Bluebook
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1
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Content last modified 6/05/2009.
(CONFIDENTIAL
FR)
December 15,
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
CONFIDENTIAL (FR)
December 15,
1972
MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) The money supply aggregates now appear to be growing at annual rates about 1-1/2 and 1 percentage points in excess of the Committee's November-December ranges of tolerance, below.
as shown in
the table
However, during most of the interval, growth rates appeared to be
running at or only slightly above their acceptable ranges.
During
November, growth in M1 was at about a 6-1/2 per cent annual rate--nearly double the low October rate.
While growth in M2 was at about the same
rate as in October, it too was at a faster pace than desired. 1/ It is possible that the recent strength in the money supply partly reflects Growth in Money and Credit Aggregates and RPD During November-December Period (SAAR in Percentage Points) Ranges of Tolerance
Current Estimates
RPD
6-10
13
M1
4-7
8-1/2
M
5-8
9
MEMO: Federal funds 4.75--5.-50 5,29 Week ending December 13 1/ More detail on recent changes in the reserve and monetary aggregates is provided by Tables 1 and 2 attached at the end of the Blue Book and in Appendix 1.
technical problems of measurement and seasonal adjustments flowing from the change in this
Regulation J,
although our adjustments made for the effects of
change: appear to us to be reasonably accurate.
The most likely
explanation of the overshoot would seem to be that money growth is again beginning to respond in a more nearly usual relationship to the rapid rate of economic expansion. (2)
Intermeeting
estimates of the growth in RPD's during
the November-December target period have been substantially above the Committee's 6-10 per cent range of tolerance, with the most recent estimate close to a 13 per cent annual rate.
However, about 3 percentage points
of this overshoot reflects an increase in the reserve multiplier, as deposit growth has been greater than anticipated at large banks subject to high marginal reserve requirements and less than anticipated at smaller banks (including our estimates for non-member banks). The recent regulatory changes have made the multiplier unusually difficult to predict. (3)
As evidence developed that the monetary aggregates were
tending to run near the top or above the Committee's ranges of tolerance, the Desk provided RPD's more reluctantly. borrowing rose substantially over the bidding for Federal funds intensified.
As a result, member bank
intermeeting period,
From the 5 per cent level pre-
vailing at the time of the last Committee meeting, funds rate rose in cent.
and bank
the average Federal
successive statement weeks to 5.03,
5.17,
and 5.29 per
Most recently, funds have traded around 5-1/2 per cent, the upper
limit of the Committee's range of tolerance.
(4)
The advance in the Federal funds rate was accompanied by
rate increases ranging generally from 10 to 30 basis points in short-term markets and from 5 to 20 basis points in longer-term markets.
The rate
on the 3-month Treasury bill reached a high of around 5.10 per cent in the most recent auction held today--roughly 30 basis points above the level prevailing at the time of the last meeting.
The Treasury has just
announced the offering of a $2 billion, 2-year, 5-7/8 per cent note to be auctioned December 20 and paid for December 28.
In addition, it reveal-
ed plans to offer $500-$750 million of 20-30 year bonds in early January. (5)
The table on the following page compares recent changes
in the money and credit aggregates (at seasonally adjusted annual rates) with those for selected earlier periods.
Most Recent two Calendar Years Dec. '71 over Dec. '69
Past Year Nov. '72 over Nov. '71
Total Reserves
6.9
10.1
7.8
8.8
11.5
Nonborrowed Reserves
9,0
9.6
4.5
5.4
9.3
Reserves available to support private nonbank deposits
8.3
9.1
9.2
10.1
13.7
M1 (currency plus demand deposits) 1/ 6.0
7.0
6.9
5.2
6.4
13.0
10.3
9.1
7.9
7.6
11.0
12.6
11.2
10.0
9.1
9.3
11.7
9.7
10.4
11.8
10.2
14.4
12.8
14.8
20.6
22.4
9.1
5.0
2.0
0.6
Past 6 Months Nov. '72 over May '72
Past 3 Months Nov. '72 over Aug. '72
Past Month Nov. '72 over Oct. '72
Concepts of Money
M2 (M1 plus time deposits at commercial banks other than large
CD's) M3
(M2 plus deposits
at thrift institutions)
Bank Credit
Total member Lank 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 0.3 2.3 -0.1 0.8 -0.4 1/ Other than interbank and U. S. Government. 2/ 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 investment of commercial banks, commercial paper, and thrift institutions--which are either end-of-month or last Wednesday of month figures.
