Bluebook
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1
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2
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Content last modified 6/05/2009.
CONFIDENTIAL (FR)
April 26, 1968
MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments Since the April 18 announcement of the increase in the discount rate (to 5-1/2 per cent) and in Regulation Q ceilings on large denomination negotiable CD's, and in light of the Committee's move toward firmer monetary conditions at the subsequent FOMC meeting, both short- and long-term market yields have risen moderately on
balance, and the prime rate has risen 1/2 point.
Aside from temporary
declines at the end of the double settlement week, Federal funds rates have traded around 6 per cent in recent sessions.
The 3- and 6-month
bill rates have increased by around 15-20 basis points to 5.50 and 5.65 per cent, respectively.
Net borrowed reserves of $536 million
were published for the statement week containing the discount rate change, partly reflecting very low excess reserve holdings of country banks in the second half of their reserve periods; this figure compares with average net borrowed reserves of $268 million for the preceding three weeks. Bill rates have shown only moderate increases thus far since the discount rate hike largely because of sizable bill demands.
Among
these were demands for reinvestment of the proceeds of the $2.3 billion of tax anticipations bills which were not turned in for taxes, and large seasonal demands from public funds. Prior to the move to even greater monetary restraint associated with the discount rate increase, short-term rates had moved gradually
FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE ('Monthlv averages and, where available, weekly averages of daily figures) Mov ,I
Market. lndicators Federal 3-month Funds Treasury Rate Bill
Rnond Yield n __ __ _
BorrowFree ings teserves (In millions of dollars)
Period
1
I--Mar. Apr. May June
July Aug. Sept. Oct. Nov. Dec. 1968--Jan. Feb.
Mar.
4/ 4/
4/
1968--Apr. 3 10 17 24
p
p p p p
Year 1967 First Half 1967 Second Half 1967 Recent variations in growth Mar. 29-June 28 June 28-Nov. 29 Nov. 29-Apr. 24
196 150 94 88 132 86 82 141 124 185
4.50
4.26
4.56
4.03 3.94 3.97 3.78 3.88 3.99 3.87
3.84 3.60 3.53 4.20 4.26
4.49
4.55 4.72 4.96
4.64 4.90 4.99 5.01 5.12 5.16 5.36 5.66 5.59
142 21 -312
275 368 649
4.60 4.68 5.02
5.00 4.98 5.17
5.39 5.38 5.59
-366 -193 -244 -536
696 646 763 651
5.63 5.66 5.70 5.58
5.17 5.28 5.39 5.47
195 153 238
173 222 123
4.19 4.36 4.02
245 254 - 59
110 112 427
4.00 3.96 4.90
4.14
Av e r 4.29 4.07 4.51
3.66 4.41 5.07
___.
-
172 199 275 257 311 270 252 212 225 148
4.42
__
Corporate MuniciU.S. New pal Gov't. Issues (Aaa) (20 yr.) (Aaa)1/
5.31 5.38 5.62 5.79 5.78 3.86**
5.85** 6.08 6.50 6.51
3.47 3.50 3.71 3.80 3.86 3.78 3.81 3.88 3.99
1n.. .,f
T~js'rr ,0
Total Nonborrowed Re(Saoal Reserves serves
IRark
Cv~~i~
Bank Adused Money Credit Money Proxy
2nr( Mtnau~
Time Deposits 2/l
million (In (In billions of dollars) nf doll1ars1 (Seasonally Adjusted)
+555 + 92 + 96 + 95
+307 +291 + 96
4.15
+250 +223 -292
6.24** 6.29** 6.56**
4.06 4.01 4.28
+340 +177 -255
5.54 5.41 5.41 5.51
6.58 6.41 6.42 6.66
4.18 4.08
a g e s 5.01 4.70 5.31
5.77 5.45 6.10
3.74 3.56 3.91
4.83 5.25 5.48
5.63 5.96 5.53
3.68 3.86 3.94
+415 + 49 - 8 +164 +223 +269 +193 +311 +157 -145 +389 +236 + 55
+ 1.8 + 2.3 + 1.0 + -
4.08
4.18
+11.5 +15.0 + 7.4
+ 1.0 + 0.9
+ 0.9
0.2 0.9 2.1 1.9
Annual rates of increase 3/ + 9.8 +11.6 + 6.5 +15.8 +10.7 +12.1 + 6.8 +17.3 + 8.5 +10.5 + 6.0 +13.1
+18.8 +12.5 + 3.4
Includes issues carrying 5-year and 10-year call protection,**issues carry , 5-year call protection. ll commercial banks. Time deposits adjusted at week shown Base is change for month preceding specilied period or in case of weekly periods, the first Reserve aggregate changes have been adjusted for change in reserve requirements held against net demand 4/ deposits effective at mid-month, January 1968. April 26, 1968. p - Preliminary.
+ 6.9 + 6.3 + 5.6
+14.3 +14.1 + 4.4
CONFIDENTIAL (FR)
April 26, 1968.
higher in response to the early April firming of open market policy. In the early part of April the 3-month bill rate rose by around 15 basis points to almost 5.35 per cent.
Dealer financing costs rose
markedly in this period, partly as a result of the sharp rise in the basic reserve deficit of New York money market banks as the tax period approached.
