 9.0 7.0 20.3 10.1 7.8 7.6 20.3 10.1 7.8 7.0 6.6 6.2 4.8 6.6 6.2 4.8 10.0 9.2 9.1 9.3 8.3 7.7 9.5 Growth Rates Quarterly Average 1983--Q1 Q2 Q3 20.3 10. 1 7.8 8.2 10.2 8.1 8.3 8.9 10.2 8.1 8.3 8.6 10.2 8.1 8.3 8.3 14.1 12.2 9.2 6.7 14.1 12.2 9.2 5.6 14.1 12.2 9.2 4.5 Memo: Growth Rate Base period to 1983Q4 1 I. Base period is February-March 1983 average for M2, fourth quarter 1983 average for MI. 6.9 1982 average for M3, and second quarter ranges while M3 would be in the upper portion of its range. some For M1, rebound in growth over the next three months might be expected as the restraining effect of the higher and early summer dissipates. interest rates that emerged in the spring Moreover, underlying transactions needs and income growth are likely to be fairly sizable, as indicated by the staff projection of about a 9 percent growth in nominal GNP in the fourth quarter. Even with the acceleration in monthly growth rates under alternative B, on a quarterly average basis M1 is projected to increase at only a 5-1/2 per- cent annual rate in the fourth quarter. The implied increase in velocity would not be especially large when compared to other expansion periods, but it would represent a further quickening of M1 velocity growth rates following the turn-around to small increases in the second and third quarters. (12) M2 growth is also expected to accelerate under alternative B--as well as M3 growth to a degree--as expansion in its nontransactions component picks up from the unusually sluggish pace of recent months. The anticipated decline in Treasury deposits from their very high end-ofSeptember level should be accompanied by more aggressive efforts by banks to obtain funds from the public generally. The staff does not expect the decontrol of most time deposits on October I to affect growth of the aggregates very significantly over time, given the earlier availability of ceiling-free MMDAs and longer-term time accounts. Active promotion of the new accounts does not appear to be widespread, according to results of a Reserve Bank survey, though there are reports of emerging price competition in a few key markets. The money paths allow for only small near-term effects--in the direction of restraining M1 and increasing M2 growth. (13) Federal funds under alternative B would be expected to trade in the area of 9-1/4 to 9-1/2 percent, and adjustment plus seasonal borrowing might average between $550 and $750 million. Nonborrowed and total reserves would be expected to increase at 9 and 6 percent rates, respectively. market It is difficult to foresee any significant change in interest rates more generally under this alternative. Rates could back up a little in the degree that some market participants are anticipating more of an easing in monetary policy given the recent weakness in money supply. Any increase in rates should be quite limited, though, as incoming data are expected to continue to show money growth well within the FOMC's ranges and economic activity expanding only moderately. (14) The debt of domestic nonfinancial sectors is projected to increase in the fourth quarter at about the 9 percent annual third quarter. rate of the This would bring growth for the year to around 10-1/4 per- cent, in the middle of the Committee's 8-1/2 to 11-1/2 percent monitoring range. Borrowing by the U.S. Government is expected to continue at about the pace of the third quarter as an increased deficit is financed by the Treasury drawing down its unusually large cash balance. The increase in household mortgage indebtedness should also be roughly the same