Prospective developments (6)
Three alternative sets of relationships among monetary
aggregates and money market conditions (with figures for aggregates representing seasonally adjusted annual rates of growth) are shown in summary form below for FOMC consideration.
More detailed monthly and
quarterly figures are shown in the table on the following page. Alt. A
Alt. B
Alt. C
Longer-run targets for aggregates(represented by average growth rates for first half of 1973) 1/
7% 5-1/2
7-1/2 Credit Proxy
7 7-1/2
RPD
6-1/2 7
5 5
Associated range for December '72-January '73 Nonborrowed RPD
6-1/2--10-1/2
2-6
RPD
8-1/2--12-1/2
8-12
7-11
M1
7-1/2--10-1/2
7-10
6-9
M2
8-11
Federal funds rate 1/
10-14
4-7/8--5-1/2
Rounded to nearest 1/2 per cent.
7-1/2--10-1/2
5-1/8--5-7/8
7-10 5-3/8--6-1/4
Alternative Longer-Run Targets for Key Monetary Aggregates M1
M2
Adjusted Credit Proxy
Alt. A
Alt. B
Alt. C
Alt.
245.6
512.5
512.5
512.4
247.1
246.8
516.2
515.9
250.3
250. 1
249.3
522.7
254.4
253.5
251.8
532.1
Alt. A
Alt.
1972 Dec.
245.7
245.7
1973 Jan.
247.2
March June
B
Alt.
C
Alt. B
Alt.
401.1
401.1
401.0
515.4
403.2
403.0
402.5
522.4
520.5
406.8
406.7
405. 1
530.8
526.5
415.4
414.7
411. 7
A
C
Quarters 1972 4th Q.
7.0
7.0
6.5
Rates of Growth 8.5 8.5
8.5
8.5
8.5
8.5
1973 1st Q. 2nd Q.
7.5 6.5
7.0 5.5
6.0 4.0
8.0 7.0
6.5 4.5
5.5 8.5
5.5 8.0
4.0 6.5
1972 Dec.
10.5
10.5
10.0
10.0
10.0
10.0
5.0
5.0
5.0
1973 Jan.
7.5
7.0
5.5
8.5
8.0
7.0
6.5
5.5
4.5
7.5 6.5
Months
Total Reserves A
RPD Alt. B
Alt. C
31,240
28,790
28,785
28,782
31,151 31,133 33,049
31,089 30,986 31,797
29,037 29,370 29,884
29,008 29,328 29,799
29.947 29,182 29,547
13.0 -1.5 12.0 11.5 -3.5
13.0 -3.5 10.5 11.5 -6.0
9.5 8.0 7.0 12.0 10.5
9.5 7.5 6.5 12.0 9.5
9.5 5.5 5.0 11.5 7.0
Alt. A
Alt.
1972 Dec.
31,248
31,243
1973 Jan. March June
31,181 31,176 32,150
Quarters 1972 4th Q. 1973 let Q. 2nd Q. Months: Dec. 1972 Jan. 1973
B
Alt.
C
Alt.
Rates of Growth 13.0 -1.0 12.5 12.0 -2.5
(7)
The December-January ranges of tolerance for the aggregates
range above the associated longer-run targets.
Accordingly, the Committee
may wish to specify that shortfalls of some dimension should not be taken as indicating a need to provide reserves more actively to ease money market conditions.
The 2-month ranges are high mainly because of the substantial
increase of the monetary aggregates that seems already in train for December; the January growth rates for M 1 are indicated to be closer to longer-run targets.
