Bluebook

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Content last modified 6/05/2009.

November 21, 1969

CONFIDENTIAL (FR)

MONEY MARKET AND RESERVE RELATIONSHIPS

Recent developments (1)

Interest rates in short- and long-term markets have risen

sharply since the last meeting of the Committee.

In bond markets,

yields on new corporate issues have shown the largest rise and have moved well above early October highs.

Outstanding Federal agency issues rose

about 75 - 90 basis points, and some Treasury bills with longer maturities have risen about as much.

The 3-month Treasury bill is up about 40

basis points to a new high of 7.38 per cent at the close of business November 21. (2)

on

Other short-term rates have also risen sharply. Federal funds have most frequently been traded at 9-1/4

per cent since the last meeting of the Committee, and the effective rate on most days was in a narrow range between 9 and 9-1/2 per cent.

Over

the previous policy period the weekly average effective rate on Federal funds had varied between 8-3/4 and 9-5/8 per cent.

Dealer loan rates

at New York City banks, which had declined somewhat after mid-October, tended to increase during the course of the last three weeks and were quoted most frequently at 9-1/2 to 10 per cent toward the end of this period, as dealer financing needs were enlarged in the aftermath of the late October auction of Treasury tax bills and recent bill sales by foreign accounts related to unwinding of speculation on the German mark.

Period

FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (Monthly averages and where available, weekly averages of daily figures) Money Market Indicators Bond Yields Flow of Reserves. Free Borrowings Federal 3-month U.S. Corporate Nonorrowd Toal Reserves New Municipal Total millons os Tr ury overnment Iues M pal Nonborrowed Reserves Reserves (In millions of RtIssues (Aaa) (Aaa) (In millions dollars for week R B 2/ of dollars) ending in) -

Free

Crporate

Bank Credit and Money, Bank Bank Credit

Money Money Supply

i

S.A.

Time Time Deposit'

(In billions of dollars)

