bluebooks · August 11, 1969

Bluebook

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Content last modified 6/05/2009.

August 8, 1969.

CONFIDENTIAL (FR)

MONEY MARKET AND RESERVE RELATIONSHIPS

Recent developments (1)

Major deposit and reserve aggregates contracted signifi-

cantly further in July, and interest rates remained generally at high levels.

Most recently, however, both short- and long-term rates have

turned down, as signs of more moderate credit demands have developed in some sectors and market opinion that the peak in yields may have passed has strengthened somewhat.

Final action on the income surtax--at least

for the calendar 1969 segment--contributed to this changed expectation. Also, markets were generally strengthened by the Treasury's decision to follow a conservative approach in its August refinancing.

Yields on

longer-tern debt securities have declined 1/8 - 1/4 of a percentage point from their recent highs; and short-term rates--apart from day-today money rates--are generally down 1/8 - 1/2 of a percentage point from theirs. (2)

The 3-month Treasury bill rate rose to a peak of around

7.20 per cent in the immediate aftermath of the Treasury's July tax-bill financing.

Since then, it has declined, and in the first week of August

fluctuated around 7 per cent. strong.

Demands for Treasury bills have been quite

Reinvestment of funds released through retirement of the maturing

CCC special certificates has recently contributed to these demands, along with stepped-up cash flows to the auto companies during the early part of the model change-over period.

With market anticipations of somewhat lower

-2rates tending to strengthen, the 7.82 per cent yield set by the Treasury on the single (18 month) note offered in the August refinancing proved to be highly attractive. (3) In the latter part of July, the tendency for rates in securities markets to edge down was abetted by a coincident easing of day-to-day money market rates.

In the two weeks following the last

Committee meeting, the effective rate on Federal funds averaged around 8-1/4 per cent, substantially below the 9 to 9-1/4 per cent average for the three preceding statement weeks.

This moderation of pressures on

Federal funds reflected a skewing of reserve distribution in favor of banks at money centers.

At New York City banks, in particular, the

basic reserve deficit dropped to a very low average level.

Since the

end of July, however, day-to-day money rates have tightened, raising the average effective rate on Federal funds to more than 9-1/2 per cent; and in recent days trading has frequently been at 10 per cent or above. reasons behind this firming are not entirely clear.

The

It is possible that

recent Federal Reserve regulatory actions and administrative pressures on repetitive borrowers at the discount window may have increased demand for Federal funds at a time when country bank reserve positions have come under increased pressure as a result of widespread deposit losses. (4) Net borrowed reserves of member banks in the last 3 statement weeks have averaged about $1.0 billion, little changed from the preceding 3-week period.

Average member bank borrowings from the

Federal Reserve dropped slightly to $1.2 billion in the latest period. But borrowings by country banks have risen by about $100 million between the two periods to an average of about $660 million, as monetary restraint has spread more widely.

-3(5)

The recent declines in security market rates occurred

despite a sharp further contraction of commercial bank deposits during July.

This shrinkage continued to center on large time CD's, which

dropped by $1.8 billion.

But attrition also persisted in other time and

savings deposits, as the still high market rates continued to stimulate further savings withdrawals during the post-interest crediting period. Reflecting in part transfers out of U.S. Government deposits, the money supply rose at a 6 per cent annual rate in July, after correcting for the bias introduced by the deduction of cash items associated with the increasing volume of Euro-dollar transactions. July was around 2-1/2 percentage points.

The upward adjustment for

In the second quarter,

the

money supply growth rate has been revised upward by 2 percentage points to a 4-1/2 per cent annual rate.

Upward revisions in the rate of change

of total member bank deposits will be much less marked because of the larger total amount of such deposits. (6)

Reflecting the heavy time deposit contraction of July,

total member bank deposits are estimated to have declined at a 21.5 per cent annual rate, substantially more than was projected four weeks ago. Similarly, total reserves declined during July at a nearly 30 per cent annual rate.

Adjustment of the deposit data for Euro-dollar borrowings

from foreign branches lessened the decline in the adjusted proxy to a 13.5 per cent annual rate.

This compares with a decline of 5 - 8 per cent

projected in the last Blue Book. (7) With Euro-dollar borrowings thur offsetting only a part of the further shrinkage in bank deposits, major money market banks continued to move aggressively to attract funds from other non-deposit sources.

It is estimates these non-deposit sources in July rose by

-4about the equivalent of 4 - 5 percentage points on the proxy, or somewhat more than earlier anticipated.

This includes borrowings by head offices

of banks through repurchase agreements and through funds obtained outside the U.S. (other than from branches), and by affiliates through issuance of commercial paper. (8)

The following table summarizes the changes in major

deposit and reserve aggregates for the last half of 1968 and thus far in 1969. July '68Dec. '68 Total reserves

9.8

Nonborrowed reserves

9.9

Jan. Mar.

