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RESEARCH

Week ending: June 26, 19/4

Fcdcrsl Reserve 3snk
of St. Louis

Hie multiplier relating the money stock (M]) to the
monetary base is currently lower than that prevailing a year
ago. A partial explanation lies in increases of the currency
and time deposit ratios, two of the determinants of the money
multiplier.* Over the past twelve months, the rate of growth
in the narrowly defined money stock has exceeded the rate of
growth of its private demand deposit component. This implies
a faster growth in the currency component of Mp as compared to
the demand deposit component and thus an increase in the
public's preference for currency relative to demand deposits.
Over the same interval the rate of growth of
plus time
deposits, inclusive of large CDs, surpassed the growth of
alone. Such a discrepancy in these rates of growth imply an
increase in the public's preference for time deposits relative
to demand deposits.
The composition of total time deposits has changed
substantially in favor of large CDs over the past six months.
This change reflects a rapid rise in the interest rates on
large CDs, which are not constrained by Regulation Q ceiling
rates. Since late December 1973, the outstanding volume of
large CDs has increased by about $15 billion to a level of $79
billion.
The volume of business loans at commercial banks has
continued to rise. This rise, accompanied by a rapid rise in
bank loan rates, reflects an accelerated increase in the
demand for bank loans by business borrowers. The concomitant
increase in the broad spectrum of short- and long-term
interest rates mirror an underlying robust demand for credit.
An exception to the general rise in interest rates since
early-May has been the rate on the 3-month Treasury bill.

For a discussion of the proximate determinants of the money
multiplier, see the October 1969 Review of this Bank.


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

Prepared by Federal Reserve Bank of St. Louis
Released: June 28, 1974

.Monetary

base

AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED BY THIS BANK

BILLIONS OF DOLLARS

MAY

BILLIONS OF DOLLARS
112

22
I 10

108

106

104

102

100

2 10 30 13 27 II 25

JUN

0 22

5 19

3 17 31

14 20 12 20

NOV

JUL

LATEST DATA PLOTTED WEEK ENDING, JUNE 26,

9 23

0 20

0 20

3 17

FEB

DEC

MAR

APR

1

IS 20 12 20 10 24

1074

USES OF MONETARY BASE ARE MEMBER BANK RESERVES AND CURRENCY MELD BY THE PUBLIC AND NONMEMBER
BANKS, ADJUSTED FOR RESERVE REQUIREMENT CHANGES AND SHIFTS IN DEPOSITS.
FOR A DESCRIPTION
OF THE BASE SEE THE AUGUST 19BS ••REVIEW” OF THIS BANK.

e

COMPOUNDED ANNUAL RATES OF CHANGE , AVERAGE OF FOUR WEEKS ENDING,
6/27/73

9/26/73 11/28/73 12/26/73

1/23/74

2/27/74

3/27/74

4/24/74

7.0
8.6
8.3
7.8

10.8
9.5
8.5

9.6
8.3

6.5

TO THE AVERAGE
OF FOUR WEEKS
ENDING,
11/28/73
12/26/73
1/23/74
2/27/74
3/27/74
4/24/74
5/29/74
6/26/74

6.5
7.2
7.6
7.3
7.5
7.9
7.9
7.7

10.2
10.3
9. 1
9. I
9.6
9.3
8.9

10.7
8.6
8.7
9.4
9.0
8.5

7.6
8. 1
9. 1
8.7
8.2

,8£ snul'

2


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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

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

RATIO

RATIO

MULTIPLIER

BAD

LATEST DATA PLOTTED WEEK ENDING. JUNE 19,

1974

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
98

-

COMPOUNDED ANNUAL RATES
OF CHANGE, AVERAGE OF
___ THE FOUR WEEKS ENDING
JUNE 26, 1974 FROM
THE FOUR WEEKS ENDING.
MAR.

