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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) September 8, 1967. MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments Bank credit expansion slackened markedly in the last three statement weeks of August as measured by the proxy, although increasing at a 17 per cent annual rate for the month on average (and 18½ per cent, after including the rapid increase in Euro-dollar borrowings in August). Outstanding business loans contracted sharply last month, but banks' holdings of U.S. Government securities continued to rise on balance. Until the last week in August weekly reporting banks continued for the most part to be moderate net sellers of Treasury bills following their massive increase in holdings in connection with the large early July Treasury tax bill issue. However, holdings of U.S. Government securities rebounded toward the end of August, as banks participated heavily in the $2.5 billion Treasury cash financing involving a 3½ year note with a 5-3/8 per cent coupon (that could be paid for with full tax and loan credit) and purchased Treasury bills in the market. Generally, the U.S. Government's financing needs have been the principal influence tending to enlarge bank credit expansion during the past two months. Treasury debt offerings were reflected not only in the investment and underwriting function of banks but also in the position of Government security dealers. Dealers built up bill positions in early July and generally maintained them at advanced levels FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (Monthly averages and, where available, weekly averages of daily figures) arket Indicators Bond Yields Flow of Reserves. Bank Credit and Money Bank T NonTotal Corporate MuniciBorrowFederal 3-month Money Free teserves ings (In millions of dollars) Period Period Funds Rate Treasury Bill U.S. Gov't. (20 y.) New pal (Aaa) Issues (Aaa)I/ borrowed ReReserves serves (I iionlrs Credit Supply upply Deposits 2 Proxy (In billions of dollars) (Seasonally Adjusted) '966--Aug. Sept. Oct. Nov. Dec. -374 -390 -425 -235 -196 740 765 766 605 529 5.45 5.30 5.46 5.75 5.39 4.95 5.36 5.33 5.31 4.96 4.95 4.94 4.83 4.88 4.76 5.64** 5.82** 5.70** 5.71 5.73 3.91 3.93 3.82 3.78 3.79 -240 - 36 -116 +150 - 13 -290 + 84 -131 - 59 - 16 + 0.2 0.1 0.9 0.6 0.4 + 0.2 + 0.4 - 0.4 -+ 0.3 + + + + 1967--Jan. Feb. - 59 42 476 366 4.87 4.99 4.72 4.56 4.51 4.61 5.43 5.18 3.50 3.38 +475 +325 +359 +218 + 3.3 + 3.3 - 0.1 + 1.2 + 2.2 + 2.6 Mar. Apr 172 199 196 150 4.50 4.03 4.26 3.84 4.56 4.64 5.31 5.38 3.47 3.50 +555 + 92 +415 + 49 + 3.0 + 2.1 + 1.6 - 0.3 + 2.6 + 2.0 May 275 94 3.94 3.60 4.90 5.62 3.71 + 96 - 8 + 1.2 + 1.6 + 1.9 June July Aug p 257 317 263 88 132 86 3.97 3.78 3.88 3.53 4.20 4.26 4.99 5.01 5.12 5.79 5.78 5.89** 3.80 3.86 3.78 + 95 +313 +275 +164 +229 +243 + 2.0 + 3.2 + 3.7 + 1.7 + 1.7 + 1.2 + 2.5 + 2.2 + 2.6 p p p p 179 295 237 411 195 116 91 129 47 46 3.75 4.02 4.07 3.97 3.53 4.15 4.17 4.18 4.29 4.42 5.07 5.09 5.12 5.13 5.14 5.82 5.84 5.92 5.99** 5.97 3.75 3.75 3.80 3.80 3.80 + + + + + 0.5 + 0.5 + 0.4 --- + + + + + 6 p 288 79 4.03 4.33 5.11 Ave ages 5.83** 3.80 1967--Aug. Sept 2 9 16 23 30 1.2 1.2 0.3 0.2 0.2 + 2.3 + 0.4 Annual rates of increase 3/ 1.2 0.7 0.2 0.3 1.3 0.7 1.0 0.5 0.3 0.6 + 0.2 Year 1966 -283 672 5.06 4.85 4.77 5.41 3.67 + 0.8* + 1.2* + 3.7* + 2.2 + 8.8* Second Half 1966 First Half 1967 -338 153 763 222 5.39 4.38 5.12 4.09 4.87 4.70 5.74 5.45 3.83 3.56 - 1.3* +15.0 - 2.3* +10.7 + 0.3* +12.1 - 0.2 + 6.8 + 6.5* +17.3 Recent variations in growth July 6-Nov 16 Nov. 16-Mar 29 Mar. 29-Sept. 6 -346 - 23 264 732 397 107 5.43 5.01 3.94 5.13 4.70 3.91 4.89 4.64 4.92 5.72 5.36 5.73** 3.85 3.57 3.74 - 2.1 +12.4 +11.6 - 0.6 + 5.6 + 8.1 + 4.2 +16.4 +15.5 1/ Includes issues carrying 5-year and 10-year call protection; ** issues carry a 5-year call protection. Time deposits adjusted at all commercial banks. Base is change for month preceding specified period or in case of weekly periods, the first week shown. Changes have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary. September 8, 1967. 