'69'69

0.1

Apr. '69June '69 1.2

July -23.5

-2.9

-4.7

-20.2

-2.2

-19.3

Bank credit, as indicated by: Proxy

12.8

-2.8

Proxy plus Euro-dollars

13.0

0.1

1.8

Total loans and investments (as of last Wednesday of month) 15.0

2.3

3.7

1.51/ 1.5-

2.7

4.5

6.1

Money supply Time and savings deposits Savings accounts at thrift institutions

6.1 17.1

6.4

-6.5 6.1

-3.6 3.9

-11.8

-21.1

0.5

NOTE: Dates are inclusive. Data corrected for bias introduced by deduction of cash items associated with the increasing volume of Euro-dollar transactions. 1/ This figure excludes transitory one day increase in outstanding bank credit on the last Wednesday of July from $1.2 billion in outstanding System matched-sale purchase transactions.

Prospective developments (9)

After taking account of the relatively wide range of

fluctuation in the Federal funds rate over the past four weeks, maintenance of prevailing firm conditions in the money market may be considered to entail a Federal funds rate averaging around 9 per cent, member bank borrowings in a $1 - $1-1/2 billion range, and net borrowed reserves around $1 billion.

However, the relationships that actually develop

between the Federal funds rate and marginal reserve measures (as well as between these and credit conditions more generally) will depend in part on how banks adjust to the new Federal Reserve regulations as they become effective.

In view of the highly concentrated impact of these regulations

on a relatively few banks, it seems likely that these banks will increase their demands on the Federal funds market, and also at times the discount window.

The redefinition of instruments to be classed as deposits subject

to reserves to include bills payable and London drafts has already become effective.

The exemption for loans sold under repurchase agreements from

Regulations Q and D will be phasing out.

Final action has not yet been

taken on Euro-dollar reserve requirements and the proposed more restricted definition of Federal funds transactions. (10)

The redefinition of deposits to include such items as

bills payable and London checks is expected to increase required reserves in the week ending August 20 by about $450 million.

This redefinition

has probably contributed to the recent lessening of pressure on shortterm Euro-dollar rates.

With respect to repurchase agreements, all

-6outstanding agreements written after July 25 will become subject to Regulations Q and D on August 28.

It is not expected that there will

be much if any of the newly written RP's outstanding after late August (and thus no significant increase in required reserves).

However

that may be, banks' behavior toward alternative sources of funds and their own loans and investments is probably already in the process of change in view of the prospective decline in RP's against loans as a continuing source of funds; about $1.3 billion of such RP's sold to nonbanks were outstanding toward the end of July and will run off over time, tending to reduce bank credit by an equivalent amount.

Moreover,

the proposed changes with respect to Euro-dollars and Federal funds, while not yet effective, may have already begun to have a marginal impact on bank attitudes. (11)

If money market conditions are not to be allowed to

tighten, one would expect open market operations to accommodate the increase in required reserves generated by these recent regulatory changes.

Even if reserves are provided in full, however, there will

still be some reduction of commercial bank liquidity (even assuming that the level of bank deposits is unaffected by the increased cost of funds to banks) as banks in effect exchange earning assets with the Federal Reserve for the needed reserves.

In light of this, and taking

into account the erosion of RP's as a source of funds, it might be necessary to supply reserves in a slightly higher than a one-for-one ratio if increased tensions in bank financing positions are to be avoided.

-7(12)

Apart from technical operations to accommodate required

reserves, it is not clear how active System open market operations will have to be if the Federal funds rate is to be below the 9-1/2 - 10-1/2 per cent range of recent days.

In part, this will depend on the extent

to which individual banks become more willing to borrow from the discount window in adjusting to new regulations. however, should only be temporary,

Any such increase in borrowing,

assuming continued normal operation of

the window, and would likely be accompanied by strong demands for Federal funds.

Under the circumstances, if over-all credit conditions are not

to become more restrictive, it is probable that some moderation in the recent downward pressure on total and nonborrowed reserves will be needed.

And, assuming banks do not become fundamentally more able or

willing to borrow at the discount window, it may well be that net borrowed reserves and member bank borrowings will have to be toward the low end of the ranges specified in paragraph (9) for the over-all constellation of money market conditions to remain about unchanged on balance. (13)

Against the background of the money market conditions

and factors affecting them described in the preceding paragraphs, the 3-month bill rate may continue in a 6-3/4 - 7-1/4 per cent range over the next four weeks.

Some upward pressure on the bill rate may be

generated by bank adjustments to the new regulations, by further offerings of Federal Agency issues, and by the expected Treasury cash offering in late August.

But System operations, as noted earlier, may

offset some of these pressures.

-8As to the cash offering, it is

expected to be quite moderate in size (perhaps around $1-1/2 - $2 billion) and in the Treasury bill area.

