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F//V/1/VCT//IL

OX\TX\

Week ending: July 25, 1979

!.pDA _
The discount rate -- the interest rate at
*—/Vto61idh member banks borrow from their district Federal
Reserve Banks -- was raised last week from 9.50 to 10
percent, the highest level in history. This change was
the first since November 1978, when the discount rate
was raised 100 basis points, the largest of seven
increases last year.
The seven increases in 1978
raised the discount rate from 6 to 9.50 percent.
In
1973, when many short-term interest rates were at
historically high levels, the discount rate was also
raised seven times from 4.50 to 7.50 percent.
The
discount rate finally peaked at 8 percent in April
1974.
Movements in the discount rate relative to
the Federal funds rate differed substantially in the
current period compared to 1973-74. The spread between
the discount rate and the Federal funds rate is
significantly narrower than it was then. In the last
half of 1973, the spread between the Federal funds rate
and the discount rate fluctuated between 220 and 330
basis points. At that time, the discount rate was 7.50
percent and the funds rate fluctuated around a level
slightly above 10 percent. The spread widened in 1974,
reaching 555 basis points in July, as the funds rate
topped 13 percent when the discount rate was 8 percent.
In contrast, the spread in the most recent period did
not reach 100 basis points. Between May 16 and July 18
of this year, the two months prior to the latest
discount rate change, the spread between the Federal
funds rate and the discount rate averaged 78 basis
points. During this period, the funds rate fluctuated
around 10.25 percent.
Although the spread between the funds rate
and the discount rate was much wider in 1973, member
bank borrowing from Federal Reserve Banks did not
differ significantly from that in 1979, when the spread
was relatively narrow. Member bank borrowing averaged
$1.5 billion between mid-May and mid-July of this year,
a time when the spread between the funds rate and the
discount rate was less than 100 basis points. In the
first six months of 1973, when the spread between the
two rates averaged about 160 basis points, member banks
borrowed an average of $1.7 billion from Federal
Reserve Banks. It was not until May 1974 that member
bank borrowing increased dramatically.


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

Prepared by Federal Reserve Bank of St. Louis
Released: July 27, 1979

V

2

ADJUSTED MONETARY BASE
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED BY THIS BANK

LLIONS OF DOLLARS

ILL IONS OF DOLLARS
—|---------- ------------- 154

billions

JUN.

5

JUN

147.0
147.2
147.7
147.4
148.1
148.4

19

2

IB 30

JUL

13

27

SEP

II

25

8 22

6 20

3

17 31

OCT

14 28

FEB

14

28

MAR

11

25

9

23

APR
1979

LATEST DATA PLOTTED WEEK ENDING: JULY 25,

1979

THE ADJUSTED MONETARY BASE CONSISTS OF: ( I ) MEMBER BANK RESERVES AT THE FEDERAL RFSFRVF
BAlfCS. (21 CURRENCY IN CIRCULATION (CURRENCY HELD BY THE PUBLIC AND N THE VAULTS OF
COMMERCIAL BANKS), AM) (3 ) AN ADJUSTMENT FOR RESERVE REQUIREMENT RAT .'0 CHANGESe computed
THF
°V&Ttf,J!£T£2J!2yiTf5? base is federL reservecredit 0 dat^
THIS^AI**1*'

* OETAILEO DESCRIPTION OF THE ADJUSTED MONETARY BASE IS AVAILABLE FROM

ADJUSTED MONETARY BASE
COMPOUNDED ANNUAL RATES OF CHANGE , AVERAGE OF FOUR WEEKS ENDING:
7/26/78

10/25/78 12/27/78

1/24/79

2/28/79

3/28/79

4/25/79

3.7
4.8
5.2
6.2
7.0

5. 1
5.5
6.8
7.6

7.0
8.0
8.7

8.3
9.1

5/23/79

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
12/27/78
1/24/79
2/28/79
3/28/79
4/25/79
5/23/79
6/27/79
7/25/79

8.6
8.6
7.9
7.3
7.4
7.3
7.5
7.8


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

6.7
6. 1
5.5
5.8
5.9
6.4
6.9

6.3
5.2
5.7
5.8
6.6
7.2

10.4

PREPARED BY FEDERAL RESERVE BAM< OF ST. LOUIS

MULTIPLIER i/
ADJUSTED FEDERAL RESERVE CREDIT^
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

RATIO
2.9

RATIO
2.9

MULT PLIER

1979
JUN.
....

■'‘S'

il_LL

BAXL2

13
i?

