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CONFIDENTIAL (FR) September 5, 1969 MONEY MARKET AND RESERVE RELATIONSHIPS Recent Developments (1) Since the last meeting of the Committee, interest rates have risen to new highs. long-term The sharpest increase--about 50 basis points--was in yields on State and local government securities; other long-term securities rose 15 to 40 basis points. The rise of interest rates reflected further substantial reduction in bank holdings of State and local government securities and uncertainties as to the future tax status of such securities, heavy actual and expected borrowings by Federal Agencies as other sources of housing finance were constricted, and--in view of continuing inflationary pressures and the likelihood of continued monetary restraint--an erosion of market convictions that interest rates were on their way down in the near-term. In the short- term market, the 3-month Treasury bill rate has fluctuated within recent ranges; the outstanding bill peaked at 7.16 per cent in late August, following auctioning of a $2.1 billion Treasury strip of short maturing bills, but has most recently traded around 7.05 per cent. (2) The Federal funds market experienced considerable churning in August and early September, as, among other things, banks adjusted to changes in System reserve regulations. The most frequent effective Federal funds rate since the last meeting has been 9-3/4 per -2cent. But the average effective rate was about 9 per cent, as the Federal funds rate dropped off rather sharply on a number of days when major banks found themselves with excess reserves. During the four statement weeks ending September 3, net borrowed reserves at all member banks and member bank borrowings averaged $1 billion and $1-1/4 billion, respectively, little changed from the preceding four week period. With respect to reserve aggregates, nonborrowed and total reserves declined in August by about 4 per cent and 6-1/2 per cent, respectively. (3) The bank credit proxy, adjusted to reflect Euro-dollar borrowings, is now estimated to have declined at about a 10 per cent annual rate on average in August, in line with projections in the last Blue Book. Funds obtained from nondeposit sources other than Euro- dollars are estimated to have declined somewhat in the course of August as the run-off of loan Rp's in response to the System's new regulation more than offset a further rise in outstanding commercial paper issued by bank affiliates. On average for the month, however, nondeposit sources other than Euro-dollars would still add about 2 percentage points to the proxy estimate of bank credit in August, compared with about 5 percentage points in July when the proxy plus Euro-dollars had declined at an 11 per cent annual rate. (4) CD run-off in August is estimated at around $850 million, and the average annual rate of decline in total time and savings deposits is estimated at about 15-1/2 per cent for the month. The money supply in August declined at a 5-1/2 per cent annual rate, or at the weak end of earlier projections. -3(5) The following table summarizes annual rates of change in major deposit and reserve aggregates for the latter half of 1968 and thus far in 1969. July '68Dec. '68 '69'69 Jan. June July '69Aug. '69 Total reserves 10.9 -0.7 -14.5 Nonborrowed reserves 11.0 -3.7 -11.6 Proxy 13.4 -3.5 -14.7 Proxy plus Euro-dollars 13.5 Total loans and investments (as of last Wednesday of month) 15.0 Bank credit, as indicated by: Money supply Time and savings deposits Savings accounts at thrift institutions 1/ -10.4 3.0 6.8 3.8 16.1 -5.0 6.4 4.9 0.3 -17.8 - S 1.2 0.2- July 1969. Prospective developments (6) An unchanged constellation of money market conditions may be considered to include a Federal funds rate averaging around 9 per cent, member bank borrowings in a $1 - $1-1/2 billion range, and net borrowed reserves around $1 billion. Under these conditions, the 3-month bill rate may fluctuate in a 6-3/4 - 7-1/4 per cent range, about the same range as in recent experience. The System will be a net seller -4of bills until around mid-month, partly to offset expected direct Treasury borrowing from the Federal Reserve. During this period the market will also be affected by the need to provide short-term finance in connection with corporate dividend and tax dates. the System will return to the buy side of the market. After mid-month, In that period, downward pressure on the bill rate might also be exerted by reinvestment demand for bills if the Treasury offers a "rights' exchange for the $5-3/4 billion of publicly held coupon issues maturing on October 1. (7) The Treasury is expected to announce terms of the exchange on September 17, and the market anticipates that a security in the intermediate-term area may be included as an option. The relativelysizable Treasury refunding together with prospective Federal agency issues, the recent build-up in the corporate calendar, and continued inability of banks to purchase municipals suggest that upward pressures on longer-term interest rates may continue. Sizable investment demand at the current advanced level of interest rates could emerge, however, if there were developing expectations of a cooling in the economy. (8) Financing of the recent Treasury bill strip, paid for on August 25, and prospective demands on banks in connection with the mid-September tax period and Alaskan oil lease payments are likely to be reflecte in some expansion of total member bank deposits and bank credit, on average, in September and only a moderate decline in reserve aggregates. Total and nonborrowed reserves might decline in a 3 - 7 per -5cent, annual rate, range during the month on average. The decline reflects the lagged effects on required reserves of reductions in outstanding total member bank deposits in the first three weeks of August.1 (9) / Total member bank deposits in September are expected to rise in a 2 - 5 per cent annual rate range, on average, with the increase accounted for by a sharp rise in U.S. Government deposits. Because of transfers to U.S. Government deposits, private demand deposits are expected to contract further in September. However, the already reduced liquidity of corporations suggests that they will have to rely importantly on new loans from banks to finance larger than seasonal tax payments. Thus, the decline in private demand deposits is expected to be only about half of the rise in U.S. Government deposits. On balance, the outstanding money supply may contract in a 4 - 7 per cent, annual rate, range in September. (10) Total time and savings deposits at banks may decline in a 0 - 3 per cent, annual rate, range in September. Outstanding CD's are expected to decline by about $1 billion in September, or somewhat more than seasonally, given the continuing unfavorable interest Adjusted to be on a consistent timing basis with deposits, the reserve aggregates would show increases of around 1 - 3 per cent in September. 