in the fourth quarter as in the third, but consumer installment credit may pick up a little further with the strengthening in consumer durables purchases. Business borrowing may remain modest as a quite moderate growth in investment spending is accompanied by a further rise in profits. (15) Alternative A contemplates that the federal funds rate would need to fall to an area just above the current 8-1/2 percent -10- discount rate--with a drop in borrowing to the $200 to $400 million range-- if the Committee were to seek the more rapid growth rates in money specified by this alternative. These specifications include a 9 percent M1 and 9-1/2 percent M2 growth from September to December; such growth rates would leave MI in the upper part of its long-run range in the fourth quarter on average, and M2 close to its midpoint. (16) M3 would approach its upper limit. A substantial rally in financial markets would probably accompany an easing in bank reserve positions of the dimensions suggested in alternative A, with the 3-month bill rate falling to the neighborhood of 8-1/4 percent. A further decline in CD rates would put downward pressure on the prime rate, which might be reduced 1/2 percentage point, or perhaps somewhat more, given the relatively wide spread that already has developed between the prime and short-term market rates. conditions would probably The easing in market lead to resumption of balance sheet restructuring by businesses through increased issuance of bonds--and also of stocks as equity prices tended to improve along with the drop in bond yields. The downward pressure on mortgage rates that would be generated under this alternative would tend to limit the drop in housing starts that currently seems in store. The foreign exchange value of the dollar would decline further. (17) Whether the rate declines contemplated under alternative A, with money market rates hovering around the current discount rate, would be sustained into next year is, at this point, questionable. Assuming moderate continuing strength in the economy, interest rates might have to rise later this year or early next to begin restraining MI and M2 growth to rates within the Committee's reduced longer-run -11- ranges for 1984 tentatively set at 4 to 8 percent and 6-1/2 to 9-1/2 percent, respectively. (18) Alternative C--which calls for some tightening of money money market conditions in the period ahead--would tend to restrain M2 growth within the lower part of its longer-run range, while bringing M1 growth to its midpoint. This alternative implies M1 growth at 5 percent from September to December, about the same as in the previous three months, while M2 and M3 growth would accelerate only modestly. (19) The federal funds rate under alternative C would be expected to rise to around 10 per cent, with discount window borrowing rising to around $1 billion, as reserve provision is constrained relative to demand. Other market interest rates would move up substantially. The 3-month bill might increase to around 9-1/2 percent, and yields on bonds and mortgages would adjust upward by perhaps 50 to 75 basis points over the near term. Over a longer horizon, though, with higher interest rates damping money demand and probably slowing the economic expansion relative to staff forecasts, interest rate increases might be expected at least to be reversed and perhaps move to levels somewhat below those currently prevailing to sustain a moderate pace of economic recovery next year. -12Directive language (20) Given below is a suggested operational paragraph for the directive, with