\k

1 1 1 Jill ■ III .111

1 1 1 1

LATEST DATA PLOTTED WEEK END INGs

.111 . i i.i i

JULY 18,

111

XI 1 i..i 11 XL 1 1

1979

BILLIONS OF DOLLARS
132
---------- 1---------- 1------------- 1----------

BILLIONS OF DOLLARS
132

COMPOUNDED ANNUAL R ATES
-----OF CHANGE. AVERAGE
THE FOUR lifEEKS END 1 MG
” JULY 25, 1979 FROM
-----THE FOUR WEEKS END 1 MG: _
-

MAY
APR.
----- MAR.
_ FEB.
JAN.

23 ,
1979
25 ,
1979
28 ,1979
28 ,
1979
24 ,
1979
26

-

r

USTED FEDER/ L RES :RVE :red i

9.
8.
7.
6.
6.

_

2i515
M 1 1 1 1 1 1 1 1 1 l’

8.

JUL.

1978

K, r

-

-

-r

-

■ A,
PV

Laza

JUN .20
■ 27
,f
JUL
ii

-

billi ate

~

127 §
127
if?
ill i

~

116
1 14

Jxx JJX
7 21
5 19

1111

XXL
SEP
1978

XXL -III 1
OCT

NOV

11 i XL 1 1

111

111

111

tin

DEC

FEB

MAR

APR

MAY

LATEST DATA PLOTTED WEEK ENDING-. JULY 25.

JAN

1111111
JUN

JUL

INI1
0
AUG

1979
1979

1/ RATIO OF MONEY STOCK tMl ) / ADJUSTED MONETARY BASE

2/

I 18

-

IqpfqCRE?fiI.cCT°^1FIPi£&-R£S££VE HOLDINGS OF SECURITIES, LOANS. FLOAT


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

PREPARED BY FEDERAL RESERVE BAM< OF ST. LOUIS

3

4

MONEY STOCK PLUS NET TIME DEPOSITS (M2)
BILLIONS OF

AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

dollars

billions of

BILLIONS
JUN.

902.8
904.6
905.8
909.0
914.8

2

JUN

'.6 30

JUL

13

27

SEP

11

25

.8 22

OCT

FEB

LATEST DATA PLOTTED WEEK ENDING: JULY 18,

MAR

JUN

JUL

1979

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

MONEY STOCK PLUS NET TIME DEPOSITS ( M 2 )
COMPOUNDED ANNUAL RATES OF CHANGE,
7/19/78

10/18/78 12/20/78

AVERAGE OF FOUR WEEKS ENDING:

1/17/79

2/21/79

3/21/79

1.7
4.4
5.9
7. 1
8.2

6.9
8.3
9. 1
10. 1

1 1 .0
1 1.0
11.8

4/18/79

5/16/79

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
12/20/78
1/17/79
2/21/79
3/21/79
4/18/79
5/16/79
6/20/79
7/18/79

8. 1
7.0
6.0
5.6
6. 1
6.6
7. 1
7.6


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

3. 1
2.3
2.5
3.7
4.7
5.6
6. 4

0.9
1.6
3.6
5. I
6.2
7.2

1 1 . 1
12. 1

12.4

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

MONEY STOCK ( Ml )
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS
385 ---------- 1---------- .--------

BILLIONS OF DOLLARS
------------------------------- 385

BILLIONS
368.5
368.7
369.9
373.4
372.5

5

JUN

19

JUL

2

16 30

AUG

15 27

SEP
1978

II

OCT

25

8 22

NOV

6 20

3

DEC

LATEST DATA PLOTTED WEEK ENDING: JULY 18,

17

JAN

31

14

28

FEB

14

28

MAR

1 1

25

APR

9 23

MAY
1979

JUN

JUL

AUG

1979

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS’ H.6 RELEASE.
THE MONEY STOCK CONSISTS OF DEMAfO DEPOSITS PLUS CURRENCY AND COIN HELD BY THE NONBANK PUBLIC.

