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4

^VJL^W.\

t rsj x\ r* c t x\ l.

o/i r/i

Week ending: November 12, 1980
LJBRARVnterest rates have increased rapidly since the beginning of
Septem|aS For example, following the upswing in other market rates, the
prime rate has also risen, increasing 400 basis points during the past two and
one-half months. After remaining at 11 percent throughout the month of
October, the discount rate has been increased to 12 percent. In addition, the
Board of Governors has announced that a two percentage point surcharge will
be levied on banks with deposits of $500 million or more that borrow
frequently from the discount window.

P

The recent increase in the prime rate is attributable to the
continued strong demand for business loans (see page 11) and the rapidly rising
cost to banks of acquiring additional loanable funds. An important source of
such additional funds is 90-day certificates of deposit (CDs). Consequently, as
the 90-day CD rate changes, the prime rate tends to move in a corresponding
direction. In the table below, the prevailing prime rate is compared to the
90-day CD rate, adjusted for reserve requirements on funds raised by issuing
CDs. Throughout the period, this reserve requirement is 6 percent. As
illustrated in the table, the prime rate during recent weeks has been below the
adjusted 90-day CD rate.
Comparison of Effective Cost of Issuing 90-Day
Certificates of Deposit and Prime Rate
90-day CD rate*
Adjusted
Market
market rate
rate

Period

Prime
rate**

Difference

Sept.

5
12
19
26

10.72 %
10.90
11.34
11.45

11.40 %
11.60
12.06
12.18

11.50 %
11.71
12.21
12.46

Oct.

3
10
17
24
31

12.81
12.36
12.52
12.90
13.98

13.63
13.15
13.32
13.72
14.87

13.00
13.50
13.50
13.93
14.07

-0.63
0.35
0.18
0.21
-0.80

Nov.

7
14

14.98
14.94

15.94
15.89

14.50
15.50

-1.44
-0.39

0.10
0.11
0.15
0.30

* Five-day averages for week ending date shown.
** Seven-day averages for week ending two days prior to date shown.
This release is published later than usual because
much of the data was not available until November 18.

Prepared by Federal Reserve Bank of St. Louis
Released: November 18, 1980

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

2

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

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

170

OCT.

164.3
164.5
165.9
165.6
166.0
166.5

NOV.

I I I I
AUG

1979

SEP

1980

LATEST DATA PLOTTED WEEK ENDING: NOVEMBER 12.

1980

THE ADJUSTED MONETARY BASE CONSISTS OF: ( I ) MEMBER BANK RESERVES AT THE FEDERAL RESERVE
BANKS. (2) CURRENCY IN CIRCULATION (CURRENCY HELD BY THE PUBLIC AND IN THE VAULTS OF
C0*«4EAciAL 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:
11/14/79

2/13/80

4/9/80

5/14/80

6/11/80

7.8
6.8
7.0
7.3
7.9
8.6
8.4
8.8

6.3
6.8
7.3
8.3
9.2
8.8
9.3

5.3
6.5
8. 1
9.4
8.9
9.5

9.0
10.3
1 1.5
10.3
10.8

1 1.0
12.4
10.7
11.2

7/9/80

8/13/80

9/10/80

10.4
11.3

9.6

TO THE AVERAGE
OF FOUR WEEKS
END 1NG:
4/ 9/80
5/14/80
6/11/80
7/ 9/80
8/13/80
9/10/80
10/15/80
11/12/80


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

13.7
11.1
1 1.6

PREPARED BY FEDERAL RESERVE BANK OF ST.

LOUIS

ADJUSTED BANK RESERVES 1/
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

BILLIONS
49.7
49.6
49.5
50.6
50.0
50.4

5

19

3

17

31

14

26

12

26

9 23

6 20

5

19

2

16 30

14

28

1979

II

25

1980

LATEST DATA PLOTTED WEEK ENDING: NOVEMBER 5,

1980

'/ ADjySTED MONETARY BASE LESS CURRENCY HELD BY THE NONBANK PUBLIC (MEMBER BANK RESERVES AT
FEDERAL RESERVE BANKS ( + ) CURRENCY HELD BY COtACRC IAL BANKS ).

ADJUSTED BANK RESERVES
COMPOUNDED ANNUAL RATES OF CHANGE
11/7/79

2/6/80

4/2/80

5/7/80

AVERAGE OF FOUR WEEKS ENDING:
6/4/80

7/2/80

8/6/80

4.9
10.3
10.5
9.0

15.2
13.7
11.1

16.4
12.0

9/3/80

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
4/
5/
6/
7/
8/
9/
10/
11/

2/80
7/80
4/80
2/80
6/80
3/80
8/80
5/80

7.0
5.2
5.2
4.6
5. 1
6.7
7.2
6.8


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

4.3
4.6
3.7
4.7
7.0
7.6
7. 1

1.2
0.8
3.0
6.5
7.3
6.7

2.7
5. 1
9.2
9.6
8.5

7.2

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

395
billions

__ OCT.

381.7

— NOV.

