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F//V/I/VC//1/.

0/1 7/1

Week ending: December 16, 1981
LJBRARV

OEC 22 190

Tflere is a close long-run relationship between M1B and the adjusted monetary
base. However, the shorter-run movements in these aggregates may diverge because of
changes in the public's preference for holdings of certain assets, such as a change in its
desire to hold currency relative to checkable deposits (k-ratio) or time and savings
deposits relative to checkable deposits (t-ratio). Such developments are reflected in
movements in the M1B multiplier (page 8). For example, if the public desires to hold a
smaller proportion of money in the form of currency, then the proportion of base held in
the form of reserves increases, and checkable deposits will likely expand. Other things
equal, this will cause the multiplier to rise as the k-ratio falls. Likewise, if the public
decides to hold a smaller proportion of bank deposits in the form of time deposits, then
reserves are freed to support more checkable deposits. This leads to a reduction in the
t-ratio and, other things equal, an increase in the multiplier. Thus, for a given growth in
the adjusted base, decisions to hold less currency or time deposits relative to checkable
deposits will result in an expansion of the money supply.
Both the adjusted base and M1B have increased at about a 5.0 percent rate
from January to November of this year. This close relationship occurred despite the
sometimes divergent growth rates of the two aggregates over shorter intervals. From
January to April, for example, M1B increased at a 14.1 percent rate while the adjusted
base increased at an 8.4 percent rate. The growth in M1B was associated with a larger
growth in checkable deposits (16.6 percent) relative to both currency (8.1 percent) and
time and savings deposits (2.6 percent). Hence, the t- and k-ratios decreased and the
multiplier increased.
Similarly, from April to June, M1B decreased at a rate of 6.1 percent while the
adjusted base increased at a 5.2 percent rate. Both currency and time and savings
deposits grew relative to checkable deposits over this period. As a result, both the t- and
k-ratios increased and the multiplier declined. From June to November, the growth rates
of currency, time and savings deposits and checkable deposits have remained more
stable. This is reflected in a closer relationship between the growth of M1B (4.7 percent)
and the growth of adjusted base (3.0 percent).
Growth Rates of Adjusted Monetary Base and Selected Components
of Monetary Aggregates

Period

Adjusted
monetary
base

Currency held
by the
nonbank
public

M1B

Savings plus
time deposits
at commercial
banks

Total
checkable
deposits

1/81 - 4/81

8.4

4/81 - 6/81

5.2

-6.1

5.2

18.9

-10.0

6/81 -11/81

3.0

4.7

4.5

10.2

4.5

%

14.1

%

8.1

%

2.6

%

DUE TO THE HOLIDAY ON FRIDAY, NEXT WEEK'S RELEASE
WILL BE PUBLISHED LATE.

Prepared by Federal Reserve Bank of St. Louis
Released: December T8, 1981


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

16.6 %

2
ADJUSTED MONETARY BASE
AVERAGES OF DAILY FIGURES

SEASONALLY ADJUSTED BY THIS BANK

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
176

BILLIONS
__ NOV.

169.6
170.1
170.0

DEC.
170.0

FEB

MAR

1980
LATEST DATA PLOTTED WEEK ENDING: DECEMBER 16,

1981

THE ADJUSTED MONETARY BASE CONSISTS OF: ( I ) RESERVE ACCOUNTS OF FINANCIAL INSTITUTIONS
AT FEDERAL RESERVE BANKS, (2) CURRENCY IN CIRCULATION (CURRENCY HELD BY THE PUBLIC AND
IN THE VAULTS OF COMMERCIAL BANKS). AND (3) AN ADJUSTMENT FOR RESERVE REQUIREMENT RATIO
CHANGES.
THE MAJOR SOURCE OF THE ADJUSTED MONETARY BASE IS FEDERAL RESERVE CREDIT.
DATA
ARE COMPUTED BY THIS BANK.
A DETAILED DESCRIPTION OF THE ADJUSTED MONETARY BASE IS
AVAILABLE FROM THIS BANK.

