Bluebook

Prefatory Note

The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.

1

In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing).

2

A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff.

Content last modified 6/05/2009.

June 24, 1966

CONFIDENTIAL (FR)

MONEY MARKET AND RESERVE RELATIONSHIPS Money markets Recent developments.

Bill rates moved even further out of

touch with other short-term rates during recent weeks. The 3-month bill declined below the discount rate and was quoted as low as 4.34 per cent during the past few days, before turning up on Friday.

Rates on short-

term Federal Agency issues have also edged down to levels slightly below their early June peaks, as the market has digested the recent influx of new issues.

Other short-term rates, however, have remained stable or advanced slightly further.

This week major New York banks have posted

a 5½ per cent rate on 3-month CD's, and there are reports of prime banks willing to pay that rate on one-month maturities.

Federal funds have

traded at 5½ per cent in the last few days and even touched 5-5/8 per cent, in the backwash of loan demand related to accelerated tax payments; and dealer loan rates rose further to a new high of 5-7/8 per cent in New York. Net borrowed reserves after revision averaged about $325 million over the two statement weeks ending June 15, somewhat below their May average, but rose to $417 million in the latest statement week.

Member

bank borrowings were relatively low by recent standards in the week ending June 8--the second half of a country bank settlement period--but increased to an average of $740 million during the past two statement weeks.

onlIuly

~I-~_

avesae

andu

FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE -~__l IL1_ ~ r --L "" C ~~ weeKy averages or aany r igres; amounts in millions of dollars)

where avaIaDle.

Money Market Indicators

Bond Yields

3-month Federal TreasFunds ury Free BorrowBill ings Rate Reserves

Period

Corporate U. S. New Gov't. Issues (Aaa) (20 yr.)

Flow of Reserves. Bank Credit and Money Municipal (Aaa)

Nonborrowed Reserves

Total Bank Credit ReProxy serves

Money Mo n e y upply

Time D De

T i me

1965--May June July Aug. Sept. Oct. Nov. Dec.

-156 -176 -178 -162 -139 -132 - 77 - 22

490 534 527 549 552 490 418 452

4.08 4.01 4.07 4.11 3.95 4.05 4.09 4.28

3.89 3.80 3.83 3.84 3.92 4.02 4.08 4.37

4.21 4.21 4.21 4.25 4.30 4.32 4.40 4.50

4.51 4.58 4.61 4.63 4.67 4.69 4.72 4.85

3.09 3.15 3.16 3.16 3.25 3.31 3.34 3.39

- 31 +151 + 30 -116 + 11 + 85 + 59 +365

- 61 +173 + 23 - 50 + 14 + 44 - 44 +338

+ 772 +1,802 +1,414 +1,608 + 249 +2,592 + 759 +2,147

-1,100 +1,800 + 700 + 200 +1,600 +1,300 + 100 +1,700

+1,100 +1,300 +1,700 +2,500 +1,500 +2,000 +1,900 +1,500

1966--Jan. Feb. Mar. Apr. May p June proj._2

- 51 -117 -210 -276 -338 -363

431 474 545 638 653 710

4.32 4.58 4.64 4.64 4.83 5.04

4.58 4.65 4.58 4.61 4.63 4.52

4.52 4.71 4.72 4.65 4.69 4.73

4.84 4.98 5.27 5.05 5.21 5.36

3.39 3.48 3.55 3.46 3.53 3.59

+103 + 41 - 59 +238 -104 + 41*

+117 + 85 + 62 +335 - 76 + 28*

+1,793 + 820 + 787 +3,587 + 479 + 990*

+1,000 400 +1,200 +1,900 -1,600 +1,800

+1,000 + 800 + 800 +2,000 +1,300 +1,100*

-331 -340 -344 ,339

617 680 663 653

4.78 4.70 4.98 4.72

4.65 4.63 4.62 4.64

4.71 4.68 4.66 4.68

5.14 5.15 5.21 5.57**

3.52 3.52 3.52 3.57

+ + -

-

+ + + +

-387 -321 -326 -417

812 547 788 691

4.81 4.88 5.15 5.20

4.63 4.56 4.56 4.44

4.73 4.73 4.76 4.71

3.60 3.60 3.59 3.58

295 467

3.47 4.05

3.53 3.95

4.19 4.27

5.36 5.34 5.43 5.31 Averages 4.44 4.58

430 515 584 678

4.31 4.61 4.70 4.84

4.49 4.64 4.55 4.60

4.52 4.74 4.64 4.70

4.85 5 .19 5.03 5.28

3.40 3.55 3.45 3.55

Year

May

4 11 18 25

June

1 8 15 22

p p p p

1964 107 1965 - 90 Recent variations in growth Dec. 1-Feb. 2 - 31 Feb. 2-Mar. 16 -166 Mar.16-Apr. 13 -246 Apr.13-June 22 -338

