Bluebook

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1

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Content last modified 6/05/2009.

(CONFIDENTIAL

FR)

May 19,

1972

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

By the Staff BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

May 19, 1972

CONFIDENTIAL (FR) MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1)

For April and May combined, growth in reserves available to suppor)

private nonbank deposits (RPD)--at a 7-1/2 per cent annual rate1/--appears to be within the 7--11 per cent range targeted for this period by the Committee, as shown in the attached Table 1.

While revised RPD figures have been published,

the data shown in Table 1 are based on the old series since this was the yardstick used by the Committee and the Desk.

The old figures are compared with

the new revised RPD series in the Appendix beginning on page 12. (2) Growth rates of M 1 and M 2 were both close to the 8 per cent annual rates desired by the Committee in April.

However, expansion in the

adjusted credit proxy--at nearly a 14 per cent annual rate --was substantially above the rate projected as being consistent with these money supply growth rates at the last meeting.

The unexpected strength in the proxy reflected

greater than anticipated strength in both Government deposits and large CD's. (3)

In May, with Government deposits continuing to increase--instead

of dropping sharply as projected--the unexpectedly large expansion in the proxy has persisted.

Growth in M1, on the other hand, fell substantially short of

expectations in the first two weeks of May, perhaps reflecting post-tax date clearances of April personal income tax checks, which appear

1/ Data on RPD are actuals for the period through May 17.

Of course, for the succeeding two weeks of the month only required reserves against private nonbank deposits are available (on a lagged accounting basis), and required reserve figures for the final week of the month are still a preliminary estimate.

-2to have been both unusually heavy and unusually slow this year.

Preliminary

data for the week ending May 17 indicate a large resurgence in M1 growth--as might be expected once the negative effect of delayed tax clearance subsided. Even assuming that the recent higher level of M 1 is confirmed by final data and then maintained over the rest of the month, M1 growth for all of May may be no greater than a 4-1/2 per cent annual rate, considerably below the 8-1/2 per cent rate

thought likely at the time of the last Committee meeting. M 2 in May,

on the other hand, appears to be running somewhat ahead of expectations, as growth of time deposits other than large CD's turned stronger than anticipated. (4)

Over the four-statement-week period ending May 17, the Federal

funds rate averaged close to 4-1/4 per cent, about one-eighth of a percentage point above the average for the preceding four weeks. average for the week of May 17 was 4.32 per cent.

Most recently, the

These rates are in the

lower part of the 4--5 per cent range thought at the time of the last meeting to be consistent with growth in RPD at the mid-point of the targeted range. One factor that may have kept the funds rate from rising more in the period was a drop in the overnight Eurodollar rate as compared with earlier weeks, further widening the distance of

the Eurodollar below the funds rate.

There

is some evidence that this differential has induced a flow of funds into the U. S.

market, (5)

particularly through agencies of foreign banks. Both short- and long-term interest rates moved down following

the last Committee meeting, largely in reaction to the terms of the Treasury May refunding and to the changed outlook for Treasury financing.

The net

-3repayment of debt announced for the Treasury's refinancing, the continuing very high level of the cash balance, and reports by Treasury officials that second half cash needs would probably be much smaller than previously indicated, all contributed to a marked downward revision in market judgments about the likely pressure from Treasury borrowing in the months just ahead.

Most

recently, there has been some tendency for rates to rise again, particularly in the Treasury bill market.

Key factors in the recent bill rate rise have

been the uncreep in the average rate on Federal funds and next week's bunching of the monthly and two weekly bill auctions in a 5-day period.

Also, the timing

of certain recent bill sales by the Desk, for System and other official accounts, was interpreted by market participants as evidence that Federal policy makers wanted bill rates-to rise.

Currently, the 3-month Treasury bill is trading

around 3.80 per cent--somewhat above its level at the time of the last Committee meeting and well above the 3.42 per cent low reached in early May just after the Treasury refinancing. (6)

The following table compares seasonally adjusted annual rates

of change in major financial aggregates for recent periods.

-4-

1971

Fourth and First Quarters Combined (Mar. over Sept.)

Latest Month (April over March)

Total Reserves

7.3

6.2

23.4

Nonborrowed Reserves

8.0

8.9

22.9

Reserves available to support private nonbank deposits

7.7

8.6

6.9

6.2

5.2

8.2

than large CD's)

11.1

10.8

7.5

M3 (M2 plus deposits at thrift institutions)

13.3

12.7

11.1

9.5

10.6

13.9

11.3

13.3

3.6

$ 7.9

1.7

1.3

-1.8

2.1

0.3

Concepts of Money M 1 (currency plus demand

deposits 1/) M2 (M1 plus time deposits at commercial banks other

Bank Credit Total member bank deposits (Bank credit proxy adj.) Loans and investments of commercial banks 2/ Short-term market paper (Actual $ change in billions) Large CD's Nonbank commercial paper 1/ 2/

Other than interbank and U. S. Government. Based on month-end figures. Includes loans sold to affiliates 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 (7)

Three alternative patterns of monetary aggregates and

money market conditions are summarized below for Committee consideration.