1974
1974
1974
1974
1973
1973
1973

96

14.2
11.6
8.7
9.4
9.1
9.9
7.5

94
FEDERAL RESERVE CREDIT
92

90

1511
MAY

MILLIONS

88

2

86

2 IS 90 IS 27 II IS

9 22

5 19

3 17 31

14 2« 12 26

NOV

DEC

1973
LATEST DATA PLOTTED WEEK ENDING. JUNE 26,

9 23

6 20

6 20

3 17

FEB

MAR

APR
1974

1

IS 29 12 26 10 24

1974

1/ RATIO OF MONEY STOCK (Ml ) / MONETARY BASE.
2/ DEFINED TO INCLUDE HOLDINGS OF SECURITIES, LOANS. FLOAT AND "OTHER" ASSETS, ADJUSTED FOR
RESERVE REQUIREMENT CHANGES AND CHANGES IN REQUIREMENTS DUE TO SHIFTS IN DEPOSITS AMONG
CLASSES OF BANKS.
DATA ARE SEASONALLY ADJUSTED BY THIS BANK.


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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

n

rC'i
DEMAND DEPOSIT COMPONENT OF MONEY STOCK

AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
225

B.I LI IQN5
215.1
216.0
213.5
216.6
215.9
216.8

220

215

210

205

2 16 SO 13 27 II 25

JUN

6 22

5 10

5 17 31

JUL

14 2« 12 26

NOV

8 23

6 20

6 20

3 17

I

15 29 12

DEC

1973

1974

LATEST DATA PLOTTED WEEK ENDING* JUNE 18,

1974

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

COMPOUNDED ANNUAL RATES OF CHANGE , AVERAGE OF FOUR WEEKS ENDING:
6/20/73

9/19/73 11/21/73 12/19/73

1/16/74

2/20/74

3/20/74

4/17/74

8.6
8.7
7.0
7.0

12.7
8.8
8.4

5.6
6.0

4.7

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
11/21/73
12/19/73
1/16/74
2/20/74
3/20/74
4/17/74
5/22/74
6/19/74

2.7
3.8
3.6
3.4
4.7
5. 1
4.9
5.0

7.4
6. 1
5.3
6.9
7.2
6.6
6.6

6. 1
4.7
7.4
7.7
6.8
6.8

2.2
6.5
7.0
6.1
6.2

4


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

PREPARED BY FEDERAL RESERVE BAf* OF ST. LOUIS

MONEY STOCK
AVERAGES OF DAILY FIGURES
\s

CCACnMAl I

BILLIONS OF DOLLARS
285 r---------- 1--------- 1—

A n

ill o -rr-r\

BILLIONS OF DOLLARS
----- ---------- ------------- 285

BILLIONS
279.5
280.6
278. I
281.1
280.9
281.6

------

ill I 111
J !• SO 13 27 II 25

JUN

• 22

5 1*

9 17 91

JUL

M 21 12 2C

NOV

• 29

« 20

6 20

9 17

MAR

DEC

APR

I

19 2f 12 26 10 24

LATtST DATA PLOTTED WEEK ENDING. JUNE 19, 1974
CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' M.6 RELEASE.