2/ 3/ CONFIDENTIAL (FR) -2- September 8, 1967. Positions in coupon issues have fluctuated widely with through August. the recent Treasury refunding and cash financing. In view of uncertain- ties as to the future course of interest rates, dealers were unusually quick to dispose of the 15-month note obtained in the mid-August refunding, despite the large positive carry available with 5¼ per cent coupon issue relative to borrowing costs that have frequently been around 4 per cent. Dealers have recently experienced a positive carry on practically all Treasury issues in portfolio, with the exception of the 1-month bill. The ready availability of short-term funds to banks, both from domestic sources and from abroad, along with a usual seasonal improvement in New York banks' basic reserve position, contributed to an easing in the Federal funds and dealer loan markets. In the latter part of August the Federal funds rate fell to a level generally below 4 per cent and new dealer loan rates also frequently dropped below that level. In consequence, dealers relied increasingly on banks to finance their positions, with more than three-fifths of dealer borrowings at banks as compared with one-third a year ago August. In early September, however, both Federal funds and dealer loan rates moved back to 4 per cent and above. Banks were able to increase both their outstanding negotiable CD's and their liabilities to foreign branches each by $600 million further over the period from August 2 to August 30. The inflows of such funds appeared larger to some banks than immediate loan demands CONFIDENTIAL (FR) -3- September 8, 1967. justified, even with the mid-September tax date and potential CD runoffs approaching, and there were recent reductions in rates on CD's maturing within three months by a few major banks. During the first week of September outstanding CD's declined markedly at New York City banks. On average in August all time and savings deposits at commercial banks rose at a 17.5 per cent annual rate, while the money supply rose by 8 per cent. The private money supply showed no growth in the last half of August, even though U.S. Government deposits declined during the last three weeks of the month. In support of the August expansion in total deposits, total reserves rose at a 12 per cent annual rate, somewhat less than the expansion in required reserves, as banks economized to a degree on excess reserves. The 3-month bill rate fluctuated in a 4.15 - 4.45 per cent range since the last meeting of the Committee, and such a relatively high level of rates may have induced some banks to move, at the margin, out of Federal funds into bills. During the four statement weeks ending September 6, member bank borrowings averaged $75 million and free reserves $283 million, little changed from the previous four weeks. Annual rates of increase for key monetary variables during the past nine months ending August are shown below in comparison with rates for the equivalent period a year earlier when policy was tightening. September 8, 1967. CONFIDENTIAL (FR) December through August, inclusive 1965-66 1966-67 3.6% 1.9 Total reserves Nonborrowed reserves Bank credit Proxy Proxy, including Euro-dollars End of month series Business loans of banks 9.8% 