proposed deletions of language and the numerical specifications adopted at the meeting on August 23 shown in strike-through form. The Committee seeks in the short run to (maintain/INCREASE SLIGHTLY/DECREASE SLIGHTLY) the existing degree of reserve restraint. The action is expected to be associated with growth of AND ____percent 8] ____ M2 and M3 at annual rates of around [DEL: June-to] September TO DECEMBER, consistent RESPECTIVELY from [DEL: with the targets established for these aggregates for the year. Depending on evidence about the strength of economic recovery and other factors bearing on the business and inflation outlook, lesser restraint would be acceptable in the context of a significant shortfall in growth of the aggregates from current expectations, while somewhat greater restraint would be acceptable should the aggregates expand more rapidly. a deceleration in] Committee anticipates that [DEL: an annual M1 growth to AT to] June 7] ____percent from [DEL: rate of around [DEL: TO DECEMBER will be consistent with its The September FOURTH-quarter [DEL: third] objectives for the broader aggregates, and that expansion in total domestic nonfinancial debt would remain within the ranges established for the year. consultation The Chairman may call for Committee if it appears to the Manager for Domestic Opera- tions 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 persistently 6-to 10] ____ outside a range of [DEL: to ____ percent. Net Changes in System Holdings of Securities 1 October 3, 1983 Millions of dollars, not seasonally adjusted Treasury coupons net purchases Treasury Period 1983--Qtr. i within 1-year 15 5-10 870 6,243 -3,052 5,337 5,698 1,184 603 912 294 312 4,188 3,456 2,138 1,702 1.794 1,526 523 703 393 388 I II III IV -4.329 5,585 150 4.292 20 -68 71 88 50 570 891 485 81 113 194 I II -1,403 5,116 173 595 326 1978 1979 1980 1981 1982 1982--Qr. bills net2 change 1983--Mar. 3 over 10 Federal agencies net purchases total within 1-5 10 10 4 Net change o er to over over 10 10 total total 2,880 516 1,721 July Aug. 666 1,480 6 Net RPs 7,962 5,035 4,564 2,768 2,803 8,724 10.290 2,035 8.491 8,312 -1,774 -2,597 2,462 684 1,461 52 123 132 70 635 1,198 900 -4,371 6,208 1,295 5,179 -999 -5,375 7,855 -20 108 1.203 -1,425 6,208 -3,325 -793 1,063 454 811 379 307 - 1,250 1,259 Apr. May June outright holdn1-5 otal 173 595 326 108 1,203 156 481 215 124 975 -168 2,873 1,718 1,617 2,971 -3,041 -723 1,632 1,341 523 1.152 1983--July 6 13 20 27 267 193 159 83 267 1,158 159 83 3,081 -969 3,689 -4,706 Aug. 3 10 17 24 31 86 942 560 266 -289 86 942 560 266 427 736 -15 -837 -542 2,479 Sept. 7 14 21 28 -714 50 2,636 153 -714 45 2,636 153 2,879 -4,312 2,346 -133 LEVEL--Sept. 28 66.0 19.1 32.9 13.7 17.6 83.3 L ______________ A 1 Change from end-of-period to end-of-period. 2 Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions. 3 Outright transactions in market and with foreign accounts, and short-term notes acquired in exchange for maturing bills. Excludes redemptions, maturity shifts, rollovers of maturing coupon issues, and direct Treasury borrowing from the System. 4 Outright transactions in market and with foreign accounts only. Excludes redemptions and maturity shifts. 2.7 4.3 1.2 .5 8.7 158r.0 .5 .5 158.0 5 In addition to the net purchases of securities, also reflects changes1 in System holdings of bankers' acceptances, direct Treasury borrowing from the System and redemptions (-) of agency and Treasury coupon issues. 