1968--September October November December

-

146 192 255 327

492 458 541 743

5 78 5 92 5.81 6 02

5.19 5.35 5.45 5.96

5.28 5.44 5.56 5.88

6.27 6.47 6.61 6.79

4.23 4.21 4.33 4.50

+185 +206 + 29 +120

+ 98 +193 +181 +279

+ + + +

2.1 3.2 2.8 3.2

+ + + +

1969--January February March April May June July August September October p

491 580 635 844 -1,116 -1,078 -1,045 997 744 995

715 836 837 1,031 1,359 1,355 1,311 1,211 1,026 1,190

6 30 6.64 6.79 7.41 8.67 8.90 8.61 9.19 9.15 8 71

6.14 6.12 6.02 6.11 6.04 6.44 7.00 6.98 7.09 7 00

5.99 6.11 6.22 6.03 6.11 6.28 6.27 6.22 6.55 6 50

6.92 6.91* 7.37 7.17 7.22 7.58 7.63 7.65 7.98 7 89

4.58 4.74 4.97 5.00 5.19 5.58 5.60 5.74 5 83 5 80

+103 -112 -182 -270 +134 -183 -430 - 61 +169 -162

+175 - 79 - 88 -197 +460 -179 -526 -129 + 1 - 36

+ + -

1.2** 0.3 2.5 1.2 0.3 2.5 4.6 2.7 0.4 2 2

+ + + + + + + -

1.0 0.5 0.5 1.3 0.2 0.7 0.3 0.3 -+ 0.1

- 1.7 - 0.8 - 0.1

b 13 20 27

839 996 -1,162 992

1090 1,329 1,221 1,204

9.57 9.18 8.79 8.82

6.99 7.04 6.86 7.04

6.21 6.19 6.20 6.24

7.57* 7.53 7.61 7.82

5.70 5.73 5.73 5.80

+484 -102 -394 +344

+340 + 47 -387 +282

+

0.9 0.3 1.5 0.7

--+ 0.4 - 0.6

- 1.1 - 0.7 - 0.5 - 0.5

3 In 17 24

-

838 349 886 901

1,240 740 1,018 1,105

9.57 8.57 9.07 9.61

7.01 7.09 7.11 7.13

6.35 6.45 6.49 6.60

7.90** 8.02** 8.04 8.13

5.80 5.85 5.85 5.82

- 65 +493 -323 -165

- 24 - 84 + 45 -134

+ + -

0.7 2.1 3.4 2.1

+ + -

0.6 0.2 0.3 1.3

+ + -

0.1 0.1 0.3 0.2

1 8 15 22 29 p

-1 116 828 -1,129 844 -1,055

1,436 964 1,347 1.015 1,183

9.11 9.43 9.68 8 68 8.39

7.07 7.00 7.02 6.94 7.00

6.76 6.65 6.46 6.29 6.50

8.22 8.10 7.95 7.82 7.87

5.83 5.80 5.75 5.80 5.84

+163 - 71 -316 +558 -512

+481 -484 + 27 +300 -286

+ -

0.8 0.5 1.8 2.2 0 7

+ + -

1.3 0.9 1.2 1.5

+ +

0.3 0.4 0.3 0.3 0.1

5 12 19

-1,028 890 996

1,327 1,244 1,072

9 07 9 32 8 79

7 01 7 14 7.16

6 59 6.66 6 78

8.13 8 27** 8 44

5 75 5.78 5 95

+356 - 68 +434

+398 -137 +331

+ 2.5 -+ 0.5

Year 1968 Second Half 1968 First Half 1969

-

210 218 779

548 529 1,034

5.58 5.77 7.45

5.36 5.42 6.17

5.45 5.44 6.12

6.47 6.50 7.20

4.20 4.22 4.99

+ 6.0 +10.2 - 3.7

Annual rates of increase + 7.9 + 9.0 + + +13.4 +10.7 + 0.7 - 3.5 +

Recent variation in growth 7/3/68 - 12/18/68 12/18/68 - 11/19/69

-

203 849

516 1,101

5.90 8 06

5.34 6.51

5.40 6 24

6.47 7 51

4.21 5 30

+11.0 - 3.4

+12.9 - 1.8

1969--Aug

Sept.

Oct.

Nov.

Averages

P Average of total number of days in period. 1/ call protection. 2/ Includes issues carring 5-year and 10-year call protection, * - issues carry a 10-year 3/Time deposits adjusted at all commercial banks. week shown. 4/ Base is change for month preceding specified period or in case of weekly periods, the first

P reliminary.

** - Reflects $400 million reduction in member bank deposits resulting from withdrawal of a large country bank Percentage annual rates are adjusted to eliminate this break in series. from System membership.

November 21,

1969.

+14.8 - 4.J

0.4 0.4 1.8 1.2

--

+ 0.2 + 1.1 + 0.8

4/ 7.2 7.0 4.3

+ 5.9 + 3.2

+ + + +

-

2.6 3.0 2.7 2.8

0.6 0.9 3.1 3.2 0.4 0.6

- 0.3 + 0.1 + 0.1

+11.5 +17.3 - 4.0

+18.6 - 6.2

S.A. - Seasonally adjusted.

Net borrowed reserves of all member banks fluctuated in a $900 million

to $1 billion range over the last three statement weeks, while the weekly averages of member bank borrowing were between $1 and $1.3 billion. (3) With respect to deposits, data for the latter part of October now indicate a weaker deposit performance for that month than was estimated at the time of the last Committee meeting.

Total member bank

deposits declined at a 9.2 per cent annual rate, a little over a percentage point weaker than earlier estimated, while the money supply rose at only about a 1/2 per cent annual rate, about 2 percentage points below earlier estimates.

As to nondeposit sources, Euro-dollars in October

were weaker than expected, but commercial paper issued by bank affiliates rose rapidly in the course of the month.

On balance, the proxy adjusted

to include all nondeposit sources of funds declined at a 7-1/2 per cent annual rate in October, compared with the 6-1/2 per cent decline estimated at the last meeting. (4) Thus far in November, on the other hand, both time and demand deposits are showing more strength than expected earlier, while the net issuance of bank-related commercial paper appears to have moderated somewhat since the proposed Board regulation was issued on October 29.

Time deposits are being influenced by continued net inflows

of foreign official time deposits in larger dimensions than earlier allowed for.

And, insofar as can be gauged from currently available

data, private demand deposits seem to be rising moderately at the same time as U.S. Government deposits are showing a sharp rise; in the past,

so marked an increase in Government deposits has frequently been associated with at least some decline in private demand deposits.

It

is possible that the recent bulge of security market issues has required somewhat more bank financing than is typical, because poor market receptions have left the issues in dealer hands for longer than usual even after syndicate price restrictions have been broken.

The return of

funds from Germany in the wake of the mark revaluation may also have resulted in a temporary bulge in cash balances. (5) major deposit

The following table summarizes annual rates of change in and reserve aggregates for 1968 as a whole and thus far

in 1969.

Year 1968

Jan. '69June '69

Total reserves

7.8

0.7

Nonborrowed reserves

6.0

Total member bank deposits (bank credit proxy)

Proxy plus Euro-dollars

'69'69

July Sept.

Oct.

'69

- 9.3

-10.9

-3.7

- 4.8

-17.1

9.0

-3.5

-9.4

- 9.2

9.8

-0.2

-6.2

-10.0

n.a.

-4.3

- 7.5

3.0

- 0.5

Bank credit, as indicated by:

Proxy plus Euro-dollars and other nondeposit sources

n. a.

Total loans and investments of all commercial banks

(as of last Wednesday of month) Money supply Time and savings deposits

11.0 7.2

0.6

4.3

11.5

-4.0

6.3

5.0

0.3

-13.3

-3.7

Savings accounts at non-bank

thrift institutions

Note:

Dates are inclusive.