1/ -6rate structure. However, on a seasonally adjusted basis, the September decline in CD's appears likely to be smaller than in August since, because of interest rate relationships, corporations have not built up September CD maturities to anything like the extent they usually do to meet tax payments. Relative to maturities the attrition ts expected to be at least as large as in other recent months. Consumer- type time deposits are expected to continue weak, but not as weak as in July and the first half of August, if experience with recent intraquarterly patterns is any guide. (11) The net change in Euro-dollar borrowings and other nondeposit sources of funds to banks may not, on balance, significantly alter the September projection of the proxy series. The marginal reserve requirement on Euro-dollars affects such borrowings beginning with the current statement week, but banks will not have to put up the reserves until the week beginning October 16. The effect of such reserve requirements on bank behavior remains to be seen, but we are assuming only a small further growth in Euro-dollars. With respect to other nondeposit sources, loan Rp's will continue to decline because of the recent regulatory change; on the other hand, commercial paper issued by bank affiliates probably will continue to increase but seems unlikely to compensate fully for the reversal of trend in loan Rp's. FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (Monthly averages and where available, weekly averages of daily figures) Money Market Indicators Bond Yields Flow of Reserves Bank Credit and Money, S.A. Free Corporate1 o Time Money Bank Total l Nonborrowed U.S. 3-monLh Federal Borrowings Reserves Rar eant re Grvos eorrowings New Municipal I DepositE Supply Credit Reserves Reserves (Aaa) Issues overnment Treasury Funds (In millions of Rate 8111 (20 yr.) Proxy y 33/ dollars for weeks y (Aan) (n millions ending tn) 2/ of dollars) (In billions of dollars) Perd od 1968--August September October November December - 240 146 192 255 327 577 492 458 541 743 6.03 5.78 5.92 5.81 6.02 5.23 5.19 5.35 5.45 5.96 5.22 5.28 5.44 5.56 5.88 6.15 6.27 6.47 6.61 6.79 4.00 4.23 4.21 4.33 4.50 + + + + + 489 185 206 29 120 + + + + + 498 98 193 181 279 + + + + + 5.2 2.1 3.2 2.8 3.2 + + + + 1.0 0.6 0.9 1.8 1.2 + + + + + 1,o9--January February March April May June July August p 491 580 635 844 -1,116 -1,078 -1,045 -1,011 715 836 837 1,031 1,359 1,355 1,311 1,210 6.30 6.64 6.79 7.41 8.67 8.90 8.61 9.19 6.14 6.12 6.02 6.11 6.04 6.44 7.00 6.98 5.99 6.11 6.22 6.03 6.11 6.28 6.27 6.22 6.92 6.91* 7.37 7.17 7.22 7.58 7.63 7.65 4.58 4.74 4.97 5.00 5.19 5.58 5.60 5.74 + + - 103 112 182 270 134 183 430 85 + + - 175 79 88 197 460 179 526 153 + - 1.2** 0.3 2.5 1.2 0.3 2.5 4.5 2.8 + + + + + + - 0.9 0.3 0.2 1.6 0.1 0.8 1.0 0.9 - 1.8 - 1.5 -- 0.2 - 0.7 - 0.9 - 3.4 - 2.5 2 9 16 23 30 -1,138 891 -1,103 972 -1,123 1,634 1,020 1,279 1,354 1,269 9.00 9.07 9.23 8.50 8.05 6.38 6.93 6.98 7.08 7.12 6.27 6.34 6.25 6.25 6.26 7.63 7.68* 7.52 7.58 7.75 5.55 5.52 5.52 5.62 5.78 - 45 82 91 96 347 + + + - 456 711 62 135 552 + - 0.7 1.2 2.7 1.3 0.9 + + - 1.3 0.6 0.8 0.3 0.7 - 0.7 1.1 0.9 0.7 0.6 Aug. 6 13 20 p 27 p 839 996 -1.183 -1,026 1,090 1,329 1 221 1,201 9.57 9.18 8.79 8.82 6.99 7.04 6.86 7.04 6.21 6.19 6.20 6.24 7.57* 7.53 7.61 7.82 5.70 5.73 5.73 5.80 + + 484 102 415 331 + + + 340 47 408 266 - 0.9 - 0.3 - 1.6 + 0.8 + + + - 0.4 0.2 0.2 0.9 - 0.7 0.5 0.3 0.3 Sept. 3 p - 1,239 9.57 7.02 6.35 7.90 5.80 - 117 - 74 + 0.8 + 0.4 548 529 1,034 5.45 5.44 6.12 6.47 6.50 7.20 4.20 4.22 4.99 + 6.4 +11.0 - 3.7 516 1,091 5.40 6.15 6.47 7.33 4.21 5.15 +11.0 - 5.8 1969--July 917 Avera Year 1968 Second Half 1968 First Half 1969 -210 -218 -779 Recent variation in growth 7/3/68 - 12/18/68 12/18/68 - 9/3/69 I 1/ 2/ 3/ 4/ - 203 - 834 Annual rates of increase 4/ + 7.0 + 9.0 + 7.9 + 6.8 +13.4 +10.9 + 3.8 - 3.5 + 0.7 ,es +12.9 - 3.2 +14.8 - 5.8 + 4.3 + 3.0 3.4 2.8 2.9 2.4 2.4 + 0.2 +11.3 +17.1 - 5.0 +18.1 - 7.8 IL I1__I P Average of total number of days in period. Includes issues carrying 5-year and 10-year call protection, * - issues carry a 10-year call protection. Time deposits adjusted at all commercial banks. week shown. Base is change for month preceding specified period or in case of weekly periods, the first Preliminary. ** - Reflects $400 million reduction in member bank deposits resulting from withdrawal of a large country bank Percentage annual rates are adjusted to eliminate this break in series. from System membership. Septmeber 5, 1969. S.A. - Seasonally aojusteu. Chart 1 MEMBER BANK RESERVES MONTHLY FIGURES AVERAGES OF DAILY I I I I I I I I I BILLIONS OF DOLLARS, SEASONALLY ADJUSTEDI I I _ I I I I I __ I I 28 5 TOTAL RESERVES 28 0 REQUIRED RESERVES- - RESERVES 26.5 NONBORROWED RESERVES 26.0 25.5 25.0 24.5 24.0 BILLIONS OF DOLLARS, NOT SEASONALLY ADJUSTED • n 1.5 MEMBER BANK BORROWINGS I , 1.0 .5 _/---^.-^, EXCESS RESERVES .. 0 J J 1968 1969 - Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS TOTAL MEMBER BANK DEPOSITS (CREDIT PROXY] SEAS ADJ WEEKLY AVERAGES OF DAILY FIGURES 302 298 294 290 286 282 278 274 270 14 LIABILITIES TO OVERSEAS BRANCHES (WEEKLY REPORTING BANKS) 12 NOT SEAS ADJ, 10 6 4 I I I 1968 I | | 1969 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 C i ty R e s e r v e Other Major banks Outside N.Y. 8 N.Y. s Country Monthly (reserves weeks ending in): 1968--April May June July August September October November December - 341 374 386 192 240 146 192 255 270 348 354 341 331 337 346 267 286 330 689 728 727 523 577 492 458 541 600 56 65 72 13 195 125 81 65 134 262 155 168 140 65 158 88 171 223 148 186 141 102 101 73 117 93 66 223 322 346 268 215 136 172 212 177 1969--January February - 477 580 359 256 836 836 131 62 302 255 149 215 253 304 March - 635 202 837 58 233 254 293 April May June July August p 844 -1,116 -1,078 -1,045 -1,011 187 243 277 266 199 1,031 1.359 1,355 1,311 1,210 85 123 57 89 81 411 346 459 250 253 260 397 288 364 257 275 493 550 608 619 7 -1,120 483 1,603 146 462 488 507 14 - 910 261 1,171 121 260 385 405 21 28 -1,242 -1,190 116 113 1,358 1,303 164 59 378 284 361 353 455 607 June 4 11 18 25 -1,152 812 -1,216 -1,132 369 448 99 191 1,521 1,260 1,315 1,323 43 86 -97 552 371 465 460 289 302 281 273 637 501 569 492 July 2 9 16 23 30 -1,138 891 -1,103 972 -1,123 496 129 176 382 146 1,634 1,020 1,279 1,354 1,269 125 -88 86 146 416 165 302 214 152 396 334 390 393 308 697 521 499 661 663 1969--May Aug. Sept. 6 13 20 p 27 p 3 p p - Preliminary. - 839 996 -1,181 -1,026 251 333 38 175 1,090 1,329 1,221 1,201 18 118 136 52 183 365 267 196 251 256 194 326 638 589 624 627 - 322 1,239 57 286 234 662 917 Table 2 AGGREGATE RESERVES AND MONETARY VARIABLES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages of daily figures) I . . R e .. r ve Total Reserves Period A are Nonborrowed Reserves " a t e s Required Reserves IT M___onetary Total Member Bank Deposts Mone Total I I Annually 1967 1968 . s e +10.3 + 7.8 +11.6 + 6.0 +10.5 + 7.9 +11.8 + 9.0 + 6.6 + 7.0 1968 1968 1968 1968 + 7.9 + 1.5 +11.5 + 9.6 + 1.1 + 2.1 +15.0 + 5.3 + 7.5 + 1.8 +11.5 + 9.8 + 7.3 + 1.4 +13.6 +12.7 + + + + 1st Quarter 1969 2nd Quarter 1969 + 0.1 + 1.2 + 2.8 + 4.7 + 1.7 + .2 - 4.8 - 6.9 + 2.5 + 8.8 + 7.6 +22.4 + 4.3 + 8.5 + 7.9 +12.1 - 6.9 + 0.9 +12.3 +13.8 +22.4 + 8.3 + 9.2 + 1.3 + 5.3 + 7.5 - 3.4 + 4.5 - 4.9 - 8.0 -12.0 + 6.0 - 8.2 -19.3 - 3.9 Quarterly 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Monthly: 1968--April May June July August September October November December 1969--January