13.5 12.1 12.4 12.2 6.9 6.6 8.3 9.3 18.2 Time deposits Money supply U.S. Government deposits 16.7 7.1 -7.3 11.5 3.5 8.2 Prospective developments Maintenance of prevailing money market conditions over the next three weeks would appear to encompass a Federal funds rate averaging 4 per cent or a little below, dealer new loan rates in New York in a 4 1/84-3/8 per cent range, a 3-month Treasury bill rate in a 4.15 4.45 per cent range, member bank borrowings averaging between $50 and $100 million, and free reserves between $200 and $300 million. The approaching September tax date is not expected to generate any sizable problems, but, as the basic reserve deficiencies of major reporting banks enlarge, it will be a factor adding at the margin to market pressures and tending to forestall the re-emergence of Federal funds and dealer loan rates as low as in late August. The 3-month bill rate could decline toward the lower end of the indicated range because of the attractive maturity dates around the mid-December tax period and year-end for such bills to be auctioned in the period immediately ahead. There might also be some downward CONFIDENTIAL (FR) -5- September 8, 1967. pressure on bill rates generally because the auto strike may reduce some short-term credit demands from, say, finance companies. However, the market impact of the work stoppage is likely to be minor so long as it is limited to one firm. As an offset to such downward tendencies, dealer bill positions are relatively high, and bill rates normally show a seasonal rise in September. The System will not be a buyer in the market until late September and early October, when System security purchases might exceed $1 billion. At around that time, however, it is likely that the market will be focusing on Treasury cash needs in October; current market expectations appear to be for a $4 - $5 billion Treasury tax bill financing later in October. In general, the course of bill rates will be strongly influenced by the strength of demand for bills from businesses and banks; such demands could be substantial so long as business loan demand from banks remains quite moderate, as currently expected, and as corporations rebuild the liquid assets that were depleted in making the large second quarter tax payments. It is not expected that banks will aggressively offer negotiable CD's in the weeks immediately ahead. $300 - $500 million in September. We are assuming a CD run-off of CD's maturing in September total $5.1 billion, slightly less than last year, but considerably more than in 1965. Corporate income tax payments, projected at $4.3 billion, in September are about the same as in the last two years, but payments to the Treasury of withheld personal income and social security taxes are CONFIDENTIAL (FR) -6- projected higher than in the preceding two years. September 8, 1967. These statistical comparisons suggest a moderate CD run-off in September. The sizable build-up in CD's and Euro-dollars during recent months might be a factor limiting banks' interest in quickly replacing maturing CD's. Increases in other time and savings deposits are projected at near recent rates, with the total of time and savings deposits expected to rise in an 11 - 13 per cent range in September on average. Private demand deposits at banks are not likely to show any significant expansion in September, and may well decline somewhat, as over-all loan demands on banks are not expected to be very substantial in the coming weeks. Real estate loans are likely to continue expanding at near recent rates, and outstanding business loans will turn up after their sharp August decline. However, business loans are likely to rise at only