2.1

-0.5

Prospective developments

(6)

For the second paragraph of the current economic policy

directive, the Committee might wish to continue the language currently in force which reads as follows (alternative A): "To implement this policy, System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining the prevailing firm conditions in money and short-term credit markets; provided, however, that operations shall be modified if bank credit appears to be deviating significantly from current projections." (7)

Prevailing firm conditions in the money and short-term

credit markets might continue to be taken to encompass a Federal funds rate of about 8-1/2 - 9-1/2 per cent, member bank borrowings $1 - $1-1/2 billion,and net borrowed reserves of $900 million - $1.2 billion.

The

3-month bill rate, however, is likely to be in a somewhat higher range than earlier--perhaps between 7 and 7-1/2 per cent.

Seasonal pressures,

including the forthcoming mid-December tax period, and the relatively high level of dealer bill positions before the current $2-1/2 billion Treasury tax bill financing, may tend to sustain the bill rate at an advanced level.

In addition, uncertainty as to the implications for the

over-all tightness of the banking system of the Board's proposed regulation affecting bank-related commercial paper may be exerting some upward bill rate pressures.

These factors would work to maintain the Federal funds

rate in the upper part of the range noted above, although in the latter part of November and early December a seasonal shift in reserves toward money center banks may temporarily take some edge off pressures in the market for day-to-day money.

-5(8)

Total member bank deposits in November are expected to

rise in a 9 - 12 per cent, annual rate, range, with total and nonborrowed reserves rising in a roughly similar order of magnitude. This range for the increase in member bank deposits is 4 percentage points higher than projected at the last Committee meeting.

But of that

difference 1-1/2 percentage points is attributable to the fact that the most recent Treasury tax bill financing was $500 million larger than earlier assumed and came in late November rather than early December.

In

addition, another percentage point results from the lower than previously estimated level of total member bank deposits in October.

Even after

adjusting for these factors, deposit growth in November is projected to be somewhat stronger than earlier.

Given relatively strong loan demands,

partly to meet large mid-December corporate tax payments and partly to finance underwriting of a continued sizeable flow of security issues, total member bank deposits in December are projected to rise in a 0 - 3 per cent, annual rate range.

If so, average member bank deposit growth

from September through December will have been slightly positive--perhaps by a percentage point or two--compared with the 9-1/2 per cent rate of decline experienced in the third quarter. (9)

With respect to nondeposit sources of funds, we expect

the recent slower growth in outstanding commercial paper of bank affiliates (which has averaged about $100 million per week during the first two statement weeks of November) to continue.

However, some demand for nondeposit

funds is likely to continue to be diverted to the Euro-dollar market,

-6exerting upward rate pressures there.

Euro-dollar borrowings of U.S.

banks have risen about $500 million from the average outstanding in the last statement week of October to the most recent statement week, and have increased somewhat further in recent days.

Taking account of Euro-

dollar and all other non-deposit sources of funds combined we would expect additions of about 3 percentage points to the November estimate, and of possibly 1 percentage point to the projected December change. Recently, there have been market reports of some increase in the issuance of "ineligible" bankers' acceptances. (10)

The money supply in November is now projected to rise in

a 4 - 7 per cent, annual rate, range, as both currency and demand deposits have shown more strength than earlier expected.

Some weakness in the money

supply is anticipated in December, with possibly a small decline on average at an annual rate, as private demand deposits are absorbed in the process of distributing the recently offered Treasury tax bills to ultimate holders.

Over the fourth quarter

as a whole money supply may grow in a

1 to 2 per cent annual rate range, compared with no change in the third quarter. (11)

Projections of time and savings deposits have been

particularly difficult because of uncertainties in forecasting the behavior pattern of the BIS and other foreign official institutions that have been placing funds in the domestic CD market.

Moreover, the sharp

decline in the level of outstanding CD's has reduced maturities and hence the potential runoff; in December only about $3 billion are estimated to

-7mature.

Even with consumer-type time deposits remaining weak, total time

and savings deposits might show little net change on balance in the November-December period, assuming foreign inflows continue and recognizing the difficulties of interpreting seasonal CD movements after a long period of attrition. (12)

The current advanced level of yields in capital markets--

with some interest being shown by investors in Aa-rated utility recently offered around the 8-7/8 per cent level

bonds

and with a recent agency

issue selling relatively well--suggests the posibility that long-term interest rates might backtrack a little in the period ahead.

Such an

abatement of pressures would be encouraged if the stringency in the Treasury bill market were to moderate, as may be possible since dealers appear to be discounting seasonal and other pressures well in advance.