February March April May June July August p p - Preliminary. -3.8 -8.5 +19.9 - 7.6 -22.5 - 6.7 Variables S up p 1 y Private Demand eposts Currency D tI y + 5.5 + 7.4 Commercial bank time deposits adjusted Credit Proxy (Incl. Eurodollar borrowings) +16.1 +11.7 +11.3 + 9.8 4.8 9.1 5.3 8.2 + 7.0 + 3.2 +17.9 +15.7 + 7.6 + 3.7 +14.7 +12.3 - 2.2 + 2.9 + 4.7 - 6.5 - 3.6 - 1.4 + 1.4 - 5.2 - 0.6 +11.3 + 9.4 +22.3 + 2.6 +10.4 + 8.4 +10.2 - 3.2 + 2.2 + 7.3 + 9.4 +22.2 + 8.8 +13.3 +11.5 +13.0 + 5.2 +13.0 + 9.0 + 3.4 + 6.3 - 3.8 + 5.7 +11.3 + 7.4 + 5.0 + 2.6 +13.4 + 8.3 +16.4 + 4.9 + 3.2 + 0.4 + 6.0 + 9.7 +10.5 +22.5 +10.6 +12.1 +11.6 +12.7 +12.7 - 3.0 - 4.4 - 5.0 +14.3 - 8.6 -17.6 - 7.6 - 4.8 - 1.2 -10.1 + 4.9 - 1.2 -10.2 -18.5 -11.7 + + + + + t - 5.6 1.8 1.2 9.8 .6 4.9 6.1 5.4 + 8.8 + 5.8 +11.5 + 5.7 +11.4 + 2.8 + 2.8 +11.2 + 5.6 + 5.5 + 8.3 + 8.2 +10.9 + 8.1 + 5.3 + 5.3 + 7.0 + 6.9 - 5.7 + 6.5 +11.3 + 8.0 + 3.8 +14.0 +21.4 +17.3 +17.7 +14.4 +14.3 + 6.4 - 0.8 - 0.8 -10.6 +12.7 - 1.2 - 4.2 - 5.4 - 3.1 + 3.1 + 6.3 - 8.6 - 8.9 -20.5 -15.3 - 2.4 + 2.0 - 6.7 + 5.5 -1.2 -11.0 -9.9 Table 3 AGGREGATE RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based on monthly averages of daily figures) Reserve Reserv Aggregtes Period Total re reserve Nonborroed Required reqerved eserves Norve r edeposits millions of dollars) Member Bank Deposits Supported by Required Reserves Total Private U.S member bank depots M Supply Gov't. demand demand deposits 1/ deposts o n s 1 i b In Total o f d o Currency 2/ lI a r s Credit Commercial bank time Proxy Private deposits (Incl Euro dollar adjusted demand tborrowings 4/ deposits 3 Monthly th(In 1968--January February March April May June July August September October November December 26,134 26 352 26,451 26,298 26,353 26,547 26 715 27,213 27,311 27,504 27,685 27,964 25,818 25,961 25,755 25,606 25,626 25,889 26,186 26,675 26,860 27,066 27,095 27,215 25,774 25,989 26,078 25,964 25,952 26,196 26,402 26,893 26,951 27,185 27,376 27,609 275.1 277.4 278.5 277.3 277.8 279.5 281.7 286.9 289.0 292.2 295.0 298.2 149.9 150.2 151,2 151.3 151.5 151.8 153.8 156.5 158.9 161.5 163.5 165.6 119.7 120.1 120.6 120.8 122.7 123.8 125.2 125.6 124.8 125.7 127.0 128.2 5.4 7.1 6.7 5.2 3.7 3.9 2.7 4.8 5.3 5.0 4.7 4.2 182.7 183.1 183.9 184.7 186.7 188.1 190.2 191.2 190.6 191.5 193.3 194.5 40.6 40.7 41.1 41.4 41.6 42.0 42.2 42.6 42.7 42.8 43.2 43.4 142.1 142.4 142.8 143.4 145.0 146.0 148.0 148.6 147.9 148.7 150.1 151.1 184.1 185.2 186.7 187.1 187.6 188.2 190.4 193.8 196.6 199.5 201.9 204.3 279.4 281.9 283.2 282.1 283.5 285.8 288.3 293.7 296.3 299.3 302.2 305.4 1969--January February March April May June July August p 28,139 28,060 27,972 27,775 28,235 28,056 27,530 27,377 27,318 27,206 27,024 26,754 26,888 26,705 26,275 26,190 27,902 27,832 27,729 27,614 27,942 27,742 27,334 27,160 297.0 296.7 294.2 295.4 295.1 292.6 288.1 285.3 163.2 161.0 160.5 160.1 159.3 158.1 155.1 152.5 128.4 129.1 128.9 129.4 130.0 130.5 130.6 129.9 5.4 6.7 4.8 5.9 5.9 4.0 2.4 2.9 195.4 195.7 195.9 197.5 197.4 198.2 199.2 198.3 43.6 43.9 44.2 44.2 44.6 44.9 45.1 45.3 151.9 151.8 151.7 153.3 152.9 153.3 154.1 153.0 202.5 201.0 201.0 200.8 200.1 199.2 195.8 193.3 304.8 305.3 303.6 305.0 305.0 304.7 301.9 299.4 Private demand deposits include emano deposits ( or inividuals, partnersnips ana corporations anu net interbank ueptow L5. 