Also, one key money market bank seemed to shift its
longer-run money position policy to become more of a borrower in the funds market and less ready a supplier of funds to dealers. In adjustment to the Treasury bill rates and dealer financing costs, repurchase agreements made by the Management in the period April 3-18 were made at 5-1/8 per cent, 1/8 above the then prevailing discount rate.
In addition, an earlier scarcity of bills, which had
pushed rates sharply lower toward the end of March, was mitigated through moderate net sales of bills by the Desk for foreign accounts, net bill sales of $335 million by the System in the first half of the month, and an announcement by the Treasury of $100 million cash additions to the weekly 6-month bill auction through mid-year.
Thus, of the 30 basis
point rise in the 3-month bill rate since the April 2 FOMC meeting, about half occurred before the discount rate hike and about half afterwards. Other short-term rates showed mixed changes in the earlier part of April and have generally risen 10 - 20 basis points on balance since the discount rate hike. The progressively tighter conditions in short-term markets put banks at an increasing competitive disadvantage in bidding for CD
CONFIDENTIAL (FR)
-3-
money before the Q-ceiling changes.
April 26, 1968.
As a result, there were large
run-offs of CD's during April, amounting to over $1 billion by around mid-month.
The new CD ceiling rates led to a somewhat larger than
usual increase in outstanding CD's in the week following the tax date, although a large proportion of these sales apparently were for purposes of resale into the market; there are no strong indications as yet of a widespread bank aggressiveness in seeking new CD funds.
For the
most part, posted CD rates beyond the 30-59 day area have remained somewhat below the new ceilings, but there are reports that active issuance of 3-month CD's at the 6 per cent ceiling rate.
Also in
the course of April there was a slackening in inflows of consumer-type time and savings deposits, especially at large banks. A sizable portion of the April CD maturities occurred around the tax date and contributed to heavy bank sales of Treasury bills and
to the sharp run-up of bill rates at that point.
Banks were experiencing
increasing loan demand pressure in the first half of the month as well, though there was apparently some abatement of such demands after the tax period. Bank sales of Treasury securities to meet CD maturities and
loan demand have tended to hold down the credit proxy.
For April bank
credit on average is estimated to decline at about a 3-1/2 per cent annual rate, and time and savings deposits to rise at only a 1/2 of one per cent annual rate.
Private demand deposits, on the other hand,
expanded at around a 14 per cent annual rate in April, considerably higher
CONFIDENTIAL (FR)
April 26, 1968.
than in March, mainly reflecting large net transfers from U.S. Government deposits.
With currency also continuing to grow rapidly, the
money supply in April bulged sharply. The behavior of the key monetary variables over the past five months since monetary policy shifted toward restraint is shown below, (at annual rates of increase).
May '67Nov. ';7 9.6
Total reserves
Dec. Apr. 4.6
Nonborrowed reserves
10.0
Bank credit proxy
11.3
3.7
8.4
5.6
deposits at banks
14.7
5.5
Savings accounts at thrift institutions
9.1
Money supply
'67'68
-1.2
Time and savings
6.1-
NOTE: Dates are inclusive. 1/ Dec. '67 through March '68.
Prospective developments The possibilities of a tax increase, the status of peace negotiations, and uncertainties as to the specifics of a Treasury financing are among the factors which make any projection of a constellation of money market conditions in the period ahead especially subject to unexpected variations.
As best can be gauged at this point,
the maintenance of prevailing firmer conditions in the money market during
CONFIDENTIAL(FR)
-5-
April 26, 1968.
the next four weeks may involve a Federal funds rate fluctuating around 6 per cent, member bank borrowings around $750 million and net borrowed reserves in a $350-$500 million range.
Both borrowing
and net borrowed reserves might possibly be deeper depending in part on the extent of reserve pressure that develops at central money market banks and on the inclination of banks to borrow from the discount window rather than in the funds market.
Persistence of this degree of tautness
in such money market indicators may serve to drive the 3-month bill rate up in a 5-1/2 -- 5-3/4 per cent range, partly because of the associated high dealer financing costs (with costs of new money in New York often 6-1/2 per cent or a little above) and also because of the effect on attitudes of market participants who may not have yet fully appreciated the extent of monetary tightness that is in train. If it were not for the possible effect on bill rates of a sustained taut monetary policy, the 3-month bill rate over the next few weeks might show little, if any, tendency to rise further.
The ending
of mid-April tax period pressures has begun to ease the reserve position of central money market banks, and if past behavior is any guide, the position of such banks is likely to be relatively comfortable in May. Moreover, large bill sales by dealers to the public during the past several days have depleted the trading supply of bills going into a period when System open market operations are likely to be on the buy side at least over the next two weeks.
Finally, the weekly additions
to the 3-month bill auction are scheduled to come to an end.
April 26, 1968.
-6-
CONFIDENTIAL (FR)
The forthcoming mid-May Treasury financing is expected to have relatively little impact on bill rates, unless the whole financing were to be concentratedin a15-18 month issue.
Market expectations are that
the Treasury will probably seek to avoid the sizable attrition that might accompany a "rights" exchange for the $4 billion of publicly held maturing issues.
