bluebooks · January 11, 1971

Bluebook

Prefatory Note

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

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

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

Content last modified 6/05/2009.

(CONFIDENTIAL

FR)

January 8, 1971.

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Prepared for the Federal Open Market Committee

By the Staff BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

CONFIDENTIAL (FR) MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) Weekly deposit data now available on a preliminary basis through December 30 and on a partial basis through January 6 indicate that growth in the narrowly-defined money supply was at an annual rate of about 6.7 per cent on average in December, and only about 3.6 per cent for the fourth quarter.

While the rate of growth in money supply

during December exceeded that of any previous month since August, it still fell appreciably short of the projected 9.5 per cent rebound that was indicated at the last meeting of the Committee.

Moreover, the

November money supply growth rate was revised downward to 2.8 per cent from the 4.5 per cent rate estimated in mid-December.

The combination

of these developments resulted in a fourth quarter money supply growth rate that was about 1-1/2 percentage points below the roughly 5 per cent rate of growth that had been expected in consequence of the FOMC's decision at the last meeting.

In the case of the adjusted bank credit

proxy, it too grew somewhat less in December than had been indicated at the mid-December meeting, but the rate of growth was still substantial as extremely strong time deposit growth more than offset further declines in non-deposit funds.

The latest estimates and the original

target paths for the various monetary aggregates are compared in the following table:

Recent Paths of Key Monetary Aggregates (Seasonally adjusted, billions of dollars) Money Supply (M1 )

Indicated at Last Meeting 1/

Actual Results

Adjusted Credit Proxy Indicated at Last Meeting 1/

Actual Results

1970 Month

October

213.0

324.8

November

213.8

213.5

326.9

326.7

December

215.5

214.7

331.6

331.0

214.5

214.5 214.2

328.3 331.0 330.2 332.7 333.2

328.3 330.7 330.1 331.4 331.7

334.0

331.6

Week ending Dec. 2 9 16 23 30

216.4

215.3 213.6 214.8

Jan. 6

215.6

214.1

214.9 215.5 215.4

% Annual Rates of Change

Fourth Quarter

5.0

2/ 3.6

9.0

8.1

November over October

4.5

2.8

7.8

7.0

December over November

9.5

6.7

17.5

1/ 2/

16.2

Alternative B path of previous Blue Book. 3.8 per cent annual rate for fourth quarter average over third quarter average.

(2) That there might be a significant shortfall in money supply did not become evident until December 28, although there were some tentative indications of the direction of movement just before the long Christmas weekend.

During the final days of December, it was still not known

whether the preliminary estimate of a shortfall for the week of the

-3-

23rd would be revised upward--as_had happened at times in the past--or how much of a year-end bulge in deposits might develop from the widely predicted heavy seasonal repatriation of Euro-dollars by corporations seeking to comply with balance of payments regulations.

By January 4,

however, more complete data indicated that the drop in the week of the 23rd was even larger than suggested earlier; the drop apparently reflected the accompanying very large pay-off of business loans and a marked increase in the Treasury balance. (3)

The day-to-day behavior of the Federal funds rate since

the last meeting of the Committee has been particularly volatile, as is often the case during the period around year-end.

During the last two

statement weeks of December the funds rate averaged 4.83 per cent, and then in the week ending January 6 it dropped to 3.82 per cent, largely because bank reluctance to borrow on the year-end statement date produced a low Federal funds rate which carried through the turn-of-the year holiday weekend.

In the past two days, Federal funds have been trading mostly

in a range of 4-3/8--4-3/4 per cent, with the Desk aiming most recently at about 4-1/2 per cent rate in the aggregates.

in view of the weakness that has developed

Net free reserves averaging about $120 million were

published for the last two statement weeks, with year-end maneuvering and bad weather conditions leading to sizable excess reserves. (4)

After a period of hesitation and even back-up in the

last half of December, interest rates have declined in the last two days, with the largest drop in corporate bond yields.

In early

January the bank prime loan rate was reduced to 6-1/2 per cent, following the reduction to 6-3/4 per cent just before Christmas.

The Federal

Reserve discount rate was cut another 1/4 point to 5-1/4 per cent

-4effective January 8; this reduction had already been well discounted by the market.

Most recently the 3-month bill was quoted around 4.75 per

cent. (5)

The following table summarizes seasonally adjusted annual

rates of change in major financial aggregates for selected periods.

Third Quarter (Sept. over June)

Fourth Quarter (Dec. over Sept.)

Past Year (Dec. over Dec.)

First Half of 1970 (June over Dec.)