MONEY STOCK (Mi
COMPOUNDED ANNUAL RATES OF CHANGE ,
7/19/78

10/18/78 12/20/78

1/17/79

AVERAGE OF FOUR WEEKS ENDING:

2/21/79

3/21/79

4/18/79

5.0
7.6
8. 1
8.7

11.8
10.9
11.0

11.0
11.1

5/16/79

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
12/20/78
1/17/79
2/21/79
3/21/79
4/18/79
5/16/79
6/20/79
7/18/79

4.6
4. 1
2.3
2.0
2.9
3.8
4.4
4.9


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

-0.7
-2.2
-1 .9
-0. 1
1 .6
2.7
3.5

-3.0
-2.2
0.7
2.9
4. 1
5. 1

-3.6
0.6
3.3
4.7
5.7

10.2

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

5

6

YIELDS ON SELECTED SECURITIES
AVERAGES OF DAILY RATES ENDED FRIDAY

PERCENT
12.5 r—

12.0

PERCENT
—i 12.5

PRIME BAN!
LOAN RATE

12.0

11.5
11.0

11.0
10.5

90 DAY CD’S***

10.0

COMMERCIAL PAPER

CORPORATE Aaa BONDS

I 1 I I
1

15 29

12

JAN

26

9 23

I

15 29

90 DAY
CD’S JBKX

PRIME
COMMERC1AL
PAPER
4-6 MONTH

10.08
10.09
9.99
9.90
9.89
9.84
9.94
10. 10
10.29

9.91
9.88
9.71
9.61
9.61
9.62
9.75
9.83
9.98

JUNE

1
8
15
22
29
JULY
6
13
20
27 *
AUG.
3
10
17
24
31

10 24

1979

LATEST DATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK ENDING: JULY 27,

1979

13 27

FEB

1978

PRIME
BANKERS’
ACCEPTANCES
9.93
9.90
9.73
9.76
9.72
9.73
9.94
10.03
10.20

1979

CORPORATE
Aaa BONDS

MUNICIPAL
BONDS ***
X

9.48
9.41
9.25
9.23
9.23
9. 16
9. 17
9. 19
9.21

6. 16
6.09
6. 1 1
6. 18
6. 12
6.08
6. 1 1
6. 15
N. A.

* AVERAGES OF RATES AVAILABLE.
** BOND BUYER’S AVERAGE INDEX OF 20 MUNICIPAL BONDS* THURSDAY DATA.
*W* SEVEN-DAY AVERAGES OF SECONDARY MARKET RATES FOft THE WEEK ENDING WEDNESDAY TWO DAYS
EARLIER THAN DATES SHOWN.
CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS’ H.9 RELEASE.
N.A. - NOT AVAILABLE


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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

SELECTED
!l .5

INTEREST RATES

AVERAGES OF DAILY RATES ENDED FRIDAY

PERCENT

PERCENT
—I I 1.5

r-

'

FEDERAL FUNDS RATE

10.0

DISCOUNT RATE

3-5 YEAR
TREASURY SECURITIES

THREE-MONTH TREASURY
MARKET YIELD

2

'8 30

JUN

14 28

JUL

11

AUG

25

8

22

SEP

6

20

OCT

317

NOV

LJ. I 1 I | |
I

15 29

12 26

JAN

9 23

9 23

6 20

l

15 29

1978
LATEST DATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK END^NGs JULY 27,

1979
JUNE

1
8
15
22
29
JULY
6
13
20
27 x
AUG.
3
10
17
24
31

13

27

10 24

FEB
! 979

FEDERAL
FUNDS *»