A basic factor influencing bill

rates, as well as longer-term rates, over the next few weeks will be the state of market expectations.

If tentative recent attitudes to the

effect that market interest rates are beginning to turn down become stronger, it is likely that dealers will be willing to build up positions and thereby provide some downward impetus to interest rates.

These

attitudes, however, will be importantly influenced by dealer financing costs, which have recently risen, as well as by the fundamental economic outlook. (14)

Given continuance of the current relatively high

structure of market interest rates and taut lending conditions at banks, the recent pattern of sluggish loan growth at banks is likely to continue. In part, this would appear to reflect supply constraints.

But it may

also be a harbinger of cyclical reductions in demand, assuming that business corporations have about passed through the recent phase of rapid expansion in capital outlays. and (15) With both demand/supply factors holding down loan growth, demand deposits are likely to contract in a 3 - 6 per cent, annual rate, range in August.

The money stock will probably decline

in a 2 - 5 per cent, annual rate range as currency in circulation

-9continues to grow.1/

U.S. Government deposits are also expected to

decline somewhat on average. (16)

Market interest rates will continue to exert a strong

pull on CD's and other time and savings deposits at banks.

Consumer-

type time deposits are not expected to show any very significant recovery from the large July net outflow.

And attrition of CD's in August is

likely to continue given present ceiling rates, although slowing to about $1 billionas amounts maturing are reduced. (17)

Member bank deposits will continue to decline relatively

sharply in August, though the decline should be considerably less than that of July, and total reserves outstanding will also be reduced.

The

decline in total member bank deposits may be in a 10 - 13 per cent, annual rate, range.

Euro-dollar borrowings through branches are not

expected to show much buoyancy, and may add about a percentage point or so to member bank deposits in the absence of any major change in the supply of funds abroad. quite conjectural.

The behavior of nondeposit sources of funds is

Some, such as loan RP's, are likely to be contracting

fairly sharply as the month progresses.

But issuance of commercial paper

by affiliates of banks is likely to continue, with the rapidity of the increase

depending in part on the intensity and incidence of credit

demands.

All in all, however, we do not believe that the total of non-

deposit sources will rise as rapidly in August as in July.

1/ Figures projected for August for the money stock, total member bank deposits, and reserve aggregates take into account revisions resulting from the redefinition of deposits.

-10A Policy Alternative (18)

If the Committee wishes to consider somewhat less

restrictive money market conditions as a policy alternative, such conditions might include a Federal funds rate fluctuating around 8-1/2 per cent, member bank borrowings ranging between $900 million and $1.1 billion, and net borrowed reserves in a range $100 - $200 million lower.

The

persistence of such money market conditions may be expected to tilt market expectations toward further anticipation of lower interest rates in the future.

And as dealers and others become more willing to position

securities, both short- and long-term interest rates are likely to decline.

But given the extent to which banks will have to adjust to

new regulatory provisions, the decline in short-term interest rates may be of relatively modest proportions.

Still, the 3-month bill rate may

move down into a 6-1/2 - 6-7/8 per cent range. (19)

The market interest rate movement anticipated with a

modest easing of money market conditions is not likely to proceed to the point where time deposits at banks become significantly more competitive under existing Regulation Q ceilings.

Thus CD attrition

in August is not likely to slow more than noted earlier.

And there is

little reason to expect a significant growth pattern to develop in other time deposits.

Nor is the money supply likely to show appreciably

greater strength.

The additional reserves provided through nonborrowed

reserves to attain the alternative money market conditions are likely to be partly absorbed by reduced member bank borrowing, with a resulting

-11relatively small net effect on total reserves or on deposits--perhaps, say, a percentage point or so. (20)

To have a significant effect on deposits would probably

require a change in Regulation Q ceilings and/or some further easing of money market conditions over time.

As the market became more

certain of the course of monetary policy, individual banks would be encouraged to re-enter the securities market, thus tending to generate new deposit balances at declining market interest rates. would become more competitive.

Time deposits

The demand for money should also tend

to increase as interest rates go down, but this effect might well be outweighed by a weakening in transactions demand for cash if growth in GNP slows further as expected.

NOTE: The attached tables and charts have not been corrected for the bias introduced by the deduction of cash items associated with the increased volume of Euro-dollar transactions. The necessary data to do so was only available at the last minute and revised figures were incorporated in the text.

FINANCIAL MARKET RELATIONSHIPS (YC

Lonthtly

Period

1968--June July August September Occtber November December 6

19 9--January February March April May June July p 1969--June

July

Au Aug

Mone

Free Borrowings Reserves (In millions of dollars for weeks ending in) - 386 727 192 523 240 577 14b 492 192 458 255 541 327 743 -

erages and

wnere availabc.