More detailed monthly and quarterly figures, including data for

total reserves and RPD, are shown on the next two pages. A

B

C

4-1/4--5-1/2

4-3/4--6

50--300

100--650

250--800

May

4-1/2%

4-1/2%

4-1/2%

June

9%

8-1/2%

8%

2nd Q.

7-1/2%

7-1/4%

7%

3rd Q.

7-1/2%

6-1/2%

5-1/2%

7-1/2%

7%

7%

Federal funds rate Member bank borrowings

3-3/4--5

Growth in M1 (SAAR)

Near-term growth in RPD (SAAR) May

June

13%

May-June

10%

(8)

10-1/2%

12% 9-1/2%

Of the three alternatives presented,

9%

alternative A involves

money market conditions closest to those most recently prevailing. point of the Federal funds rate range for A is

The mid-

around 4-1/4--4-1/2 per cent.

Under this alternative, we would expect the 3-month bill rate to be in a 3-3/8--4-1/4 per cent range between now and the next meeting of the Committee, and to move above the upper end in the summer.

Alternative Monthly and Quarterly Patterns for Key Monetary Aggregates

Alt. 1972

May June July Aug. Sept.

A

236.0 237.8 239.8 241.1 242.4

Alt. B

Alt.

C

236.0 237.7 239.5 240.6 241.6

236.0 237.6 239.2 240.0 240.8

Alt. A

Alt.

486.9 491.2 495.2 496.5 501.6

486.9 491.0 494.5 497.2 499.5

B

Alt. C 486.9 490.5 493.3 495.3 497.0

Per Cent Annual Rates of Growth May June July Aug. Sept. 2nd Q. 3rd Q.

4.5 9.0 10.0 6.5 6.5

4.5 8.5 9.0 5.5 5.0

4.5 8.0 8.0 4.0 4.0

9.5 10.5 10.0 8.0 7.5

9.5 10.0 8.5 6.5 5.5

7.5 7.5

7-1/4 6.5

7.0 5.5

9.0 8.5

9.0 7.0

Adjusted Credit Proxy

1972

May June July Aug. Sept.

Alt. A

Alt. B

Alt. C.

381.7 382.7 383.4 386.8 390.5

381.7 382.5 382.9 385.7 388.8

381.7 382.3 382.3 384.8 387.6

Per Cent Annual Rates of Growth May June July Aug. Sept.

2nd Q. 3rd.Q.

17.0 3.0 2.0 10.5 11.5

17.0 2.5 1.5 9.0 9.5

17.0 2.0 .0 8.0 8.5

11.5 8.0

11.0 6.5

11.0 5.5

9.5 9.0 7.0 5.0 4.0 8.5 5.5

Alternative Monthly and Quarterly Patterns of Reserve Aggregates

Total Reserves

1972

May June July Aug. Sept.

Alt. A

Alt.

B

32,897 33,246 32,987 33,008 33,281

32,891 33,213 32,923 32,895 33,121

RPD 1/ Alt.

C

Alt. A

Alt.

B

Alt. C

32,891 33,179 32,857 32,787 32,975

30,006 30,330 30,432 30,649 30,826

30,000 30,297 30,369 30,537 30,668

30,000 30,264 30,303 30,430 30,523

Per Cent Annual Rates of Growth

May June July Aug. Sept.

9.0 12.5 -9.5 1.0 10.0

8.5 11.5 -10.5 - 1.0 8.0

8.5 10.5 -11.5 - 2.5 7.0

7.5 13.0 4.0 8.5 7.0

7.0 12.0 3.0 6.5 5.0

2nd Q. 3rd Q.

15.0 0.5

15.0 - 1.0

14.5 - 2.5

9.5 6.5

9.0 5.0

1/

Reserves ava ilable to support private nonbank deposits.

7.0 10.5 1.5 5.0 3.5

8.5 3.5

-8(9)

The bill rate is likely to be under downward pressure from

market forces over the near-term, as the Treasury is expected to repay almost $4 billion of publicly-held indicate the Treasury is

issues maturing in June.

Board staff projections

likely to have to borrow a sizable amount of new

money--perhaps around $8 billion--in July and August, but projections by the Treasury suggest a considerably smaller cash need.

The market at the moment

seems to be assuming a cash need close to our estimates, and anticipation of such a need could serve to offset downward pressure on the bill rate as June progresses,

as

could possible net sales of bills from foreign accounts.

But the principal source of near-term upward pressure on bill rates would be a tendency for the Federal funds rate to edge up from recent levels. be particularly likely under alternatives B and C, alternative A.

If

This would

but even could occur under

demands for bank reserves and for money are not as strong

as assumed, however, the funds rate and other short-term rates would, of course,

be correspondingly reduced for any given rate of bank reserve provision. (10)

The demand for money is expected to remain strong largely

because of the substantial 11--11-1/2 per cent annual rate of growth projected for nominal GNP in the second and third quarters.