Rather, a cash exchange is anticipated, possibly
with both a short- and intermediate-term offering, with the Treasury perhaps raising some new cash if market conditions are appropriate. A cash exchange has in the past generally been associated with somewhat less bill demand from holders of maturing issues than has a "rights" exchange, in which the appearance of "rights" value on the maturing issue has made it attractive for holders of the issue to sell it and often to reinvest the proceeds in the bill market. A bill rate even at the upper end of the projected range will enable banks to compete fairly effectively for CD funds if they choose. But banks are not expected to be overly aggressive in seeking longerterm CD funds at near ceiling rates unless loan demands are exceptionally strong or unless they become more convinced that the outlook is for considerably higher interest rates in the months ahead--which is a possible development if the recent revived hopes for a tax increase again fade away.
The staff expectation is that banks will add somewhat
to outstanding negotiable CD's in May, as they make an effort to begin recovering from the approximately $1.5 billion run-off between the midMarch and mid-April tax periods.
Net additions to outstanding CD's
may be in the order of $300 - $600 million over the month, or just slightly more than seasonal.
CONFIDENTIAL (FR)
April 26, 1968.
This relatively conservative estimate of CD offerings is also based partly on the expectation that immediate bank needs for funds are not likely to be extremely large.
Business loan demands on
banks during coming weeks are expected to slacken somewhat from their very rapid mid-March to mid-April pace.
There may be some pick-up in
bank credit demands, however, in connection with the mid-May refunding, as dealers and other temporary holders seek financing.
It is not
expected that banks, in terms of their longer-run portfolio choices,
will be able, or willing, to do much more than roll over the maturing mid-May issues. Given these prospective credit demands, and with the Treasury assumed to raise only about $400 million of new cash through overallotments in the mid-May refunding, outstanding bank credit is likely to show little change in the course of May, and, on average, move only in a +2 to -2 per cent annual rate range.
Bank credit would, of course,
show a larger increase if the Treasury raised more new cash than assumed around mid-May, and particularly so if tax and loan crediting were granted on the cash portion. Assuming the bulk of the Treasury's cash financing is accomplished in June, bank credit might grow at a 4-6 per cent annual rate; loan demands are also likely to be stronger, and banks may begin to press CD offerings more strongly on the market.
If the mid-points
of these ranges are realized, bank credit expansion (as measured by the proxy) would be at about a 4 per cent annual rate over the first half of the year.
CONFIDENTIAL (FR)
-8-
April 26, 1968.
The anticipated moderate recovery in CD's is likely to lead to growth in time and savings deposits during May in a 5 - 7 per cent annual rate range, with inflows of consumer time and savings deposits remaining sluggish given the existing structure of market interest rates.
Money supply growth in May is expected to drop off from April,
though to remain relatively rapid, at around an 8 - 10 per cent annual rate.
The net new cash expected to be raised by the Treasury in May
will not be sufficient to forestall a further sizable decline in the Treasury's cash balance (seasonally adjusted), and this will result in further shifting of funds from U.S. Government to private demand deposits.
The quite rapid growth in currency of the past two months
is projected to slow down; the staff does not yet have any very convincing explanation for the surge in currency growth, and, similarly, no strong reason to assume the growth will continue. The constrained growth in bank credit in May, and also in June when compared with other periods of Treasury cash borrowing, is likely to contribute to additional upward pressures on longer-term interest rates, barring a tax increase or the psychological impact of a break-through in Vietnam peace negotiations.
There is no evidence
yet of large-scale anticipatory capital market borrowing by corporations and state and local governments, but there are signs of a growing calendar in both markets that will tend to add to market pressures in a period when the Treasury will be marketing coupon issues and possibly a PC.
Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) "
Period
Excess reserves
As
Member banks borrowings
revised
to
Free
349 369
1968--January February March p April p Weekly: 1968--Jan.
Feb.
Mar.
&pr.