Market Indicators Federal Funds Rate

IN PERSPECTIVE

weekly averages of daily Bond Yields

U S ove rnent (20 yr )

3-month Treasury Bi11 ' '

5 5 5 5 5 5 5

40 29 22 28 44 56 88

Corporate New Issues Issues (Aaa) 2/ 2/ 6 65 6.51" 6 15 6.27 6.47 6.61 6 79

Nonborrowed Reserves

Municipal (Aaa) (Aaa)

- 1.5 -03 2.5 + +131 3 -0.6 - 3.3 - 5.1

+ 0.6 + 0 +0.2 + 1.7 - 0.5 -+ 0.6

-1.8 -15 --0.2 -0.7 -0.9 - 3.5

106 137 517 - 11

86 74 507 126

- 1.4 + 0.1 - 1.2 - 1.7

+ + -

0.8 0.8 0.7 0.2

-0.4 + 0.1 - 0.5 - 0.5

+ -

+ 1.2 S0 3 - 0.7 -0.1 -0.1

-0.3 -1 1 -0.6 -0.7 0.2

7.52 7.75 7.66* 7.50-

+ -

2 9 16 23 p

-1,138 - 891 -1,103 -1,001 -1 166

1,634

6.27 6.34 6 25 6.25

7.63 7.68* 7.52 7.58 7 75

1 093

6.21

7.57*

+ -

105 - 88 - 54 -241 180 BREA ( BREA

5 36

529 1,03'

5.42

Recent variation in growth 7/3/68 - 12f18/68 12/18/68 -8/6/69

203 815

516 1,072

6 17

5.90 7.60

5.34 6.29

+ +

196 717 31 8 - '82 IN

2/ 3/ 4/

4.20 4.22 4.99

6.47 7 27

4.21 5 23

Reflects $400 million reduction in member bank deposits resulting from withdrawal of a annual rates are adjusted to eliminate this break in series # - Annual rates are for 12/18/68 - 7/30/69. -

0.9 1.3 3.1 1.8 0.6

RIES.

- 0.7

Annual rates of increase 4/ 6.47 6.50 7.20

+ 5.6 + 9.9 - 5.2

+ 7 1 + 9.8 - 0 7

+ 8 6 +12.8 - 4.5

+ 6.5 + 6 1 + 2.2

+11.3 +17.1 - 5.0

+ 9.9 -10.44

+11.8 - 7.1#

+14.1 - 6.8#

+ 3.4

+18.1

+ 2.2#

S A. -

Seasonally

L £4 I p - Preliminary Average of total number of days in period. protection. Includes issues carr ing 5-year and 10-year call protection, * - issues carry a 10-year call Time deposits adjusted at all commercial banks. week shown Base is change for month preceding specified period or in case of weekly periods, the first

Jj-

Avera 548

(In (In billions of doll.,a) 1.5 + 1.3 + 0.6 2.1 + 2.0 + 2.2 5.0 +0.9 +3.4 2.0 -0.8 +2.8 3.0 +0.7 +2.9 2.7 + 1.7 + 2.4 3.1 + 1.2 + 2.4

140 108 100 151 378 256 683

6.40 6.32 6.22 6.27

210 218 779

Time Deposict 3/

+ +

1,521 1,260 1,315 1,323

Mny Mkn

Money Supply

69 143 194 224 53 260 582

-1 152 812 -1 216 -1,132

Year 1968 Se:ond Half 1968 First Half 1969

drl

+ + + +4 * + +

4 11 18 25

.1-

182 142 484 63 172 158 254

+ -

923

rei IA

+ + + + + + +

6.92 6.91* 7.37 7.17 7.22 7.58 7.63

rr~r^*u-.

Bank Credit Proxy

251 271 475 150 185 A 95

5.99 6.11 6.22 6.03 6.11 6.28 6.27

6 p

an Bn

+ 4 + + + + +

715 836 837 1,031 1,359 1,355 1,312

1,279 1,355 1,971

~~Resrve

Flo of Reere Total Reserves

(In millions of dollars)

I 'I --

491 580 635 844 -1 116 -1,078 -1,069

1,020

igures) Clo~of

large country bank from System membership.

August 8, 1969.

Percentage

7.5#

adjusted.