ADJUSTED MONETARY BASE
COMPOUNDED ANNUAL RATES OF CHANGE,

AVERAGE OF FOUR WEEKS ENDING:

12/17/80

3/18/81

5/13/81

6/17/81

7/15/8 1

8/19/81

9/16/81

5. 1
5.0
4.7
5.5
4.9
4.2
4.4
4.5

6.7
5.9
6.9
5.8
4.6
4.8
4.9

3.9
6.2
4.8
3.3
3.9
4. 1

7. 1
4.9
3.0
3.7
4.0

5.7
2.9
3.8
4.1

-1.5
1.4
2.4

2.1
3.1

10/14/81

TO THE AVERAGE
OF FOUR WEEKS
END 1 NG -.
5/13/81
6/17/81
7/15/81
8/19/81
9/16/81
10/14/81
11/18/81
12/16/81


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

6.0

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

ADJUSTED RESERVES
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS
50 ------------- 1---------- 1--------

BILLIONS OF DOLLARS
-------- ------------------------- 50

BILLIONS
NOV.

47.0
47.8
48.2
47.8
48.2
47.5

DEC.

I

15

29

12

26

10 24

7 21

1980
LATEST DATA PLOTTED WEEK ENDING: DECEMBER 9,

1981

BASE ( RESERVE ACCOUNTS OF FINANCIAL INSTITUTIONS AT FEDERAL RESERVE
BANKS PLUS CURRENCY IN CIRCULATION) LESS CURRENCY HELD BY THE NONBANK PUBLIC.

ADJUSTED RESERVES
COMPOUNDED ANNUAL RATES OF CHANGE,
2/10/80

3/11/81

5/6/81

6/10/81

6.2
2.0
5.7
5.7
3.4
3.2
4.0

0.0
6.5
6.3
3. 1
2.9
4.0

5.0
5.2
1.3
1.5
3.0

AVERAGE OF FOUR WEEKS ENDING:
7/8/81

8/12/81

9/9/81

10/7/81

TO THE AVERAGE
OF FOUR WEEKS
END 1NG:
5/ 6/81
6/10/81
7/ 8/81
8/12/81
9/ 9/81
10/ 7/81
11/11/81
12/ 9/81

-1.6
0.4
-1 . 1
1.6
2.0
0.8
0.9
1.7


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

13.0
5.2
4.4
5.6

-2.7
-0.8
1.9

-3.6
0.8

6.3

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

3

4
MONEY STOCK ( Ml A )
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
400

BU-L1QNS
360. 1
360.3
360.0
364.5
362.4

JAN

OCT

FEB

NOV

1980
LATEST DATA PLOTTED WEEK ENDING: DECEMBER 9,

1981

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE.
MIA CONSISTS OF CURRENCY HELD BY THE NONBANK PUBLIC PLUS COMMERCIAL BANK DEMAND DEPOSITS
HELD BY THE NONBANK PUBLIC (EXCLUDING THOSE HELD BY FOREIGN BANKS AND OFFICIAL INSTITUTIONS)
PLUS TRAVELER'S CHECKS OF NONBANK ISSUERS.

MONEY STOCK (MIA)
COMPOUNDED ANNUAL RATES OF CHANGE
12/10/80

3/11/81

5/6/81

6/10/81

AVERAGE OF FOUR WEEKS ENDING:
7/8/81

8/12/81

9/9/81

10/7/81

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
5/ 6/81
6/10/81
7/ 8/81
8/12/81
9/ 9/81
10/ 7/81
11/11/81
12/ 9/81

-14.8
-13.7
-12.4
-10.8
-10.1
-9.4
-8.5
-7.3


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

-4.3
-4.0
-3.3
-3.4
-3.2
-2.8
-1.8

-6.6
-4.5
-4.4
-4.0
-3.3
-2.0

-1.7
-2.5
-2.3
-1 .9
-0.5

-2.2
-2. 1
-1 .6
0.0

-3.0
-2.0
0.2

-1 .0
1.6

3. 1

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

MONEY STOCK ( MlB )
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS

of

dollars

billions

450

— NOV.