However,

since dealer financing costs are so high and underwriting positions undesirably large, it would take only a modest amount of new additions to the calendar of forthcoming bond issues to push long-term interest rates up even higher. (13)

If the Committee should decide to move toward slightly

less firm money market conditions, it might wish to consider the following second paragraph for the directive (alternative B): "To implement this policy, System open market operations until the next meeting of the Committee shall be conducted with a view to achieving slightly less firm conditions in money and short-term credit markets; provided, however, that operations shall be modified if bank credit appears to be deviating significantly from current projections."

-8(14)

The slightly less firm money market conditions might

involve Federal funds more frequently around 8-1/2 per cent, member bank borrowings around $1 billion or a little less, and net borrowed reserves fluctuating around $800 million.

The 3-month bill rate under these

conditions might move down into 6-7/8 - 7-1/8 per cent range, and upward pressure on long-term interest rates might well abate.

Rates could even

decline significantly, particularly in long-term markets, if investor expectations were affected by indications of even a modest relaxation of policy.

The monetary aggregates would be affected only in a minor way

over the near-term by the change in market conditions specified above, unless there is a sharp shift in market expectations.

But a significant

upward impact on the aggregates probably would appear to require a more extended easing of money market conditions, especially when ceiling rates on deposits are so far below the market and bank investment policies have become so cautious in securities markets.

Chart 1

MEMBER BANK RESERVES MONTHLY

AVERAGES OF DAILY

FIGURES

BILLIONS OF DOLLARS, SEASONALLY ADJUSTED 28.5

28 0

27.5

27.0

26.5

25.5

25.0

24.5

24.0

M

J 1968

S

D

M 1969

Chart 2

MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS

TOTAL MEMBER BANK DEPOSITS (CREDIT PROXY) SEAS ADJ WEEKLY AVERAGES OF DAILY FIGURES

302

298

294

290

286

282

278

274

270

14

LIABILITIES TO OVERSEAS BRANCHES (WEEKLY REPORTING BANKS)

12 -NOT

SEAS ADJ,

10 ------

~7

^--.

8

6 4 1968

1969

Chart 3

MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS BILLIONS OF DOLLARS 198

194 MONEY SUPPLY

190

208

186

182

204

D TIME DEPOSITS ADJUSTED (All Commercial Banks)

178

2

200

_______

196

192

188

184 NEGOTIABLE CD'S NOT SEAS ADJ, WEDNESDAYS

24

180

20

16

12

8

I M

I

I i 1968

I S

I

I D

I

I M

I

I J 1969

I S

I

I D

Chart 4

DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES

I

I

I

i

i

I

BILLIONS OF DOLLARS

MONEY SUPPLY COI

48

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

/A

AwAvi'

^ 1968

1969 1969

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

Free reserves

Excess reserves

Banks R eserve Major banks

Total

8 N.Y.

Borrowin Ci ty Other

s Country

Outside N.Y.

Monthly (reserves weeks ending in): 1969--September October November December

-

146 192 255 270

346 267 286 330

492 458 541 600

125 81 65 134

158 88 171 223

73 117 93 66

1969--January February March April May June July August September Octoberp

- 477 580 635 - 844 -1,116 -1,078 -1,045 997 - 744 995

359 256 202 187 243 277 266 214 282 195

836 836 837 1,031 1,359 1,355 1,311 1,211 1,026 1,190

131 62 58 85 123 57 89 81 83 106

302 255 233 411 346 459 250 253 236 327

149 215 254 260 397 288 364 256 222 293

253 304 293 275 493 550 608 621 485 464

1969--July

2

-1,138

496

1,634

125

416

396

697

9

-

891

129

1,020

--

165

334

52L

16 23 30

-1,103 972 -1,123

176 382 146

1,279 1,354 1,269

88 86 146

302 214 152

390 393 308

499 661 663

Aug.

6 13 20 27

- 839 996 -1,162 992

251 333 59 212

1,090 1,329 1,221 1,204

18 118 136 53

183 365 267 196

251 256 194 322

638 589 624 633

Sept.

3 10 17 24

-

838 349 886 901

402 391 132 204

1,240 740 1,018 1,105

57 64 128 83

286 39 331 306

233 172 136 328

664 465 423 388

Oct.

1 8 15 22 29 p

-1,116 828 -1,129 844 -1,055

320 139 218 171 128

1,436 967 1,347 1,015 1,183

95 170 210 -53

531 112 396 275 322

257 267 302 344 294

553 418 439 396 514

Nov.

5 p 12 p

-1,028 890 -

299 354

1,327 1,244

121 350

425 296

292 190

489 408

19 p

-

76

1,072

--

390

262

420

p -

freliminary.