Both rates of growth are

larger than projected by the staff at the last FOMC meeting.

With sizable

transactions demands, efforts to move onto a slower growth path for monetary aggregates--as in alternatives B and C--are likely to involve additional upward pressures on short-term interest rates, with such pressures particularly strong under alternative C.

In June and July,

the projected sharp drop in

balance will tend temporarily to accelerate growth in M1. forward by one month the sharp drop in anticipated for May but did not develop.

the Treasury

This reflects pushing

the Treasury balance that had been

(11)

For alternative B, the mid-point of the Federal funds

rate range is just under 5 per cent.

If the rate were to move up toward

that area, this would clearly impart upward impetus to other short-term rates and bring expectations of a possible increase in the 4-1/2 per cent discount rate increasingly into the thinking of market participants. We would expect the 3-month bill rate under this alternative to be in a 3-7/8--5-1/4 per cent range between now and the next Committee meeting. Under alternative C, the bill rate could move higher more quickly. As noted earlier, however, there is considerable uncertainty about whether Treasury cash needs over the next three months will be as large as assumed in our projections; this makes the size and timing of upward movements in interest rates more than usually uncertain. (12)

Inflows to banks of time deposits other than large CD's

are expected to moderate over the months ahead from their rather rapid May pace.

Moderation should be most noticeable after mid-year, though,

when short-term market interest rates are most likely to be rising significantly.

Under alternative A, we would expect the rate of growth in such

deposits in the third quarter to drop to around 9 per cent, somewhat below the expected second quarter pace, and about half the first quarter rate. Under alternatives B and C, the rate of growth would likely be substantially smaller.

This would be particularly so under the money market conditions

expected to be consistent with alternative C aggregates.

Short-term market

rates in the third quarter under those circumstances are likely to be above most current ceiling rates on consumer-type time deposits.

-10-

(13)

A declining trend of net saving inflows to nonbank

institutions would also be expected by the third quarter.

While these

institutions have somewhat higher ceiling rates than banks, competitiveness of their deposits would, of course, be diminished as the 3-month bill rate advances.

Competitiveness would be severely eroded if the

bill rate moved into a 5-1/2--6 per cent range. (14)

Banks are expected to be relatively aggressive in offer-

ing large negotiable CD's,

Strong loan expansion--with business loans

expected to continue rising at around the rate of the past few months-in conjunction with diminishing net inflow of funds from consumer-type time deposits are likely to encourage bank demand for CD funds.

If

short-term rates rise into the alternative C range, we would expect that banks would have to rely particularly heavily on large CD's as interest

rate ceilings constrain consumer-type time deposit inflows. (15)

Longer-term interest rates are not likely to be subject

to upward interest rate pressures from the demand side over the next few months.

The volume of corporate bonds coming to market appears to be

abating somewhat further, and mortgage credit demands seem to be topping out.

Market expectations appear to have shifted to an assumption of

relative rate stability over the next few months, but expectations could change abruptly if money market conditions firm.

Expectations might not

change to any significant degree under alternative A but would shift more markedly if short-term market conditions move into the ranges associated

with B and C.

-11-

Proposed directive (16)

Possible language for the operational paragraph of the

directive is given below.

The three alternative adjectives qualifying

"growth in monetary aggregates over the months ahead" might be taken to correspond with the similarly lettered patterns of aggregate growth rates described in the preceding section. of account taking while "To implement this policy,[DEL: Treasury forthcoming the and developments market capital financing,] the Committee seeks to achieve bank reserve and (A - MODERATE ) money market conditions that will support (B - somewhat more moderate) (C - MORE MODERATE ) growth in monetary aggregates over the months ahead." Deletion of the reference to capital market developments is proposed in light of the recent and prospective moderation of credit demands in securities markets.

The Committee may wish, however, to consider including the

capital markets reference--particularly under alternative C and possibly B--in view of the possibility under these alternatives that strong upward rate pressures could develop in longer-term markets.

-12-APPENDIX

Revised RPD Data

On May 18, the RPD series was released to the public; the series will now appear weekly in two Board statistical releases and monthly in the

Bulletin.

Weekly and monthly data are available back through 1960.

The

published seasonally adjusted series differs somewhat from the previously available internal figures as a result of technical adjustments undertaken in the course of a thorough methodological review. While, as before, seasonally adjusted RPD is based on seasonally adjusted deposit aggregates, two technical adjustments were made to the data. First, required reserve ratios were aggregated from micro data in order to adjust ratios for the distribution of deposits below and above $5 million at each bank, reflecting differences in reserve requirements.

This changed the level

of the RPD series by about $30 million on average. Second, required reserves for private demand and total time and savings deposits were calculated directly. 1/ In the old series, required reserves for net interbank and Treasury deposits had been subtracted from total reserves to calculate RPD. 2/ This different method of calculation reduced the level of RPD by about $350 million on average. As indicated in the first three columns of the table on the next page, the level of the new series is lower than for the old series.