3-MONTH
TREASURY
BILL

6-MONTH
TREASURY
BILL XX*

1-YEAR
TREASURY
BILL

3-5 YEAR
TREASURY
SECURITIES

LONG-TERM
TREASURY
SECURITIES

10.28
10.23
10.23
10.28
10.32
10.42
10.28
10.35
10.63

9.55
9.36
8.97
8.96
8.83
9. 10
9.28
9.31
9.35

9.41
9.43
9.05
8.87
8.90
8.87
9. 16
9.26
9.47

9.05
8.94
8.74
8.84
8.64
8.70
8.79
8.93
9.02

9.08
8.97
8.85
8.93
8.78
8.71
8.82
8.91
8.98

8.98
8.90
8.81
8.85
8.76
8.74
8.82
8.88
8.89

TREASURY B?LL vfELDSRofiSDl?SCOu5TRBAS?l.AF,E C0MPUTED BT THE FEDERAL RESERVE BANK OF ST. LOUIS.


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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

7

8

NET TIME DEPOSITS
ALL COMMERCIAL BANKS
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
550

BILLIONS

Z

545

534.3
535.8
537. 1
539.2
540.3
542.3

JUL.

540
535
530

515
510
505
500

2

16 30

13 27

SEP

II

25

8 22

6 20

3

17

31

FEB

OCT

MAR

APR
1979

LATEST DATA PLOTTED WEEK E«>ING: JULY 18, 1979
CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE.
M NET TIME DEPOSITS ARE DEFINED AS: SAVINGS DEPOSITS. TIME DEPOSITS OPEN ACCOUNT PLUS TIME
CERTIFICATES OF DEPOSIT OTHER THAN NEGOTIABLE TIME CERTIFICATES OF DEPOSIT ISSUED IN
DENOMINATIONS OF *100,000 OR MORE BY LARGE WEEKLY REPORTING COMMERCIAL BANKS.

NET TIME DEPOSITS
COMPOUNDED ANNUAL RATES OF CHANGE,
7/19/78

10/18/78 12/20/78

AVERAGE OF FOUR WEEKS ENDING:

1/17/79

2/21/79

3/21/79

4/18/79

5/16/79

5.6
7.2
7.8
8.8
9.9

8.3
8.8
9.8
1 1.0

10.3
11.1
12.2

11.2
12.7

14.0

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
12/20/78
1/17/79
2/21/79
3/21/79
4/18/79
5/16/79
6/20/79
7/18/79

10.7
9.2
8.6
8.3
8.5
8.7
9.0
9.6


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

5.8
5.7
5.7
6.5
6.9
7.7
8.5

3.6
4.3
5.8
6.6
7.6
8.8

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

DEMAND DEPOSIT COMPONENT OF MONFY STOCK
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS
280 ---------- 1---------- ,--------

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

B'lUQNS
267.3
266.8
267.9
271.4
270.2

7

21

JUN

5

ig

JUL

2

16 50

AUG

13 27

SEP

II

OCT

25

8 22

8

20

3

17

NOV

SI

14

28

FEB

14

28

MAR

II

25

APR

1978
LATEST DATA PLOTTED WEEK ENDING*. JULY 18.

1979

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

DEMAND DEPOSIT COMPONENT OF MONEY STOCK
COMPOUNDED ANNUAL RATES OF CHANGE,
7/19/78

10/18/78 12/20/78

1/17/79

AVERAGE OF FOUR WEEKS ENDING:

2/21/79

3/21/79

4/18/79

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
12/20/78
1/17/79
2/21/79
3/21/79
4/18/79
5/16/79
6/20/79
7/18/79

2.5
1 .7
-0.5
-0.9
0.4
1 .7
2.5
3. 1


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

-4.3
-6.3
-5.8
-3.3
-1 .0
0.4
1.6

-7.4
-6.2
-2.3
0.8
2.4
3.6

-7.9
-2.3
1.6
3.4
4.6

3.8
7.5
8. 1
8.8

5/16/79

13 5
11.9

12lo

10.5

PREPARED BY FEDERAL RESERVE BANK OF ST.

9

LOUIS

10

CURRENCY COMPONENT
OF MONEY STOCK
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
106

BILLIONS
JUN.