Also, in both December and January the $5.4billion of revenue
sharing payments may have a transitory effect in increasing growth in M 1 for any given level of interest rates. (8) The three alternatives shown for longer-run targets include annual rates of growth in M 1 for the first half of 1973 of 7, 6, and 5 per cent.
This is the same range of targets as presented to the FOMC at its
previous meeting.
At that meeting, the Committee adopted a longer-run target
path for the aggregates (for the fourth quarter of '72 and first quarter of '73 combined) as indexed by M 1 growth of 6 per cent. noted earlier, have indicated that M desires.
Recent figures, as
growth is strong relative to Committee
We expect that growth in M 1 for the fourth quarter of 1972 will be
about 7 per cent, give or take 1/2 of one percentage point. (9) None of the paths presented indicates a first quarter growth rate for M1 consistent with a 6 per cent average growth rate for the fourth and first quarters combined.
To achieve that objective the required first
quarter growth would have to be at around a 5 per cent annual rate.
The
staff believes that efforts to obtain such a growth rate would lead to a
-8very sharp rise in the funds rate during the winter, followed by a drop in the funds rate during the spring unless the Committee were willing to tolerate considerably slower growth rates in the aggregates as the year progressed. (10)
Of the alternatives presented,
a 5 per cent M 1 target for the first
alternative C--which encompasses
half of 1973--does involve a slowing of
M1 growth that eventually compensates for recent overshoots. factors affecting money demand,
the slowing of M1 growth is
most marked in the second quarter.
Because of indicated to be
In that period, money demand is expected
to be moderated by disappearance of the transitory upward effect on M 1 of unusually large tax refunds in late winter and early spring.
In addition,
demand for money would be reduced,with a lag, by the substantial rise of interest rates indicated for that alternative.
It is thought that attainment
of the alternative C aggregate targets would be accompanied by a rise in
the
Federal funds rate to around 6 per cent over the next few weeks, with perhaps some modest further increase developing later in the winter. (11) the first
Alternative B encompasses a 6 per cent M1 growth rate over
half of 1973,
while alternative A involves a 7 per cent rate.
The 6 per cent target appears consistent with little further change in money market conditions, but the higher target would seem to involve some easing. In any event, money demand is likely to be weaker in the second quarter than the first, partly because of the effect of the tax refunds noted in the previous paragraph.
In addition,
under alternative B, Treasury bill
and other
short-term market rates are likely to rise a bit over the first quarter, even given prevailing money market conditions, demand later.
and thereby work to retard money
-9(12)
Over the next few weeks, because the market has not yet
adjusted to a 5-1/2 per cent Federal funds rate, persistence of the rate around that level could lead to a rise in the 3-month bill to around 5-1/4 per cent.
However, bill purchases by the public in recent days, partly
related to revenue sharing, have improved the technical position of the bill market and may moderate very near-term rate adjustments.
A movement of
the Federal funds rate above 5-1/2 per cent--as would be contemplated under alternative C and is possible under alternative B--would set off larger short-term market rate adjustments. become more pressing.
Questions about the discount rate would
And if the funds rate were to penetrate the 6 per cent
level, the accompanying rise in short-term market rates could bring into question the substainability of ceiling rates on consumer-type time deposits as net inflows of such deposits decelerated markedly. (13)
Long-term interest rates may show only little, if any,
increase under alternative B in view of the moderate size of long-term credit demands.
The more substantial rise in short rates anticipated under
alternative C, however, probably would exert considerable pressure on longer-term markets.
This would be expected on anticipatory grounds alone,
but would be reinforced as unfavorable rate relationships put savings inflows to banks and other institutions increasingly under downward pressure.
-10-
Proposed directives (14)
Presented below are three alternative formulations for
the operational paragraph of the directive, which might be taken to correspond to the similarly lettered policy alternatives discussed in the preceding section.
In all three alternatives a reference to
Treasury financing operations is proposed in light of the forthcoming auction of $2 billion in notes and the announced plans for a 20-30 year bond offering in early January.
Deletion of the reference to
bank regulatory changes is suggested on the grounds that banks have adjusted to the new regulations.