1/ To this total are added required reserves for nondeposit funds and excess reserves to obtain RPD. In the old series, average demand deposit reserve ratios were used, 2/ However, because of the distribution of interbank deposits by class of bank, the required reserve ratio applicable to interbank deposits is considerably different from the average reserve ratio.

Appendix

-13-

Reserves Available to Support Private Nonbank Deposits 1972 (Seasonally Adjusted) Old Series Period

(2)

(3)

January February March

(4) (5)

April May 1/

(6)

QI

(7) (8) (9)

February -March March-Alpril April-Maay /

(2)

I/

Difference

S

(3)

Old Series

New Se:ries

Target

(Percentage Annu al Rate of Change

(Millions of Dollars)

d

(1)

(1)

New Series

(4)

(5)

(6)

(7)

29,509 29,611 30,001

29,064 29,244 29,625

445 367 376

13.7 4.1 15.8

9.2 7.4 1:5.6

30,172 (30,388)

29,821 (30,006)

353 (382)

6.9 (8.5)

7.9. ( 7.4)

-

11.3

110.8

--

10.0 11.4

1 1.6 1 1.8

(7.5)

( 7.7)

6.0-10.0 10.5-14.5 7.0-11.0

S-

--

-

5.5 19.0 10.5

7.5

Partly pi :ojected.

However, seasonally adjusted annual rates of change, shown in columns 5 and 6, are not very different over quarters or even two month periods (see lines 6, 7, 8 and 9 of the table).

For example, in the first quarter of 1972, the old series

increased at a seasonally adjusted annual rate of 11.3 per cent,

while the new

series show a 10.8 per cent rate of growth. Some month-to-month annual rates of change do show significant differences between the two series, particularly in January and February of this year.

During the February-March period the new seasonally adjusted annual rate

of increase is a little above the target range, whereas under the old series it

Appendix was at the top of the range.

-14This, of course, represents only a technical

change in relationship between deposits and reserves and does not in itself imply any revision in deposit figures.

CHART 1

STRICTLY CONFIDENTIAL (FR) 5/19/72

RESERVES AVAILABLE TO SUPPORT PRIVATE NONBANK DEPOSITS BILLIONS OF DOLLARS

32

S30 31

15/17/72)

S11%growth for Apr -May

28 -30 7% growth

26

j

I D 1970

M

J 1971

S

0

M 1972

J

I F

M 1972

I

I ,-I A

M

STRICTLY CONFIDENTIAL (FR)

CHART 2

5/19/72

MONETARY AGGREGATES (5/17/72)

ROW MONEY SUPPLY M1

BILLIONS OF DOLLARS

I

236 23 -234

-240

S230

-232

-230

-220

-228 210

ADER MONEY SUPPLY M2 480

470

(5/17/72)

-460

-450 480 -440-

-430 -470

-420

-410 - 460

i_ 1970

_ _

_,

1971

,_II_

_

1

, 1972

D '71

J

I

I F

M '72

A

,1 M

STRICTLY CONFIDENTIAL (FR) 5/19/72

CHART 3

MONETARY AGGREGATES BILLIONS OF DOLLARS

ADJUSTED CREDIT PROXY

364

360 1

1

I

I

I

I

TOTAL RESERVES 33

32

31 1970

1971

1972

D '71

J

F

M '72

A

M

CHART 4

MONEY MARKET CONDITIONS AND INTEREST RATES INTEREST RATES Short-term

INTEREST RATES Long-term

WEEKLY AVERAGES

1970

1971

1972

1976

1971

1972

1970

1971

1972

STRICTLY CONFIDENTIAL (FR)

Table 1

May 19, 1972

Bank Reserves

Period

Required Reserves Seasonally Adjusted U.S. Gov't. Time and and Private Nonborrowed Interbank Nondeposits Demand Reserves

Aggregate Reserves

Reserves Available for Private Nonbank Deposits Not Seasonally Adjusted Seasonally Adjusted Actual Target and Actual Target and and Associated and Associated Projected Patterns Projected Patterns

Total Reserves

(7) 1972--Feb. Mar. Apr. May

30,009 30,2701/

30,359-30,559-

29,611 30,001 30,172 30,388

31,616 32,032 32,657 32,897

29,737 29,710 30,270 30,215

29,719 30,367 30,069-30,269-

31,580 31,931 32,541 32,806

20,805 21,039 21,183 21,253

(8) 8,656 8,755 8,760 8,937

(9) 2,005 2,031 2,484 2,508

Annual Rates of Change Quarterly: 1971--3rd 4th 1972--lst 2nd

.,,,.,.....,...,,,.,. """""""""",..'.,''0 ",0"",..""",.'°''°' °.°° ,°,. °'' '°'0 ''0 '°

,,..°.,,..*,. """.,0,,,H °'.'.°..°'''0 °0°' '°, °'°0''°

Qtr. Qtr. Qtr. Qtr.