a moderate pace since the great bulk of accelerated tax payments are now behind us. On the other hand, loans to security dealers, which were an important force sustaining bank credit expansion in the last two months, are not expected to rise further and may fall on average in September as Government security dealers' positions are reduced in the course of the month. With such time and private demand deposit behavior, and with U.S. Government deposits showing a slight rise on average during the month, the bank credit proxy may rise in a 9 - 12 per cent range during September. However, the auto strike and possibilities of a sharper reduction in demand for security loans than allowed for and less bank interest in CD's suggest that the odds on a rate of growth September 8, 1967. -7- CONFIDENTIAL (FR) at the lower end of the range, or even a little lower, are not trivial. A bank credit expansion in the projected range, with loan demands moderate, will permit banks to add substantially to their security holdings. This would be an influence tending to moderate upward interest rate pressures in the municipal market that might stem from the enlarged September calendar and would add to investment demands in the markets for intermediate-term Treasury coupon issues and for Treasury bills. In the corporate market, the somewhat less heavy calendar of new issues may serve to keep yields from rising significantly further, and additional declines as the month progresses cannot be ruled out. If the Committee wishes to alter monetary policy in a firming direction, it may have in view a set of money market conditions entailing a Federal funds rate trading frequently at 4 1/8 cent, member bank per borrowings consistently between $100 and $150 million, and free reserves averaging in a $100 - $200 million range. Such a policy would exert upward pressure on bill rates, and the 3-month bill is likely to approach and perhaps exceed 4½ per cent. Because market participants are very sensitive to the possibility of a change in monetary policy at this juncture, the tighter stance would probably be quickly detected and translated into sizable expectational rate increases, especially in the intermediate- and longer-term maturity range. How far and how long such market adjustments might run would depend in good part on the intensity of the discussions likely to follow as to implications for -8- CONFIDENTIAL (FR) September 8, 1967. further monetary policy action, disintermediation, Regulation Q, and changes in the mix of fiscal and monetary policies. The possible effect of any such firming of market conditions on bank credit growth might well be perverse in the first few weeks. Banks may increase efforts to capture such CD funds as they could while rate ceilings permitted and also to accelerate inflows of Euro-dollars. Subsequent moderation of bank deposit expansion might prove either gradual or abrupt, depending upon how tightly CD rates crowded up against Regulation Q ceilings. Money market conditions intermediate between those currently prevailing and those indicated just above as consistent with a firming policy could be permitted to develop if bank credit growth brought the proviso clause of a "no change" directive into play. In that event, the Federal funds rate might still average around 4 per cent, but be more frequently above than below that rate, and member bank borrowings average closer to $100 million. The expectational impact of such a shading in market conditions is likely to be less than if firmer money market conditions are sought. While there may be some risks in such a course, the odds are that no significant disintermediation is likely to be triggered by so slight an adjustment, and long-term rates also may show only a minor response. Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Excess reserves Period As Member banks Free borrowings revised to reserves date I _____________ Monthly (reserves weeks ending in): As first published each week As expected at conclusion of each week's open 1966--August September October November December 366 375 341 370 333 740 765 766 605 529 -374 -390 -425 -235 -196 1967--January February March April May June 417 408 368 349 364 345 449 349 476 366 196 150 94 88 132 86 - 59 + 42 +172 +199 +270 +257 +317 +363 3 10 17 24 31 405 329 404 327 381 134 63 123 50 102 +271 +266 +281 +277 +279 +345 +260 +261 +288 +264 +343 +262 +291 +291 +264 7 14 21 331 355 261 431 77 43 91 141 +254 +312 +170 +290 +284 +325 +198 +304 +290 +339 +229 +292 12 19 26 462 643 236 453 353 69 51 54 +109 +574 +185 +399 +152 +597 +195 +403 +168 +604 +214 +417 2 9p 16 p 23 p 30 p 295 386 366 458 241 116 91 129 47 46 +179 +295 +237 +411 +206 +324 +195 +422 +182 +188 +319 +269 +438 6 p 367 79 +288 +288 July August p Weekly: 1967--May June 28 July Aug. Sept. 5 p - Preliminary market opeations +258 +202 +219 TABLE A-2 AGGREGATE RESERVES AND RELATED MEASURES (In Retrospective Changes, Seasonally Adjusted per cent, annual rates based on monthly averages of daily figures) Ag gr e Reserve ates Monet ary Required reserves Total Reserves Nonbor ed Nonborroved Reserves Total Member Against Demand Total Monthly: 1966--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. + 5.2 + 1.2 + 9.3 + 2.3 + 2.7 +12.1 + 1.3 + 0.2 + 8.1 -15.2 + 4.5 - 6.9 3.1 0.9 + 4.2 + 0.8 Deposits (comm. Bank Deposits Bank Deposits (credit) 1/ Mone Total banks) - - Deposits Annually: 1965 1966 Variables Time Su pply Private Demand Deposits + 5.1 + 1.4 + 2.3 + 0.9 + 9.1 + 3.7 +16.0 + 8.8 + 4.7 + 2.2 + 4.3 + 1.2 + 9.8 +80 + 2.4 - 3.8 +12.6 + 6.3 + 8.4 + 1.1 + 2.7 + 9.5 + 8.3 + 1.8 + 6.4 +10.0 - 0.4 + 3.0 + 1.7 + 4.9 + 4.9 + 6.5 +12.1 +16.0 +12.6 +11.0 +16.3 + 9.2 + 3.8 + + + + + 0.5 + 6.0 -13.0 + 8.1 + 5.0 + 4.0 +12.0 + 8.4 + 4.4 + 9.3 + 1.5 - 2.3 - 2.8 + 9.8 + 2.1 - 2.0 - 6.4 + 8.3 - 0.7 - - 2.2 + 6.7 + 3.9 - 4.9 + 5.9 -11.5 8.4 1.0 3.0 3.1 - 4.5 - 7.2 - 0.5 - 6.7 + 1.8 +14.0 +19.2 +26.0 +14.4 +11.6 +11.5 +17.4 +12.0 +21.6 +29.4 +15.3 + 9.8 + 5.0 + 2.5 + 4.7 + 8.1 - 2.1 - 0.4 + 4.9 - 1.2 -2.8 + 4.8 + 8.4 + 4.9 +16.1 +16.0 +11.6 +16.0 Aue. D +13.8 +16.1 +14.1 ", +12.2 ' '' ' ' l/ Includes all deposits subject to reser ve requirements. movements in total member bank credit. 1967--Jan. Feb. Mar. Apr. May June Jul. , - 1.0 - 0.5 - 4.4 - 3.4 + 2.0 7.9 2.9 6.4 9.2 - 2.1 - 4.5 + 2.8 + 2.7 - 4.9 - 8.1 + 1.4 + 2.8 + + + 0.9 1.8 4.5 0.9 0.9 +16.1 +16.5 - 0.7 - 2.7 +15.9 +19.3 + 8.5 + 9.1 +14.3 +19.0 +11.2 +12.7 + 9.9 - 2.8 - 5.4 +14.4 +12.5 + 5.6 +15.3 +13.5 +11.7 +13.3 + 8.8 +17.5 +15.2 +15.2 +11.6 +14.0 +10.4 +17.7 + 8.1 +16.9 "' Movements in this aggregate correspond closely with , Changes in reserves, total deposits and time deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary. 2/ Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS, SEASONALLY ADJUS 25.0 24.5 24.0 23.5 - RI TOTAL 23.0 22.5 --- NONBORROWED 22.0 RESERVES __ NET 21.5 BOR RVES BILLIONS OF DOLLARS 1.0 MEMBER .5 - o o EXCESS 0 1 R i M J 1966 S D M J 1967 S D Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS 286 TOTAL MEMBER BANK DEPOSITS [CREDIT PROXY) 282 SEAS ADJ AVERAGE OF DAILY FIGURES WEEKLY 278 274 270 266 262 258 254 250 246 242 6 LIABILITIES TO OVERSEAS BRANCHES (WEEKLY NOT SEAS ADJ, ------- -- 4 REPORTING BANKS) WEDNESDAYS 2 0 I S I| I D SES967WENSDY 1966 1966 M J 1967 S D Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS BILLIONS OF