COMPOUNDED ANNUAL RATES OF CHANGE , AVERAGE OF FOUR WEEKS ENDINGt
6/20/75

9/19/75 M/21/75 12/19/75

1/16/74

2/20/74

5/20/74

4/17/74

9.3
9.5
8. 1
7.9

12.6
9.6
9.0

6.9
7.0

5.7

TO THE AVERAGE
OF FOUR WEEKS
ENDING.
M/21/75
12/19/75
1/16/74
2/20/74
5/20/74
4/17/74
5/22/74
6/19/74


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

3.4
4.6
4.5
4.5
5.6
6.0
5.8
5.9

7.9
7.0
6.3
7.8
8.0
7.5
7.5

7.5
6.2
8.4
8.7
7.9
7.8

4. 1
7.6
8. 1
7.3
7.3

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

260

YIELDS ON SELECTED SECURITIES
AVERAGES OF DAILY RATES ENDED rRI DAY

PERCENT

PERCENT

L tjim iiu u u iu .il

12.0
I 1.5

1 1.0
10.5
'RIME BANK
OAN RATE

10.0
9.5
9.0
8.5

COMMERCIAL PAPER

8.0
7.5

CORPORATE AAA BONDS

7.0
6.5
6.0
5.5
5.0
MUNICIPAL
BONDS »t
4.5

4 18

1

13 29 IS 27 10 24

7 21

3 IS

2 16 SO H 2* II 23

DEC

JAN

6 22

6 22

3 19

3 17 SI

JUN

FEB

1973

MAY

3
10
17
24
31
JUNE
7
14
21
28 K
JULY
5
12
19
26

JUL

1974

LATEST DATA PLOTTED ARE AVERAGES OP RATES AVAILABLE FOR THE WEEK ENDING. JUNE 28,

1974

4 28 12 26

1974

90 DAY
CD'S MM

PRIME
COMMERCIAL
PAPER
4-6 MONTH

PRIME
BANKERS’
ACCEPTANCES

CORPORATE
Aaa bonds

MUNICIPAL
BONDS m

10.99
11.24
11.34
11.23
11.07
11.05
10.97
11.39
11.62

10.73
10.83
10.80
10.38
10.31
10.53
10.75
11.10
11.29

10.40
10.70
10.75
10.75
10.75
10.75
10.75
10.75
10.83

8.34
8.38
8.36
8.38
8.39
8.40
8.40
8.49
8.56

5.91
6.00
6.04
6.05
6.08
6.01
6.04
6. 13
N.A.

* AVERAGES OF RATES AVAILABLE.
XX BOND BUYER’S AVERAGE INDEX OF 20 MUNICIPAL BONDS, THURSDAY DATA.
MBS SEVEN-DAY AVERAGES OF SECONDARY MARKET RATES FOR THE WEEK ENDING WEDNESDAY TWO DAYS
EARLIER THAN DATES SHOWN.
CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS’ H.9 RELEASE.
 N.A. - MOT AVAILABLE
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis

6

0

SELECTED SHORT-TERM

AVERAGES OF DAILY RATES ENDED FRIDAY

PERCENT

12.5

INTEREST RATES
PERCENT
—i 12.5

r-

FEDERAL FUNDS RATE

LUl i. 1..I J 1
4 16
18

I
l

MAY

JUN

II J

111111 ITT

DISCOUNT RATE

III i 11 I HI LLU-1 U 11 I I I 1 I I I 1 I I I i I

IS 20 IS 27 IQ 24
29
to

JUL

7 21

AUG
SEP
1973

3 IS
19

OCT

2 16 SO 14 28 II 23

NOV

DEC

JAN

S 22
8

FEB

8 22

MAR

1 1 I

111 I

S 19
18

S 17 SI

APR
1976

MAY

I I I

1 II

14 28 12 28
26

JUN

JUL

LATEST DATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK ENDINGt JUNE 28, 1974

S-MONTH
TREASURY
BILLS

1974
MAY

3
10
17
24
31
JUNE 7
14
21
28 *
JULY
5
12
19
26

11.17
11.29
11.46
10.95
11.54
11.45
11.60
11.85
11.97

3-3 YEAR
GOVERNMENT
SECURITIES

LONG-TERM
GOVERNMENT
SECURITIES

8.81
8.60
8.00
7.90
8.04
8.05
8.23
7.88
7.46

8.29
8.51
8.20
8.09
8.07
8.06
8.06
8.09
8.28

7. 1 1
7.09
7.02
7.08
7.06
7.04
6.99
7.00
7.07

* AVERAGES OF RATES AVAILABLE.
Wt SEVEN-DAY AVERAGES FOR WEEK ENDING WEDNESDAY TWO DAYS EARLIER THAN DATE SHOWN.
CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS’ H.9 RELEASE.

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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

-

#IME DEPOSITS

ALL COMMERCIAL BANKS
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
410
400
390
380

TOTAL TIME DEPOSITS

370
360
350
340
330
320
310
300
NET TIME DEPOSITS K
290
280

2 I« 80 IS 27 || 23

JUN

8 22

S 19

3 17 31

JUL

H 28 12 26

NOV

9 23

6 20

6 20

3 17

FEB

DEC

MAR

APR

1

IS 29 12 26 10 24

1973
LATEST DATA PLOTTED WEEK ENDINQt JUNE 19, 1974
CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS1 H.3 RELEASE.
* NET TIME DEPOSITS ARE DEFINED AS* SAVINGS DEPOSITS, TIME DEPOSITS OPEN ACCOUNT PLUS TIME
CERT IF1CATES ®F DEPOSIT OTHER THAN NEGOTIABLE TIME dERTIFICATES OF DEPOSIT ISSUED IN
DENOMINATIONS OF 9100,000 OR MORE BY LARGE WEEKLY REPORTING COMMERCIAL BASKS.