Chart 1

MEMBER BANK RESERVES MONTHLY AVERAGES OF DAILY FIGURES I I I I I I I I I BILLIONS OP DOLLARS, SEASONALLY ADJUSTED 28.5

28.0

27.5

27.0

26.5

26.0

25 5

25 0

24 5

24 0 23 5 BILL IONS OF DOLLARS NOT SEASONALLY ADJUSTED 1

------------------.---

MEMBER BANK BORROWINGS

Ooa

EXCESS

RESERVES

S 1967

1968

1969

Chart 2

MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS

I I I I I II I TOTAL MEMBER BANK DEPOSITS ICREDIT PROXY]

I I

SEAS ADJ WEEKLY AVERAGES OF DAILY FIGURES 302

298

294

290

216

282

278

274

270

LIABILITIES TO OVERSEAS BRANCHES (WEEKLY REPORTING BANKS) 12

-NOT

SEAS ADJ

J 1968

J 1969

Chart 3

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

19B

TIME DEPOSITS ADJUSTED (All Commercial Banks)

NEGOTIABLE CD'S NOT SEAS

AD)

1968

WEDNESDAYS

Chart

DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES

l I

BILLIONS OF DOLLARS

MONEY SUPPLY COMPONENTS: CURRENCY OUTSIDE BANKS

DEMAND DEPOSITS -

150

146

142

138

134

U.S. GOVT. DEMAND DEPOSITS (Member Banks)

J 1968

J 1969

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

Period

Excess reserves

Total

Banks Borrowings C i t y R e s e r v e Major banks 8 N.Y. Outside N.Y. Other

Country

Monthly (reseres weeks ending in): 1968--April May June July August September October November December

196 9--January February March April May June Jul) p

341 374 386 192 240 146 192 255 270

348 354 341 331 337 267 286 330

689 728 727 523 577 492 458 541 600

56 65 72 13 195 125 81 65 134

262 155 168 140 65 158 88 171 223

148 186 141 102 101 73 117 93 66

223 322 346 268 215 136 172 212 177

- 477 - 580 - 635 - 844 -1,116 -1.078 -1,069

359 256 202 187 243 277 243

836 836 837 1,031 1,359 1,355 1,312

131 62 58 85 123 57 89

302 255 233 411 346 459 248

149 215 254 260 397 288 365

253 304 293 275 493 550 609

7 14 21 28

-1,120 - 910 -1.242 -1,190

483 261 116 113

1,603 1,171 1,358 1,303

146 121 165 59

462 260 378 284

489 385 360 353

506 405 455 607

June

4 11 18 25 p

-1,152 - 812 -1,216 -1,132

369 448 99 191

1,521 1,260 1,315 1,323

43 86 -97

552 375 465 449

289 300 283 276

637 501 569 492

July

2 9 16 23 30

-1,138 - 891 -1,103 -1,001 -1,166

496 129 176 354 107

1,634 1,020 1,279 1,355 1,273

125 -88 86 146

416 162 302 213 148

395 333 391 393 313

697 523 497 663 666

170

1,093

181

251

641

1969--May

Aug.

p p p p p

6 p

p - Preliminary.

923

346

Table 2

(In R e a e r v e Period

Total Reserves

Annually 19 67 1968 Quarterly 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

1968 1968 1968 1968

1st Quarter 1969 2nd Quarter 1969 Monthly: 1968--April May June July August September October November December 19

p -

6 9

-- January February March April May June July p

Preliminary.

Aggre

Nonborrowed Reserves

+10.0 + 7.1

+11 5 + 3.2

+ 7 + 1 +10 + 8

5 0 4 6

+ 0 7 + 1 7 +13.9 + 4 3

1 0 0.4

- 4 0 - 6.5

- 7.3 + 2.2 + 8.3 + 6.4 +21 9 + 2.8 + 7.6 + 6 9 +11.1 + 6 1 - 4.7 - 4 3 - 66 +16 5 -11.0 -29.7

AGGREGATE RESERVES ANDMONETARY VARIABLES Retrospective Changes, Seasonally Adjusted per cent, annual rates based on monthly averagesof daily Les

I Requit.u Reserves

ToL l emberk ie Dembpr o 1

Mon Total

figures) r

a r

S u p p ly Pv utu t,7(rD,

s ( L

rumter l i, dL 1t pu I idjublls d

Credit Proxy (In l. Eurodollar borrowings)