Total Reserves

7.2

-0.2

19.2

6.1

Nonborrowed Reserves

9.0

1.9

24.4

7.2

M 1 (Currency plus demand deposits 1/)

5.5

5.9

6.1

3.6

M2 (M1 plus time deposits at commercial banks other than large CD's)

8.3

6.0

11.0

9.2

M 3 (M2 plus deposits at thrift institutions)

8.0

5.4

10.7

9.8

10.4

6.0

15.9

12.1

Total member bank deposits (Bank credit proxy adj.)

8.3

3.5

17.2

8.0

Loans and investments of commercial banks 2/

7.2

4.5

13.9

5.2

$14.8

$ 2.0

$ 8.5

$ 4.3

Concepts of Money

M4 (M3 plus large CD's) Bank Credit

Short-term market paper (actual $ change)

Large CD's Bank-related commercial paper

Nonbank commercial paper 1/ 2/

1.9

3.3

3.2

2.1

- 1.4

3.0

2.2

2.5

Other than interbank and U.S. Government. Based on month-end figures. Includes loans sold to affiliate and branches.

NOTE:

All items are based on averages of daily figures, except for data on total loans and investments of commercial banks, commercial paper and

thrift institutions--which are either end-of-month or last Wednesday of month figures.

Prospective developments (6) Taking the December figures as a starting point, the table on the next page shows three patterns of growth for the monetary aggregates over the first quarter which the Committee may wish to consider.

The three growth paths shown for the narrowly-defined money

supply present alternatives that take account in differing ways of the recent shortfalls relative to expectations, as follows: (A) Alternative A shows a pattern consistent with a 6 per cent annual rate of growth for M 1 over the first quarter of 1971.

This

would be equal to the rate of growth for the quarter that the Committee indicated as the minimum acceptable at its last meeting, at a time when it was expected that fourth quarter growth would be 5 per cent.

Thus

alternative A does not make up for the fourth quarter shortfall.

The

growth rate for the fourth and first quarters taken together would be only about 4-3/4 per cent, as compared with the 5-1/2 per cent previously desired.

As a result, under

alternative A the March level of the money

supply would be about $1 billion below previous expectations. (B) Alternative B shows a growth path for the first quarter which makes up for the shortfall in December and in the fourth quarter. The first quarter growth rate in this alternative is 7-1/2 per cent, which would lead to a March level for the money stock equal to that resulting from the earlier 5-1/2 per cent path for the fourth and first quarters taken together. (C) Alternative C, which has an 8-1/2 per cent annual rate of growth in the first quarter for M1,makes up for the shortfall and raises the growth rate in money supply for the September-to-March period back up to the 6 per cent rate of expansion experienced over the first three quarters of 1970.

-7Alternative Paths of Key Monetary Aggregates--Monthly and Quarterly Money Supply Alt. A Alt. B Alt.

Adj. Credit Proxy Alt. A Alt. B Alt.

rotal Reserves Alt. A Alt. B Alt. C

1970 214.7

214.7

331.1

29.9

January

215.7

215.8

334.2

334.5

334.6

30.3

February

217.1

217.5

217.7

336.7

337.9

338.4

30.6

30.7

March

217.8

218.8

219.2

337.7

339.9

340.5

30.4

30.7

30.8

December 1971

Per cent Annual Rates of Growth December

6.7

5-1/2

February

10-1/2

March

8-1/2

3-1/2

4th Q 1970

3.6

8.1

1st Q 1971

7-1/2

8-1/2

10-1/2

January

6.7

16.2

12-1/2

14.0

15-1/2

17-1/2

13-1/2

11-1/2

14-1/2

7-1/2

-5-1/2

-1/2

8.1

6.6

6-1/2

11-1/2

-8(7)

The range of money market conditions, as typified by

the Federal funds rate, expected to be consistent over the next few weeks with the various paths for the aggregates are noted below.

The

large increases in the money stock, given the Federal funds rate, depend mainly on the resurgence in economic activity expected to result from the catch-up in GM auto output during the first quarter.

How strong a

resurgence will develop and how such a temporary bulge will affect money demand are additional uncertainties that compound the usual difficulties of specifying relationships between money market conditions and monetary aggregates. First qtr. annual rate of increase Federal funds rate Alternative

Money Stock

Bank Credit 8

--5-3/4

--4-3/4

7-1/2

10-1/2

3-1/4--

8-1/2

11-1/2

(8)

The weekly paths between now and the next meeting for the

various alternatives are shown in the table on the next page. (9)

Realization of alternative A aggregates would require, in

the staff's judgment, pushing the Federal funds rate up from its recent trading range of around 4-1/2 per cent.

With nominal GNP projected to

rise at an 11.7 per cent rate in the first quarter, strong transaction demands for money and a pick-up in short-term private credit demands are expected.