NET TIME DEPOSITS
COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING*
6/20/73

9/19/73 11/21/73 12/19/73

1/16/7'’

2/20/74

3/20/74

4/17/74

8.3
7.8
8.7

6.3
8.0

9.0

TO THE AVERAGE
OF FOUR WEEKS
ENDING*
11/21/73
12/19/73
1/16/74
2/20/74
3/20/74
4/17/74
5/22/74
6/19/74

12.5
1 1.8
12.2
12.8
12.7
12.0
11.4
11.5

13.0
13.3
14. 1
13.7
12.5
11.7
1 1.7

11.2
13.4
12.8
11.4
10.5
10.7

15.8
14.3
12.2
11.0
11.1

14.3
11.6
10.3
10.5

8


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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

%

MONEY STOCK PLUS TIME” EPOS ITS
AVERAGES OF DAIlY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
----- ---------- ---------- =3 680

690 r---------- ---------------

MONEY STOCK PLUS TOTAL TIKE DEPOSITS

MONEY STOCK PLUS NET TIME DEPOSITS

2 16

MAY

30 19 27 II 2S

JUN

JUL

• 22 5 19

5 17 91

AUG
SEP
1973

OCT

UTUT BATA PLOT TEC WEEK ENDING.

H 26 12

NOV

JUNE 19.

6 20

9 17

DEC

I

19 29 12 26 10 24

1974

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS1

H.B RELEASE.

»Ma IS DEFINED AS. CURRENCY. DEMAND DEPOSITS PLUS NET TIME DEPOSITS t SEE PAGE 9).

MONEY STOCK PLUS NET TIME DEPOSITS (M2)
COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING:
6/20/73
9/19/73 1 1/21/73 12/19/73 1/16/74 2/20/74 3/20/74 4/17/74
TO THE AVERAGE
OF FOUR WEEKS
ENDING.
11/21/73
12/19/73
1/18/74
2/20/74
3/20/74
4/17/74
5/22/74
6/19/74


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

8. I
8.3
8.4
8.8
9.2
9. 1
8.7
8.8

10.5
10.2
10.4
10.8
10.4
9.7
9.7

9.4
10.0
10.7
10.2
9.3
9.3

10. 1
1 l .0
10.3
9.2
9.3

11.8
10.6
9.2
9.3

10.5
8.6
8.8

6.7
7.6

7.4

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

9

CERT# I CATES OF DEPOS I #

LARGE COMMERCIAL BANKSW
WEDNESDAY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS of dollars

82
80
78
76
74
72
70

68
66
64
62

60
58
56
0

2 IS

MAY

SO IS 27 11 25 3 22

JUN

JUL

AUG

5 19

SEP

3 17 91

OCT

LLLL-LLL-LLL 3 117 _LL1 29 III Jit I
I I I IS
6 20 6 20
12 26 10 24

H 28 12 26 9 23

NOV

DEC

JAN

FEB

MAR

1973

APR

MAY

JUN

JUL

1974

LATEST DATA PLOTTED WEEK ENDINGi JUNE 19.

1974

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE.
NEGOTIABLE TIME CERTIFICATES OF DEPOSIT ISSUED IN DENOMINATIONS OF 9100,000 OR MORE BY LARGE
WEEKLY REPORTING COMMERCIAL BANKS.
r

artttme^kposituata

1974
MAY

1
8
15
22
29
JUNE
5
12
19
26
JULY
3
10
17
24
31

BILLIONS
CERTIFICATES CERTIFICATES
NET TIME
OF DEPOSIT
OF DEPOSIT
DEPOS1TS K
NOT SEAS. AOJ.
74.3
76.0
76.9
78.8
79.6
79.2
79.6
79. 1