DOLLARS 180 _ __ _ _-~190 175 -~185 170 IS18 165 160 -- ---- _ ___ __ __ ____ ____ ______ ____ __ ____ _ _ ___ - 170 - -165 __ ____ ___ -- 25 _ i175 ____ _______ _ _ ___ -155 - - __ NEGOTIABLE CD'S (Unadjiu st ed) 20 15 10-_ _ M _ _ _ _ _ J 1966 _ _ _ S _ __ _ D M _ _ _ _ _ _ JS D 1967 * CHANGE IN SERIES 145 Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS MONEY SUPPLY COMPONENTS: CURRENCY OUTSIDE BANKS i 30 140 DEMAND 135 130 - 125 DEPOSITS I 120 U.S. GOVT. (Member DEMAND DEPOSITS Banks) iiiiiiiiiiiiiiiiij 1966 1967 Table B-1 MAJOR SOURCES AND USES OF RESERVES Retrospective and Prospective (Dollar amounts in millions, based on weekly averages of daily figures) Factors affecting supply of reserves = Change Federal Reserve Gold Currency Technical in credit (excl. o outside factors total stock k s reserves net 2/ banks float) 1/ Period Year: 1965 (12/30/64 - 12/29/65) = Bank use of reserves Required Excess reserves reserves 3/ +4,035 -1,602 -2,143 + 798 +1,089 +1,188 - 99 +3,149 - 627 -2,243 + 805 +1,085 +1,111 - 26 +2,245 +2,158 - 528 151 - 952 523 -1,174 -1,694 - 411 211 - 285 141 - 126 70 2 9 p 16 p + + - 181 122 226 - 15 37 + + 33 517 71 + - 245 438 81 - 47 6 234 + - 111 85 214 + - 158 91 20 23 p 30 p - 300 263 + - 1 14 + + 125 242 + - 203 273 + - 29 311 - 63 94 + - 92 217 6 + 475 - 36 - 503 + 552 + 490 + 364 + 126 1966 (12/29/65 - 12/28/66) Year-to-date: (12/29/65 - 9/7/66) (12/28/66 - 9/6/67) Weekly: 1967--Aug. Sept. p PROJECTED -- 4 Oct. For For For See 13 20 -1,000 120 + --- + + 175 55 + + 845 120 + + 20 295 + + 20 295 27 1967--Sept. + 450 -- + 260 - 660 + 50 + 50 4 11 18 25 + + - 725 245 485 240 ----- + + 265 310 80 245 - 350 -+ 370 + 160 + + 110 65 35 165 + + 110 65 35 165 retrospective details, see Table B-4. factors included, see Table B-3. required reserves by type of deposits, see Table B-2. reverse side for explanation of projections. p - Preliminary. -- Table B-2 CHANGES IN REQUIRED RESERVE COMPONENTS Retrospective and Prospective Seasonal and Nonseasonal Changes (Dollar amounts in millions, based on weekly averages of daily figures) Total required reserves Period Supporting U. S. Gov't. demand deposits I Supporting private deposits Seasonal changes Total Demand 9 Time I Other than seasonal chan2es Demand Time C ACTUAL Year: 1965 (12/30/64 - 12/29/65) 1966 (12/29/65 - 12/28/66) +1,277 +1,194 + 14 - - 115 - 4 4 + - 499 5 + 677 +1,221 1/ -1,024 +1,188 +1,111 - 89 87 (12/29/65 - 9/7/66) (12/28/66 - 9/6/67) - 285 141 - 183 - 111 Weekly: 1967--Aug. 2 9 16 23 30 + 111 - 85 214 63 94 + + - 163 7 227 75 157 274 92 13 138 63 6 + 364 + 173 191 + + + + + 20 295 50 110 65 35 165 + + 140 45 465 35 195 255 125 Year-to-date: Sept. 102 30 - 755 4 2/ 997 6 + 107 - 5 - 11 + + - 36 51 41 18 40 34 19 17 34 - 5 + 79 14 + + + -25 5 5 5 5 5 + + + - 75 15 15 15 100 90 15 - PROJECTED 1967--Sept. Oct. 13 20 27 4 11 18 25 + + + + + + 160 340 415 145 130 220 40 1/ Reflects reserve requirements changes in July and September 1966 /2 Reflects reserve requirements changes in March 1967. p - Preliminary. + + + + + + 220 365 425 105 15 115 30 + + + + + + + 15 15 20 20 20 20 20 Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Technical factors (net) Period ACTUAL Year: 1965 (12/30/64 1966 (12/29/65 Foreign deposits Float Treasury and gold operations loans (Sign indicates effect on reserves) Other nonmember Leposits and . R. accounts + 798 294 673 + 171 64 77 805 + + + + - 30 Year to date: (12/29/65 - 9/7/66) (12/28/66 - 9/6/67) -1,174 -1,694 - 82 233 - 959 + 12 10 Weekly: 1967-Aug. - 245 - 178 + 79 7 34 + - 193 54 18 247 324 + + 14 16 2 7 12 122 31 14 30 73 S 12 45 - 12/29/65) - 12/28/66) + 438 16 23 30 + - 81 203 273 6 + 552 + 399 + 120 19 