+10 2 + 7 1

+11 7 + 8 6

+ 6 4 + 6 5

+ 5 5 + 7 4

+ 6 7 + 6 2

+16 1 +113

+11 6 + 9 5

7 + 1 +10 + 8

+ 7.0 + 1 2 +13 1 +12.2

+ + + +

+ 7 + 3 +17 +15

+ 7 + 3 +14 +11

+ 0 6 - 1 5

+ 1 9 + 2.5

+ 7 4 + 6 J

+ 0 5 + 1.3

- 6 5 - 3 6

- 2 4

- 7.3 + 0.6 +11.8 +12.6 +21.9 + 6.8 + 8 3 + 0 3 + , 2

- 5.6 - 0.6 +10.4 + 8 3 +21 4 + 1 4 + 9 6 + 7 5 + 9 2

- 4 + 1 + 6 + 9 +21 + 8 +12 +11 +12

7 7 5 0 4 4 5 1 7

+ 5.9 +11 7 + 8 4 +12 8 + 5 7 - 5 0 + 4 +10 7 + 7 5

+ 8 + 5 +11 + 5 +11 + 2 + 2 +11 + 5

+ 6 +12 + 7 +14 + 3 - 7 + 5 +10 + 7

+ 2 + 3 + 3 +14 +21 +17 +17 +14 414

6 2 8 0 4 3 7 4 3

- 3 8 + 5 1 + 9 3 +10 1 +22 1 + 9 4 +11 8 +11.3 +11 6

+ 3 1 - 64 - 8 7 -10 1 + 2 4 -11.8 -26 6

+11 3 - 4 6 - 4 7 - 3.1 +10.8 -12.1 -24.0

- 4 9 -12 -10 2 + 5.3 - ' 5 -13.5 -21.5

+ 3 7 +06 + 12 +10.5 - 3 1 -+ 3.7

+ 5 5 +83 8 2 -+10.9 + 8.1 + 5.3

-10 6 -89 -- 1.2 - 4 2 - 5 4 -21.1

- 2 0 +20 - 7 1 + 6.0 - 1 6 - ,.4

1 4 4 8

5.4 3.6

4 6 8 7 4 5 7.6

6 8 6 6

9 8 7 6

8 8 5 7 4 8 8 2 P

3 9 3 7

7 0 6 9

8 6 5 9 3 3 7 6 3

+ 4 0 6 8 +1).6 - 6 3 - 1.2 + 2.4

0 2 9 7

-13.5

4 5 0 7

Table 3 AGGREGATE RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based on monthly averages of daily figures)

Pertd

Reserve Aggregates ReserveSuppored Total Nonborroedl Required reserves (In

reser ( I n m l i n o f( millions of dolla-s) reserves

p os i

( orm

Member Bank Deposits by Reuircd Rerues Tme k

depos ts p o s itsde (

s1 I nIde si t 1 n h

_______

/ I I 1

d d... p os i i o n

, >

< ' I

______ Pra j . y 'l...

r l

Credit 11 i I Proxy dpusics (lil Eur o.I]l.,r d ,I .l

Monthly 196 8--Jan. Feb. Mar Apr May June July Aug. Sept. Oct. Nov Dec.

26,064 26,273 26 363 26,202 26,250 26,432 26,574 27,058 27,121 27,293 27.451 27,705

25,748 25,884 25,667 25,510 25, 23 25,774 26,045 26 520 26,670 26,855 26.861 26,956

25,704 25,910 25,990 25,868 25,856 26,080 26,261 26,729 26,761 26,974 27,142 27,350

274 7 277.0 278.0 276 9 277.3 278 8 280.9 285.9 287.9 290.9 293.6 296.7

149.9 150.2 151.2 151 3 151.5 151.8 153 8 156.5 158.9 161.5 163.5 165.8

119.4 119.7 120 1 120.4 122.1 123 2 124.3 124.6 123.6 124 5 125.4 126.7

5.4 7 1 6 7 5.2 3 7 3 9 2.7 4.8 5 3 5.0 4,7 4 2

182 3 18 7 181 4 184 3 186 I 187.4 189.4 190 I 189.5 190.2 191.9 19 3 1

141 7 141.9 142.2 If I 0 146. 4 14j.4 1 7 2 147.6 146.7 147.4 148 7 149.6

IHt4 I 18. 2 186 7 187 I 187 6 188 2 190 4 193 8 196.6 199 5 201. 9 204 3

279 0 281 5 282 6 281 7 282 9 28% I 287 292.8 295 1 298 0 100. 8 101. 7

1969--Jan. Feb. Mar Apr May June July p

27.845 27,737 27,637 27,486 27,864 27,608 26,835

27,025 26,882 26,688 26,464 26,517 26,257 25,675

27,608 27,502 27,394 27,324 27,571 27,294

295.1 294.8 292.3 293.6 293.0 289.7 284.5

163.2 161.0 160.5 160 1 159.3 158 1 155 0

126.6 127 2 126 9 127.6 127 8 127 5 127 0

5.3 6 7 4.8 5.8

19I 7 191.8 194 . 0 19 j 7 19) 2 195 2 195.8

150.1 149 9 149 8 t)l 5 I 1) 7 15(0 1 1 >0.6

202 5 2111 0 201 0

31 10. 301 I 11).7 I1. 2 10)2.8 311. 7 298 1

26,748

4.0 2.5

Private demand deposits include demand deposits of Individuals, partnerships, and corporaltons and rinL inttrlink dtipoisat Includes currency outside the 1 'j,, tLIL Federal Reserve, and the vaults of all Lommi r.ial b ink 3/ Includes (1) demand deposits at commercial than the sc du ," d, n I l< ,tTrntL 1, k l ,ritl tit UI S tIll uvcrI . 111 , It1 I process of collection and F dr 0 cL'rvc 1 u ' ad fI) fortI n rlrrand Ib Idn Sit t ill I .(. v 1 11l's Iv 4/ Excludes Int'r re and U 5 Go e-'e-nt tinet po i p - Preli-nnar