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. and (2) foreign demand balances at Federal Reserve Banks. process of collection and Federal Reserve float, Government time deposits Excludes interbank and U.S Government, less cash items in Table 4 AGGREGATE R( si've' Pet l o d AFpi Noeri rseIveosis re____e_ _______________ s qursed membei hnkl demand iepo dborrowings deposits deposits 1 8 15 22 29 (In mi] I lons of 28,359 27,439 28.041 27,333 28,290 27,552 28 223 27,416 28,009 26,998 27,883 27,799 28,065 28,010 27,781 298.8 298.9 296.7 296.3 295.7 165.5 164.4 163.9 162.8 162.1 b 129.3 129.9 128.5 127.9 126.8 5 12 19 26 27,999 27,929 27,986 28,246 27,170 27,180 26,917 27,490 27,740 27,748 27,748 28,017 295.8 297.4 297.4 296 3 161.4 161.1 160.8 160.6 Mar. 5 12 19 26 28,285 28,034 27,781 27,942 27,401 27,109 27,000 26,931 28,003 27,734 27,686 27,684 295.5 295.7 294.1 293.2 Apr. 2 9 16 23 30 27,879 27,611 27,590 27,848 28.023 26,689 26,634 26,838 26,733 26,830 27,570 27,431 27,515 27,698 27,823 May 7 14 21 28 28,501 28.162 28,020 28,219 27,048 26,980 26,629 26,920 June 4 11 18 25 28,320 28,308 27,833 27,761 July 2 9 16 23 30 Aug. Weekly: 6 19 9--Jan. Feb. Sept. 1 r AND MONETARY VARIABLES Ad usted Member 1) nk Deposits Supported by Required Reserves To al I Private U.S. igti Tol rTotsvel RESERVFS Seaonally In . Gov' dremind deposits deposits 1[ S1 Commercial bank time Private deposits demand adjusted deposits 3 4 [deposits 3 41 S on Total s 0 I Currency 2/ 2/ d o 1 1 a r Credit Proxy (Incl Eurc dollar borrowings s 4.1 4.6 4.3 5.6 6.9 195.1 197.1 195.5 195.4 193.5 43.4 43.5 43.5 43.6 43.5 151.8 153.6 152.0 151.8 150.0 204.1 203.3 202.8 202.1 201.5 305.6 305.6 299.8 304.6 304.3 128.0 128.2 129.8 129.9 6.5 8.0 6.8 5.7 194.5 194.8 196.9 196.2 43.7 43.9 44.0 43.8 150.8 150.9 152.4 201.0 201.0 201.0 200.9 304.3 306.0 305.9 305.1 160.4 160.6 160.5 160.7 129.5 128.6 128.5 129.0 5.6 6.5 5.1 3.6 195.6 195.5 196.0 196.6 43.8 44.1 44.2 44.3 151.8 151.4 151.8 152.3 200.7 200.9 200.7 200.9 304.4 305.0 303.6 302.8 293.6 294.9 295.6 295.9 294.7 160.7 160.6 160.2 160.1 159.8 130.0 129.5 130.0 129.1 128.3 3.0 4.9 5.3 6.8 6.6 197.0 198.7 198.3 196.8 195.7 44.3 44.4 44.2 44.3 44.2 152.7 154.3 154.0 152.5 151.5 201.1 201.2 200.9 200.6 200.3 303.0 304.2 305.1 305.7 304.7 27,993 27,888 27,844 28,091 294.7 296.5 295.2 294.9 159.6 159.4 159.3 159.1 128.7 129.8 131.0 130.6 6.4 7.3 5.0 5.3 196.1 197.1 198.9 198.2 44.3 44.5 44.5 44.6 151.8 152.6 154.4 153.6 200.2 200.2 200.1 200.0 304.5 306.2 305.0 305.1 26,829 27,028 26,543 26,588 27,826 27,800 27,698 27,701 293.7 293.9 293.1 291.3 158.8 158.7 158.2 157.6 130.6 130.6 130.6 130.3 4.3 4.6 4.3 3.4 197.6 198.5 198.2 197.9 44.9 44.8 44.9 44.9 152.7 153.7 153.3 153.0 199.6 199.7 199.3 198.7 303.6 304.9 305.6 304.5 28,217 27,506 27,568 27,703 27,151 26,543 26,461 26,370 26,274 25,927 27,711 27,462 27,492 27,307 26,980 290.6 289.4 286.7 288.0 287.1 157.0 156.1 155.3 154.6 154.1 130.7 130.2 130.5 130.5 130.0 2.9 3.0 .9 3.0 3.0 199.2 199.8 199.0 198.7 198.0 45.1 45.1 45.0 45.2 45.1 154.1 154.7 154.0 153.5 152.9 198.0 196.9 196.0 195.3 194.7 303.8 302.5 300.7 302.2 301.3 6 13 20 27 27,491 27,538 27,110 27,396 26,411 26,309 25,894 26,225 27,258 27,216 27,164 27,135 286.2 285.9 284.3 285.1 153.4 152.9 152.4 152.1 129.9 129.9 130.2 130.0 2.9 3.1 1.7 3.1 198.4 198.6 198.8 197.9 45.2 45.3 45.4 153.2 153.4 153.6 152.5 194.0 193.5 193.2 192.9 300.2 299.8 298.5 299.4 3 27,322 26,108 26,950 285.9 152.1 130.1 3.7 198.3 45.6 152.7 193.1 300.1 L~~ _ __ _ _ _ __ _ _. _ _ _ I . __ . 