150
--
date
Monthly (reserves weeks ending in): 1967--April May June July August September October November December
reserves
As first published each week
As expected at conclusion of each week's open market oper titons
345
88
449 356 334 353 349 333
132 86 82 141 124 185
199 275 257 317 270 252 212 225 148
417 389 337 354
275 368 649 689
142 21 -312 -335
3 10 17 24 31
653 564 157 376 336
495 180 224 233 241
158 384
398
363
- 67
- 55
- 28
143 95
133 44
73 35
7 14 21 28
375 488 379 313
241 384 405 442
134 104
85 75
88 89
- 26
- 44
- 57
-129
-143
-148
6 13 20 27
316 458 414 161
500 779 733 582
-184 -321 -319 -421
-151 -309 -332 -410
-155 -320 -289
3 10 17 24
330 453 519 115
696 646 763 651
-366 -193 -244 -536
-328 -173 -230 -536
-340 -198 -220 -557
p - Preliminary
94
71
45
-407
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 Total R
Ag
se
r v e
s
______Deposits(credit)
a
Monet l M Total Member Bank Deposits
Nonborrowed R e
_______________
regates 2/ Required reserves Against
/
1/2/
De oits
v Variables Time Money Supply Deposits Private ______
banks)Dost
Deposits
Annually: 1966 1967
+ 1.2 + 9.8
+ 0.8 +11.5
+ 1.4 +10.2
+ 0.9 + 7.0
+ 3.7 +11.6
+ 8.8 +15.8
+ 2.2 + 6.5
+ 1.2 + 6.8
Monthly: 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
+19.2 +11.5 +21.6 + 2.5 - 0.4 + 8.4 +11.3 +13.5 + 9.6 +15.3 + 7.6 - 7.0
+26.0 +17.4 +29.4 + 4.7 + 4.9 + 4.9 +15.2 +14.7 + 4.8 +12.4 +10.9 -14.2
+14.4 +12.0 +15.3 + 8.1 - 1.2 + 4.8 +16.0 +15.6 + 9.0 +18.0 + 5.5 - 0.3
+14.0 +11.6 + 9.8 + 5.0 -2.1 - 2.8 +15.8 +14.4 + 7.2 +16.1 + 2.8 -10.2
+16.1 +15.9 +14.3 + 9.9 + 5.6 + 8.8 +15.2 +16.9 +10.3 +12.0 + 7.9 - 0.4
+16.5 +19.3 +19.0 +14.4 +13.5 +17.5 +15.2 +17.1 +11.4 +13.3 +11.2 + 8.5
- 0.7 + 8.5
- 2.7 + 9.1 +12.7 - 5.4 +15.3 +13.3 +14.0 +10.4 - 0.9 + 6.9 + 7.7 - 0.9
1968--Jan. 3/ Feb. Mar. p Apr. p
+18.9 +11.3 + 2.6 + 2.5
+16.7 +10.2 -12.3 - 4.5
+13.8 + 8.3 + 1.7 - 3.5
+17.8 +16.3 + 0.3 - 6.0
+ 7.9 +10.0 + 4.3 - 3.5
- 1.3 + 8.4 +11.0 + 0.5
-
A
A
&
II.
I
+11.2 - 2.8 +12.5 +11.7 +11.6 + 8.1 + 0.7 + 7.4 + 6.0 + 2.0 + 6.6 + 5.9 +13.0
I
+ 6.8 - 0.8 + 4.2 +14.5
____________
Includes all deposits subject to reserve requirements. Movements in this aggregate correspond closely withh movements in total member bank credit. Changes in reserves, total deposits and time deposits have been adjusted for redefinition of time deposits effective June 9, 1966. Reserve aggregate changes have been adjusted for change in reserve requirements held against net demand deposits effective at mid-month, January 1968. Preliminary.
Chart 1
MEMBER BANK RESERVES MONTHLY
AVERAGES
BILLIONS OF
OF
DAILY FIGURES
DOLLARS, SEASONALLY ADJUSTED
25.0
24.5
24.0
23 5
R 23.0
e
omm
m*
REQUIRED
RESERVES
22.5
22.0
21.5
BILLIONS OF DOLLARS
MEMBER
.5
e
e
--
-
BANK
"
--- SS M
BORROWINGS
J
1966
5
/
-
D
M
D
M
J
1967
S
D
Chart 2
MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF
2 86
DOLLARS
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
282
278
274
270
266
262
258
254
250
246
242 6
LIABILITIES TO OVERSEAS NOT SEAS
ADJ,
BRANCHES [WEEKLY REPORTING BANKS)
WEDNESDAYS
4
2
0 1966
1967
1968
I
I
Chart
3
MONEY SUPPLY AND BANK
EPOSITS
SEASONALLY
OF DAILY FIGURES
ADJUSTED WEEKLY
AVERAGES
BILLIONS OF DOLLARS
I
BILLIONS OF DC)LLARS
190
190
186
186
182
192 MONEY
SUPPLY
178 -
188
174
184
170
180
176
172 TIME DEPOSITS ADJUSTED (All Commercial Banks) 168
164
160
24
NEGOTIABLE (Unadjusted)
156
CD'S
20
16
1
12 D 1966
M
J 1967
S
D
M
J 1968
S
Chart 4
DEMAND DEPOSITS AND CURRENCY SEASONALLY
ADJUSTED WEEKLY
I -F
AVERAGES
OF
DAILY FIGURES
I I I I I I II I I
I I
BILLIOr NS OF DOLLARS
I
I|
MONEY SUPPLY COMPONENTS:
CURRENCY
OUTSIDE
BANKS
40
IA,
146
142
-----
DEMAND 138
DEPOSITS
A
+
134
130
12
U.S. GOVT. (Member
1966
DEMAND DEPOSITS Banks)
1967
1968
~
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 Gold Currency Technical outside factors k credit (excl.
Period
flostock float) 1/
bans banks
Change in total
= Bank use of reserves Required reserves
Excess reserves
nt 2/ net 2/
r s reserves
+
805 165
+1,085 +1,522
+1,111
-
+1,517
+
26 5
314
-
780 158
+
589 169
-
191 327
164 144 272 164
+ + -
161 249 124 346
+ + -
158 391 168 93
40 271 441 623
+ + + -
137 5 605 544
+ -
32 118 539 140
345 40 45 30 350
- 15 - 60 140 - 260 15
-
15 60 140 260 15
50 50
+
+
65 135
3/______
Year: ,6 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67)
+3,149 44,718
-
Year-to-date: (12/28/66 - 4/26/67) (12/27/67 - 4/24/68) 5/
+ 690 +1,237
51 -1,950
Weekly: 1968--Mar.