201). 199 2 195.7

1/ 2/

111 sh

l tn

ill

Table 4 RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based on weekly averages of dally figures)

AGGREGATE

Oeserve Aggregates Period

Weekly: 1969--Jan

Total

Nonborroed

Requred

reserves reserves reserves reserve. rdeposics e (In millions ot dollars)

Member Bank Deposits Supported by Reouired Reserves l Time Private U S

ember bank depositss

M y S Money Cov't

lotal nd dr 1/ d dcositepostss b l o n s of d

demand (In

Comercial Credit bank time Proxy Prvae deposits (Inl Eur dollar adjusted Currency 1 dmand d4/ 32/ borrowings Ideposits borwig I , r

1 8 15 22 29

28,096 27,778 28,027 27,910 27,682

27,176 27,070 27,289 27,103 26,671

27,620 27,536 27,802 27,697 27,454

297.4 297 2 294 9 294 4 293 8

165 164 163 162 162

5 4 9 8 1

127 128 126 126 124

9 2 7 0 9

4 4 4 5 6

0 5 3 6 8

193 195 193 193 191

7 4 8 6 6

43 43 43 43 43

4 s 5 6 5

150.3 151 9 150 2 150 0 148 1

204 203 202 202 201

1 3 8 1 5

304 1 303 9 302 8

Feb

5 12 19 26

27,666 27,593 27,707 27,913

26,837 26,844 26,638 27,157

27,407 27,412 27,439 27,684

294 295 295 294

1 5 3 4

161 161 160 160

4 1 8 6

126 126 127 128

2 3 7 0

65 8 0 6 8 5 8

192 192 194 194

8 9 8 3

43 43 44 4

7 9 0 8

149 149 150 150

1 0 9 5

201 201 2(1 200

0 0 0 9

302 304 303 JOJ

Mar.

5 12 19 26

27,919 27,710 27,461 27,611

27,03' 26,789 26 660 26,600

27,637 27,410 27,366 27,353

293 293 292 291

6 8 1 2

160 160 160 160

4 6 5 7

127 126 126 126

6 7 6 9

5 6 65 5 1 3 6

193 193 S194 194

8 6 0 6

418 44 1 44 2 44 3

149 149 149 150

9 5 9 3

200 200 200 200

7 9 7 9

302 6

Apr

2 9 16 23 30

27,535 27,264 27,271 27,710 27,683

26,345 26,287 26,519 26,595 26,490

27,226 27,084 27,196 27,560 27,483

291 8 294 1 293 6 293.7 292,4

160 7 160 6 160 2 160.1 159 8

128 1 128 7 128 1 126 9 126.0

3 0 4 9 5 3 6 7 6.6

195 197 196 194 193

2 9 4 6 4

44 44 44 44 44

3 4 2 3 2

150 153 152 150 149

8 5 1 3 2

201 201 200 200 200

1 2 9 6 3

301 303 303 303 302

May

7 14 21 28

28,119 27,758 27,657 27,878

26,666 26,576 26,266 26,579

27,611 27,484 27,481 27,750

292 7 294.6 293 2 292.5

159.6 159 4 159 3 '39.1

126 6 127 8 128.8 128.1

6 5 7.3 5 1 5.3

194 0 195 1 196 8 195 8

44 44 44 44

3 5 5 6

149 150 152 151

7 6 3 2

200 200 200 200

2 2 1 0

302 4 304 3 302 9 302.7

June

4 11 18 25

27,964 27,890 27,383 27.291

26,473 26,610 26,093 26,118

27,470 27,382 27,148 27,231

291.1 291.2 290. 1 288 3

158 8 158.7 158. 2 157 6

128.0 127. 9 127. 6 127 2

4. 3 4 6 4. 3 3 5

195 0 195 8 195 1 194.7

44.9 44 3 44 9 44 9

150 1 150.9 150 3 149.9

199.6 199. 7 199. 198 7

301 1 302. 3 302.6 301 5

27,687 26,970

26,013 25,925 25,803 25,623 25,243

27,181 26,926

287 4 286 0 282.9 284.8 284.1

157 0 156 1 155.4 155.0 154.6

127 4 126 6 127.0 127.1 126.9

3 0 3 3 1 0 3.0 3 1

195.9 196.2 195.5 195.4 195.3

45 1 45' 1 45.0 45.2 45.2

150 9 149.9 151. 1 150.5 150.2

198.1 197.3 196.1 195.7 195.1

300 6 299 I 296.9 298.9 298.3

July

2 9 16 23 p 30 p

27,001 27,053 26,471

26,925 26,686 26,339

Private demand deposits include demand deposits of individuals, partnerships, and corporations and net interbank deposits Includes currency outside the Tteasury, 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, process of collection and Federal Reserve float, and (2) foreign demand balances at Federal Reserve Banks. Excludes interank and U S Government time deposits