387.7
387.2
386.5
387.2

4

NOV

28

12 26

DEC

9 23

6

20

FEB

5

19

2

16 30

14 28

II

25

9 23

6

20

3

17

MAR
1980

LATEST DATA PLOTTED WEEK ENDING: NOVEMBER 5.

1980

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

mm. ?RNfi§,TS,v?fir.Cy55iyCL.AtJD„S0^„^LyS COMMERCIAL BANK DEMAND DEPOSITS HELD BY THE NONBANK
PUBLIC EXCLUDING THOSE HELD BY FOREIGN BAKKS AND OFFICIAL INSTITUTIONS.

MONEY STOCK (MIA)
COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING:
11/7/79

2/6/80

4/2/80

5/7/80

6/4/80

7/2/80

8/6/80

9/3/80

-4.7
-2.5
-0. 1
2.5
4.0
5.2
5.8

-7.4
-2.0
2.3
4.4
5.8
6.5

7.9
10.3
11.2
11.5
11.4

12.9
13.3
13. 1
12.7

14.3
13.6
13.1

13.3
12.6

11.8

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
4/
5/
6/
7/
8/
9/
10/
11/

2/80
7/80
4/80
2/80
6/80
3/80
8/80
5/80

4.0
-0.2
0.5
1.7
3.2
4.2
5.0
5.5


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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

MONEY STOCK ( MlB )
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS
420 ---------- 1------------- 1------

BILLIONS OF DOLLARS
------------------- ----------- 420

BILUQKS
— OCT.

SEP

404.8
410.2
411.8
411.4
410.5
411.9

OCT
NOV
I 979

DEC

JAN

FEB

MAR

APR

LATEST DATA PLOTTED WEEK ENDING: NOVEMBER 5,

MAY

JUN
1980

JUL

AUG

SEP

OCT

NOV

I960

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

MONEY STOCK (MIB)
COMPOUNDED ANNUAL RATES OF CHANGE,
11/7/79

AVERAGE OF FOUR WEEKS ENDING:

2/6/80

4/2/80

5/7/80

6/4/80

7/2/80

8/6/80

9/3/80

-2.8
-1 . 4
1.6
4.5
6. 1
7.4
8.0

-6.5
-0.2
4.4
6.7
8.3
8.9

9. 1
12.2
13.4
13.9
13.8

16.6
16.8
16.5
15.8

17.4
16.8
15.9

16.4
15.3

14.5

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
4/
5/
6/
7/
8/
9/
10/
11/

2/80
7/80
4/80
2/80
6/80
3/80
8/80
5/80

5.0
1.2
1.5
3.0
4.8
5.9
6.9
7.3


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

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

6

YIELDS ON SELECTED SECURITIES
AVERAGES OF DAILY RATES ENDED FRIDAY

PERCENT

21 .0

21.0

20.0

20.0

19.0
18.0

18.0
17.0
16.0

I ME BANK
LOAN RATE

15.0
14.0
13.0
COMMERCIAL PAPER
12.0

12.0
11.0

CORPORATE Aaa BONDS

10.0

10.0

9.0
MUNICI PAL
BONDSx*

8.0

7.0
6.0
I I I I
5

SEP

18

2

OCT

16 30

14 28

DEC

11

25

8 22

7

21

4

18

2

16 50

13 27

II

25

8 22

5

18

3

17 31

14 28

JAN

1979
LATEST DATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK ENDING: NOVEMBER 14, 1980

1980
SEP.

5
12
19
26
OCT.
3
10
17
24
31
NOV.
7
14 IK
21
28

90 DAY
CD’S
10.72
10.90
11.34
11.45
12.81
12.36
12.52
12.90
13.98
14.98
14.94

PRIME
COMMERCIAL
PAPER XXX

PRIME
BANKERS'
ACCEPTANCES

10.39
10.62
10.94
11.25
12.51
11.98
12. 15
12.32
13.38
14.48
14.47

10.63
10.80
11.07
11.37
12.51
12. 17
12.24
12.66
13.71
14.68
14.60

CORPORATE
Aaa BONDS
11.89
11.90
12.00
12. 15
12.30
12. 18
12.11
12.27
12.72
12.96
12.98

CORPORATE
Baa BONDS

MUNICIPAL
BONDS XX

13.55
13.57
13.69
13.82
14.12
14.12
14.09
14.27
14.49
14.57
14.62

8.78
8.82
8.98
9. 18
9.22
9.01
8.81
9.06
9.45
9.64
N.A.