Apr.
-2,408 -
412 313
+ +
76 199
+
236 544 29
+
497
+
25
15 22 29
305 555 210 330 230
+
655 25
+ +
100 105
+ + -
5 12
435 325
-
450 240
+
3 10 17 24
p p p D
1
8
Jun.
-2,243 -2,305
-
410 479 516 323
6 13 20 27
332 280 134 418
PROJECTED 1968--May
627 725
_______________________
-
274 737
-
388
1
/
J ______________LJ
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 reverso side for explanation. Jan. Includes increase in reserve requirements of $360 million effecLive January 18, 1968.
i
p -
11,
65 135
1________
Preliminary.
1968 and $190 million effective
Table B-1 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 Currency Technical Gold Federal Reserve credit (excl. t outside factors
Period
fla
~~~____~~_______float)
I/
stockt
1/
_____banks
b
s
=
2/
Change in total
net 2/
reserves
+
805
-
165
+1,085 +1,522
= Bank use of reserves Required Excess reserves 3/_____
reserves
Year: ,6 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67)
627 725
-2,243 -2,305
51
989 868
-2,408
-1,950
-
314
412 313 76 199
+
164
274 737 388
-
144
+ +
272 164
236 544 29 497
+ + +
40 271 441
-
623
+3,149 +4,718
-
+ 690 +1,237
-
+1,111 +1,517
Year-to-date: (12/28/66
- 4/26/67)
(12/27/67
- 4/24/68) 5/
Weekly: 1968--Mar.
Apr.
410 479 516 323
6 13 20 27 3 10 17 24
p p p p
-
332 280 134
418
1
25 655 25
+
345 40
15 22 29
+ +
+
45
+ +
100 105
-
30 350
5 12
435 325
-
450 240
+
50 50
J
________________________
L
1 ________
in
589 169
161 249 124 346
+ + -
158 391 168 93
137 5 605 544
+ -
32 118 539 140
15 60 140 260 15
reserve requirements
of $360 million effective J.n.
-
15 60 140 260
-
15
-
-
65
-
65
+
135
+
135
II
1
-
I
________
p - Preliminary.
For retrospective details see Table B-4, For factors included, see Table B-3 For required rcserves by type of deposits, see Table B-2. See revers, side for e-planation. Includes increase January 18, 1968.
+
I
305 555 210 330 230
8
Jun.
780 158
III
PROJECTED 1968--May
-
11,
1968 and $190 million effective
191 327
FINANCIAL MARKET RELATIONSHIPS ('Monthlv averages and,
where available,
Money arket Indicators Free Borrow- Federal 3-month Funds Treasings eserves (In millions Rate ury of dollars) Bill
Perd
IN PERSPECTIVE
weekly averages of daily figures)
Bond Yields Corporate Municipal U.S. New Gov't. Issues (Aaa) (20 y.) (Aaa)l/
Flo. of Reserves. Bank Credit NonTotal Bank y ReCredit S borrowed Reserves serves Proxy (In million of billions of (In billions ollarsl -_f
and Money Desi 2/ dollars) dollars)
(Seasonally Adjusted) /--Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1968--Jan. Feb. Mar.
4/ 4/ 4/ p
1968--Apr. 3 10 17 24
p p p p
Year 1967 First Half 1967 Second Half 1967 Recent variations in growth Mar. 29-June 28 June 28-Nov. 29 Nov. 29-Apr. 24
172 199
196 150
4.50 4.03
4.26 3.84
4.56 4.64
5.31 5.38
3.47 3.50
+555 + 92
+415 + 49
+ 3.0 + 2.1
+ 1.6 - 0.3
+ 2.6 + 2.0
275 257 311 270 252 212 225 148
94 88 132 86 82 141 124 185
3.94 3.97 3.78 3.88 3.99 3.87 4.14 4.49
3.60 3.53 4.20 4.26 4.42 4.55 4.72 4.96
4.90 4.99 5.01 5.12 5.16 5.36 5.66 5.59
5.62 5.79 5.78 3.86** 5.85** 6.08 6.50 6.51
3.71 3.80 3.86 3.78 3.81 3.88 3.99 4.15
+ 96 + 95 +307 +291 + 96 +250 +223 -292
8 +164 +223 +269 +193 +311 +157 -145
+ + + + + + + -
+ + + + + + + +
+ + + + + + + +
142 21 -312
275 368 649
4.60 4.68 5.02
5.00 4.98 5.17
5.39 5.38 5.59
6.24** 6.29** 6.56**
4.06 4.01 4.28
+340 +177 -255
+389 +236 + 55
+ 1.8 + 2.3 + 1.0
+ 1.0 -+ 0.9
- 0.2 + 1.3 + 1.7
-366 -193 -244 -536
696 646 763 651
5.63 5.66 5.70 5.58
5.17 5.28 5.39 5.47
5.54 5.41 5.41 5.51
6.58 6.41 6.42 6.66
4.18 4.08 4.08 4.18
+ -
+ + -
+ + -
195 153 238
173 222 123
4.19 4.36 4.02
a g e s 5.01 4.70 5.31
5.77 5.45 6.10
3.74 3.56 3.91
245 254 - 59
110 112 427
4.00 3.96 4.90
4.83 5.25 5.48
5.63 5.96 5.53
3.68 3.86 3.94
A v e r 4.29 4.07 4.51
3.66 4.41 5.07
+11.5 +15.0 + 7.4
1.2 2.0 3.2 3.7 2.3 2.7 1.9 0.1
0.2 0.9 2.1 1.9
1.6 1.7 1.7 1.2 0.1 1.1 0.9 0.3
0.5 0.2 2.9 1.8
Annual rates of increase 3/ + 6.5 + 9.8 +11.6 + 6.8 +10.7 +12.1 + 6.0 +10.5 + 8.5
+18.8 +12.5 + 3.4
Includes issues carrying 5-year and 10-year call proLection,**issues carry a 5-year call protection. Time deposits adjusted at Sa11 commercial banks. week shown. 3/ Base is change for month preceding specified period or in case of weekly periods, the first net demand against hel requirements reserve in change for Reserve aggregate changes have been adjusted 4/ 1968. January deposits effective at mid-month, April 26, 1968. p - Preliminary.