996

1

136 172 212 177

Table 2 AGGREGATE RESERVES AND MONETARY VARIABLES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages of daily figures) I

I

II

Reserve Period

Total Reserves

Aggregates

Monetary

Nonborrowed Reserves

Required Reserves

Variab Supp

Mo n e y

Total Member Bank DepositTotal

Currency

1 es

y1 IPrivate Demand Deposits

I

Commercial bank time deposits adjusted

Credit Proxy (Incl. Eurodollar borrowings)

Annually +10.3 + 7.8

+11.7 + 6.0

+10.5 + 7.9

+11.8 + 9.0

+ 6.6 + 7.2

+ 5.5 + 7.4

+ 7.0 + 7.1

+15.9 +11.5

+11.7 + 9.8

1968 1968 1968 1968

+ 7.9 + 1.5 +11.5 + 9.6

+ 1.1 + 2.1 +15.0 + 5.3

+ 7.5 + 1.8 +11.5 + 9.8

+ 7.3 + 1.4 +13.6 +12.7

+ + + +

+ + + +

6.9 7.8 7.6 6.6

+ + + +

+ 7.6 + 3.0 +16.5 +17.3

+ 7.6 + 3.7 +14.7 +11.9

1st Quarter 1969 2nd Quarter 1969 3rd Quarter 1969

+ 0.1 + 1.2

- 2.8 - 4.7 - 4.8

+ 1.7 + 0.2 -8.6

- 4.8 - 2.2 - 9.4

+ 4.1 + 4.5

+ 6.5 + 6.3 + 3.6

+

- 5.1 - 3.0

+ 1.4

-13.3

- 6.2

-5.2 -0.6 +11.3 + 9.4 +22.3 + 2.6 +10.4 + 8.4 +10.2

- 5.2 + 2.2 + 7.3 + 9.4 +22.2 + 8.8 +13.3 +11.5 +13.0

+ 5.9 +11.0 + 9.0 + 8.9 + 8.9 + 2.5 + 2.5 +11.3 + 7.4

+ 5.8 + 8.7 + 8.7 + 5.7 + 8.6 + 8.5 + 2.8 +11.2 + 5.6

+ 5.0 +12.5

+ 3.2 + 3.2 + 2.6 +15.9 +17.0 +16.1 +18.3 +16.2 +16.6

- 4.7

+12.7 - 3.0 - 4.4 - 5.0 +14.3 - 8.6 -17.6 - 7.6 - 0.8 -10.3

- 3.2 - 1.2 -10.1 + 4.9 - 1.2 -10.2 -18.9 -11.3 + 1.7 - 9.2

+ + + + + + +

+ 2.8 + 8.3 + 8.2 + 2.7 + 8.1 + 8.1 + 5.4 + 8.0 - 2.6 +10.6

+ 7.1 + 1.6 + 1.6 +10.2

-10.0

- 0.8

- 4.7 - 0.6

+ 2.0 - 6.7 + 5.5

-

- 3.6 - 5.4

1967 1968 Quarterly Ist Quarter 2nd Quarter 3rd Quarter 4th Quarter

- 9.3

5.5 8.7 6.8 7.1

+

-

1.8

Monthly: 1968--April May June

July August September October November December 1969--January February March April May June July August September October v p - Preliminary.

-6.9

-6.9

+ 2.5 + 8.8 + 7.6 +22.4 + 4.3 + 8.5 + 7.9 +12.1

+ 0.9 +12.3 +13.8 +22.4 + 8.3 + 9.2 + 1.3 + 5.3

+ 7.5

+ 4.5

- 3.4 - 3.8 - 8.5

- 4.9 - 8.0

+19.9

-12.0 + 6.0

-

- 8.2

7.6

-22.5 - 5.6 -10.9

-19.3 -

2.8

+ 7.7 -17.1

6.2 3.1 3.1 7.9 1.2 4.2 1.8

- 1.8

0. + 0.b

+ 8.3

+ 9.8 + 8.9 + 1.6 + 2.4 +11.3 + 7.2

1.6

+ 3.1 + 1.6 - 4.7 - 0.8 - 0.8

+ 6.0 + 9.7 +10.5 +22.5 +10.6 +12.1 +11.6 +11.5

- 1.2

-18.5 -19.4

-11.4

- 2.5 - 3.7

+ 2.4 -10.0

- 9.5

Table 3 AGGREGATE RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based

reserves

reserves

member bank deposits

demand deposits 1/

deposits

b i

( I n

(In millions of dollars)

dend d deposits 1 I i

o n s

Total o f

Credit Proxy

Conmmercial bank time

S

Member Bank Deposits Supported by Required Reserves

Reserve Aggregates 5/ v A reserves

on monthly averages of daily figures)

Currency 2/

demand deposits 3

adjusted 4/

dollar borrowings

d o 1 1 a r s )

Monthly: 1968--January February March April May June July August September October November December

26,134 26,352 26,451 26,298 26,353 26,547 26,715 27,213 27,311 27,504 27,685 27,964

25,818 25,961 25,755 25,606 25,626 25,889 26,186 26,675 26,860 27,066 27,095 27,215