3.09 3.16

+ 4.6 + 4.2

296 287 374 696

400 400 300 700

200 200 400 500

+ 346 -+ 200 + 485 +1,300 + 200 765* + 300 + 100* +1.524* +2,200 -- * Annual rates of increase 3/ + 4.2 + 7.6 + 4.3 +12.8 + 5.1 + 9.1 + 4.8 +16.1 +10.4 - 1.2 +19.8 + 3.8*

+ 7.7 + 6.7 +15.4 + 4.9

+ 7.9 + 6.4 +14.8 + 9.3*

Dec. 1-June 22 -194 554 4.61 4.57 4.64 5.11 3.49 + 7.1* + 7.7 + 9.2* Time deposits adjusted at all commercial banks. June averages of free reserves and borrowings are for the four weeks ending June 22; money market rates and bond

yields are averages for the month to date; and changes in monetary variables include projections for the final week of June. 3/ Base is average for month preceding specified period or in the case of weekly periods, the first week shown. p - Preliminary. **Not representative. *Changes have been adjusted for redefinition of time deposits effective June 9. June 24, 1966.

CONFIDENTIAL (FR)

- 2 -

June 24, 1966

The gathering tightness in the banking system as the period progressed tended to focus on major banks in New York, whose basic reserve deficiency (net borrowed reserves plus net Federal funds purchases) worsened sharply in the latest statement week.

This

worsening was larger than normally occurs in the first few days after the mid-June tax date and was related in part to the continued loan demand to help corporations make accelerated payments to the Treasury of withheld individual income and social security taxes.

Prospective developments.

Assuming net borrowed reserves

over the next four weeks remain around the $370 million average of the past two statement weeks, one might expect some shifting of relationships within the constellation of money market conditions but continued market tightness over-all.

Treasury bill rates may continue low in the period

immediately ahead in view of the extremely short market supply of bills and of the System's need to supply about $1 billion of reserves over the July 4 holiday period. and perhaps rapidly.

Subsequently, bill rates are likely to rise,

Banks will be reversing window-dressing operations,

investor demand for bills may be reduced as the volume of new capital market issues tapers off in early summer, and high financing costs will begin to bite as dealer bill positions rise.

A most important factor

in the bill market, however, will be the Treasury's decision with respect to the size and timing of any tax bill financing. Once the current tax-related burst of loan demand at banks passes, there may be some easing in the Federal funds rate.

Dealer

loan rates would also tend to decline somewhat, but should remain on

- 3 -

CONFIDENTIAL (FR)

June 24, 1966

the high side so long as basic loan demands are strong and banks encounter difficulties finding CD funds. The relatively light July calendar for corporate and municipal issues suggests that credit demands will not place much upward pressure on long-term rates over the next four weeks, although shifting expectations could lead to some rate rise.

Moreover, it is possible that

recent declines in yields on Treasury notes and bonds may be at least partially reversed in response to investor switching into attractively priced Agency, municipal, and corporate issues and to possible selling by financial institutions under liquidity pressure, The extent of savings outflows from nonbank savings institutions after midyear and the likely responses of the institutions themselves and of the regulatory authorities are among market uncertainties that will be resolved soon.

If such savings outflows are sizable and

if the Federal Reserve provides assistance to the institutions involved one way or another through the discount function, both market expectations and open market operations might be affected in the short-run. To the extent that any such Federal Reserve lending is allowed outside the conventional Regulation A constraints, the System may need to make substantially offsetting open market sales of securities in order to guard against an incidental easing of credit conditions, at least over the short-run, in the process of providing assistance through the discount window to a particular sector of the market.

However,

it is difficult to foresee the net outcome of so complex a situation--

CONFIDENTIAL (FR)

- 4 -

June 24, 1966

coming as it would amidst all the already existing uncertainties as to Vietnam, fiscal policy, and monetary policy actions.

One possibility

is that resulting shifts in market expectations could lead to upward interest rate movements.

Such expectations could also be generated by

more widespread announcements of increases in rates paid by nonbank savings institutions. In so potentially fluid a situation, compounded by a combination of changing financial asset preferences and public policies, money market conditions may need to be given more than the usual degree of emphasis in the conduct of open market operations.

Under the circum-

stances, an effort to achieve somewhat deeper net borrowed reserves (say to persistently around $450 million), apart from any special Federal Reserve lending outside ordinary Regulation A constraints, would have to be undertaken cautiously.

Such a net borrowed reserve

level would intensify upward pressure on interest rates.