78.0
79.7
80.6
82.0
82.5
81 .9
82.5
83.5

312.8
312.7
313.6
313.3
314.4
315.8
316.2
316.8

M2 m
589.6
591 .3
593. 1
593.9
592.5
596.9
597. 1
598.4

* SEE FOOTNOTE PAGE 8.
Wt SEE FOOTNOTE PAGE 9.
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS
10


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

BORROWINGS FROM FEDERAL RESERVE BANKS

ALL MEMBER BANKS

IN THE NATION

AVERAGES OF DAILY FIGURES

billions of dollars

billions of

dollars

4.5
JJZl MIU.IQW&
MAY

22
29
JUN.
5
12
19
26

3090
3006
3054
2729
3223
27M

BORROWINGS

2 Ifi SO IS 27 II 25
JUN
JUL

* 22

5 19

S 17 SI M 21 II N
NOV
DEC

9 23

« 20

t 79

SI?

l

is » 11 X 10 24

LATEST DATA PLOTTED WEEK ENOINCt JUNE 26, 1974

BUSINESS LOANS
(COMMERCIAL AND
BILLIONS OF DOLLARS

INDUSTRIAL)

WEEKLY REPORTING LARGE COMMERCIAL BANKS
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

126
COMPOUNDED ANNUAL RATES OF CHANGE
AVERAGE OF THE FOUR WEEKS ENDING
JUNE 19, 1974 FROM THE FOUR
WEEKS ENDING.
BUSINESS
BUSINESS
LOANS
LOANS
ADJUSTED
APR.
MAR.
FEB.
JAN.
DEC.
SEP.
JUN.

17,
20
20
16
19
19
20

126
124
122

1974
30.7

120

31.0

24.3

1 IS

BUSINESS LOANS ADJUSTED

17.4

116
114

112
110
BUSINESS
BUSINESS
LOANS LOANS
A&waiEfl.

BUSINESS LOANS

105
106
104

102
2 It 50 15 27 H 25

JUN

JUL

9 22

S 19

1

LATEST DATA PLOTTED WEEK ENDING. JUNE 19,

DEC

9 23

6 20

8 to

FEB

14 23 12 2«

NOV

MAR

3 17

!

15 29 12 2* 10 24

1974

1/ INCLUDES LOANS SOLD OUTRIGHT BY COMMERCIAL BANKS TO OWN SUBSIDIARIES, FOREIGN BRANCHES,
HOLDING COMPANIES, AND OTHER AFFILIATES.

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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

MEMBER BANK DEPOSITS
SUBJECT TO RESERVE REQUIREMENTS
(CREDIT PROXY )
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS
Z
Z
=
=

BILLIONS OF DOLLARS
495

COMPOUNDED ANNUAL RATES OF CHANGE,
AVERAGE OF THE FOUR WEEKS ENDING
JUNE 19, 1974 FROM THE FOUR
WEEKS ENOINGt
CREDIT
CREDIT
PROXY
PROXY
ADJUSTED

- APR.

1974

485

18.3

21.2

23.0

47 5

Z JAN.
Z DEC.
Z SEP.

465
CREDIT PROXY ADJUSTED 1/
455

BILLIONS
CREDIT

CREDIT
PROXY

TOBOL

CREDIT PROXY

ADJUSTED

445

435

467.4
472.4
473. 1

30 IS 27 11 25
JUN
JUL

8 22

3 17 31

14 28 12 26
NOV
DEC

9 23

6 20

FEB

1973
LATEST DATA PLOTTED WEEK ENDING.
CURRENT DATA APPEAR
1/

12


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

MAR

3 17
APR

I

482.5
482.9

IS 29 12 26 10 24

1974
JUNE 19,

1974

IN THE BOARD OF GOVERNORS'

H.9 RELEASE.

INCLUDES MEMBER BANK DEPOSITS. BANK-RELATED COMMERCIAL PAPER,
U.S. BANKS, AND CERTAIN OTHER NONDEPOSIT SOURCES.

EURODOLLAR BORROWINGS OF

PREPARED BY FEDERAL RESERVE BANK OF ST. IOUiS

425

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