— DEC.

433.3
435.7
437.4
435.9
439.8
440.6

LATEST DATA PLOTTED WEEK ENDING: DECEMBER 9,

1981

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS’ H.6 RELEASE.
MlB CONSISTS OF MIA PLUS OTHER CHECKABLE DEPOSITS AT ALL DEPOSITARY INSTITUTIONS.

MONEY STOCK ( MlB )
COMPOUNDED ANNUAL RATES OF CHANGE,
12/10/80

3/11/81

5/6/81

AVERAGE OF FOUR WEEKS ENDING:

6/10/81

7/8/81

2.2
2.2
1.9
2.2
4. 1

2.9
2.3
2.5
4.7

8/12/81

9/9/81

10/7/81

2.2
6. 1

8.3

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
5/ 6/81
6/10/81
7/ 8/81
8/12/81
9/ 9/81
10/ 7/81
1 I/I 1/81
12/ 9/81

9.4
5.3
4.6
4.5
4.2
3.9
3.8
4.7


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

5.9
4.6
4.3
4.0
3.6
3.5
4.7

-5.7
-2.5
-1.5
-1 .0
-0.3
1 .6

1.7
2.2
5. 1

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

s

6
YIELDS ON SELECTED SECURITIES
AVERAGES OF DAILY RATES ENDED FRIDAY

PERCENT

22.0

22.0

21 .0

PRIME BANK
LOAN RATE

21.0

20.0

20.0

19.0

19.0
90 DAY CD'S
18.0

17.0

17.0

16.0

16.0
COMMERCIAL
PAPER

15.0

14.0

14.0
CORPORATE
Aaa BONDS

13.0

12.0
1 I .0

10.0
9.0
8.0
I I I I
1

OCT

NOV
1980

DEC

JAN

FEB

MAR

APR

15 29

MAY

12 26 10 24

JUN
11

7 21

AUG

30

SEP

13 27

NOV

LATEST DATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK ENDING: DECEMBER 18,

90 DAY
CD'S

1981
OCT.

NOV.

DEC.

2
9
16
23
30
6
13
20
27
4
1 1
18 *
25

16.48
15.50
15.03
15.28
15.14
14. 13
12.77
11.97
11.51
11.62
11.96
12.64

PRIME
COMMERCIAL
PAPER
15.89
14.95
14.48
14.70
14.57
13.64
12.41
11.57
11.09
11.35
11.61
12.32

PRIME
BANKERS'
ACCEPTANCES
15.83
14.91
14.53
14.81
14.57
13.54
12.34
1 1 .51
11.14
11.37
1 1.71
12.31

CORPORATE
BONDS

AAA

15.85
15.40
15. 18
15.36
15.51
14.88
14. 18
13.92
13.92
13.99
14. 16
14. 10

CORPORATE
Baa BONDS
17.25
17.09
16.99
17.09
17. 19
16.87
16.41
16.20
16.08
16. 15
16.42
16.51

11

25

DEC
1981

MUNICIPAL
BONDS *#
12.93
12.73
12.53
12.99
12.99
12.44
11.43
11.71
11.98
12.18
12.89
N. A.

* AVERAGES OF RATES AVAILABLE.
** BOND BUYER'S AVERAGE INDEX OF 20 MUNICIPAL BONDS, THURSDAY DATA.
DATA ARE 4-MONTH COMMERCIAL PAPER RATES.
N.A. - NOT AVAILABLE


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

PREPARED BY FEDERAL RESERVE BANK OF ST.

LOUIS

0

SELECTED

INTEREST RATES

AVERAGES OF DAILY RATES ENDED FRIDAY
22.0

22.0

21 .0

21.0
FEDERAL FUNDS RATE

20.0

19.0

18.0
3-MONTH
TREASURY BILL

17.0

17.0

16.0

15.0

M.O
DISCOUNT
RATE
13.0

13.0

12.0

12.0

5-YEAR
TREASURY SECURITIES

1 1.0

1 1.0

10.0

10.0
9.0
I I I I
FEB

MAR

APR

LATEST DATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK ENDING: DECEMBER 18,

FEDERAL
FUNDS **

1981
OCT.

NOV.