But the

degree of pressure would depend on whether this was interpreted as just one further step toward an even deeper net borrowed number and on whether or not the market expected Regulation Q ceilings and the discount rate to be raised.

Reserve flows, bank credit, and money Recent developments.

On the basis of estimates for the

first three weeks in June, expansion in bank credit on average for all of the month probably will be atabout a 5 per cent rate, slightly less than anticipated at the beginning of the month.

Credit expansion

- 5 -

CONFIDENTIAL (FR)

June 24, 1966

was slow in the first half, but picked up sharply on and after the midmonth tax date.

As a result, the bank credit increase measured from

the beginning to the end of June is likely to be about 13 per cent. Private demand deposits are likely to expand at a 15 per cent annual rate for June, although the impact of new tax speed-ups makes it more than usually difficult to estimate both private and Government demand deposits for the last two weeks of the month.

The estimated

rapid expansion in private demand deposits this month is being offset in part by a larger than anticipated decline in Government demand deposits, seasonally adjusted.

Time and savings deposits in June

appear to be growing at a slower rate than in May.

These June estimates imply expansion rates for the first half of 1966 as a whole somewhat below those for the year 1965 for bank credit, time deposits, and nonborrowed reserves.

The credit proxy

has increased at an annual rate of 7 per cent thus far this year,

compared with 9 per cent in 1965; nonborrowed reserves have increased at about 2.5 per cent this year, compared with 4.2 last year; and time deposits have grown by 9.5 per cent compared to 16 per cent last year. On the other hand, money supply and total reserves have increased almost as rapidly as last year--4.7 and 5 per cent respectively.

Prospective developments.

The rapid increase of bank credit

over the latter part of June may slow down as July progresses, but the average increase in July is likely to be relatively large--perhaps in the order of 9-11 per cent.

The large increase in July reflects in part

June 24, 1966

- 6 -

CONFIDENTIAL (FR)

the delayed impact on the monthly averages of the late June rise. But also during next month further acceleration of corporate payments to the Treasury of withheld individual income and social security taxes may add to basically strong business loan demands.

Furthermore, any

substantial borrowing at banks by nonbank financial institutions to meet concentrated savings withdrawals would serve to enlarge bank credit totals.

The current projection also does not assume a Treasury cash

financing in July but if there is one, it is likely to be more toward the end of the month and therefore would have only a comparatively small effect on the average credit expansion. Several factors make the outlook for time deposit growth particularly uncertain in the weeks ahead.

Perhaps the principal unknown

is how banks will fare after the midyear interest-crediting date when an outflow of funds from nonbank savings institutions is widely anticipated.

Recent announced rate increases by nonbank savings institutions

may tend to restrain growth in consumer-type time deposits at banks. With respect to negotiable CD's, the availability of funds for investment in them has probably been limited recently by corporate needs to make accelerated tax payments of one sort or another and by competition from Federal agency issues.

Still, at the current level of market rates--

and with the bulk of the recent agency issues absorbed into the market-banks may find that they can increase outstanding CD's some in the period ahead.

Over-all, time and savings deposits may rise at a pace

perhaps no more rapid than the 8-10 per cent annual rate of the past two months and perhaps by less.

CONFIDENTIAL (FR)

June 24, 1966

- 7 -

On our current projections Government deposits are expected to decline less than seasonally in July, even assuming no Treasury cash financing.

This may hold down the growth of private demand

deposits (and money supply) over the short-run.

Over the longer run,

there is little reason to expect any significantly lower rate of growth in money than the 4.7 per cent rate of the first half of this year, assuming no let-up in basic loan demands.

This outlook adds up to an

annual rate of expansion for total required reserves, seasonally adjusted, in the order of 10 per cent during July on average.

Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Excess reserves

Period

As 6.

1

_

Member banks borrowings

Free

reserves

date

revised

As expected at conclusioi of each week's open market opeations

-

Monthly (reserves weeks ending in):

As first published each week

1965--March April May June July August September October November December

349 342 334 358 349 387 413 358 341 430

395 471 490 534 527 549 552 490 418 452

- 46 -129 -156 -176 -178 -162 -139 -132 - 77 - 22

1966--January February March April May p June p Weekly 1966--February

380 357 335 362 315 347

431 474 545 638 653 710

- 51 -117 -210 -276 -338 -363

2 9 16 23

348 344 337 398

418 503 453 520

- 70 -159 -116 -122

- 17 -120 -122 -102

- 22 -121 - 99 - 95

March

2 9 16 23 30

293 360 363 371 288

464 614 536 602 508

-171 -254 -173 -231 -220

-172 -219 -224 -274 -229

-186 -193 -217 -260 -222

April

6 13 20 27

333 360 373 380

623 603 685 642

-290 -243 -312 -262

-225 -286 -281 -280

-241 -282 -270 -316

May

4 11 18 25

286 340 319 314

617 680 663 653

-331 -340 -344 -339

-280 -324 -315 -351

-280 -310 -341 -370

June

I 8 15 I 22 r

425 226 462 274

812 547 788 691

-387 -321 -326 -417

-364 -375 -341

-342 -360 -336 -394

p - Preliminary

____________________

4

TABLE A-2 AGGREGATE RESERVES AND RELATED MEASURES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages of daily figures) Reserve R e s e r v e

AnnrenataR Ag . t . ...