3.1 5.8 11.3 (9.5)

1972--Feb. Mar. Apr. May Apr.-May

4.1 15.8 6.9 (8.5) (7.5)

*.0....0,.,.,'H''''0'''0. "''000""''' *OO,.....O,0.0..U.0....0 000..00000...o.. ,..,,..,0........ '.''"0 .. 0''00"0''''00' 000...0.0,........0.....000, ..0.000,0..0o0,oo. .... ~.000.,.....0'''"''' "00"000'''0"0o'''" ,O0O..,........,0,0.''O0 ,.O..0,....0,0.,H 000oo ....... ..... o ..... o ..0.., ........... • 0000.,,0...0,..0.'"" 0.,,0.000000'' 000O...0.00.'' ""0.,O.O00""0000'0 000.*.00.0,,....'00" 0...0 00 "00'0 .... ,HHO.,..0,..,,0.,O0" IHH,0..0..H,~ oo oo..... ..... ..... rrr o.0 ..0..00...0,

29,909 29,971 30,346 29,499 30,125

............... ......... ....,..,.....0..... .00.....H,.H..,H....,,'. 00..OH.H,,.,,,0,0.H.0,., ............ 0....... ...0,....*,.HH,....0.O'H ..0.O.....O.0,,H,0''''''' 0.0. .....OHH.H' ''' '0 ..0.O.....OHH,..0.....,H ...o...,.o.,0,..0...... ..0.O...,.OH0 .'00'''''O' 0....... 0,.,..,,H.0.00''''''''' ,.......0...0..o0

30,260 30,057 30,033 30,325

00O..0..0.OO.00.00.HO''0 .00O..0.0.O.,00.HO0.0000"0 .. .,0..0,00.'' 0,0o..0...o...0000,0.,..o.0 00....0..00.0,o000oo0...o.0 ,0.,,..0,., *00.00.,*.,.HH ooo ,o .oo 00 ... .. 0o 0o

Weekly: 1972--Mar.

10.5 7.5 7.0-11.01

1 8 15 22 29 :::::::::::::::::::::::::::

Apr.

5 12 19 26

May

3 10 17

:: ::::

. ........ ..........

30,253 30,333 30,424

~

°,°...H....°°....0...H,.. ,,°.°°.....°....... °.°...,°°..........°, , ..........,,,°....'°o'. °.....°.,,,...°,...,. o.o.0,.....,0.......0..0 000.00,HO,*.0..''00"0'''0 .......... .o..oo0....o.oo. 0000..,,,H.........O'0''00

°°0°°0...°°....... .00°°00.°.,°..H .°o°...° °....°° °,..°..''.'° ,.0o,,00.0.000000, ".,0000o00...0 0,'0' ''0''''000" ..0............... 0.''000''00"0"00''

~

.... 0.,,O...~.........H, .,......,..,,...,... ,,, ..o......,..o.....o........

7.2 2.2 10.1 (15.0)

6.0 6.8 11.0 (14.0)

2.4 2.8 10.5 (8.0)

6.7 14.5 17.8 (13.5)

-5.9 15.8 23.4 (9.0) (16.0)

-3.7 13.3 22.9 (10.0) (16.5)

2.8 13.5 8.2 (4.0) (6.0)

15.5 13.7 0.7 (24.0) (12.5)

............

"::::::':!:!::

29,514 29,376 29,926 29,412 30.043

31,744 31,709 32,164 31,650 32,466

31,666 31,598 32,151 31,538 32,307

21,005 21,005 21,155 20,875 21,102

8,723 8,734 8,774 8,750 8,750

1,835 1,738 1,818 2,151 2,341

30,095 29,881 30,221 30,604

32,655 32,526 32,615 32,889

32,519 32,512 32,568 32,613

21,184 21,093 21,388 21,120

8,714 8,744 8,751 8,873

2,395 2,469 2,582 2,564

30,670 30,396 30,318

32,556 32,667 33,038

32,443 32,585 33,003

21,293 21,219 21,282

8,839 8,892 8,935

2,303 2,333 2,615

"

NOTE: Data shown in parentheses are current projections. 1/ The range is centered on the 9.0 per cent annual rate of growth in these reserves from March to May thought growth in monetary aggregates midway between patterns I and II shown in the Bluebook of April 14, 1972.

to be consistent with

Annual Growth Rates midway between Patterns I & II 1/ Apr. May OIl M1 8 8-1/2 7-1/4 M2 8 7-1/2 7-1/2 Credit Proxy (Adj.) 8-1/2

-2-1/2

Table 2

Broad Money Supply (M2 )

Adjusted Credit Proxy

(1) (2) (3) Monthly Pattern irSBillions of Dollars 1972--Jan. Feb. Mar. Apr. May

May 19

(FR)

1972

5-1/4

Narrow Money Supply (M1 )

Period

STRICTLY CONFIDENTIAL

Monetary Aggregates (Actuals and current projections, seasonally adjusted)

228.8 231.2 233.5

469.9 475.5 480.1 483.1 (486.9)

235.1

(236.0

U.S. Govt. Deposits

Total Time and Savings

Time deposits other than CD's

Negotiable CD's

Nondeposit Sources of Funds

(4)

(5)

(6)

(7)

(8)

364.9 366.7 372.1

6.3 3.7 6.1

376.4 (381.7)

7.4 (7.7)

274.4 278.1 279.9 282.8 (287.1)

241.2 244.3 246.5 248.0 (250.9)

33.2 33.8 33.4 34.7

4.0 3.6 3.7 3.5

(36.2)

(3.7)

8.2 15.9

14.7

Annual Percentage Rates of Change--Quarterly and Monthly 1971--3rd Qtr. 4th Qtr.