DEC.

2
9
16
23
30
6
13
20
27
4
1 1
18 *
25

15
15
14
15
14
14
14
13
12
12
12
12

00
46
93
32
87
79
01
17
42
48
04
26

3-MONTH
TREASURY
BILL
14.37
13.81
13.41
13.37
13. 14
12.21
10.93
10.31
10.23
10.39
10.47
10.96

6-MONTH
TREASURY
B1LL **#
14
14
13
13
13
12
1 1
10
10
10
10
1 1

93
22
50
80
62
72
51
97
92
70
77
60

1-YEAR
TREASURY
BILL
14
13
13
13
13
12
1 1
10
10
10
1 1
1 1

54
71
42
60
36
35
29
78
63
85
13
54

5-YEAR
TREASURY
SECURITIES
16
15
15
15
15
14
13
13
12
13
13
13

1 1
39
14
45
36
36
43
12
81
03
47
42

1981

LONG-TERM
TREASURY
SECURITIES
15.05
14.42
14.34
14.61
14.72
13.81
13. 16
12.78
12.71
12.78
13.21
13.20

* AVERAGES OF RATES AVAILABLE.
#* SEVEN-DAY AVERAGES FOR WEEK ENDING WEDNESDAY TWO DAYS EARLIER THAN DATE SHOWN.
CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.I5 RELEASE.
new i ssue rate
LONG-TERM TREASURY SECURITIES ARE COMPUTED BY THE FEDERAL RESERVE BANK OF ST. LOUIS.
TREASURY BILL YIELDS ON DISCOUNT BASIS.


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

PREPARED 8Y FEDERAL RESERVE BANK OF ST. LOUIS

7

8
MULTIPLIERS!/
CURRENCY OF MONEY STOCK MEASURES 2/
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

RATIO
MONEY MULTIPLIERS

DEC.

RATIO
NOV.

I I I I I I I I I I I I J LLLL
LATEST DATA PLOTTED WEEK ENDING; DECEMBER 9,

1981
BILLIONS OF DOLLARS
----------------- -------------- 128

BILLIONS OF DOLLARS
128 ------------- ,---------- 1-----“

COMPOUNDED ANNUAL RATES
OF CHANGE. AVERAGE OF
-----THE FOUR WEEKS ENDING
DECEMBER 9, 1981 FROM
- THE FOUR WEEKS ENDING;
- OCT.
SEP.
- AUG.
JUL.
—JUN.
MAR.
- DEC.

7,
9,
12,
8,
10,
11,
10,

1981
1981
1981
1981
1981
1981
1980

5.4
3.7
2.8
4.0
4.2
5.4
5.5

CURRENCY

BILLIONS
NOV.

I I I I I I I I I I I I
15

29

12

26

10 24

7

21

I

15

29

13 27

10 24

8 22

2

<6 30

14 28

11

25

9 23

1980
LATEST DATA PLOTTED WEEK ENDING; DECEMBER 9,

1981

1/ RATIO OF MONEY STOCK (MIA) OR (M1B) TO ADJUSTED MONETARY BASE

2/ CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE.


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

DEMAND DEPOSIT COMPONENT OF MONEY STOCK (MIA)
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS
280 r----------- -----------------

BILLIONS OF DOLLARS
------ I---------- 1---------- 3 280
SIUUQNS
NOV.

233.8
233.8
235.5
233.3
237.8
235.4

I I I I

LATEST DATA PLOTTED WEEK ENDING: DECEMBER 9,

1981

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE.