Should the GNP projection and these money and credit demands

be realized, short-term rates would rise in the process of keeping money growth down to 6 per cent.

Although a tightening of the money market

following a reduction in the discount rate would be rather puzzling

-9Alternative Weekly Paths of Key Monetary Aggregates Money Supply

Adj. Credit Proxy

Total Reserves

Alt. A

Alt. B

Alt C

Alt. A

Alt. B

Alt. C

214.8

331.7

30.0

214.1

331.5

30.5

215.4

332.4

332.6

30.0

30.1

216.1

334.1

334.4

334.5

30.3

30,4

216.3

216.4

336.5

337.0

337.2

30.2

33.3

30.4

217.1

217.3

217.4

337.2

337.9

338.1

30.4

3).4

30.5

217.5

217.8

218.0

337.5

338.4

338.7

30.6

3).6

30.7

A It. A

Alt. B

Alt.

30.0

1970 December 30p

1971 January

February

p -- Preliminary. e -- Estimated from partial data.

-10to the market, it would probably be interpreted as an effort to keep

short rates up, and, with some lag, the 3-month bill rate would likely move back up toward the new 5-1/4 per cent discount rate.

Marginal

reserve measures would be tighter than recently prevailing. (10)

Under alternative B, the money market may have to be

eased from currently prevailing conditions; the funds rate was around 4-1/2 per cent on Friday and might have to be moved down into the lower half of the 4--4-3/4 per cent range specified.

The 3-month bill rate

would likely go into a 4--4-5/8 per cent range, but may not drop to the lower end of the range unless the Federal funds rate falls to 4 per cent or below for a sustained period of time.

Under alternative C, which

would probably require a funds rate below 4 per cent, the bill rate might also decline below 4 per cent, although expectations that rates were bottoming out might tend to inhibit such a decline in the 3-month rate. In either case, movements in the bill rate would be influenced by expectations as to future discount rate actions as well as by the nature of forthcoming Treasury financings. (11)

The Treasury is expected to announce its mid-February

refunding on January 20.

Books will be open until Wednesday, January 27

on the exchange portion, and if there is a cash portion, an auction would be likely and would be held in early February.

About $5 billion of

publicly-held securities mature in February, but the Treasury is also likely to include in the exchange $1 billion of maturing March coupon issues, and may pre-refund other later maturing issues.

A large refunding

that accomplishes a noticeable amount of debt extension would tend to

-11lower short-term interest rates,-partly as a result of demand for bills from holders of maturing issues not wishing to lengthen.

Recent upward

adjustments in interest rates on intermediate-term Government securities were partly in anticipation of such an enlarged refunding. (12)

With the forthcoming Treasury refunding probably largely

discounted by the market, with recent corporate issues well received, and in light of the still large spread of long- over short-term rates, it seems likely that longer-term interest rates will drop further, except under conditions specified for alternative A.

Interest rate declines

would tend to accelerate should the Federal funds rate move down significantly from prevailing levels. (13)

Banks over the period ahead are likely to continue to be

aggressive buyers of municipal and U.S. Government securities in order to lock in existing yields,

Even though business loan demand may rise, net

inflows of total deposits to banks are likely to be sufficiently strong to leave them with a substantial surplus of investment funds.

Growth

in time and savings deposits other than CD's, as well as large CD's, may slow somewhat from the advanced rate of the last half of 1970, in light of the projected acceleration in consumer durable goods spending, but is still likely to remain vigorous.

Relatively more expansion in time

deposits would be expected under alternatives B and C, in view of the anticipated further declines in market interest rates.

With respect to

nondeposit sources, banks will become even less willing holders of Eurodollars to the extent that domestic short-term interest rates decline further relative to Euro-dollar rates.

The actual movement of bank Euro-

dollar holdings will depend in large part on any further official action

-12that may be taken to affect them.

For the present projection, we have

assumed a further drop in Euro-dollar holdings of about $300 to $400 million per month under Alternatives B and C. Possible directive language (14)

This section presents possible language for the second

paragraph of the directive for the three alternative policy courses discussed above.

As will be noted, all three alternatives have the same

second sentence, calling for bank reserves and money market conditions consistent with the objectives described in the first sentence.

Also,

the second sentence includes a reference to the forthcoming Treasury financing; as mentioned in paragraph (11), above, an announcement of the terms of this financing is expected on January 20.

Finally, it will

be noted that the structure of all three alternatives is similar to that in the directives the Committee was issuing before the December 15 meeting; it has been assumed that the Committee adopted a different structure in the second paragraph of the December 15 directive primarily because of special circumstances it expected to prevail during the period, encompassing the year-end, to which that directive applied. (15)

Alternative A.