-n

Required reserves Total Reserves

Annually: 1963 1964 1965 Monthly: 1965--January February March April May June July August September October November December 1966--January February March April May p June proj. 2/

Nonborrowed Reserves

Total Sbanks

S+ 3.5 + 4.2

+ 5.1

+ 3.5 + 4.6 + 4.2

+ 3.8 + 4.9

+ 5.0

+ 5.3 +10.4 + 8.1 +12.5

- 1.4 + 6.4

- 3.4

-

1.8

- 1.1

+ 9.6 + 1.3

+ 8.6

+ 9.8 + 3.6

- 2.7

+ 0.8 + 2.4 - 2.4 +18.6

+ 5.1 + 8.4 + 1.7 - 6.5

+ 5.7 +4.3 +11.5 +11.4

- 8.7

+ 0.6 + 4.8

+ 2.3 + 6.1

+ 3.3 +20.5

+18.3

- 3.8

+ 6.3 + 4.6

+ 5.7 + 2.2

+11.5

+ 3.3 +17.9 - 4.0

- 3.2

+ 4.5

+13.1

+ 1.5

+ 2.2

+15.0 - 4.2 + 3.9

- 5.7

- 0.1

Against Demand Deposits

Ma ne t arv M o. .. . . . . Total Member Bank Deposits (credit) 1/

banks)

.

ab ble s . . . . . Money Supply Private Total Demand Deposits

+ 2.4 + 3.2 + 3.6

+ 7.5 + 7.6 + 9.1

+14.7 +12.8 +16.1

+ 3.8

- 2.6 - 2.0 + 6.9 + 5.0 -14.0 +15.6 + 1.4 - 0.4 +13.9 + 8.4 - 1.7 +11.7

+10.5

+20.9 +20.5 +10.1

+ 2.3

+12.7

+ 6.0

+ 7.5 + 8.4 + 1.3 +13.5 + 3.9 +11.0

+15.0 +21.8

+ 4.1 - 2.4 +12.1

+ 9.1 + 4.1

+ 4.0

+ 8.2 + 6.5 + 6.5

+13.0 -18.1

+17.9

+16.0

+ 2.4

+17.6

+ 4.9

+10.3 + 8.6

Includes all deposits subject to reserve requirements.

+11.1

+ 9.7 +14.1 + 4.1 + 9.6

+ 4.3 + 4.8

- 2.3

+ 4.5

+ 3.2 + 4.0 + 4.6 + 1.0 - 3.8

+ 4.8 + 7.6

+ 9.9

-

8.2

-12.3

+11.6

+13.5 + 5.2 + 1.5

+16.3

+11.8 + 9.5 + 0.7 +12.3

+13.2 + 9.3 - 0.9

+ 7.2

+ 5.5 - 5.5 +10.1

+12.8 +16.9 +15.9

+12.4

- 2.9

+ 8.6 +13.5 -11.2 +12.7

+ 4.7 --

+14.8

+15.4 -16.1 +15.4

Movements in this aggregate correspond closely with

movements in total member bank credit. 2/ Changes have been adjusted for redefinition of time deposits effective June 9. p - Preliminary.

Va r . . . . Time Deposits (comm.

Chart 1

MEMBER BANK RESERVES SEASONALLY ADJUSTED MONTHLY AVERAGES OF DAILY FIGURES I

BILLIONS OF DOLLARS

22.5

22.0

21.5

21.0

20.5

r** REQUIRED TOTAL PRIVATE

20.0

AGAINST DEPOSITS

19.5

19.0

16.5

? REQUIRED AGAINST PRIVATE DEMAND DEPOSITS

16.0

o

--- ~rir0*0

-

#

-t,u

)

15.5

15.0 S

1964

D

M

J

1965

S

D

M

1966

J

Chart 2

MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

TOTAL

MEMBER

BANK

(Credit

Proxy)

DEPOSITS

245

240

235

230 MONEY

SUPPLY

170

165

225

-220 4

WEEK

MOVING

AVERAGE

160

155

TIME (All

DEPOSITS

ADJUSTED

Commercial

Banks)

150

145

140

135 CD'S

NEGOTIABLE 130

S(Unadjusted)

I II I J 1965

I

I

I I

II

I

I 1 1966

I

Chart 3

DEMAND

DEPOSITS

AND CURRENCY

SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS

45

MONEY SUPPLY COMPONENTS 40 CURRENCY

OUTSIDE

BANKS

35

30

140

135

DEMAND

DEPOSITS

130

125 4

WEEK

MOVING

AVERAGE

120

S

U.S.