For alternatives B and C, a reference
to credit market developments is suggested should the Committee wish to take account of the possible reaction to a further rise in the funds rate while the market is still adjusting to the rise that has already occurred. Alternative A To implement this policy, while taking account of TREASURY FINANCING OPERATIONS the regulatory bank recent of effects [DEL: changes], the Committee seeks to achieve bank reserve and money market conditions that will support [DEL: moderate] more gates over the months ahead [DEL: quarter] third the in recorded than
growth in monetary aggreAT
ABOUT THE RATES THAT APPEAR INDICATED FOR THE SECOND HALF OF THIS YEAR. Alternative B To implement this policy, while taking account of TREASURY FINANCING OPERATIONS the changes] regulatory bank recent of effects [DEL:
-11-
AND POSSIBLE CREDIT MARKET DEVELOPMENTS, the Committee seeks to achieve bank reserve and money market
conditions that will
support [DEL: more] moderate growth in monetary aggregates over the months ahead [DEL: quarter]. third the in recorded than Alternative C To implement this policy, while taking account of TREASURY FINANCING OPERATIONS the regulatory bank recent of effects [DEL: changes] AND POSSIBLE CREDIT MARKET DEVELOPMENTS, the Committee seeks to achieve bank reserve and money market conditions that will support [DEL: moderate] more
SLOWER growth in monetary aggregates
over the months ahead than recorded quarter] third the in [DEL: INDICATED FOR THE SECOND HALF OF THIS YEAR.
APPEARS
CHART 1
STRICTLY CONFIDENTIAL(FR)
12/15/72
RESERVES AVAILABLE TO SUPPORT PRIVATE NONBANK DEPOSITS BILLIONS OF DOLLARS
-133
-31
growth for -Dec.
-127
L J
S 1971
D
M
J 1972
S
D
I
S
N 1972
*Break in Series; Actual Level of RPO After Reduction in Reserve ReqJrements Effective November 9, 1972. **RPD Adlusted to Remove Discontinuty Introduced by Reduction in Reserve Requirements
D
J
1973
CHART 2 12/15/72
MONETARY AGGREGATES NARROW MONEY SUPPLY M1
BILLIONS OF DOLLARS
L^-
240
7% growth for Nov
/
- 40
-220
f<
BROADER MONEY SUPPLY M2
(12/13.71
8% growth for
growth
1971
1972
A
S
0 N 1972
0
J 1973
CHART 3
STRICTLY CONFIDENTIAL (FR) 12/15/72
MONETARY AGGREGATES ADJUSTED CREDIT PROXY
BILLIONS OF DOLLARS
400
-380
112/13/72) 3160
1111
1
;
TOTAL RESERVES
/13/72)
i J
Ij
j 1971
Ii
(12/13/72)
/
i 1972
A
S
0 1972
1 N
*Break in Series, Actual Level of Total Reserves After Reduction in Reserve Requirements Effective November 9, 1972
0
J '73
CHART 4
MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDITIONS
PER CENT
INTEREST RATES Short-term
--
^
^"^^"
INTEREST RATES Long-term
WEEKLY AVERAGES
FEDERAL MUNICIPAL Aaa WEDNESDAY -----
GOVERNMENT BONDb
''-"
FRESERVES
BILLIONS OF DOLLAI
BORROWED
I
A~t~
*j,
20 YEAR AVERAGES
\
i v
,
I
"'
-
-
NET BORROWED
_L197
1971
1
II
1972II ll
1972
1971
1972
1971 1971
II
1972I 1972
PER CENT
Table 1
STRICTLY CONFIDENTIAL (FR) December 15,1972
Bank Reserves
Period
1972--July Aug. Sept. Oct. Nov. Dec.
30,365 30,555 30,903 30.975 29,313 (28,785)
Annual Rates of Change 1971-*4th Qtr. 1972--1st 2nd 3rd 4th
Qtr. Qtr. Qtr. Qtr.
1972--July Aug. Sept. Oct. Nov. Dec. Nov. -Dec. 1/
Weekly. 1972--Aug.