This alternative is proposed for possible

use if the Committee decides upon a 6 per cent target growth rate for the money supply in the first quarter, despite the shortfall in the fourth quarter from the 5 per cent rate that had been expected at the time of the last meeting.

-13-

To implement this policy, THE COMMITTEE SEEKS TO PROMOTE MODERATE GROWTH IN MONEY AND ATTENDANT BANK CREDIT EXPANSION OVER THE MONTHS AHEAD.

System open market operations UNTIL

THE NEXT MEETING OF THE COMMITTEE shall be conducted with a view to maintaining BANK RESERVES AND [DEL: attained] recently the money market conditions CONSISTENT WITH THOSE OBJECTIVES, TAKING ACCOUNT OF THE FORTHCOMING TREASURY FINANCING [DEL: until expected that provided Committee, of meeting next the

be least at will credit bank and money in growth of rates achieved]. Unlike alternatives B and C below,

the first sentence of this alternative

does not indicate that the Committee desires to promote easier conditions in credit markets.

Such a statement has been omitted since this directive

might entail tighter money market conditions with potential consequences for credit markets generally. (19) use if

Alternative B. This alternative is proposed for possible

the Committee decides that the fourth-quarter shortfall in money

should be made up in the first quarter.

As indicated in paragraph (6B)

above, attainment of the average March level of money contemplated by the Committee at the December 15 meeting would involve a growth rate for money over the first quarter of about 7-1/2 per cent. To implement this policy, THE COMMITTEE SEEKS TO PROMOTE SOME EASING OF CONDITIONS IN CREDIT MARKETS AND MODERATE GROWTH IN MONEY AND ATTENDANT BANK CREDIT EXPANSION.

System open

-14-

market operations UNTIL THE NEXT MEETING OF THE COMMITTEE shall be conducted with a view to maintaining BANK RESERVES AND [DEL: attainged] recently the WITH THOSE OBJECTIVES,

money market conditions CONSISTENT TAKING ACCOUNT OF THE FORTHCOMING

TREASURY FINANCING until Committee, of meeting next the [DEL: provided and money in growth of rates expected the that bank achieved]. be least at will credit The phrase "some easing of conditions in

credit markets"

has been

reintroduced here in line with the expectation noted in paragraphs (10) and (12).

That interest rates--encompassing intermediate- and longer-

term as well as short-term rates--would decline under this alternative. (20)

Alternative C.

This alternative is proposed for

possible use if the Committee decides to seek growth in money over the first quarter at a faster rate than would be required simply to make up the fourth quarter shortfall.

One possible growth rate under this

alternative--8-1/2 per cent--was noted in paragraph (6C) above. To implement this policy, THE COMMITTEE SEEKS TO PROMOTE EASING OF CONDITIONS IN CREDIT MARKETS AND MORE RAPID GROWTH IN MONEY,

WITH ATTENDANT BANK CREDIT

EXPANSION, OVER THE MONTHS AHEAD.

System open market

operations UNTIL THE NEXT MEETING OF THE COMMITTEE shall be conducted with a view to maintaining BANK RESERVES AND [DEL: attained] recently the

money market conditions

CONSISTENT WITH THOSE OBJECTIVES,

TAKING ACCOUNT OF THE

-15-

the of meeting next the until FORTHCOMING TREASURY FINANCING [DEL: Committee, in growth of rates expected the that provided achieved]. be least at will credit bank and money

Whereas alternative B includes a statement to the effect that "the Committee seeks to promote some easing of conditions in credit markets," the word "some" is omitted in the corresponding statement in this alternative.

This difference reflects the expectation that interest rates

would decline somewhat more under this alternative--which calls for "more rapid growth in money"--than under alternative B.

Table 1

STRICTLYCONFIDENTIAL (FR)

PATHS OF KEY MONETARY AGGREGATES

January

11,

1971

SEASONALLY ADJUSTED

Monthly Pattern in Billions of Dollars 1970:

1971:

Sept.

324.5

212 8

212.8

218.5

Oct. Nov. Dec

324.8 326.9 331.6

324.8 326.7 131.)

213.0 213.8 215.

213.0 213.5 21/.7

222.2 225.0 229.7

222.2 225.0 210.3

29.1 29.2 29.7

29.4 29.5 29.9

334.6 337.3

334. 5 337 . 3

341.5

138. 8

216.9 217.9 218.8

/15 7 717 t 218.1

233.4 237.6 241.4

234.5 238.9 241 .4

30.1 30.0 30.2

30.3 30.6 30.5

1.4 14.1 32.2 21.6

-2.9 2.6 19.2 6.0

-2.9 2.6 19.2

Jan. Feb. Mar.

(proj.) (proj.) (proj.)