DEMAND DEPOSIT COMPONENT OF MONEY STOCK ( Ml A )
COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING:
12/10/80

3/11/81

5/6/81

6/10/81

7/8/81

8/12/81

9/9/81

10/7/81

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
5/ 6/81
6/10/81
7/ 8/81
8/12/81
9/ 9/81
10/ 7/81
11/11/81
12/ 9/81

-23.8
-22.0
-20. 1
-18.2
-17.2
-15.9
-14.7
-13. 1


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

-9.6
-8.8
-8. 1
-8. 1
-7.3
-6.8
-5.3

-10.9
-9.0
-8.9
-7.6
-6.9
-5.0

-5.9
-6.7
-5.5
-5.1
-3.1

-6.8
-5.3
-4.8
-2.5

-5.1
-4.5
-1.5

-2.7
0.7

1.7

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

9

10
SAVINGS PLUS SMALL TIME DEPOSITS
ALL COMMERCIAL BANKS
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
515

BILLIONS
NOV.

DEC.

510

505.0
507.5
508.9
510. 1
509.7
510.7

505

500

I I II
JAN

FEB

LATEST DATA PLOTTED WEEK ENDING; DECEMBER 9,

1981

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS’ H.6 RELEASE.
TIME DEPOSITS ISSUED IN DENOMINATIONS OF LESS THAN $100,000.

SAV1NGS PLUS SMALL TIME DEPOSITS
COMPOUNDED ANNUAL RATES OF CHANGE
12/10/80

3/11/81

5/6/81

6/10/81

3.6
4.2
4. 1
4.9
5.4
5.3
6.3
6.9

4.8
4.6
5.6
6.3
6. 1
7.3
8.0

5.4
6.8
7.5
6.9
8.4
9. 1

6.8
7.8
7.0
8.8
9.6

AVERAGE OF FOUR WEEKS ENDING:
7/8/81

8/12/81

9/9/81

10/7/81

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
5/ 6/81
6/10/81
7/ 8/81
8/12/81
9/ 9/81
10/ 7/81
11/11/81
12/ 9/81


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

9.6
8.0
9.9
10.7

7.2
10. 1
11.1

10.2
1 1.5

14.8

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

r
BORROWINGS FROM FEDERAL RESERVE BANKS
AVERAGES OF DAILY FIGURES

BILLIONS OF DOLLARS
4.0 i----------- 1---------- 1-----1981

BILLIONS OF DOLLARS
—---------- -----------4.0

MILL IONS

— DEC.

OCT

NOV
1980

DEC

JAN

FEB

MAR

APR

MAY

LATEST DATA PLOTTED WEEK ENDING: DECEMBER 16,

JUN

JUL
1981

AUG

SEP

OCT

NOV

DEC

1981

BUSINESS LOANS u
(COMMERCIAL AND

INDUSTRIAL)

WEEKLY REPORTING LARGE COMMERCIAL BANKS 2/
SEASONALLY ADJUSTED BY THIS BANK

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
196

_ COMPOUNDED ANNUAL RATES
_ OF CHANGE, AVERAGE OF
_ THE FOUR WEEKS ENDING
DECEMBER 9, 1981 FROM
_ THE FOUR WEEKS ENDING:
“OCT.
— SEP.
~ AUG.
-JUL.
~ JUN.
— MAR.
— DEC.

7,
9,
12,
8,
10,
11,
10,

1981
1981
1981
1981
1981
1981
1980

10.9

16.0
1 I .0

MILUQNS
NOV.

4
187,565
188,507

DEC.

2

190,731
191,112

I I I I I I I I I I I I I I I I I
I

15

29

13 27

!0 24

1981

1980
LATEST DATA PLOTTED WEEK ENDING: DECEMBER 9,

1981

1/ BUSINESS LOANS INCLUDE BANKERS’ ACCEPTANCES AND COMMERCIAL PAPER.
2/ BANKS WITH DOMESTIC ASSETS OF 1750 MILLION OR MORE


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

11

12
LARGE TIME DEPOSITS
ALL COMMERCIAL BANKS
BILLIONS OF DOLLARS

AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS

I I I I

LATEST DATA PLOTTED WEEK ENDING: DECEMBER 9,

1981

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE.
TIME DEPOSITS ISSUED IN DENOMINATIONS OF «100,000 OR MORE.
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS


http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

1


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102