3.7 1.1

1972--Ist Qtr. 2nd Qtr.

9.3 ( 7.5)

13.3 (9.0)

(11.5)

14.8 (15.0)

17.1 (11.0)

3.2 12.6 11 .9 8.2 (4.5)

13.4 14.3 11.6 7.5 (9.5)

9.9 5.9 17.7 13.9 (17.0)

20.0 16.2 7.8 12.4 (18.0)

24.4 15.4 10.8 7.3 (14.0)

3.2 5.2 6.2 6.7 6.9

279.7 279.4 279.8 279.5 280.2

245.9 245.7 246.8 246.4 246.6

33.8 33.7 33.0 33.1 33.7

3.6 3.7 3.8 3.7 3.8

7.6 8.2 6.4 6.3

281.1 281.7 282.9 283.8

247.7 247.5 247.9 248.4

33.4 34.2 35.0 35.4

3.5 3.5 3.5 3.7

7.9 7.0 7.2

285.3 286.1 287.3

249.7

35.6 36.0 36.2

3.6 3.6 3.8

1972--Jan. Feb. Mar. Apr. May

4.4 8.0

Weekly Pattern in Billions 231. 4 232. 5 233.9

1972-- Mar.

477.3 478.1 480.7 480.2 480.0

233.8 233.4 Apr.

May

5 12 19 26 I3 17 pe

235.1

482.8 482.3

7.6 9.7 11.3

(

Dollars 368.3 369.9

372. 5 372.7 373.4

235.2

482.4 483.6

375.8 375.6 375.2 376.7

234.7 234.4 236.7

484.4 484.5 487.8

379.3 378.9 381.8

234.9 234.5

-~L___________

.

5.3

________

Data shown in parentheses are current projections. Annual rates of change other than those for the past are rounded to As shown in the April 14, 1972 Bluebook.

I

250.1 251.1 ,

pe--Partially estimated

NOTES: 1/

the nearest half per cent.

CONFIDENTIAL (FR)

Appendix Table I RESERVES AND MONETARY VARIABLES

Reserves

Period

Total

Nonborrowed

Money Stock Measures

Bank Credit Measures

M

M

Adjusted Credit Proxy

(5)

(6)

M2

(3) Annually:

(4)

May19, 1972

Other

Total Loans and Investments

Time Other than CD's

Total Time

Thrift Institution Deposits

CD's

(13) (12) (Dollar Change in Billions) (11)

(Per Cent Annual Rates of Growth)

1968 1969 1970 1971

+ + + +

7.8 3.2 5.4 6.2

+ 9.3 + 2.3 + 8.1 + 11.1

8.3 2.7 7.8

+ +

9.7 0.3

+

8.3

+ 11.0 + 3.9 + 8.1

+ 13.3

+

9.5

+

+ + +

U.S. Gov't. Demand

Nondeposit Funds

+ 11.3

+ 11.1

+

4.9 + 17.9 + 17.9

+ 1.4 + 11.0 + 16.2

+ 3.4 + 7.7 + 17.5

I- 14.5

+ 5.2 + 10.8

+

+ 6.0 + 15.6

+ 4.7 + 10.6

2.6 11.9

4- 21.2 + 10.1

+ 20.1 + 13.5

3.9 4.1

+ + + 4+

21.9 17.3 13.7 12.8 20.4

2.6 1.3 2.3 1.8 0.1

+ 26.0 + 28.3 + 26.5

+ 23.9 + 18.5

1.1 0.9 0.6

+ 22.5

11.3

6.4

-

2.8

2.6

-

0.1

+ 13.0 - 8.4

+

0.3

+

1.1

+

S12.6 7.9

-

7.6

-

4.6 2.6 0.4

-

0.3

-

Semi-Annually: 1st Half 1970 2nd Half 1970

+

0.4

+

5.6

+

+ 11.6

+

5.2

+ 10.1

+ 4.8 + 11.4

lst Half 1971 2nd Half 1971

+ +

+ +

10.0 2.4

+ 15.5 + 6.3

+

9.7

+ 11.5

+ 22.3

+

8.8

+ 10.6

+ 12.2

+ 10.9

+ 12.3

+

8.4

+

7.6

+ 10.3 + 9.7 + 11.1 + 15.1

9.6 4.7

5.8

8.4

+ 26.3

Quarterlv: 1st 2nd 3rd 4th 1st

1971:

1972:

Qtr. Qtr. Qtr. Qtr. Qtr.