6.2

16.5

29.2

Annual Percentage Rates of Change--Quarterly and Monthly 1970:

1st 2nd 3rd 4th

Qtr. Qtr. Qtr. Qtr. p

0.5 6.5 17.2

5.9 5.8 6.1

9.0

8.1

5.0

3.6

1.4 14.1 32.2 20.5

12.0

9.5

6.0

6.5

20.5

19.5

6.6

7.5

1971:

1st Qtr. (proj.)

1970:

Sept.

29.8

27.5

Oct. Nov. Dec.

20.3 15.1 25.0

20.3 15.1 28.3

-3.6 3.5 18.5

Jan. Feb. Mar.

(proj.) (proj.) (proj.)

19.5 21.5 19.0

22.0 22.5 12.5

16.5 -3.0 8.5

Nov.

4 11 18 25

325 5 326.0 326.7 327.8

325.5 326.0 326.7 327.7

212.7 213.7 213.9 713.8

212.7 213.1 213.9 213.6

223.4 223.8 224.9 226.1

223.4 223.8 224.9 226.0

11.2 13.0 13.0 12.4

29.4 29.4 29.5 29.4

29.6

2 9 16 23 30 p

328.3 131 0 330.2 332.7 3 13.

328.3 330.7 330.1 331.4 331. 1

214.5 214.2 715.3 213.6 214.8

227. 1 228.4 229.1 230.3 230.6

227.2 228.8 229.7 231.6 232. 1

11.7 12.0 12.0 11.9 11.8

29.7 29.7 29.7 29.8 29.7

29.7 29.7

331.h

214.5 214.9 215 5 71 .4 216.4 215.6

332.6

216.'5

214.1 215.4

232.7 232.3

232.8 233.6

11.7 11.6

30.2 30.1

30. 30 0

1971:

7. 5 27.5 -

1.9

3.6 18.0

14.0 12.5 -

4.0

Weekly Pattern In Billions of Dollars 1970:

Dec.

1971:

NOTES:

Jan.

6 (proj.) 13 (proj.)

334 0 331 3

29.4 29. 5

?9.8

10.1 jo. I 10

Annual rates of h nne ,iher than thoe for the past are rounded to the nearest half per cent. 1/ Path show annual rates of increase of monfv e iyppiv and the ad )usled credi t proxy for the fourth and first quarters that represent "expected rate ofI t growth" referred to In thl FOMWdirective adopted Dncembor II; these were rates of growth for November ani December together as projected at tie t impeof the last rOMr meet inR .

FR 712 - D

CONFIDENTIAL (FR)

Table 2

AGGREGATE RESERVES AND MONETARY VARIABLES 1

RETROSPECTIVE CHANGES, SEASONALLY ADJUSTED (In per cent, annual rates based on monthly averages of daily figures) Reserve Aggregates Monetary Variables 2 3 Total 4 Money Supply Total

Period

Total Reserves

Annually 1968 1969 1970 p

Nonborrowed

Nonborrowed Reserves

Member

Member Bank Deposits

Currency

Time

Deposits Adjusted

+ 7.4 + 6.0 + 6.5

+ 7.9

+11.1

+ 2.4 + 5.1

n.a. - 1.2

+ 5.1

+ 6.5 + 5.4

+ 4.7 + 0.1

+ 3.5 +12.9

+ 5.9

+ 7.8 4 5.0

+ 5.3

+ 4.9

- 4.3 + 2.0

+ 0.8 + 1.6

+ 4.5 + 6.2

+ 0.3

+ 0.5

+ 5.9

+ 6.5

+17.2 + 8.1

+ 5.8 + 6.1 + 3.6

+ + + 4

+ + + +

+ 1.4 +14.1 +32.2 +21.6

+ / 7

+ 1.6

+ 1.2

+ 2.7

-17

De< .

-11.7 + 9.7 + 6.3

Jan. Feb.

+ 3.1 -12.0

4 7.2 -15 .6 4 7.5

+14 0

+10.7

June

+21.3 -13.9 4 0.5

175.4 4I' 1 .0 .0 + '6.7

116.8

July Aug. Sept.

+ 6.0 +23.3 +27.5

-16 I V. H. 8 1, 11.

Get. Nov

1.6

+ 7.2

411.

1st Half 1970 2nd lHalf 1970 p

-0.2 +16.0

+ 1.9

4 3.1

+1 '.9

t19.9

Quarterly 3rd Qtr. 1969 4th Qtr. 1969

- 9.3 + 1.4

- 4.8 - 0.1

+ 0.1

Qtr. Qtr. Qtr. Qtr.

3.9

- 2.9 + 2.6 +19.2 + 6.6

1970 1970 1970 1970 p

Monthly 1969" Sept. Oct. Nov.