7--Sept.13 20 27 + + - 845 120 660 + - 730 530 500 + + - 80 550 160 4 - 350 -- - + + 370 160 --- + + 220 160 - 121 104 350 Sept. 477 -1,367 - PROJECTED 6 Oct. --- + + 35 100 -- -- + 150 -- 11 18 25 Table B-4 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) Total Federal Reserve credit Period [(Excl. float) U.S. Government securities Total is er Repurchase I holdings Federal Agency Bankers' acceptances I Securities I agreements tear: 1965 (12/30/64 - 12/29/65) 1966 (12/29/65 - 12/28/66) +4,035 +3,149 +3,916 +3,069 +3,145 +2,158 +916 +474 -145 +437 + 26 Year-to-date: (12/29/65 - 9/7/66) (12/28/66 - 9/6/67) +2,245 +2,158 +2,125 +2,766 +1,907 +2,509 +439 +828 -221 -571 - 20 5 12 19 26 +1,090 + 88 - 780 + 241 + + + 866 347 682 244 + + + 766 346 630 244 2 9 16 23 30 + + 181 122 - 226 300 263 + + - 118 98 217 210 255 + - 118 29 200 100 255 6 + 475 + 438 + 299 Weekly: 1967--July Aug. Sept. Member banks borrowings + 77 + 42 + 52 + - 83 +203 -469 -119 + +212 -284 9 + 23 - 75 - - 18 + - - 17 -110 + + 87 - 2 2 6 + 3 + 1 + 49 +127 I 2 + + - 62 25 38 82 - 1 - - 6 7 - 6 49 - 2 + 33 - Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES 1/ Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures) Total Period Total reserves Nonborrowed rrve reserves Totl Total Required reserves Against private deposits Total Total Demand Demand 1965--Jul. Aug. Sept. Oct. Nov. Dec. 21,857 21,923 21,869 21,986 21,976 22,186 21,356 21,417 21,318 21,533 21,589 21,722 21,488 21,533 21,494 21,645 21,671 21,861 20,626 20,719 20.904 21,073 21,170 21,285 15,921 15,943 16,065 16,147 16,196 16,266 1966--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 22,358 22,401 22,452 22,679 22,703 22,707 22,861 22,571 22,655 22,524 22,465 22,449 21,899 21,943 21,873 22,027 22,020 22,030 22,140 21,900 21,864 21,748 21,898 21,885 22,007 22,028 22,077 22,252 22,308 22,339 22,431 22,274 22,256 22,200 22,142 22,175 21,411 21,464 21,600 21,771 21,782 21,883 21,841 21,842 21,860 21,741 21,716 21,772 16,375 16,413 16,506 16,605 16,562 16,606 16,512 16,473 16,475 16,365 16,364 16,378 1967--Jan. Feb. Mar. Apr. May June Jul. Aug. p 22,808 23,026 23,441 23,490 23,482 23,646 23,875 24,118 22,360 22,685 23,240 23,332 23,428 23,523 23,836 24,111 22,442 22,666 22,955 23,110 23,086 23,178 23,487 23,803 21,803 22,044 22,297 22,293 22,559 22,890 23,053 23,274 16,328 16,478 16,647 16,578 16,786 17,024 17,119 17,244 p - Preliminary. 1/ effective June 9, 1966. Reserves have been adjusted for redefinition of time deposits Table C-2 DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts in billions, based on monthly averages of daily figures) Monthly Total member bank deposits (credit) 1/ 2/ deposits2 Private demand deposits 3/ Time U.S. Gov't. demand deposits 1965--Jul. Aug. Sept. Oct. Nov. Dec. 229.1 230.4 231.4 233.5 234.8 236.4 113.6 115.4 116.9 119.0 120.2 121.2 108.6 108.8 109.6 110.1 110.5 111.0 6.8 6.3 4.9 4.4 4.1 4.2 1966--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 238.0 239.0 239.8 242.2 243.9 244.8 246.7 246.5 246.4 245.5 244.8 245.2 121.7 122.0 123.0 124.8 126.1 127.5 128.7 129.7 130.1 129.9 129.3 130.3 111.7 112.0 112.6 113.3 113.0 113.3 112.6 112.4 112.4 111.6 111.6 111.7 4.7 5.0 4.2 4.1 4.8 4.0 5.3 4.4 3.9 4.0 4.0 3.2 1967--Jan. Feb. Mar. Apr. May June Jul. Aug. p 248.5 251.8 254.8 256.9 258.1 260.0 263.3 267.0 132.2 134.4 136.5 138.0 139.4 141.7 143.3 145.6 111.4 112.4 113.6 113.1 114.5 116.1 116.8 117.6 4.9 5.0 4.8 5.8 4.1 2.2 3.2 3.7 1/ 2/ 3/ Includes all deposits subject to reserve requirements--i.e., the total of time, private demand, and U.S. Government demand deposits. Movements in this aggregate correspond closely with movements in total member bank credit. Deposits have been adjusted for redefinition of time deposits effective June 9. 