25,774 25,989 26,078 25,964 25,952 26,196 26,402 26,893 26,951 27,185 27,376 27,609

275.1 277.4 278.5 277.3 277.8 279.5 281.7 286.9 289.0 292.2 295.0 298.2

149.9 150.2 151.2 151.3 151.5 151.8 153.8 156.5 158.9 161.5 163.5 165.8

119.7 120.1 120.6 120.8 122.7 123.8 125.2 125.6 124.8 125.7 126.8 128.2

5.4 7.1 6.7 5.2 3.7 3.9 2.7 4.8 5.3 5.0 4.7 4.2

182.6 183.3 184.2 185.1 186.8 188.2 189.6 191.0 191.4 191.8 193.6 194.8

40.6 40.7 41.1 41.3 41.6 41.9 42.1 42.4 42.7 42.8 43.2 43.4

142.0 142.6 143.2 143.8 145.3 146.3 147.5 148.6 148.8 149.1 150.5 151.4

184.1 185.8 187.2 187.7 188.2 188.6 191.1 193.8 196.4 199.4 202.1 204.9

279.4 281.9 283.2 282.1 283.5 285.8 288.3 293.7 296.3 299.3 302.2 305.1

1969--January February March April May June July August September October p

28,139 28,060 27,972 27,775 28,235 28,056 27,530 27,401 27,402 27,366

27,318 27,206 27,024 26,754 26,888 26,705 26,275 26,214 26,383 26,221

27,902 27,832 27,729 27,614 27,942 27,742 27,334 27,161 27,144 27,125

297.0 296.7 294.2 295.4 295.1 292.6 288.0 285.3 285.7 283.5

163.2 161.0 160.5 160.1 159.3 158.1 155.1 152.5 152.1 151.5

128.4 129.1 128.9 129.4 130.0 130.5 130.5 129.9 129.2 128.9

5.4 6.7 4.8 5.9 5.9 4.0 2.4 2.9 4.4 3.1

195.8 196.3 196.8 198.1 198.3 199.0 199.3 199.0 199.0 199.1

43.5 43.8 44.1 44.2 44.5 44.8 45.0 45.3 45.2 45.6

152.3 152.5 152.7 154.0 153.8 154.2 154.4 153.8 153.7 153.6

203.2 202.4 202.3 202.3 201.7 200.8 197.7 194.5 194.1 193.5

304.8 305.3 303.6 305.0 305.0 304.7 301.8 299.4 300 297

d i-1 Private ucmanu mLL u eLuuc puJl

i,

A

ei

A

an

-

AfA1..A1,t

Leposi s

nrlividuals LL o

,

artnershins p.

p

I

and

cor

orations

and

net interbhan

denn-its

... . . .. ...

.

.

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 at Federal Reserve Banks. Excludes interbank and U.S. Government time deposits. Includes increases in required reserves due to changes in Regulations M and D of approximately $400 million since October 16, 1969.

Table 4

VARIABLES RESERVESAND MONETARY AGGREGATE Mlember B inl SU b

^--.. -. ^it.^

Per iod

Ptot.L \ '.' Tol i.nd reseives reseives illions (In

Weeklv

1/ 2/ 3/ / 5/

tt'owed ,ed

.qnuled Iqu ied

Totl

Mmbi

I, nl,

DiposiLt

l5'o Ipi.tco hb b1 RMone Reqgui.d

* post

of dollars)

M

Su

Suppv _____I-_____________________

RI-.etvt

U S Cov t P Itv it, demand d.m nd Intal Currency dodeeservets d d s 1eserves 1/ /deposs deposits depic ep d o I I a r s o f b i 1 i o n s n (I

Commerciall

y __

Private demand 3 ideposits 3

Ibdnk

time .