Mar.

Apr Mly

Dec

1.7 2.4

0.4

4 4 1 441

+24.4 + 7 .2

3.5

4.6

9.4

+ 06 4 6.0 +24.1 +14.8

7.9

4 4.4

+18.0

+16.1

+ 1.5

+14

-12.7

+ 2.3

+ 1.4

0.4

+ 3.7

+40 7

3.7

- 0.7 + 3.0 + 1.9

+20 0 -11 7 -14 7

+10.3 +15.3 + 2.5

+10.5 + 3.0 + 2.2

+19.7 +10.9 +11.4

+ 5.7

+ 7.5 4 2.5

+ 4.4 + 8.9

419.0

+18.1 +23.2 + 9.7

+35.6 +28.8 +29.8

110.1 413.1 t20.6

I 1.1 + 7.0 +16.7 I

+ 6.8

+ 1.1 + 2.8 + 6 .7 -

- 1.2

+ 6.6

+ 5.7 + 7.5 + 4.9 + 7.4

0.7

+ 2.2 1 6.6

+ 3.7 8.0

+20.3 +15.1 428.3

- 4.2 + 2.8

nher 1,

Iq/10

1 6

4 66

7 +15 4 0 4

+ 8.1

471

+ 5 1

+10 7 - 17

+61 +1(1.

+ 6 1 +10.5

+ 10.1 + R.8 n.a.

-88 4 -14 1 453.1 4- 1 A

-37.5 107.0

A iprepate reserve s.erles have hIen idJusted Io el minnte chanRes in percentage reserve requirements against deposits, but reserve requirements on Euro-dollai horriowiigs arrc in Imhd hIvI:1iitnii * it t'o1 r 16. 1969, and reqii rements on bank-rolated commpr Ial paper are in luded h pinniny

1 +31.0 S422 4

3.7

+ 9.9

+ 5.2 + 2.3

+ 1.7 + 6.9 +10.0

+ 7.0

n.e.

+13.7 - 1.2 + 7.0

4, '

n.a.

413.2 414 3 -17 7 + 11.2

1031

+ 4.3

+ 1.2 +11.2

3.5 5.5

na n A

+ 7.8 +27 8

- 6.8 +12.9

+463 6 3 + 3.4 na

n a.

+ 9.9

4.2 8.0

Commercial Paper

+77 6

+ 0.8

Nonbank

Instit Deposits

+ 1.9

+ 5.2 + 5.2 + 7.8

+ 0.8

+ 3.6

5.3 5.3 6.7 2.7

Thrift

+ +.84 8

3.5 6.6

+ 9.4 - 4.1 +12.3

+12.1

-I

6.1 9.4 3.3 6.6

+ 4.7

+18.3

+ 7.9 + 7.9 + 2.6

+13.1

+ 1.2

5.0

+ 2.4 + 1.8 + 0.6

+ 5.5

1.9

NOTE.

Total

7 Private Demand Deposits

+ 7.8 + 3.1 + 5.5

+ 0.7

1970:

Adusted Credit Proxy

11, 1971

Addenda 10

n.a n.a. + 8.3

4 9.0 - 4 0

+ 7.8

Semi-annually 1st Half 1969 2nd lialf 1969

1st 2nd 3rd 4th

Adusted

January

FR 712 - E

Table 3

CONFIDENTIAL (FR)

AGGREGATE RESERVES AND MONETARY VARIABLES

January

A, 1971

SEASONALLY ADJUSTED (Based on averages of daily figures) lember Bank Deposits

Total

S. Gov.

Demand

Total Currency

1970:

Privat

Total

lo Demand Deposits (In billions of dollars)

Jan. Feb. Mar.

28,139 28,060 27.972

27,318 27,206 27,024

27.902 27,832 27.729

297.0 296.7 294.2

198.1 199.3 200.1

43.6 43.8 44.1

154.5 155.5 156.0

203.7 203.2 202.5

21.8 20.2 18.9

181.9 182.9 183.6

Apr. May June

27.775 28,235 28,056

26,754 26.888 26.705

27,614 27,942 27,742

295.4 295.1 292.6

201.0 201.6 202.4

44.2 44.5 44.8

156.8 157.1 157.6

202.1 201.7 201.2

18.2 17.4 15.8

184.0 184.3 185.4

307.5

25.5

July Aug. Sept.

27,530 27,401 27.402

26,275 26,214 26.383

27,334 27,161 27,144

288.0 285.3 285.7

203.1 202.6 202.8

45.0 45.2 45.3

158.1 157.4 157.6

198.1 195.4 194.8

14.1 12.5 12.0

184.0 182.9 182.8

305.7 303.8 304.2

26.1 26.6 27.5

Oct. Dec.