Reserves Availale for Private Nonbank Deposits Seasonally Adjusted Not Seasonally Adjusted Actual Actual and and Projected Projected (2) (1)
2 9 16 23
30,166 30,253 30,615 30,844 29,372 (29,074)
Aggregate Reserves
Total Reserves (3) 33,138 33,382 33,360 33,788 31,843 (31,243)
Required Reserves Seasonally Adjusted Time Nonborrowed Private and Reserves Demand Nondeposits (6) (4) (5) 32,924 33,016 32,802 33,205 31,191 (30,511)
21,052 21,131 21,306 21,248 19,396 (18,866)
9,136 9,249 9,408 9,491 9,572 (9,708)
6.8
4.8
2.2
0.5
16.4
10.8 7.1 10.0 (9.5)
10.1 12.8 3.6 (12.5)
11.0 13.0 -2.0 (12.0)
6.8 4.0 8.3 (8.0)
18.0 14.2 15.4 (11.5)
8,6 7.5 13.7 2.8 13.7 (12.0) (13.0)
2.9 8.8 -0.8 15.4 11.5 (11.5) (11.5)
-1.6 3.4 -7.8 14.7 9.3 (9.0) ( 9.0)
10.2 4.5 9.9 -3.3 9.0 (17.0) (13.0)
10.2 14.8 20.6 10.6 10.2 (17.0) (13.5)
U.S.
Gov't. and Interbank (7) 2,774 2,826 2,457 2,813 2,530 (2,458)
30,570 30,434 30,563 30,278 30,822
30,373 30,075 30,421 30,027 30,368
33,340 33,368 33,481 33,090 33,544
33,014 33,124 33,125 32,750 33,043
21,149 21,118 21,066 21,048 21,264
9,176 9,217 9,244 9,253 9,293
2,770 2,934 2,917 2,812 2,722
Sept. 6 13 20 27
31,397 30,457 31,025 30,794
30,869 30,104 30,763 30,644
33,775 32,765 33,370 33,398
32,938 32,617 32,586 32,815
21,285 21,277 21,414 21,249
9,331 9,412 9,417 9,445
2,378 2.308 2,345 2,604
Oct.
4 11 18 25
30,925 31,099 30,772 31,076
30,890 30,661 30,891 30,771
33,806 33,828 33,802 33,764
33,379 33,276 33,388 32,837
21,293 21,230 21,241 21,258
9,443 9,461 9,505 9,492
2,882 2,728 3,029 2,688
Nov.
1 8 15 22 29
30,984 30,991 29,203 28,118 28,763
31,056 30,870 29,512 28,136 28,820
33,741 33,788 31,966 30,630 30,807
33,141 32,742 31,474 30,147 30,202
21,236 21,320 18,998 18,247 18,826
9,539 9,555 9,554 9,576 9,598
2,757 2,796 2, 763 2,512 2,044
Dec.
6 13
28,878 28,664
28,748 28,767
31,208 31,200
30,579 30,291
18,913 18,774
9,656 9,673
2,329 2,536
30
NOTE: Data shown in parentheses are current projections. 1/ At the FOMC meeting November 21, 1972 the Committee agreed on an RPD range of 6 to 10 per cent.
Table 2
STRICTLY CONFIDENTIAL (FR)
Monetary Aggregates (Actual and current projections, seasonally adjusted)
Narrow Mononey Supply (M)
Per id
Broad ney Supply (M2)
Adjusted Credit Proxy
U.S. Govt. Deposits
(1) (2) (3) Monthly Pattern in Billions of Dollars 1972--July Aug. Sept. Oct. eNov. Dec.