GOVT.

DEMAND

(Member

DEPOSITS

Banks)

10

M

M

J 1965

S

D

M

D

M

J

1966

S

D

S

D

MAJOR SOURCES AND USES OF RESERVES Retrospective and Prospective (Dollar amounts in millions, based on weekly averages of daily figures) Factors affecting supply of reserves Federal Reserve credit (excl. / float)

Period

Gold o tock

Currency outside banks

=

Technical factors net 2/

Change

= Bank use of reserves

in total reserves

Required reserves 3/

reserves

Excess

ACTUAL Year: 1963 (12/26/62 - 12/25/63) 1964 (12/25/63 - 12/23/64)

+3,125 +3,219

-426 -165

-1,950 -1,847

- 76 -365

+676 +840

+763 +910

- 87 - 70

Year-to-date:

(12/30/64 - 6/23/65)

+1,910

-1,096

+240

-986

(12/29/65 - 6/22/66)

+ 66

+213

-147

+875

-281

-160

-814

-379

-192

-187

+207

-367

- 12

- 19

+

Weekly: 1966--Apr.

27

+145

May

4 11 18 25

+369 4422 -309 + 99

+ 1 - 15 - 86 --

-183 -455 +136 +159

- 65 - 95 +139 -490

+120 -142 -118 -234

+214 -196 - 97 -229

- 94 + 54 - 21 - 5

June

1 8 15 22

+627 - 6 +185 -224

+ -

2 1 -- 28

-173 -389 + 1 + 49

-327 +240 - 75 +578

+127 -152 +107 +378

+ 16 + 47 -129 +566

+111 -199 +236 -188

June 29

+340

- 70

+115

-375

+ 10

+ 10

--

July

6 13 20 27

+620 - 70 -635 +115

-

10 10 10 10

-600 -130 +210 +230

+235 +155 +395 -425

+245 - 55 - 40 - 90

+245 - 55 - 40 - 90

3

4495 4450

- 10

- 70

-400

+ 15

+ 15

- 10

-465

- 50

- 75

- 75

p p p p

--

PROJECTED 4/

Aug.

10

For retrospective details, see Table B-4. For factors included, see Table B-3. For required reserves by type of deposits, see Table B-2. See reverse side for explanation of projections.

p - Preliminary.

7

Explanation of Projections in Table B-1 1.

Changes in Federal Reserve credit indicate reserves needed to offset projected changes in required reserves and factors affecting the supply of reserves.

2.

Projected changes in currency outside banks reflect seasonal movements plus an allowance for growth of about $30 million per week.

3. Projected effects of Treasury operations, included in "technical factors," reflect scheduled and assumed calls in current two weeks and thereafter, maintenance of Treasury balances with Federal Reserve at $600 million. 4.

Projected changes in gold stock reflect assumed outflow $50 million per month.

5.

Projected changes in required reserves reflect estimated seasonal movements in private deposits, except as indicated in projections in Table B-2, and projected movements in U. S. Government demand deposts. Government deposit projections'are based on anticipated Treasury receipts and expenditures and the following assumed financing operations: June 24, $0.4 billion; July 29, $0.6 billion; August 1, $-0.8 billion.

after

July

at the rate of about

CHANGES IN REQUIRED RESERVE COMPONENTS

Retrospective and Prospective Seasonal and Nonseasonal Changes (Dollar amounts in millions, based on weekly averages of daily figures) Total

*U. > Period

required reser

Supporting U. S. Gov't. Gov't. demand deposits

private deposits

_Supporting

Seasonal changes

Total

Demand

Time

Other Other than than seasonal changes Demand Time

ACTUAL

Year: 1963 (12/26/62 - 12/25/63) 1964 (12/25/63 - 12/23/64)

+763 +910

+ 8 -115

+755 +1,025

+ 45 + 16

--- (12/30/64 - b/23/65) (12/29/65 - 6/22/66)