■ AVERAGES OF RATES AVAILABLE.
■* BOND BUYER'S AVERAGE INDEX OF 20 MUNICIPAL BONDS, THURSOAY DATA.
mm 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

PERCENT

PERCENT
20.0

20.0 r—

—]

FEDERAL FUNDS RATE
19.0
18.0
17.0

16.0
15.0

15.0

14.0

14.0

13.0

12.0
DISCOUNT
RATE

I I .0

11.0

10.0

10.0

5-Y
TREASURY S :curities

3-MONTH
TREASURY BILL
2

18

30

14

28

II

25

8

LL1 1 1 I 1 I 1 1.11 1 1 1 I I

22

2

16 50

13

27

II

25

8

22

1979

LATEST DATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK ENDING: NOVEMBER 14,

1980
SEP.

5
12
19
26
OCT.
3
10
17
24
31
NOV.
7
14 K
21
28

FEDERAL
FUNDS mm
10.47
10.22
10.64
10.85
12.38
12.59
12.64
12.55
13. 17
13.99
14.65

3-MONTH
TREASURY
BILL
9.78
10.09
10.26
10.45
11.39
11.24
11.07
11.66
12.51
13.28
13.25

6-MONTH
TREASURY
BILL *S*
10.25
10.23
10.88
10.82
11.72
11.14
11.28
11.41
12.28
13.27
13.23

1-YEAR
TREASURY
BILL
9.84
10. 15
10.58
10.94
11.14
10.87
10.85
11.36
12. 16
12.47
12. 17

5-YEAR
TREASURY
SECURITIES
11.23
11.31
11.68
12.01
11.80
11.46
11.55
11.89
12.62
12.94
12.55

1980

LONG-TERM
TREASURY
SECURITIES
11.03
11.14
11.37
11.66
11.71
11.35
11.31
11.64
12.19
12.41
12.26

■ AVERAGES OF RATES AVAILABLE.
mm SEVEN-DAY AVERAGES FOR WEEK EWING WEDNESDAY TWO DAYS EARL IER THAN DATE SHOWN.
CURRENT OATA APPEAR IN THE BOARD OF GOVERNORS* H 9 RELEASE
mmm NEW ISSUE RATE
bates on
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 BY FEDERAL RESERVE BANK OF ST. LOUIS

7

8

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

RATIO

RATIO

SAILS
MONEY MULTIPLIERS

OCT.

NOV.

RATIO

OCT.

NOV.
11 1 1 1 11 I 11.11 11-1.1.
LATEST DATA PLOTTED WEEK ENDING: NOVEMBER 5.

I960

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
1 IB

~

COMPOUNDED ANNUAL RATES
OF qjftNGE, AVERAGE OF
-----THE FwJR ^EEKS ENOING
NOVEMBER 5, 1980 FROM
- THE FOUR WEEKS ENDING:

- SEP.
AUG.
- JUL.
JUN.

1980
I960
1980
1980
1980
1980
1979

- MAY

FEB.
NOV.

-

10.6
10.7

11.9
11.5
CURRENCY

1980

BILLIONS

ill].min
5

19

3

17

31

14

28

12

26

9 23

6

20

FEB

S

111111

10

MAR

1979
LATEST DATA PLOTTED WEEK END ING: NOVEMBER 5.

1980
1980

1/ RATIO OF MONEY STOCK (MIA) OR (M1B > TO ADJUSTED MONETARY BASE
2/ CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS1 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

BILLIONS OF DOLLARS
285

BILLIONS
267. 1
271.5
272.8
272.0
270.9
271.6

NOV.

I I I I

I I I I
5

IB

3

17

31

14

28

12

28

9 23

6

20

3

I

2

16 30

IA

28

II

2S

9 23

6

20

3

17

1980

1979
LATEST DATA PLOTTED WEEK ENDING: NOVEMBER 5.
CURRENT DATA APPEAR

IN

1980

THE BOARD OF GOVERNORS' H.6 RELEASE.