dcposrq, adjusted 4 4/

Lredit I

Proxy Pro

(Incl Euro dollar ,or n borrowings

44.2 44.2 44.2 44.2 44.2

153.4 154.7 154.5 153.2 152.7

202.6 202.6 202.4 202.3 202.0

303.0 304.2 305.1 305.7 304.7

44.3 44.4 44.4 44.6

152.9 153.4 155.1 154.6

202.0 201.8 201.7 201.7

304.5 306.2 305.0 305.1

198.8 198.8 198.2 199.1

44.7 44.7 44.8 44.8

154.0 154.0 153.5 154.2

201.6 201.5 200.9 200.1

303.6 304.9 305.6 304.5

2.9 3.0 .9 3.0 3.0

199.2 199.4 199.3 199.1 199.1

44.9 44.9 45.0 45.0 45.0

154.4 154.5 154.3 154.2 154.1

199.3 198.8 197.9 197.2 196.7

303.8 302.5 300.7 302.2 301.3

2.9 3.1 1.7 3.1

199.1 199.1 199.5 198.9

45.1 45.2 45.2 45.3

153.9 154.0 154.3 153.7

195.6 194.9 194.4 193.9

300.2 299.8 298.6 299.4

3.2 2.2 5.2 4.1

199.5 199.3 199.6 198.3

45.5 45.1 45.3 45.3

154.0 154.2 154.3 153.0

194.0 193.9 194.2 194.0

300.0 298.1 301.6 299.2

128.1 128.8 127.8 129.7 129.1

3.8 3.0 2.7 3.1 3.2

198.3 1996 198.7 199.9 194.8

45.2 45.4 45.6 45.7 45.7

153.1 154.3 153.0 154.3 152.7

194.3 19J.9 193.6 193.3 193.4

298.2 297.5 296.1 298.5 297.1

129.3 129.0 129.7

5.5 5.9 5 6

198.6 199.7 200.5

45.6 45.8 46.0

153.0 153.9 154.5

193.1 193.2 193.3

299.4 299.9 300.6

Apr.

2 o 16 23 30

S27,879 27.611 27,590 27,848 28 023

26,689 26,634 26,838 26,733 26,830

S 27,570 S 27,431 27,515 27,698 27,823

293.6 294.9 295.6 295.9 294.7

160.7 160.6 160.2 160.1 159.8

130.0 129.5 130.0 129.1 128.3

3.0 4.9 5.3 6.8 6.6

197.6 199.0 198.7 197.4 196.9

May

7 14 21 28

28,501 28 162 28,020 28,219

27,048 26,980 26,629 26,920

27.993 27,888 27,844 28,091

294.7 296.5 295.2 294.9

159.6 159.4 159.3 159.1

128.7 129.8 131.0 130.6

6.4 7.3 5.0 5.3

197.2 197.8 S199.5 199.1

June

4 11 18 25

28.320 28,308 27 833 27.761

26,829 27,028 26.543 26,588

27,826 27,800 27,698 27,701

293.7 293.9 293.1 291.3

158.8 158.7 158.2 157.6

130.6 130.6 130.6 130.3

4.3 4.6 4.3 3.4

July

2 9 16 23 30

28,217 S27,506 27,568 27,703 27,151

26,543 26,461 26,370 26,274 25,927

27,711 27,462 27,492 27,307 26,980

290.6 289.4 286.7 288.0 287.1

157.0 156.1 155.3 154.6 154.1

130.7 130.2 130.5 130.5 130.0

Aug.

6 13 20 27

27,491 27,538 27,151 27,433

26,411 26,309 25,915 26,259

27,258 27,216 27,164 27,135

286.2 285.9 284.4 285.1

153.4 152.9 152.4 152.1

129.9 129.9 130.3 129.9

Sept.

3 10 17 24

27,409 27,325 27,370 27,236

76,194 26,687 26,364 26,199

26,957 27,059 27,238 26,982

285.8 283.7 287.1 285.0

151.9 151.9 152.0 152.2

130.7 129.7 129.8 128.6

Oct.

1 8 15 22 29 p

27,717 27,233 27,260 27,560 27,274

26,362 26,291 25,975 76.533 26,021

27.417 27,044 27,059 27,263 27,028

284.2 283.7 281.9 284.1 283.4

152.3 151.9 151.4 151.3 151.2

Nor

5 p 12 p 19 p

27,072 27,535 27 866

26,377 26 309 26,743

27,347 27,340 27,720

285.9 285.9 286.4

151.2 151.0 151.1

Private demand deposits include demand deposits of individuals, partnerships, and corporations and net interbank deposits. 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 at Federal Reserve Banks. Excludes interbank and U S Government time deposits Includes increases in required reserves due to changes in Regulations M and D of approximately $400 million since October 16, 1969.

Table 5 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weeekly averages of daily figur

STotal Federal IReserve credit _(Excl. float)

Total holdings

+4,718 +3,757

+5,009 +3,298

+4,433 ( +2,143 (

--- 2 9 16 23 30

+ + +

357 113 380 773 347

+ + + +

103 146* 143* 319* 284

+ + + +

51( 57 559 819 280

-'((+ (+

7 14 21 28

+ + +

794 293 149 259

+ + +

345 118 39 307

+ + + +

41 66 190 243

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

June

4 11 18 25

+

439 35 - 18 - 168

+ + -

308 256 33 174

+ + + -

351 284 118 174

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

July

2 9 16 23 30

+ + -

679 247 261 337 379

+ + + -

297 401 30 408 287

+ + + -

180 332 122 404 264

(+ ((+ ((-

189) 121) 121) 146) 95)

Aug.

6 13 20 27

+ + +

562 153 198 86

+ +

672 69 45 96

+

241 - 71 + 355 + 61

(+ ((+ (4

241) 98) 10) 37)

Sept.

3 10 17 24

+ 273 -1,434 - 400 + 728

+ +

218 900* 686* 633*

+ 155 -1,276 890 +1,254

(+ ((+ (+

51) 632) 531) 101)

Oct.