+213 -192

+472 -110

-259 - 82

-832 -781

Weekly: 1966--Apr. 13 20 27

+ 17 +212 - 19

-314 -136 +213

+331 +348 -232

+214 -196 - 97 -229

+421 + 64 +163 8

+ 16 + 47 -129 17 +566

June 29 July

+239 +542

+471 +467

+ 78 + 72

+201 +442

+294 +185

+266 +229 -166

+ +

+ 49 +113 - 85

+ 7 + 15 + 10

-207 -260 -260 -221

-183 -214 -185 -165

+ +

-

36 59 90 67

+ 3 + 4 + 15 + 20

- 70

+ 86

+ 32

+

9

+ 41

+ 4

-196 -352 +271

+243 +223 +295

+120 +265 - 15

- 9 + 9 - 18

+117 8 +325

+ 15 -- 41 1/ + 4

+ 10

+425

-415

-300

+ 20

-145

+ 10

+245 - 55 - 40 - 90 + 15 - 75

+215 -280 -205 - 60 - 85 + 70

+ 30 +225 +165 - 30 +100 -145

+ 85 +165 +115 - 70 + 80 - 95

+ 10 - 20 + 10 -- 20 -

+ + + + -

+ + + + + +

Year-to-date:

May

June

4 11 18 25

1 p 8 p 15 p 22 p

1/

9 9 9

9 9 -- 9

PROJECTED

Aug.

6 13 20 27 3 10

75 70 30 30 30 60

10 10 10 10 10 10

1/ Reduction in percentage reserve requirements applicable to time deposits released $780 million of reserves at the end of October 1962.

Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Technical factors (net)

Period

Foreign deposits and gold loans (Sign indicates effect on reserves)

Treasury operations

Float

Other nonmember deposits and F. R. accounts

ACTUAL Year: 1963 (12/26/62 - 12/25/63) 1964 (12/25/63 - 12/23/64)

- 76 -365

-216 -470

+149 - 84

+ 88 + 11

- 97 +178

Year-to-date: 12/30/64 - 6/23/65) 12/29/65 - 6/22/66 )

-986 -814

- 48 1

-847 -459

+ 74 - 36

-165 -318

Weekly: 1966--Apr. 27

-367

-191

-188

+ 16

-

May

4 11 18 25

- 65 - 95 +139 -490

- 18 + 13 - 85 -259

- 60 -151 +248 - 42

- 28 + 28 - 6 + 6

+ 41 + 15 - 18 -195

June

1 8 15 22

-327 +240 - 75 +578

+ 17 +125 -175 + 96

-313 + 95 + 44 +445

- 20 + 3 + 2 - 25

+ + +

June 29

-375

-150

-250

+ 10

+ 15

July

--

4

11 17 54 62

PROJECTED

Aug.

6

+235

+335

-100

-

13 20

+155 +395

----

+120 +300

--- 27

-425

--

-425

-

--

3

-400

--

-400

--

-

10

- 50

--

- 50

+ 35 + 95

Table B-4 SOURCES OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Period

Total Federal Reserve credit (excl. float)

Total holdings

U. S. Government securities' Repurchase Outright Bills

Other

agreements

Bankers acceptances

Member Member bank borrowings

Year: y163 (12/26/62 - 12/25/63) 1964 (12/25/63 - 12/23/64)

+3,125 +3,219

+3,076 +3,340

+1,659 +2,086

+1,404 +1,022

+ 13 +232

+ 39 - 61

+ 10 - 60

Year-to-date: (12/30/64 - 6/23/65) (12/29/65 - 6/22/66)

+1,910 +875

+1,839 +676

+1,697 +643

+429 +254

-287 -221

- 8 + 54

+ 79 +145

-363 -519

-308 -585

+ 42

-142 -267

-

5 1

- 50 + 67

+ + + + -

13 27 4 19 29

- 56 +150 - 78 + 66 - 94

- 22 - 3 - 6 + 43

+115 - 20 + 82 - 43

+ 3 - 43 + 41

+ -

+ 26 + 34 - 33 + 4

+159 -265 +241 - 97

Weekly: 1966--Feb. 16 23

Mar.

Apr.

May

June

2 9

-166 -360

-115

- 72

- 73

+450

+273

16 23

-100

30

+ 71

- 26 - 88 +194

+252 - 84

6 13

+512 -126

+419 -103

20 27

-444 +145

+145

4

+369

-

3

-520

- 50 +147 +274 + 8 -486 +120

+145 -111 - 34 + 82 +217 -164 -135

11

+422

+391 +402

18 25

-309 + 99

+ 68

+292 +185 -128 +203

1

+627 - 6 +185 -224

+442 +225

+411 +166

- 23

- 73 - 72

8 15 22

-292

-131

+ 1 + 21 + 11 + 9 + 47

1__________________________________________

--

3

25 63 17 10

Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES Seasonally Adjusted based on monthly averages of daily figures) millions, (Dollar amounts in

Total

Period

Total

reserve

Required reserves

Nonborrowed

Nnb rsewed

Against private deposits

reserves ,,an

TotalTotal

Toa

Demand

1964--January February March April May June July August September October November December