+ 6.9 + 6.3 + 5.6
1.9 2.5 2.2 2.5 1.7 2.0 1.7 1.3
0.1 0.1 0.1 0.5
+15.8 +17.3 +13.1
+14.3 +14.1 + 4.4
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 $40 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 $1.0 billion.
4.
Projected changes in required reserves assume the existing net reserve position of banks and the structure of interest rates in the market, as well as the current economic outlook. On the basis of these assumptions of projections reflect expected movements in bank credit and money in the period ahead, including the effects of such elements as the public's loan demand, repayments of previous loans, bank's investment preferences and willingness to supply loans, bank's desires and abilities to obtain time and savings deposits, and the Government's financing needs. The projections thus encompass normal seasonal developments, temporary bursts of loan demand and expected associated repayments not currently reflected by the seasonals, and whatever cyclical and growth demands for money and credit are expected in the projection period. Assumed Treasury financing operations include: $0.2 billion increase in the weekly and monthly Treasury bill auctions through June 5; $0.4 billion, May 15; $2.0 billion, June 7.
Table B-2 CHANGES IN REQUIRED RESERVE COMPONENTS Retrospective and Prospective Seasonal and Nonseasonal Changes (Dollar amounts in millions, based on weekly averages of daily figures) Total Period
resquired reere
Supporting private deposits
Supporting U. S. Gov't. d demand
Other than De d seasonal changes e
Seasonal changes
Total
Time
Demand
Time
Demand
deposits
ar:
1966 (12/29/65 1967 (12/28/66 -
+1,111 +1,517
+
87 261
+1,198 +1,256
+
14 59
+
4 6
+
589 169
+ -
111 322
+
700 491
-
423 499
+ +
+ + -
158 391 168 93
+ +
173 368 71 92
+ + -
331 23 97 185
+ + + -
131 59 146 306
+ -
32 118 539 140
+
223 212 126 263
+ + + -
191 94 655 403
+ + + -
1 8
-
15 60
+ +
85 205
-
100 265
15 22 29
-
140 260 15
+
140 20 35
5 12
+
65 135
-
325 70
12/28/66) 12/27/67)
Year-to-date: (12/28/66 - 4/26/67) (12/27/67 - 4/24/68) 2/ Weekly: 1968--Mar.
Apr.
6 13 20 27 3 10 17 24
p p p p
5 +1,023
+1,221+ 168-1
95 85
+ +
50 820
+
422 85
+ + +
5 11 11 11
+ +
192 106 37 116
+ + -
3 13 1 6
145 221 248 131
+ -
5 5 10
+ + -
47 122 427 249
-
6
+ -
1 23
-
160 310
+
5
+ +
40 30
+ +
15 15
-
-240 50
-
75 280 100
+ +
5 5
+ + +
60 25 40
+ + +
10 10 10
+ +
260 205
+ +
175 175
-
5 10
+ +
80 30
+ +
10 10
--
PROJECTED 1968--May
Jun.
--
--
1/ 2/
Reflects reserves requirements changes in July, September 1966, and March 1967. Includes increase in reserve requirements of $360 million effective Jan. 11, 1968, and $190 million effective January 18, 1968.
p -
Preliminary.
TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures)
--Foreign deposits and gold loans reserves)
Technical factors (net)
Period ACTUAL Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67)
+ -
805 165
+ -
Year-to-date: (12/28/66 - 4/26/67) (12/27/67 - 4/24/68)
-2,408 - 314
-
Weekly: 1968--Mar.
Apr.
6 13 20 27 3 10 17 24
p p p v
Other nonmember deposits and F. R. accounts
673 85
+ -
670 34
-1,284
164 144 272 164
49 8 6 309
173 256 195 134
54 67 108 28
40 271 441 623
308 22 94 616
85 188 167 31
206 47 160 26
-
-
- 30 - 7
64 389
98 316 +
553
503 268
PROJECTED 196 8--May
Jun.
p -
1 8 15 22 29
+ + -
345 40 45 30 350
5 12
+
50 50
Preliminary.