1971 1971 1971 1971 1972

Jan, Feb. Mar.

+ 10.6 + 8.6 + 7.3

Apr. May June

+ 10.2 + 11.9

+ 12.8

+ 11.0

+ 14.1 + 20.7 + 18.7

+ 10.3

+

9.1

8.2 + + 14.1 + 9.1

+ 12.1 + 13.9 + 10.7

+ +

8.5 8.8

+

7.4

+

9.7

+ 16.0 + 13.6

+

7.7

+ 13.6

+ 11.8

+ + +

+ 10.7

+ 6.2 + 11.9 + 10.9

+

4.8

+

3.2

+ 22.9

+ 10.1 + 3.2 2.1

+

7.9

+ 13.8

-

2.8

+

0.5

+ 13.7

+ 13.0

+

2.0

+ 11.2

+ 11.9 + 6.2

+ 21.4

2.6

+ 13.0 + 17.0

+ 11.4

+

+ 23.1

+

3.2

3.7 + 13.3 + 22.9

4- 12.6

+

8.1

+

2.8

+ 13.4

+ 8.5 + 13.4 + 7.9

+ 16.9 + 9.9

July Aug. Sept.

+

4.4

+

4.1

+

+ 12.9

Oct. Nov. Dec.

7.4 + 3.4 + 10.7

Jan. Feb.

+ 20.2 5.9 + 15.8 + 23.4

Apr.

1~1

p -

+ 9.7 + 11.3

+ 11.7 + 8.4

Mar

NOTE:

+ 9.5 + 9.0 + 6.0 + 6.8 + 11.0

7.6 2.8

+ 11.9 +

8.2

I

7.5 2.9 2.9

+ 14.6

+ 16.7 + 10.3

4.1 7.9

+ 7.1 + 6.5 + 10.2

+

4.8

+ 13.1

+ 14.9

+ 13.4 + 14.3 + 11.6 + 7.5

+

+ 14.2 + 12.4 + 18.0

+ 24.4

+ 23.9

+ 15.4 + 10.8

+ 17.6

+

+

+ 15.8

9.9

+ 5.9 + 17.7 + 13.9

I

I

3.6

I

I

16,

1969,

I

1.1 0.4 0.8 1.1 0.5 1.2

+ 13.7

0.2 0.6 0.4 1.3

+ 18.8

7.3

and requirements

0.2 0.7 0.8

+ 12.9 + 15.8

+ +

Ntggra Reserve requirements on Eurodollar borrowings are included beginning OctOber included beginning October 1, 1970.

Preliminary.

+ 22.1

(

I

on bank-related commercial

I

I

paper are

6.3

CONFIDENTIAL (FR)

Appendix Table II RESERVES AND MONETARY VARIABLES (Seasonally adjusted, Billions of dollars)

Total

Period Annually: Dec. 1968 Dec. 1969

Nonborrowed. Total

Prv't Dep.

M2

M3

(5)

(6)

(3)

(4)

26.471 26.829

197.4 203.7

154.0 157.7

378.0 368.8

(1)

(2)

27.249 27.977

Bank Credit Measures

Money Stock Measures

Reserves

May 19, 1972

Adjusted Credit Proxy

Total Loans and Investments

(7)

(8)

Other

(9)

(10)

(11)

CD's (12)

NonDeposit Funds (13)

Total Time

Time Other than CD's

Thrift Institution Deposits

U.S. Gov't. Demand (14)

572.6 588.3

304.6 305.4

390.6 406.0

204.2 194.1

180.6 183.2

194.6 201.5

23.6 11.0

7.0 20.0

5.1 5.3

Monthly: 28.037

27.227

209.4

161.7

398.1

603.0

312.8

416.5

202.3

188.7

204.9

13.6

20.7

5.7

July Aug. Sept.

28.315 28.695 29.059

27.060 27.907 28.438

210.3 211.6 212.8

162.4 163.5 164.5

401.7 405.6 409.2

608.4 613.9 619.1

318.2 322.5 324.3

422.5 427.5 429.5

208.4 213.2 217.7

191.4 193.9 196.4

206.6 208.4 209.9

17.0 19.3 21.3

19.8 18.8 16.5

5.5 5.7 5.8

Oct. Nov. Dec.

28.700 28.704 29.132

28.190 28.239 28.764

213.1 213.6 214.8

164.8 164.9 165.8

412.1 414.3 418.2

623.9 627.9 634.0

324.8 326.5 330.6

430.6 433.1 438.9

221.5 224.2 228.9

198.9 200.6 203.4

211.8 213.6 215.8

22.6 23.6 25.5

14.2 12.7 11.6

5.2 6.2 6.4

1971--Jan. Feb. Mar.