101.2
101 .8

101 .9

102.0

102.3

5

19

2

16

30

13 27

II

25

8 22

6 20

3

17

31

14

28

FEB
LATEST DATA PLOTTED WEEK END ING: JULY 18,

14

It

25

9 23

6

20

MAR

1979

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

CURRENCY
COMPOUNDED ANNUAL RATES OF CHANGE,
7/19/78

10/18/78 12/20/78

AVERAGE OF FOUR WEEKS ENDINGt

1/17/79

2/21/79

3/21/79

4/18/79

5/16/79

8.5
8.4
8.0
8.4
8.6

8.2
7.7
8.3
8.5

7.4
8.3
8.6

8.4
8.7

9.6

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
12/20/78
1/17/79
2/21/79
3/21/79
4/18/79
5/16/79
6/20/79
7/18/79

10.7
10.8
10.5
10.2
10.0
9.7
9.7
9.7


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

9.5
9.3
9. 1
9.0
8.7
8.8
8.9

9.9
9.4
9. 1
8.6
8.8
8.9

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

BORROWINGS FROM FEDERAL RESERVE BANI
3ANK£
AlL MEMBER BANKS

BILLIONS OF DOLLARS
3.5 ----------,---------- 1-------------

billioABf DOLLARS
3.5

MILLIONS
1324
1587
1676
941
1181
1292

LL

— JUN. 20
27
: JUL.
4
—
11
18
25

i l l i 11

1979

TTTT

“

IN THE NATION
N

AVERAGES OF DAILY FIGURES

A

z

1.0

\A

/ \

]L

111

Li 1 1

/

/
t/

/

JV

0.5

111

r

L

d

1 1 1

1 1 1

i m i

SEP
1978

OCT

NOV

111 -.1111

1 14 28 1 14 1 28 111
u. 1
FEB

17 31

LATEST DATA PLOTTED WEEK ENOING: JULY 25,

1.5
1.0
0.5

DEC

JAN

\7

1 LLL ±U_l

\L

1.5

MAR

APR

INI

1 1 1

6 20

MAY
1979

1 1 1

1 1 1 1
1

JUN

15 29

AUG

1979

BUSINESS LOANS
( COMMERCIAL AND

INDUSTRIAL )

WEEKLY REPORTING LARGE COMMERCIAL BANKS
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS
150
1---------- 1
1
1 —
” COMPOUNDED ANNUAL RA TES
1 48 — OF CHANGE. AVERAGE 0
_ THE FOUR WEEKS END IN G
JULY 18, 1979 FROM
146 — THE FOUR WEEKS END IN
~

144
142
140

MAY
APR.
~ MAR.
— FEB.
_ JAN.
OCT.

16,
18,
21 ,
21 ,
17,
18,

1979
1979
1979
1979
1979
1978

BILLIONS OF DOLLARS
150
-

148
-

146

27.5
27.4
27.6
23.2
23.8
18.1

-

144
-

142
140
-

138
136
134
132

138
-

-

-

-

-

-

136
134
132
-

130

1SL !

128
-

126
124
0

'i 11

MILLIONS

JUN. 13
20
27
JUL. 4
11
18
111

1 1 1 I

111
SEP
1978

111

1111
8
NOV22

i

6 20 JAN
DEC 3 17

LATEST DATA PLOTTED WEEK ENDING: JULY 18,


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

1111

111

111

11_L

31 FEB 28 MAR 28 APR 25
14
14
II

1 1 1 1
9 23
MAY

142,959
143,209
143,872
144,905
146,729
147,022

_

126

~

124

............................... ...
6 20
JUN

4 18
JUL

I 15
AUG

29

1979
1979
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

11

CO TJ Tl

a

12

-Cm

m
H

pPo

C

o®5

a

z
CERTIFICATES

OF

DEPOSIT

WEDNESDAY FIGURES
NOT SEASONALLY ADJUSTED

E S>

•v

in
5

>
O

S jjj

_

o
</)
H

LARGE COMMERCIAL BANKS

r~

kj

m

m

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

104

102
100

V)
co
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LATEST DATA PLOTTED WEEK ENDING-. JULY 18.

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1979

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE.
NEGOTIABLE TIME CERTIFICATES OF DEPOSIT ISSUED IN DENOMINATIONS OF 8100,000 OR MORE BY LARGE
WEEKLY REPORTING C0M4ERCiAL BANKS.


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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

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