6 Includes changes in RPs (+), matched sale-purchase transactions (-), and matched purchase-sale transactions (+). FR 1388 (7/811 Selected Interest Rates October 3, 1983 Percent Short-Term federal funds Period Treasury bills secondary market 3-month 8-month 1 1 Long-Term money market mutual fund k bank prime loan 1-year CDs secondary market month 4 5 6 7 8 9 10 11 12 13 comm paper 1-month U.S. government constant maturity yields 3-year -year 3-ye corporate Aaa utility recently otfered ly municipal Bond Buyer c home mortgagee . onvenFHA/VA GNMA celling security 14 18 1 1982--High Low 15.61 8.69 14.41 7.43 14.23 7.84 13.51 8.12 15.84 8.53 15.56 8.19 13.89 8.09 16.86 11.50 15.01 9.81 14.81 10.46 14.63 10.42 16.34 11.75 13.44 9.25 17.66 13.57 16.50 12.00 15.56 12.41 1983--High Low 10.21 8.42 9.49 7.63 9.64 7.72 9.79 7.82 9.93 8.15 9.53 8.02 8.78 7.71 11.50 10.50 11.57 9.40 12.14 10.18 12.11 10.32 12.90 11.03 9.85 8.78 13.89 12.55 13.50 11.50 13.42 11.53 1982--Aug. Sept. 10.12 10.31 8.68 7.92 9.88 9.37 10.37 9.92 10.61 10.66 9.50 9.96 11.02 9.73 14.39 13.50 12.62 12.03 13.06 12.34 12.77 12.07 14.47 13.57 11.23 10.66 16.27 15.43 15.13 13.80 14.51 13.57 Oct. Nov. Dec. 9.71 9.20 8.05 7.71 8.07 7.94 8.29 8.34 8.16 8.63 8.44 8.23 9.51 8.95 8.66 9.08 8.66 8.53 9.16 8.54 8.22 12.52 11.85 11.50 10.62 9.98 9.88 10.91 10.55 10.54 11.17 10.54 10.54 12.34 11.88 11.9L 9.69 10.06 9.96 14.61 13.83 L3.62 12.75 12.25 12.00 12.83 12.66 12.60 1983--Jan. Feb. Mar. 8.68 8.51 8.77 7.86 8.11 8.35 7.93 8.23 8.37 8.01 8.28 8.36 8.36 8.54 8.69 8.19 8.30 8.56 7.96 7.79 7.77 11.16 10.98 10.50 9.64 9.91 9.84 10.46 10.72 10.51 10.63 10.88 10.63 11.84 12.09 11.74 9.50 9.58 9.20 13.25 13.04 12.80 12.00 12.00 12.00 12.06 11.94 11.87 Apr. May June 8.80 8.63 8.98 8.21 8.19 8.79 8.30 8.22 8.89 8.29 8.23 8.87 8.63 8.49 9.20 8.58 8.36 8.97 7.96 7.83 8.01 10.50 10.50 10.50 9.76 9.66 10.32 10.40 10.38 10.85 10.48 10.53 10.93 11.50 11.37 11.81 9.05 9.11 9.52 12.78 12.63 12.87 12.00 11.60 12.00 12.06 11.72 12.09 July Aug. 9.37 9.56 9.08 9.34 9.26 9.51 9.34 9.60 9.50 9.77 9.15 9.41 8.34 n.a. 10.50 10.89 10.90 11.30 11.38 11.85 11.40 11.82 12.39 12.75 9.53 9.72 13.42 13.81 12.36 13.30 12.54 13.01 1983--July 6 13 20 27 9.39 9.21 9.43 9.46 8.89 9.10 9.11 9.08 9.02 9.30 9.28 9.25 9.03 9.37 9.37 9.35 9.32 9.50 9.55 9.52 9.10 9.14 9.19 9.16 8.22 8.24 8.36 8.44 10.50 10.50 10.50 10.50 10.57 10.85 10.95 10.96 11.07 11.34 11.39 11.43 11.12 11.37 11.37 11.45 12.25 12.30 12.37 12.62 9.55 9.54 9.44 9.60 13.30 13.50 13.58 13.65 12.00 12.50 12.50 12.50 12.24 12.58 12.61 12.73 Aug. 3 10 17 24 31 9.59 9.66 9.67 9.41 9.44 9.31 9.49 9.43 9.22 9.21 9.51 9.64 9.54 9.34 9.46 9.63 9.79 9.63 9.38 9.55 9.71 9.93 9.89 9.59 9.63 9.32 9.53 9.54 9.29 9.25 8.47 8.57 8.73 8.73 8.70 10.50 10.71 11.00 11.00 11.00 11.25 11.57 11.32 11.0511.27 11.79 12.14 11.82 11.61 11.80 11.79 12.11 11.78 11.60 11.77 12.86 12.90 12.68 12.53 12.80 9.74 9.85 13.50 13.50 13.50 13.00 13.00 13.15 13.42 9.59 9.75 13.73 13.84 13.89 13.78 13.77 12.96 12.64 12.87 7 14 21 28 9.53 9.48 9.04 9.19 9.10 9.02 8.81 9.44 9.26 9.13 8.91 9.57 9.36 9.25 9.05 9.65 9.43 9.42 9.22 9.36 9.26 9.27 8.97 8.78 8.78 8.78 8.66 11.00 11.00 11.00 11.00 11.35 11.14 11.09 10.86 11.88 11.69 11.67 11.49 11.86 11.67 11.65 11.47 12.59 12.55 12.31 12.38 9.67 9.62 9.42 9.46 13.77 13.72 13.72 13.65 13.00 13.00 13.00 13.00 13.04 12.67 12.69 12.52 9.08 9.68 10.64p 8.88 8.81 8.71 8.93 8.95 8.88 9.07 9.10 9.04 9.27 9.20 9.15 9.06 9.03 9.14 ---- 11.00 11.00 11.00 10.89 10.87 11.49 11.50 11.47 11.48 10.81p 11.44p 11.44p Sept. Daily--Sept. 23 29 30 9.54 NOTE: Weekly date for columns 1 Ihrough 1t are statement week average. Data In column 7 are taken Irom Donoghues Money Fund Report. Columns 