27.354 27.783 27.928

26,210 26,538 26,806

27,129 27.548 27,707

283.5 285.8 285.8

203.2 203.5 203.6

45.6 45.9 46.0

157.6 157.6 157.7

194.2 194.0 194.6

11.5 11.1 11.2

182.6 182.9 183.4

302.2 305.5 305.7

27.9 28.2 29.0

Jan. Feb. Mar.

28,001 27,722 27,723

26.966 26.615 26,782

27,823 27,523 27,536

284.8 282.9 286.2

205.2 204.5 206.6

46.2 46.4 46.7

159.0 158.1 159.8

193.3 193.5 195.3

10.6 10.6 11.5

182.7 182.9 183.8

304.8 303.4 306.1

29.1 30.0 30.0

Apr. May June

28,216 27,890 27,902

27,350 26,916 27,056

28.046 27,692 27,713

290.2 289.1 290.5

208.3 209.2 209.6

47.1 47.7 47.8

161.2 161.6 161.9

198.5 200.3 202.2

12.9 13.2 13.2

185.6 187.1 189.0

309.6 309.3 311.1

31.8 32.0 31.0

July Aug. Sept.

28,041 28,585 29,240

26.694 27,780 28,708

27,896 28,408 29,024

296.0 303.2 308.0

210.6 211.8 212.8

48.1 48.2 48.2

162.5 163.7 164.6

208.2 213.2 218.5

16.9 19.0 21.7

191.3 194.2 196.8

315.8 321.9 324.5

28.8 28.4 29.7

Oct. Nov. Dec,

29,385 79,474 29,913

28.928 29.013 29,572

29,134 29,233 29,702

310.6 314.0 319.4

213.0 213. S 214.7

48.5 48.7 49.0

164.5 164.8 165.7

222.2 225.0 230.3

23.2 23.9 26.0

199.1 201. 1 204.3

324.8 326. 7 331.1

30.5 29.5 32 2

Nov.

1970:

Time 0

(In millions of dollars) 1969:

Commer

Money Supply

n.a.

Nov.

4 11 18 25

29,363 29,394 29,520 29,409

28,970 20,957 29,167 28,820

29.045 29,237 29,302 29,205

312.3 313.0 313.7 315.3

212. 7 213.1 213.9 213.6

48.6 48.6 48.7 48.6

164.2 164.4 165.2 165.0

223.4 223.8 224.9 226.0

23.4 23.5 23.7 24.3

200.0 200.3 201.2 201.7

325.5 326.0 326.7 327.7

30.4 31.0 31 .2 31 .2

Dec.

2 9 16 23 p 30 p

29,714 29,719 29,817 30,052 30,037

29,299 29,234 29,343 29,717 30.006

29,322 29,433 29,732 29,819

316.6 318.6 318.6 319.6 320.5

214.5 214.1 215.3 213.6 214.8

48.6 48.9 49.0 49.1 49.1

165.9 165.4 166.3 164.4 165.7

227.2 228.8 229.7 231.6 212.1

24.7 25.4 25.8 26.4 26 A

202.5 203.3 203.9 205.2 205.3

328.3 330.7 330.1 331.4 11 7

30.9 31 .0 29.8 29.7 29.5

29.899

NOTES: Aggregate reserve series have been adjusted to eliminate changes in percentage reserve requirements against deposits,

but reserve requirements on Eurodollar borrowings are included heginning October 16, 1969, and requirements on bank-related commercial paper are included beginning October 1, 1970. Adlijsted credit proxy includes mainly total member bank deposits sublect to reserve requirements, hank-related commercial paper, and Euro-dollar borrowings of I.S. hanks. Weekly data are daily averages for statement weeks. Monthly data are daily averages except for nonbank commercial FR 712-F paper figures which are for last day of month.

Table 4

(Dollar amounts

MARGINAL RESERVE MEASURES in millions, based on period averages of daily

Me Free reserves

Period

Monthly (reserves weeks ending in): 1969--January February March April May June July August September October November December 1970--January February March April May June July August

September October November December p

Excess reserves

figures)