DEMAND DEPOSIT COMPONENT OF MONEY STOCK ( Ml A )
COMPOUNDED ANNUAL RATES OF CHANGE
11/7/79

2/6/80

2.7
-3. 1
-2.3
-0.8
1 .0
2.3
3.5
4.0

-9. 1
-6.4
-3.2
-0. 1
1.9
3.6
4.2

AVERAGE OF FOUR WEEKS ENDING:

5/7/80

6/4/80

7/2/80

8/6/80

9/3/80

7.3
9.8
11.2
11.9
11.6

13.0
13.8
13.9
13.2

14.8
14.6
13.6

14.9
13.4

12.3

4/2/80

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
4/
5/
6/
7/
8/
9/
10/
11/

2/80
7/80
4/80
2/80
6/80
3/80
8/80
5/80


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

-13.0
-6. 1
-0.9
2.0
4. 1
4.9

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

9

10
SAV I NGS PLUS SMALL TIME DEPOSITS
ALL COMMERCIAL BANKS
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS
485

BILLION?
OCT.

NOV.

480

466.6
470.3
470.9
471.5
473.4

475
470
465
460
455
450

3

17

31

14 28

12 26

9

23

6 20

5

19

2

16 30

14

I 1

25

9 23

6 20

3

AUG
1979

28

SEP

17

1980

LATEST DATA PLOTTED WEEK ENDING: NOVEMBER 5.

1980

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

SAVINGS PLUS SMALL TIME DEPOS1TS
COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING:
11/7/79

2/6/80

4/2/80

5/7/80

6/4/80

7/2/80

9.4
8.9
9.5
10.4
10.3
9.8
10. 1

10.0
10.7
1 1 .6
11.2
10.5
10.8

9.6
11.3
10.9
10.0
10.5

13.2
12.0
10.7
11.1

12.0
10.2
10.8

8/6/80

9/3/80

TO THE AVERAGE
OF FOUR WEEKS
ENDING:
4/
5/
6/
7/
8/
9/
10/
11/

2/80
7/80
4/80
2/80
6/80
3/80
8/80
5/80

8.0
8.8
8.6
9.0
9.6
9.6
9.4
9.6


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

8.2
9.6

9.7

PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

BORROWINGS FROM FEDERAL RESERVE BANKS
ALL MEMBER BANKS IN THE NATION
AVERAGES OF DAILY FIGURES

BILLIONS OF DOLLARS
1M

BILLIONS OF DOLLARS

MILLIONS

I I I I
NOV

DEC
1980

LATEST DATA PLOTTED WEEK ENOlNG: NOVEMBER 12,

1980

BUSINESS LOANS
(COMMERCIAL AND
BILLIONS OF DOLLARS
176
174
172
170
168
166
164
162

~

— SEP.
” AUG.
— JUL.
- JUN.
— MAY
- FEB.
NOV.

3.
6,

1980
1980
1980
1980
1980
1980
1979

2y

4,
7,
6,
7.

-

17.9
20.0
16.8
13.2
8.9
7. 1
9.0

-

154

|A'

7*

A

146

168

~

164

-

f

/

-

-

-

-

1985

-

OCT.

-

iLLL LI 1 i
10

SEP

3

17

11 1 -111. n u
31

14 28

OCT
NOV
1979

12

28

DEC

9 23

JAN

111

111

1111

6 20

5

2

FEB

MAR

10

LATEST DATA PLOTTED WEEK ENDING: NOVEMBER 5.


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

16 30

APR

111
14 28

MAY

in .ini
I I

25

JUN
1980

9

23

166,261
165,549
165,743
166,130
166,168
168,324

1

JUL

“
~
~

150

—

'46

i u i 11 i 11111111 i ’
6

20

AUG

3

17

SEP

1

15

OCT

29

12

26

NOV

1980
PREPARED BY FEDERAL RESERVE BANK OF ST. LOUIS

11

154

MILLIONS

8
15
22
29
NOV. 5

5

172
170

-

r'

152

148

r

-

-y

150

174

166

i-

156

BILLIONS OF DOLLARS
176

COMPOUNDED ANNUAL RA TES
“OF CHANGE, AVERAGE 0 F
- THE FOUR WEEKS END IN G
— NOVEMBER 5, 1980 FRO
- THE FOUR WEEKS END 1N G-.

160
158

INDUSTRIAL)

WEEKLY REPORTING LARGE COMMERCIAL BANKS
SEASONALLY ADJUSTED

152

148

12
LARGE TIME DEPOSITS
ALL COMMERCIAL BANKS
AVERAGES OF DAILY FIGURES
SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

B.I.LU9MS

208
206
204

202
200

I I I I I I I I
1979

198

LATEST DATA PLOTTED WEEK ENDING-. NOVEMBER 5,

1980

CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS’ H.6 RELEASE.
TIME DEPOSITS ISSUED

IN DENOMINATIONS OF 1100,000 OR MORE.


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