+
60 90 ------
+ +
300 50 50 300 350
+
50 50
-
5
+
20 --
--- -
-
5 330 --
Table B-4 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) T
t
Total Federal Reserve credit (xcl- float)
Period
fv l
I overnment securities Total Repurchase Bills Other holdines aereements U.S.
I
I
fl a
Federal Agency Securities
Bankers' acceptances
Member banks borrowings I
Year: 1966 (12/29/65 - 12/28/66)
+3,149 +4,718
+3,069 +5,009
+2,158 +4,433
+ 474 +1,153
+
437
-
577
+ -
26 19
+ 690 +1,237
+1,218 997
+1,618 + 504
217 574
-
617 81
-
23 7
346 35 773 314
369 133 763 281
110 372 259
22
13 20 27
410 479 516 323
344 199 573 219
200 94 631 246
95 53 43 27
3 10 17 24
332 280 134 418
177 346 68 285
132 234 1 54
145 82
1967 (12/28/66 - 12/27/67)
+ -
52 69
+ -
2 203
S 55 S 59
-
450
+
306
Year-to-date: (12/28/66 (12/27/67 Weekly: 1968--Feb.
- 4/26/67) - 4/24/68) 7 14 21
28 Mar.
Apr.
6
_______________________
___________
+
+ -
11
-
-__________-
28 26 27 - 4 1 1
+
1 29
--
47
-
4
+ -
20 49 14
_________
Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES 1/ Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures)
Nonborrowed Total reserves reserves s reservesTotal
Period
Required reserves Aainst private deposits Demand Total Demand
Total
1965--Jul. Aug. Sept. Oct. Nov. Dec.
21,857 21,923 21,869 21,986 21,976 22,186
21,356 21,417 21,318 21,533 21,589 21,722
21,488 21,533 21,494 21,645 21,671 21,861
20,626 20,719 20.904 21,073 21,170 21,285
15,921 15,943 16,065 16,147 16,196 16,266
1966--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec.
22,358 22,401 22,452 22,679
21,899 21,943 21,873 22,027 22,020
22,007 22,028 22,077 22,252 22,308
22,030
22,339
22,449
22,140 21,900 21,864 21,748 21,898 21,885
22,431 22,274 22,256 22,200 22,142 22,175
21,411 21,464 21,600 21,771 21,782 21,883 21,841 21,842 21,860 21,741 21,710 21,772
16,375 16,413 16,506 16,605 16,562 16,606 16,512 16,473 16,475 16,365 16,364 16,378
1967--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec.
22,808 23,026 23,441 23,490 23,482 23,646 23,869 24,138 24,331 24,642 24,799 24,654
22,360
21,803 22,044 22,297 22,293
23,523 23,830 24,121 24,217 24,467 24,690 24,398
22,442 22,666 22,955 23,110 23,086 23,178 23,488 23,794 23 972 24,332 24,444 24,437
16,328 16,478 16,647 16,578 16,786 17,024 17.115 17,246 17,237 17,316 17,404 17,386
25,043
25,279 25,334
24,738 24,915 24,660
24,718 24,889 24,924
23,753 23,796 23,904
25,279
24,563
24,850
24,108
1968 --
22,703 22,707 22,861 22,571 22,655 22,524 22,465
2/
Jan.
2/
Feb. Mar. Apr.
p 2/
22,685 23,240 23,332
23,428
22,559 22,890 23,049 23,275 23.330 23,453 23,605 23,628
I
17,512 17,530 17,599 17,721
I
p - Preliminary. 1/ 2/
effective June 9, 1966. Reserves have been adjusted for redefinition of time deposits in reserve requirements Reserve aggregates have been adjusted for change 1 OA . . held against net demand deposits errective at mo-monUii, .au~L LCL y
Table C-2 DEPOSITS SUPPORTED By REQUIRED RESERVES AT ALL MEMBER BA Seasonally Adjusted (Dollar amounts in billions
Period
based on monthly averages of daily figures)
Total member bank deposits (credit) 1/2/
Private demand Time depsits2 deposits 3/
U.S. Gov't. demand deposits
1966--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept Oct. Nov. Dec.
238.0 239.0 239.8 242.2 243.9 244.8 246.7 246.5 246.4 245.5 244.8 245.2
121.7 122.0 123.0 124.8 126.1 127.5 128.7 129.7 130.1 129.9 129,3 130.3
111.7 112.0 112.6 113.3 113.0 113.3 112.6 112.4 112.4 111.6 111.6 111.7
4.7 5.0 4.2 4.1 4.8 4.0 5.3 4.4 3.9 4.0 4.0 3.2
1967--Jan Feb. Mar. Apr. May June Jul. Aug. Sept Oct. Nov. Dec.
248.5 251.8 254.8 256.9 258.1 260.0 263.3 267.0 269.3 272.0 273.8 273.7
132.2 134.4 136.5 138.0 139.4 141.7 143.3 145.6 147.2 148.2 149.8 150.8
111.4 112.4 113.6 113.1 114.5 116.1 116.7 117.6 117.6 118.1 118.7 118.6
4.9 4.0 4.8 5.8 4.1 2.2 3.2 3.7 4.5 5.6 5.3 4.4
1968--Jan.
275.5 277.8 278.8 278.0
150.7 151.3 152.3 152.1
119.4 119.6 120.0 120.9
5.3 6.9 6.5 5.0
Feb. Mar. Apr.