153.b 45.3 -L Private demand deposits include demand (deposits of individuals, partnerships, and corporations and net interbank deposits. Includes currency outside the Tresury, 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. Excludes interbank and U S Government time deposits I I less cash items in Table 5 (Dollar amounts I Period Year* 1967 (12/28/66 - 12/27/67) 1968 (12/27/67 - 12/26/68) *kly: .;69--Apr. May June July Aug. Sept. _ _ . Total Federal Reserve credit (Excl. float) I.S. SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes in millions of dollars, based on weekly averages of daily figures) -- h it +4,718 +3,757 , n fll i +5,009 +3,298 + + 103 146* - 143* + + 319* 284 7 14 21 28 + + 345 118 Rills +4,433 ( +2,143 ( 1/ -- ) -- ) -- ) Bankers' le s 21 - -- S S 34 58 24 ) 156) - 11 + 4 11 18 25 + + 308 256 - - S 33 174 2 9 16 23 30 + + + 297 401 30 189) - 408 287 146) 95) 6 13 20 27 + 672 241) 69 45 + 96 98) 10) 37) 3 + 218 203 514 13 2 80) -- + S 69 52 + 156) Member banks hrro~aln s ~r eso t ac - 19 - 3 577 - ecu rit CS + + 307 IH - I 460) + - +1,153 +1,176 ~ Agency 7) 533) 39 - Repurchase a r 5 eemen ts Ot-hr- - _ Federal Total 2 9 16 23 30 _ __ rI securities Government 3 8 S 14 ) ) S 37 - 10 - 11 S 2 71) 309) 191) 121) + 67 + + + 18 + + + 21 - 18 + + 3 + + 5 5 S 13 121) - 51) I I I I 2 I 1/ Figures in parenthesis reflect reserve effect of match sale-purchase agreement. * - Includes effect of changes in special certificates of $+96 million of the week of April 9, $+627 million of the week of April 16, and $-723 million of the week of April 23. p - Preliminary. MAJOR SOURCES AND USES OF RESFRVFS Retrospective and Prospective Changes in millions, based on weekly averages of daily (Dollar amounts F P e r od Period Federal Reserve e (excl . credit (excl. float) 1/ t o i s old <old stock a ff e c t t n g Currency outside banks (Sig n Year 1967 (12/28/66-12/27/67) 1968 (12/27/67-12/25/68) +4,718 +3,757 725 -2,067 s u p p Treasury loperations Float operos i n -2,305 -3,221 4 y Foreign deposits and gold c a t s 85 928 figures) r e s e r v e s of loans I Change ined total F.R. accounts c t on 389 +1,309 - 7 67 + + e f = Other nonmember deposits and reserves = Bank use of reserves Required reserves Excess reserves reserves _____ ) r eserves 316 869 +1,522 +1,508 +1,517 +1,563 + - 5 55 Aly 1969--April May June July Aug. Sept. 2 + 357 -- + 54 + 50 - 272 + 25 - 97 + 121 + 80 + 41 9 - 113 -- - 93 + 119 + 231 - 15 - 270 - 144 - 60 - 84 16 23 + 380 773 --- - 186 166 + - 380 427 + + 44 660 + + 29 5 + + 130 119 + + 17 964 + + 98 936 + 81 28 30 + 347 -- + 602 - 194 - 741 + 2 + 61 + 77 + 164 - 87 99 398 7 + 794 -- - + 16 - 18 - 40 - 100 + 553 + 155 + 14 - 293 -- -270 - 42 - 120 + 32 + 288 - 404 - 182 -222 21 28 + + 149 259 --- + 450 155 + + 141 128 + - 295 350 + 4 8 - 167 242 - 34 43 + - 111 40 - 145 3 4 11 18 25 + - 439 35 18 168 ----- + 348 51 419 115 - 108 217 354 179 + + + + 220 119 123 172 + + 18 3 - 7 + - 306 20 261 1 - 86 199 408 70 - 342 2Z8 59 162 + + + 256 79 349 92 2 9 16 23 30 + + - 679 247 261 337 379 ------ + + 3 344 136 174 719 + + - 221 23 65 87 6 + + - 262 382 122 465 920 + + 19 48 48 9 14 + + + 84 89 113 31 4 + 534 324 + 99 -111 570 + + + - 229 43 52 317 334 + + + - 305 367 47 206 236 6 13 20 p 2 7 p + + + 562 153 198 83 ----- + 201 180 413 288 + + - 318 147 259 153 + + + - 3 19 379 468 + + 30 10 8 + + 207 63 153 + + 448 82 187 + + 343 164 482 + + - 105 82 295 - 4 - 9 - 22 - 399 + 137 3 p + 275 -- - 151 + 39 - 140 - 9 - 31 - 16 - 163 + 147 - 1,345 -570 +1,315 --- - +1,050 + 420 -1,600 + + + 300 200 200 + + 5 5 + 70 220 95 + + + 70 200 35 + + + 10 35 45 + + + 10 35 45 + 380 -- - 400 - - + 240 + 240 280 -- - 75 -- -- + 100 + 100 -- - 1 PROJECTED 2 1969--Sept 10 17 24 Oct. 1 + 260 -- 8 + 455 - 1/ 2/ 3/ p - For retrospective details, see Table 5. See reverse side for explanation. Reflects increase in required reserves due to change Preliminary. in Regulation D, effective July 31. -- -- Table 6 F a period Period Reserve Federal Fed l credit (excl / float) MAIOR SOURCES AND USES OF RESERVFS Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) to o s a f f e c t i n g su p p1 y of r e se r v e s Foreign Other nonmember Currency e a Gold o Currency deposits and deposits Float y outside t oc k F R accounts and gold loans operatins banks (S i year, 1967 (12/28/66-12/27/67) 1968 (12/27/67-12/25/68) 1969--April +4,718 +3,757 g n 725 -2,067 i n i c a t e s e f c t on Change in total reserves = Bank use of reserves Exes Excess reserves Requiredd r e s e rve s ) -2,305 -3,221 + 85 928 389 +1,309 - 7 67 + + 316 869 +1,522 +1,508 +1,517 +1,563 + - 5 55 2 9 16 23 30 + + + 357 113 380 773 347 ------ + + 54 93 186 166 602 + + + - 50 119 380 427 194 + + + - 272 231 44 660 741 + + + + 25 15 29 5 2 + + + 97 270 130 119 61 + + + + 121 144 17 964 77 + + + + 80 60 98 936 164 + + - 41 84 81 28 87 May 7 14 21 28 + + + 794 293 149 259 ----- + 99 270 450 155 + + + 16 42 141 128 + - 18 120 295 350 + + 40 32 4 8 100 + 288 167 -242 + - 553 404 34 43 + + - 155 182 111 40 + - 398 222 145 3 June 4 11 18 25 + - 439 35 18 168 ----- + 348 51 419 115 - 108 217 354 179 + + + + 220 119 123 172 + + 18 3 - 7 + - 306 20 261 1 - 86 199 408 70 - 342 228 59 162 + + + 256 79 349 92 July 2 9 16 23 30 + + - 679 247 261 337 379 ------ + 3 344 136 -174 + 719 + + - 221 23 65 87 6 + + - 262 382 122 465 920 + + 19 48 48 9 14 + + + 84 89 113 31 4 + + - 534 324 99 111 570 + + + - 229 43 52 317 334 + + + - 305 367 47 206 236 Aug. 6 13 20 p 27 p + + + 562 153 198 83 ----- -201 180 -413 + 288 + + - 318 147 259 153 + + + 3 19 379 + + 30 10 8 + + 207 63 153 + + 448 82 187 + + 343 164 482 + + - 105 82 295 - 468 - 4 - 9 - 62 - 399 + 137 3 p + 275 -- - 151 + 39 - 140 - 9 - 31 - 16 - 163 + 147 -1,345 570 +1,315 --- - 70 220 95 +1,050 + 420 -1,600 + + + 300 200 200 + + 5 5 + + + 70 200 35 + + + 10 35 45 + + + 10 35 45 + + --- 380 280 --- - 400 75 + + 240 100 + + 240 100 Sept. -- PROJECTED 2 1969--Sept. Oct. 10 17 24 1 8 260 455 1/ For retrospective details, see Table 5. 2/ See reverse side for explanation. 3/ Reflects increase in required reserves due p - Preliminary. lo change + + in Regulation D, effective July 31. -- -- -- Explanation of Projections in Table 6 1. Changes in Federal Reserve credit indicate reserves needed to offset projected required reserves and factors affecting the supply of reserves. changes in 2. Projected changes in currency outside banks reflect growth of about $50 million per week. 3. Projected effects of Treaury operations, included in "technical factors," reflect scheduled and assumed calls in current two weeks and maintenance of Treasury balances with Federal Reserve at $1.0 billion, thereafter. 4. Projected changes in required reserves assume the existing net reserve position of banks and the structure of interest rates in the market, as well as the current economic outlook. On the basis of these assumptions, projections reflect expected movements in bank credit and money in the period ahead, including the effects of such elements as the public's loan demand, repayments of previous loans, banks' investment preferences and willingness to supply loans, banks' desires and abilities to obtain time and savings deposits, and the Government's financing needs. The projections thus encompass normal seasonal developments, temporary bursts of loans demand and expected associated repayments not currently reflected by the seasonals, and whatever cyclical and growth demands for money and credit are expected in the projection period. Assumed Treasury financing operations include: $-1.4 billion, October 1. seasonal movements plus an allowance for
@FedFRASER