Borrowin Banks ty C Reserve Other Major banks th (Outside N Y. 8 N.Y

irber

Total

g Country

477 - 580 - 635 - 844 -1,116 -1,078 -1,045 - 997 - 744 - 995 - 975 - 849

359 256 202 187 243 277 266 214 282 195 238 278

836 836 837 1,031 1,359 1,355 1,311 1,211 1,026 1,190 1,213 1,127

131 62 58 85 123 57 89 81 83 106 120 268

302 255 233 411 346 459 250 253 236 327 387 310

149 215 254 260 397 288 364 256 222 293 250 220

253 304 293 275 493 550 608 621 485 464 456 329

- 759 - 916 - 751 - 687 - 765 - 736 -1,134 - 706 - 374 - 271

169 210 129 178 159 171 183 175 235 196 218 250

928 1,126 880 865 924 907 1,317 881 609 467 408 348

148 106 90 227 165 140 218 143 101 12 42 37

287 317 225 331 241 289 460 278 115 40 17 16

232 289 287 119 228 217 348 273 274 312 293 265

261 414 278 188 290 261 291 187 119 103 56 30

190 - 98

1970--July

1 8 15 22 29

-718 -1,219 -1,451 -1,201 -1,078

273 75 230 185 153

991 1,294 1,681 1,386 1,231

93 360 467 139 29

260 412 569 531 528

304 283 371 395 388

333 240 274 321 286

Aug.

5 1? 19 26

822 854

589

522

188 280 92 138

1,010 1,174 681 660

114 382 21 56

362 362 243 144

303 300 229 262

231 130 188 198

482 348 144 -507 -389

17 41 356 -47 272

660 763 500 460 661

79 lo0 89 75 103

181 143 93 77 79

221 343 224 259 324

179 117 94 49 155

- 46 409 -388 242

3 2 41 200 196

398 450 586 433

21 16 11

4 46 97 13

305 310 342 292

89 73 133 117

105 163 - 166 - 327

318 282 164 108

423 445 3'0 435

69 0 86

15 29 1 22

311 282 295 287

86 65 34 40

- 60 -153 - 279 66 68 174

394 138 120 258 338 581

454 291 399 324 270 407

55 39

301 264 268 249 245 253

45 27 28 25 25 26

Sept.

9 16 23 30 Oct.

Nov.

7 14 21 28 4 11 Il In

25 Dec.

Jan.

9 16 23 p 30 p 6 p

p - Preliminary.

fl __________________ .&

72 L

56 A

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

Total Federal Reserve credit (Excl. float)

Period Year 1968 (12/27/67 - 12/25/68) 1969 (12/25/68 - 12/31/69)

U.S.

Government

securities

_Federal

Total Bills 1/

holdings

+2.143 ( +4,779 (

+3,757 +5,539

+3,298 +5,197

+ 544 + 231 +1,181

445

+ -

+ + -

632 194 230

+ -

Other

--- ) )

+1,176 + 707

Repurchase

Agency

agreements

Securities

S 21

206

Bankers'

Member banks

acceptances

3 67

borrowings

514

74S

+ +

104 301

+ -

117

221

Weekly 1970--July

Aug.

Sept.

Oct.

Nov.

Dec.

Jan.

1 8 15 22 29

5 12 19 26

185 - 460

+ + +

362 591 231

+ + +

540 462 653

343

243

+ + + +

164 316 14 864 418

2 9 16 23 30

+ +

189 473

248 982

689

7 14 21 28

482 5 224 479

+ -

268

692

+ -

671

141

2 9 16 23 p 30 p

986

103 697

- 123 142

6 p

Figures in

938

183 56

S 48

4 11 18 25

+ +

610 75 711

445 (+ 145) ) 73 ( ---

+ + + +

99 61

188

(+ 71) ( -) ( -) ( -)

+ +

247 196

+ -

33 28

+ -

9 452

45 S 50

--- + + +

133 123 250

+ +

( 638 (42 (-

293 266 644 209

) 29) 42)

632

444

) )

+ +

31 ( 193 (

236 (358 (-

90) 256)

222 (+

346)

-165 -16 63

+ -

( ( ( (

241

(94 (

)

----

) ) )

(

772

537

parenthesis reflect reserve effect of ,.itch

sqnle-purchase

) )

) 189)

agreement.

185

261 57

136

151

S -

22 11"

+ -

10 165

100

321 S 45

--- 201

258

328 ( (

41 37 22 6 - 21

100)

-1CH

+ +

12 17 13 S 40 + 21

73 S 30 24 + 7 64

337 177

853 145 586 - 35

+ + +

107

500

144)

S 29

491 201

63 6 6?

+ -

516 (-

164

+ +

202

155

29 11 13 - 47

- 25 4 16

295

10 7 26

+ +

+ + +

1 63 23 37

+ +

11 5 + 5 - 14

+ +

)

286

S 18 56 83 205

150)

509

+ +

+ -

369 19

407 ( 32

196

+ +

4 4

506

?14) -)

913

13 37 S 12 S 38 + 49

75 54

117

Cite this document

APA

Federal Reserve (1971, January 11). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19710112

BibTeX

@misc{wtfs_bluebook_19710112,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1971},
  month = {Jan},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19710112},
  note = {Retrieved via When the Fed Speaks corpus}
}