12 and 13 are 1day quotU for Friday and Thursday, respectively, following the end of the statement week. Column 14 Is an average of contract interest rates on commitments for conventional first mortgages with 80 percent toan-to.vske ratlos made by a sample ot 9.70 insured savings and loan associations on the Friday following the end of the statement week. ONMA yields are average net yields to investors on mortgage-backed securllies for immediate delivery, assuming prepayment in 12 years on pools of 0year FHANA mortgages carrying the coupon rate 50 basis polnls below the current FHNJVA ceiling. FR 1qAd711871 Security Dealer Positions October 3, 1983 Millions of dollars Cash Positions ed rod Treasury coupons Net Trasury under Total bills Forward and Futures Posltlons Tresury coupone federal 1var over 1 year *Oancy private Treasury under over federal private short-term bills 1 ywa 1 yer agency short-term 1982--High Low 49,437 -18,698 -2,151 679 -747 8.169 1,005 6.281 1.955 16,213 6,758 7,674 -11,077 -687 -4,182 -526 -2.715 853 -6.455 1983--High Lou 20.856 -348 13,273 -478 473 -687 7,108 -1.265 8.641 4.013 15,658 8.839 1,654 -10,310 -325 -3,225 -848 -4.286 -4,863 -9.564 1982--Aug. Sept. 24,048 14,300 1,330 -630 -534 4.256 2.365 3.556 4.416 14,701 12,801 6,243 3,161 -2.794 -1.286 -1,507 -2,259 -1.077 -4.618 Occ. Nov. Dec. 18,880 17.317 18.876 1 156 3,654 8.732 109 497 428 3.233 4.268 5,655 5,285 5.684 5,949 13,371 11.821 14,046 5,285 1,461 -5,519 -1.648 -3,218 -2,898 -2,404 -2,371 -2,443 -5.493 -4,468 -5,045 1983--Jan. Feb. Mar. 13,041 16,604 15.934 9,962 10,534 9.544 -232 -428 3 4,950 4.061 1,852 5.125 4.455 4,855 13,166 11,477 12,087 -7.782 -3,631 -1.734 -2.766 -1.807 -2.357 -2.654 -2,099 -1.988 -6,677 -5,886 -6,325 Apr. May June 8,706 7,775 4,449 3,657 -371 31 63 1,610 1,818 157 5.278 5,694 5.631 11.753 10,914 9.787 -7.508 -6,994 -914 -2.479 -2.628 -722 -1.482 -1.666 -1.598 -5.860 -6,288 -8,423 July. Aug. 3,004 7,535' 126 -198' 2,577* 6.919 7,994* 10,275 10.358* -2,634 -1,850* -1.641 -2,706* -1,815 -3,619* -8,665 -5,899* 5,583 6.520 7,434 7,440 10.474 10,513 10.488 10,003 -1,455 -1.385 -2,305 -4,381 -503 -632 -2,007 -2.694 -848 -1,564 -2,103 -2.016 -8,698 -9,374 -9,564 -7,720 5.330 7,615 11,156 275 411 880* 3 July 6 13 20 27 5.482 4,527 2.474 1,909 500 1,554 1,044 -478 133 167 108 95 Aug. 3 10 17 24 31 4.724 11,913 8,733 3,846 5,934 189 606 1,003 859 958 125 201 -89 -553 -541 794 3.024 2,042 2.537 3,853 7.462 8.423 8.641 7.287 7.904 10,141 10,536 10,060 9,798 10,961 -1,356 1.654 -386 -4,298 -5,624 -2,599 -3.046 -2,891 -2.541 -2,426 -2,631 -2.838 -4.056 -3,881 -4,286 -17391 -6,643 -5.591 -5.462 -4.863 Sept. 7 14 21 28 8,356* 8.535* 9,445* 11:644* -1,366' 1,081* 1,519* 3,482* -621* -494* -527* -615* 4,759* 3.453* 6.436* 8,687' 8,559* 9,559* 9,785* 8,659* 12,066* 13,854* 13.324 12.925* -3,720* -6,321* -7.259* -9,5916 -2.354* -3.276* -2.528' -2,151* -4.559* -4,780* -6,168* -4,263* -4,408* -4.542* -5,1384 -5.490* 303 -1,265 -614 1,666 NOTE: Government securities dealer cash positions consist of securities already delivered, commitments to buy (ell) securities on an outrighl basis for Immediate delivery (5 business days or less), and certain "when-Iesued" securities for delayed delivery (more than 5 business days). Futures and lorward positions include all other commtments Involving delayed delivery; futures contracts are arranged on organized exchanges. 1. Cash plus forward plus luturee positions In Treasury, federal agency, and private short-term securities. * Strictly confidential
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