20,248 20,268 20,459 20,482 20,404 20,682 20,665 20,753 21,012 20,949 21,033 21,082

19,977 19,982 20,176 20,226 20,167 20,431 20,420 20,416 20,638 20,600 20,626 20,886

19,884 19,872 20,056 20,057 20,023 20,269 20,285 20,332 20,570 20,536 20,639 20,742

19,185 19,246 19,292 19,361 19,338 19,441 19,577 19,694 19,832 19,960 19,988 20,081

15,442 15,466 15,492 15,527 15,471 15,539 15,646 15,705 15,805 15,886 15,864 15,912

1965--January February March April May June July August September October November December

21,175 21,359 21,504 21,728 21,667 21,840 21,863 21,813 21,827 21,871 21,827 22,165

20,862 20,973 21,062 21,210 21,179 21,330 21,360 21,244 21,255 21,340 21,399 21,764

20,840 20,915 21,116 21,316 21,296 21,470 21,535 21,379 21,420 21,528 21,460 21,788

20,122 20,166 20,294 20,409 20,258 20,506 20,579 20,665 20,903 21,090 21,124 21,326

15,878 15,852 15,943 16,009 15,822 16,028 16,047 16,041 16,227 16,341 16,318 16,477

1966--January February March April May p June proj.

22,282

21,867 21,908 21,849 22,087 21,983 22,024

21,996 21,994 22,076 22,352 22,273 22,346

21,407 21,396 21,588 21,842 21,630 21,905

16,533 16,500 16,666 16,846 16,592 16,836

22,367 22,429 22,764 22,688 22,716

p - Preliminary. 1/ Reserves have been adjusted for redefinition of time deposits effective June 9.

Table C-2 DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts in millions, based on monthly averages of daily figres)

Monthly

Total member bank deposits (credit)

Time deposits

1/

Private demand deposits 2/

U. S. Gov't. demand deposits

1964--January February March April May June July August September October November December

202,981 203,759 205,068 206,176 206,613 208,669 209,312 211,506 212,906 214,109 215,849 216,738

93,563 94,495 95,011 95,852 96,677 97,542 98,273 99,725 100,670 101,850 103,090 104,215

104,407 104,569 104,749 104,987 104,609 105,066 105,783 106,189 106,868 107,410 107,259 107,591

5,011 4,695 5,308 5,337 5,327 6,061 5,256 5,592 5,368 4,849 5,500 4,932

1965--January February March April May June July August September October November December

218,640 220,663 222,445 225,068 225,840 227,642 229,056 230,664 230,913 233,505 234,264 236,411

106,107 107,843 108,778 109,996 110,898 111,955 113,306 115,594 116,900 118,718 120,152 121,220

107,353 107,178 107,795 108,243 106,975 108,372 108,497 108,456 109,717 110,489 110,327 111,409

5,180 5,642 5,872 6,829 7,967 7,315 7,253 6,614 4,296 4,298 3,785 3,782

1966--January February March April May p June proj.Y

238,204 239,024 239,811 243,398 243,877 244,867

121,861 122,401 123,038 124,898 125,950 126,731

111,787 111,562 112,684 113,905 112,188 113,833

4,556 5,061 4,089 4,595 5,739 4,303

Includes all deposits subject to reserve requirements--i.e., the total Movements of time, private demand, and U.S. Government demand deposits. member in this aggregate correspond closely with movements in total bank credit. 2/ Private demand deposits include demand deposits of individuals, partnerships and corporations and net interbank balances. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, p - Preliminary. 1/

TABLE C-2a DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts in millions, based on weekly averages of daily figures)

Week ending:

Total member bank deposits (crediti 1/ ii , mmi

Time deposits

Private demand deposits 2/

U. S. Gov't. demand deposits

1965--Dec.

1 8 15 22 29

235,641 236,499 236,388 236,293 236,460

120,652 120,894 121,056 121,090 121,292

110,073 110,747 110,887 111,939 111,936

4,916 4,858 4,445 3,264 3,232

1966--Jan.

5 12 19 26

236,036 237,302 238,155 239,830

121,367 121,740 121,987 122,246

112,591 112,114 111,507 111,207

2,078 3,448 4,661 6,377

Feb.

2 9 16 23

239,899 238,866 238,966 238,542

122,193 122,026 122,562 122,490

112,050 112,003 111,715 110,694

5,656 4,837 4,689 5,358

Mar.

2 9 16 23 30

238,958 239,366 239,559 239,710 240,437

122,284 122,288 122,757 123,335 123,770

111,691 111,957 112,560 113,155 113,017

4,983 5,121 4,242 3,220 3,650

Apr.