1967. Private demand deposits include demand deposits of individual, partnerships and corporations and net interbank balances. TABLE C-2a DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts in billions, based on weekly averages of daily figures) Total member bank deposits Week ending: (_credi l/ Time deposits Private demand U. S. Gov't. demand 21 deposits 3/ 2/ deposits 256.0 256.8 257.1 257.4 1967--Apr. 137.5 137.9 138.1 138.3 113.9 113.5 112.9 112.4 4.7 5.5 6.0 6.7 May 3 10 17 24 31 257.7 258.0 258.1 257.9 258.4 138.5 138.8 139.3 139.8 140.3 113.1 113.3 114.9 114.9 115.4 6.1 5.9 3.9 3.2 2.7 June 7 14 21 28 259.3 260.2 261.2 259.9 140.9 141.6 141.8 142.1 111.9 116.1 116.2 116.2 2.6 2.6 3.2 1.6 Jul. 5 12 19 26 260.4 261.7 263.9 264.6 142.5 142.9 143.4 143.7 116.9 117.2 116.6 116.6 1.0 1.6 4.0 4.3 Aug. 2 9 16 23 30 265.8 267.0 266.7 267.0 267.1 144.4 145.0 145.4 145.8 146.5 117.2 117.6 117.4 117.7 117.6 4.3 4.4 3.9 3.4 3.0 Sept. 6 269.4 146.9 118.1 4.4 p - Preliminary. 1/ Includes all deposits subject to reserve requirements--i.e., the total 2/ 3/ of time, private demand, and U.S. Government demand deposits. Movements in this aggregate correspond closely with movements in total member bank credit. Deposits have been adjusted for redefinition of time deposits effective June 9, 1967. Private demand deposits include demand deposits on individuals, partnerships and corporations and net interbank balances. TABLE C-3 MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally adjusted (Dollar amounts in billions, based on monthly averages of daily figures) Monthly Money Supply Currency _/ Private Time Deposits Demand Deposits 2/ Adjusted 1965--Jul. Aug. Sept. Oct. Nov. Dec. 162.4 163.2 164.0 165.2 165.7 166.8 35.3 35.5 35.7 36.0 36.1 36.3 127.2 127.8 128.4 129.3 129.6 130.5 137.9 139.8 141.6 143.8 145.5 146.9 1966--Jan. Feb. March Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 167.9 168.3 169.2 170.5 170.2 170.6 169.9 170.1 170.5 170.1 170.1 170.4 36.6 36.7 36.9 37.1 37.3 37.4 37.7 37.8 37.9 38.0 38.1 38 3 131.4 131.6 132.3 133.4 132.9 133.2 132.3 132.4 132.6 132.1 132.0 132.1 147.5 148.3 149.8 151.8 153.4 154.8 156.9 158.1 158.6 158.8 158.5 159.8 1967--Jan. Feb. Mar. Apr. May June Jul. Aug. p 170.3 171.5 173,1 172.7 174.5 176.2 177.9 179.1 38.5 38.7 38.9 39.1 39.2 39.3 39.4 39.6 131.8 132.8 134.2 133.6 135.3 136.8 138.4 139.6 3 162.0 164.6 167.2 169.2 171.1 173.6 175.8 178.4 1/ Includes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. 2/ 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. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary. TABLE C-3a MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally Adjusted (Dollar amounts in billions, based on weekly averages of daily figures) Week Ending Money Supply Currency l/ Private Demand S__Deposits 1967--Apr. Time Deposits adjusted 2/ 134.3 39.1 134.0 133.5 133.0 3 168.3 169.0 169.5 169.6 173.4 173.1 172.6 172.1 39.1 39.1 39.1 May 3 10 17 24 31 172.8 173.0 174.7 174.8 175.6 39.1 39.1 39.1 39.2 39.3 133.7 133.9 135.6 135.6 136.3 169.9 170.4 171.0 171.5 172.2 June 7 14 21 28 176.0 176.3 176.4 176.4 39.3 39.4 39.4 39.4 136.7 136.9 137.0 136.9 172.6 173.6 173.7 173.9 5 177.6 178.1 177.7 177.8 39.4 39.5 39.4 39.4 138.2 138.6 138.3 138.4 174.6 175.4 175.8 176.1 176.8 177.8 178.3 178.6 179.2 179.4 July 12 19 26 178.3 178.8 179.2 179.2 179.2 39.4 p 16 p 23 p 30 p Aug. 39.6 39.6 138.9 139.3 139.6 139.7 139.5 6 p 179.6 39.7 139.9 2 9 Sept. 39.5 39.6 -- 1/ 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 of Federal Reserve Banks. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary. 2/
@FedFRASER