1 8 15 22 29 p

+ + -

622 151 895 383 180

+ + +

+ + + + +

87 88 536 172 181

( -) ) ( -( -) (- 430) (+ 137)

5 p 12 p 19 p

+1,219 + 298 + 563

+ + +

788 (+ 585 ( 788(

Period

Year: 1967 (12/28/66 - 12/27/67) 1968 (12/27/67 - 12/26/68) Weekly: 1969--Apr.

May

Nov.

U.S. Government securities

-

298 217 548 S 33 289

+1,049 + 391 + 748

Bills 1/

I Other

) )

+1,153 +1,176

I Repurchase agreement,

-

-

j

Federal Agency Securities

Bankers' acceptances

Member banks borrowings

577 21

) 7) 533) 460) 80)

293) - ) -- )

+ +

27 96

+

73

+

--67

+

129

+

27

1/ Figures in parenthesis reflect reserve effect of match sale-purchase agreement. * - Includes effect of changes in special certificates of $+96 million of the week of April 9, $+627 million of the week of April 16, $-723 million of the week of April 23 , $+507 million of the week of September 10, $+154 million of the week of September 17, and $-661 million of the week of September 24. p - Preliminary.

+

203 514

Table 6

(Dollar amounts

F a c to r s affect Federal Reerve Gold Currency credit (ecl. outside banks I _flat) (Sig n in

Period

Year: 1967 (12/28/66-12/27/67) 1968 (12/27/67-12/25/68) Weekly: 1969--April

MAJOR SOURCES AND USES OF RESERVES Retrospective and Prospective Changes in millions, based on weekly averages of daily figures)

+4,718 +3,757

725 -2,067

-2,305 -3,221

r e s e r v es oregn Other nonember deposts deposits and F.R. accounts and gold loans arati f ec t on re serves )

1 y

ng sup Treasury

Float e

c a t % s

of

85 928

389 +1,309

7 67

272 231 44 660 741

25 15 29 5 2

+ + + +

18

40 32 4 8

+ -

+ + +

357 113 380 773 347

+ + + -

50 119 380 427 194

+ + + -

7 14 21 28

+ + +

794 293 149 259

+ + +

16 42 141 128

-

+ -

120 295 350

4 11 18 25

+ -

439 35 18 168

-

108 217 354 179

+ + + +

220 119 123 172

18 3

July

2 9 16 23 30

+ + -

679 247 261 337 379

+ + -

221 23 65 S 87 - 6

+ + -

262 382 122 465 920

Aug.

6 13 20 27

+ + +

562 153 198 86

+ + -

318 147 259 153

+ + + -

Sept.

3 10 17 24

+ 273 -1,434 - 400 + 728

+ +

1 8 15 22 29 p

+ 4 . -

622 151 895 383 180

+ + + +

5 p 12 p 19 p

+1,219 + 298 + 563

-

PROJECTED 2, 26

+

105

--

-

215

+

3 10 17 24

+ -

345 70 150 475

----

-

165 140 235 205

+

June

Oct.

Nov.

1969- Nov Dec.

+

316 869

+1,522 +1,508

+1,517 +1,563

80 60 98 936 164

+

553 404 - 34 43

155 182 111 40

+ -

398 222 145 - 3

-

342

7

59 162

+ + +

256 79 349 92

19 48 48 9 14

229 43 52 317 334

+ + + -

305 367 47 206 236

3 19 395 459

30 10 8 4

343 164 473 403

+ + +

105 82 274 153

+ + +

'85 378 147 199

9 27 2 11

149 2 132 45

+

190

64 222 198 174 8

+ + -

638 137 158 871 621

11 11 18 1

353 66 147 283 3/ 360

+ + .

116 181 79 48 - 42

174 34 94

+ +

246 114 532

19

269 11 480

+ + -

171 55 278

65 15 ----

+ +

= Bank use of reserves Requred Excess equired Excess reserves

121 144 17 964 77

39 860 S 18 -1,125

-

Change n total reserves

+

2 9 16 23 30

May

= I

-+ + +

-

10

+ 50 100 500 600

86 199 -408

15

-

----

330 --- + +

160 60

-

360

-

360

+ + -

145 110 275 20

+ + -

145 110 275 20

1/ For retrospective details, see Table 5. 2/ See reverse side for explanation. 3/ Includes increases in required reserves due to changes in Regulations M and D)of approximately $400 million since October 16, 1969. p - Preliminary

41 - 84 S81 + 28 S 87

11

-259 + 72

--- Explanation of Projections in Table 6 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 $50 million per week.

3.

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 $1.0 billion, thereafter.

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, 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: $2.4 billion, November 26; $-0.7 billion, December 15; $-1.1 billion, December 22; and $100 million addition to weekly bill auctions over the remainder of the year.