6 13 20 27

242,648 243,216 243,286 243,882

124,508 124,684 125,042 125,311

113,306 113,764 114,482 113,810

4,834 4,768 3,762 4,761

May

4 11 18 25

244,178 244,465 244,091 243,395

125,369 125,455 125,815 126,330

113,407 112,952 112,372 111,954

5,402 6,058

1 8 15 22

243,741 244,226 243,461 244,985

126,419 126,791 126,608 126,735

112,201 113,034 113,061 115,291

5,121 4,401 3,792 2,959

June

5,904 5,111

p - Preliminary. I/ Includes all deposits subject to reserve requirements--i.e., the total of time, private demand, and U.S. Government demand deposits. Movements in this aggregate correspond closely with movements in total member bank credit. 2/ Private demand deposits include demand deposits on individuals, partnerships and corporations and net interbank balances. Deposits have been adjusted for redefinition of time deposits effective * June 9.

TABLE C-3 MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally Adjusted (Dollar amounts in billions, based on monthly averages of daily figures)

Private

Monthly

Money Supply

Currency 4/

Private Demand Deposits

Time Deposits Ad _/

1964--January February March April May June July August September October November December

153.6 153.8 154.1 154.5 154.5 155.5 156.6 157.1 158.2 158.8 159.1 159.7

32.6 32.8 32.9 33.0 33.3 33.4 33.6 33.8 33.9 34.0 34.2 34.2

121.0 121.1 121.2 121.4 121.2 122.1 123.0 123.3 124.3 124.8 124.8 125.4

113.5 114.6 115.3 116.2 117.3 118.5 119.4 121.0 122.1 123.5 125.1 126.6

1965--January February March April May June July August September October November December

160.0 159.7 160.3 161.1 160.0 161.8 162.5 162.7 164.3 165.6 165.7 167.4

34.5 34.7 34.7 34.7 34.9 35.0 35.2 35.4 35.6 35.9 36.1 36.3

125.5 125.1 125.6 126.4 125.1 126.8 127.3 127.3 128.7 129.7 129.6 131.2

128.8 131.0 132.1 133.5 134.6 135.9 137.6 140.1 141.6 143.6 145.5 147.0

1966--January February March April May p June pro.3/

168.4 168.0 169.2 171.1 169.5 171.3

36.7 36.8 36.9 37.1 37.3 37.4

131.8 131.2 132.3

148.0 148.8 149.6 151.6 152.9 154.0

134.0

132.2 133.9

1/ Includes currency outside the Treasury, the Federal Reserve, and the vaults of 2/

3/

all commercial banks. Includes (1) demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S. Government, less cash items in process of collection and Federal Reserve float; and (2) foreign demand balances at Federal Reserve Banks. Deposits have been adjusted for redefinition of time deposits effective June 9. p -

Preliminary.

TABLE C-3a MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally Adjusted (Dollar amounts in billions, based on monthly averages of daily figures)

Private

Week Ending 1965--Dec.

1966--Jan.

Feb.

Mar.

Apr.

May

June

2/

*

Currency 1/ SDeposits

Time Deposits

Demand /

adjusted adjuste

1 8 15 22 29

165.7 166.6 166.5 167.8 168.6

36.2 36.3 36.3 36.4 36.3

129.6 130.3 130.2 131.5 132.3

146.4 146.5 146.8

5 12 19 26

169.6 169.1

36.4 36.6 36.7 36.6

133.1 132.5 131.5 130.8

147.7 147.7

2 9 16 23

167.9 168.1 168.3

36.7

148.4 148.4

36.8 36.9

131.2 131.3 131.5 130.6

2 9 16 23 30

168.5 168.7 169.2

36.9 36.9 36.9 36.9 36.9

131.6 131.8 132.3 132.9 132.2

149.2 149.2 149.5 149.8

6 13 20 27

170.1

171.2 171.3 170.8

36.9 37.2 37.0 37.1

133.2 134.0 134.3 133.7

150.7 151.2 151.7 152.1

4 11 18 25

170.4 170.0 169.7 169.0

37.2 37.2 37.3 37.3

133.2 132.8 132.3 131.7

152.3 152.5

1 8

169.0 170.3 170.6 172.8

37.3 37.3 37.4 37.4

131.7 133.0 133.1 135.4

153.6 153.8 153.9 153.9

*15 *22

1/

Money Supply

168.1

167.4

167.5

169.8 169.1

36.9

146.9

147.4

148.0

148.2

148.8 149.0

150.2

152.9 153.4

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. Government, less cash items in process of collection and Federal Reserve float; and (2) foreign demand balances of Federal Reserve Banks. p - Preliminary. Deposits have been adjusted for redefinition of time deposits effective June 9.