1/
2/ 3/
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. Deposits have been adjusted for redefinition of time deposits effective June 9. 1966. Private demand deposits include demand deposits of individual, partnerships and corporations and net interbank balances.
TABLE C-2a DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted
(Dollair amounts in billions
Week ending:
based on weekly averages of daily tig ures)
Total member bank deposits (credit)l/ 2 /
Time deposits 2/
Private demand deposits 3/
U. S. Gov't. demand deposits
6 13 20 27
274.3 273.6 273.2 273.6
150.6 150.9 150.8 150.7
119.1 118.5 117.9 118.3
4.5 4.1 4.5 4.4
1968--Jan.
3 10 17 24 31
274.9 274.7 275.5 276.4 275.4
150.5 150.6 150.6 150.7 151.1
120.4 119.6 119.9 119.3 118.5
3.9 4.5 5.0 6.4 5.8
Feb.
7 14 21 28
277.6 276.6 276.6 279.8
150.8 151.2 151.6 151.9
119.8 119.1 120.2 119.2
7.0 6.3 4.9 8.7
Mar.
6 13 20 27
280.2 279.2 278.2 278.3
152.0 152.3 152.5 152.3
120.3 119.9 119.4 120.4
8.0 7.1 6.4 5.7
Apr.
3 10 17 24
278.2 277.3 279.4 277.5
152.3 152.3 152.3 151.7
120.5 119.7 122.2 120.6
5.5 5.3 4.9 5.2
1967--Dec.
p - Preliminary. 1/ 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/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. 3/ Private demand deposits include demand deposits of individuals, partnerships and corporations and net interbank balances.
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 Money Supply
Monthly
Currency I/
Demand Deposits 2/
Time Deposit Adjusted 3
1966--Jan. Feb. Mar. Apr. May June Jul Aug.
167.9 168.3 169.2 170.5 170.2 170.6 169.9 170.1
36.6 36.7 36.9 37.1 37.3 37.4 37.7 37.8
131.4 131.6 132.3 133.4 132.9 133.2 132.3 132.4
147.5 148.3 149.8 151.8 153.4 154.8 156.9 158.1
Sept. Oct. Nov.
170.5 170.1 170.1
37.9 38.0 38.1
132.6 132.1 132.0
158.6 158.8 158.5
Dec.
170.4
38.3
132.1
159.8
1967--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec.
170.3 171.5 173.1 172.7 174.5 176.2 177.9 179.1 179.2 180.3 181.2 181.5
38.5 38.7 38.9 39.1 39.2 39.3 39.5 39.6 39.8 39.9 40.0 40.4
131.8 132.8 134.2 133.6 135.3 136.8 138.4 139.6 139.5 140.3 141.2 141.1
162.0 164.6 167.2 169.2 171.1 173.6 175.8 178.3 180.0 182.0 183.7 185.0
1968--Jan. Feb. Mar. p
182.5 182.5 183.4
40.5 40.7 41.1
141.9 141.8 142.3
184.8 186.1 187.8
185.4
41.4
144.0
187.9
Apr.
p
Includes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. 2/ 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 of Federal Reserve float; and (2) foreign demand balances at Federal Reserve Banks. Deposits have been adjusted for redefinition of time deposits effective June 9, 196 3/ p - Preliminary. 1/
TABLE C-3a MONEY SUPPLY AND TIM DEPOSITS AT ALL COMMERCIAL BANKS Seasonally Adjusted (Dollar amounts in billions, based on weekly averages of daily figures)
Week Ending 1967--Dec.
1968--Jan.
Feb.
6 13 20 27
181.5 181.0 180.8 181.8
40.1 40.3 40.3
3 10 17 24 31 7 14 21
Private Demand
Time Deposits a ste / adjusted
40.5
184.9 185.2 185.1 184.7
183.1 182.5 183.1 182.1 181.3
40.4 40.5 40.5 40.6 40.5
142.7 142.0 142.6 141.6 140.8
184.4 184.6 184.7 184.7 185.2
182.7 181.9 183.4 182.1
40.7 40.7 40.7 40.7
142.0 141.1 142.6 141.4
185.2
40.9
27
183.6 183.4 182.8 183.8
41.1 41.1 41.1
142.7 142.3 141.7 142.6
187.0 187 6 188.0 188.0
3 10 17 24
184.3 184.1 187.0 185.2
41.2 41.4 41.5 41.3
143.1 142.7 145.5 143.9
188.1 188.2 188.1 187.6
6 13
20 Apr.
/
141.4 140.8 140.5 141.3
28 Mar.
Money Supply Currency 11Deposits2/
185.7 186.2 186.8
Includes currency outside the Treasury, the Federal Reserve and the vaults of all commercial banks. 2/ Includes (1) demand deposits at all commercial banks, other than those due to domestic commerical 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. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary. 1/
Cite this document
Federal Reserve (1968, April 29). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19680430
@misc{wtfs_bluebook_19680430,
author = {Federal Reserve},
title = {Bluebook},
year = {1968},
month = {Apr},
howpublished = {Bluebooks, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/bluebook_19680430},
note = {Retrieved via When the Fed Speaks corpus}
}