29.390 29.600 29.779

28.958 29.240 29.445

215.3 217.7 219.7

166.0 168.0 169.7

423.1 430.4 437.1

642.2 653.4 663.9

333.4 336.7 339.6

443.6 449.0 452.4

234.4 240.2 245.4

207.8 212.7 217.4

219.2 223.0 226.8

26.6 27.5 28.1

10.1 8.6 7.0

5.8 4.9 4.0

Apr. May June

29.991 30.327 30.527

29.859 30.106 30.106

221.2 223.8 225.5

170.7 173.0 174.5

441.5 446.6 450.6

672.5 681.0 687.8

342.0 344.5 346.7

455.2 458.9 464.1

248.1 251.3 254.4

220.3 222.8 225.0

231.0 234.4 237.2

27.8 28.5 29.4

5.1 4.1 4.5

5.6 5.4 4.3

July Aug. Sept.

30.639 30.743 31.073

29.915 29.985 30.556

227.4 228.0 227.6

175.8 176.3 175.5

453.4 454.5 455.6

693.8 697.6 701.2

349.8 351.0 353.3

466.5 471.1 475.4

256.4 257.3 259.6

225.9 226.5 228.0

240.4 243.1 245.6

30.4 30.8 31.6

4.3 3.9 4.1

5.1 5.7 6.6

Oct. Nov. Dec.

30.882 30.970 31.246

30.485 30.535 31.079

227.7 227.7 228.2

175.5 175.5 175.7

458.3 460.8 464.7

706.5 711.6 718.1

354.7 358.0 361.9

480.1 482.6 488.6

263.3 265.3 269.9

230.6 233.1 236.4

248.3 250.8 253.4

32.7 32.2 33.4

4.8 5.4 4.0

4.7 5.4 6.2

1972--Jan. Feb. Mar.

31.772 31.616 32.032

31.678 31.580 31.931

228.8 231.2 233.5

176.0 178.0 179.9

469.9 475.5 480.1

727.3 737.4 745.9

364.9 366.7 372.1

494.4 499.5 507.0

274.4 278.1 279.9

241.2 244.3 246.5

257.4 261.8 265.8

33.2 33.8 33.4

4.0 3.6 3.7

6.3 3.7 6.1

Apr.

32.657

32.541

235.1

181.1

483.1

752.8

376.4

508.5

282.8

248.0

269.6

34.7

3.5

7.4

2 9 16 23

31.797 31.473 31.695 31.519

31.778 31.427 31.678 31.505

229.8 230.3 231.2 232.2

176.9 177.2 178.0 178.8

472.2 473.3 475.6 477.2

365.1 365.7 366.9 367.2

:

275.8 276.5 278.2 279.3

242.4 243.0 244.4 245.0

33.5 33.8 34.3

3.8 3.7 3.7 3.6

4.8 5.1 3.8 3.0

1 8 15 22 29 5 12 19 26p

31.744 31.709 32.164 31.650 32.466 32.655 32.526 32.615 32.889

31.666 31.598 32.151 31.538 32.307 32.519 32.512 32.568 32.613

231.4 232.5 233.9 233.8 233.4 235.1 234.9 2345 235.2

178.2 179.0 180.2 180.1 179.5 181.1 181.0 180.4 181.0

477.3 478.1 480.7 480.2 480.0 482.8 482.3 482.4 483.6

279.7 279.4 279.8 279.5 280.2 281.1 281.7 282.9 283.8

245.9 245.7 246.8 246.4 246.6 247.7 247.5 247.9 248.4

33.8 33.7 33.0 3.1 33.7 33.4 34.2 35.0 35A

3.6 3.7 3.8 3.7 3.8 3.5 3.5 3.5 3.7

3.2 5.2 6.2 6.7 6.9 7.6 8.2 6.4 6.3

3p 10p

32.556 32.667

32.443 32.585

234.7 234,4

180.6 180.0

484.4 484.5

285.3 286.1

249.7 250.1

i35.6 36.0

3.6 3.6

7.9 7.0

1970--June

Weekly:

1972--Feb.

Mar, Mar,

Apr.

May

NOTES:

;

368.3:: ii :

ii i

!ii i

368.3 369.9 372.5 372.7 373.4 375.8 375.6 375.2 376.7 379.3 378.9

; : i

iiiiiiii !

if iiiiiil i

iiiIiiiiil illl

............

:::::::::::::::::

iiiiiiii33.4 ijii i ii !iii i .i.;: ....... :

:::::::::: I ....... i3::: ::

:: .... ......... :: iiiiiiiiiiii i H iiiii ...

iiiiii !ff!i!i!! 1 p::::::: .: ' ii

__

_

Reserve requirements on Euro-dollar borrowings are included beginning October 16, 1969, and requirements on bank-related commercial paper are included beginning October 1, 1970. Adjusted credit proxy includes mainly total member bank deposits subject to reserve requirements, bankrelated commercial paper, and Euro-dollar borrowings of U. S. banks. Weekly data are daily averages for statement weeks. Monthly data are daily averages except for nonbank commercial paper figures which are for last day of month. Weekly data are not available for M , total loans and investments and thrift institution deposits.

p - Preliminary.