p -

Preliminary

1/ 2/ /

less cash

items

302 7 302 4 5 2 8 2

303 1 301 6 300 8

2 4 2 5 4

Table 5 SOURCE OF FEDERAL RESERVE CREDIT

Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages i II

TotaL Federal Reserve crediti

Period

(Excl. float)

lear* 1967 (12/28/66 1968 (12/27/67 Weekly1969--Apr

May

+4,718

12/27/67) 12/26/68)

+5,009 +3,298

+3,757

+4,43 ( +2,143 (

) ( -57 (7) 559 (533) 819 (+ 460)

280 (+

+ + + +

41 66 190 243

( -) (156) (+ 156) ( -)

+ + + -

351 284 118 174

( -) (71) (309) (+ 191)

2 9 16 23 p 30 p

+ + + -

180 332 122 404 -264

(+ ((+ ((-

189) 121) 121) 146) 95)

6 p

241

241)

7 14

11 18 25 July

Aug

I 1/ * p -

)

+ + +

2 9 16 23 30

21 28 June

--- it

.. I

Iileral A.gARcuy S c rit i i

Repui ha I i Kll nt

Oth,

Rills 1/

)

-~._-~-------------r

U.S. CovernmnLt securties Total holdins

darly figur

+1 153 +1 176

80)

27 96

-211 221 4

+ +

304 52 256 32

+ + +

25 18 9 21

16 28 151

Bankers'

23 +

431

Mcilht r

t n.

bou

+ +

53 29 15 4 5

203 514

58 24

231 -248 -188 + J76 7

-11

3 8

14 + +

banks nwan

+ 2

50 20 29

-- 117 2 92 -

10 9 15 20 56

L 1,

+ + + +

577 21

+ + +

[

-14

485 432 + 187 - 55

-17 10 II 2

+ + +

218 261 55 8

18 5 13

+ + +

l I 61 259 77 82

180

2 2 21

reserve effect of match sale-purchase agreement Figures in parenthesis reflect Includes effect of changes in special certificates of $+96 million of the week of April 9, of the week of April 23. Preliminary

$+627 million

tin

wLek of April

16,

and $ 721 million

Table

Period _b

YE?ar 1967 (12/28/66-12/27/67) 1968 (12/27/67-12/25/68) Weekly 1969-- -Apr.

May

June

July

Aug.

7 14 21 28 4 11 18 25

Change In total reserves +1,522 +1,508

+ + + +

25 15 29 5 2

+ + + +

121 144 17 964 77

+ +

40 32 4 8

553 404 34 S 4J

+ +

18 3

13 20 27

195

3 10

+ -

35 145

-235 -305

1/ For retrospective details, see table 5. 2/ See reverse side for explanation. 3/ Reflects increase in required reserves due to change in p - Preliminary.

86 199 408 - 70

19 - 48 + 48 - 9 + 14

+ + -

534 324 99 123 587

401

100 25

Regulation D,

Bank use of reserves Required Excess reserves

+1,517 +1,563

-I + +

2 9 16 23 30

Sept.

MAJORSOURCES AND USES OF RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages ot dilly tigureb) F a c to r s a f f e c t n s u pp y of r e s e r v e sFederal Reserve Lurincy Foreign Other nonmember Gold Gredit Treasury ra credit (excl o outside s Float deposits deposits and F R accounts gold loans pe tonand banks 1/ float o ... . L . 1 g n S e a t e t t s t r v e s ) +4,718 725 -2,305 85 389 + 316 +3,757 -2,067 -3,221 + 928 +1,309 + 869

2 9 16 23 30

PROJECTED 2j 1969--Aug.

65 15 30

255 4103/ 195 140 135

effective July 31.

reserve

5 55

Explanation of Projections in Table 6

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

Projected changes in currency outside banks reflect seasonal movements plus an allowance for growth of about $50 million per week.

Projected effects of Treasury operations, included in "technical factors," reflect scheduled and assumed calls in current two weeks and maintenance of Treasury balances with Federal Reserve at $1.9 billion, thereafter.

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, 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, banks' investment preferences and willingness to supply loans, banks' 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 loans 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: $-0.7 billion, August 1; $-0.5 billion, August 15; $2.0 billion, August 27.

Cite this document

APA

Federal Reserve (1969, August 11). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19690812

BibTeX

@misc{wtfs_bluebook_19690812,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1969},
  month = {Aug},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19690812},
  note = {Retrieved via When the Fed Speaks corpus}
}