239.4 240.5 241,6 242.3 243.6 (245.1)
495.0 498.3 501.8 505.0 508.2 (512.5)
(4) 5.3 4.6 5.3 6.1 7.8 (5.3)
386.3 389.3 392.6 395.5 399.4 (401.1)
Total Time and Savings
Time deposits other than CD's
(5)
(6)
293.7 297.1 300.5 303.4 305.9 (310.0)
255.6 257.7 260.2 262.7 264.6 (266.8)
December 15, 1972
Negotiable CD's
Nondeposit Sources of Funds
(7)
(8)
38.1 39.3 40.3 40.7 41.3 (43.2)
3.9 4.2 4.1 4.3 4.3 (4.4)
Annual Percentage Rates of Change-quarterly and Monthly 1971--4th Qtr. 1972--let 2nd 3rd 4th
Qtr. Qtr. Qtr. Qtr.
1972--July Aug. Sept. Oct. Nov. Dec. Nov.-Dec.
1.1
8.0
9.7
9.3 5.3 8.5 (7.0)
13.3 8.6 9.3 (8.5)
11.3 11.1 10.7 (8.5)
14.2 5.5 5.5 3.5 6.4 (10.5) (8.5)
11.3 8.0 8.4 7.7 7.6 (10.0) (9.0)
12.2 9.3 10.2 8.9 11.8 (5.0) (8.5)
iii H:i::'li
i
il!
iliii iiiii iiiiiii ii.ii ili iiiliili iiiiiliiiiii i il ifil :
15.9
14.7
14.8 15.7 13.2 (iiiiiiii 12.5)
17.1 11.8 10.1 (10.0)
11.6 13.9 13.7 11.6 9.9 (16.0) (13.0)
8.5 9.9 11.6 11.5 8.7 (10.0) ( 9.5)
:::::;::::::; ::::::::::: ;::: ::::: ::
:::::::::::::::;:: ............ ...... ......
Weekly Pattern in Billions of Dollars 7
19 2--Aug. 2 9 16 23 30
NOTES:
239.7 240.1 240.9 240.5 241.2
496.2 497.1 498,6 498.3 499.8
387.5 388.2 389.8 388.7 390.1
5.5 6.0 5.6 3.1 3.4
295.1 295.6 296.5 297.6 298.9
256.5 257.0 257.7 257.8 258.5
38.6 38.6 38.8 39.7 40.4
4.1 4.1 4.1 4.4 4.1
Sept. 13 20 27
242.6 241.5 241.6 241.1
502.2 501.2 501.6 501.5
390.9 391.9 393.2 392.4
4.4 4.9 5.9 4.7
299.4 300.1 300.3 301.2
259.6 259.8 259.9 260.4
39.7 40.4 40.3 40.8
4.0 4.1 4.1 4,2
Oct. 4 11 18 25
241.8 242.7 242.2 242.3
504.0 504.8 504.9 505.4
395.1 394.0 394.6 396.3
6.7 5,2 5.2 6.0
302.6 302.6 303.8 304. 1
262.2 262.1 262.7 263.0
40.4 40.5 41.0 41.0
4.2 4.1 4.2 4.5
Nov.
I 8 15 22 29 p
242.1 242.7 244.3 244.3 242.8
505.4 506.0 508.5 509.4 508.3
397.5 397.7 396,6 400.4 400.9
7.2 8.0 5.5 7.0 8.8
303.9 304.4 305.1 306.7 307.3
263.4 263.3 264.3 265.1 265.5
40.6 41.1 40.8 41.6 41.8
4.6 4.0 4.3 4.4 4.4
Dec.
6 p 13 pe
246.1 245.2
512.2 511.6
402.8 401.9
7.8 7.4
308.4 309.4
266.0 266.4
42-3 43.1
4.3 4.4
.II flL S A ......................... Data shown in parentheses are current projections. pe - Partially estimated. Annual rates of change other than those for the past are rounded to nearest half per cent.
STRICTLY CONFIDENTIAL (FR) DECEMBER 15, 1972
Table 3 RESERVE EFFECTS OF OPEN MARKET OPERATIONS AND OTHER RESERVE FACTORS (Millions of dollars, not seasonally adjusted)
Bills & Accept.
Open Marke.t Operations 1/ Coupon Agency RP' s3/ Ttal
Daily Average Reserve Effect 2/ . Open Market AMember Other 4/ Operations
Bank Borrowing
Factors
(6)
(7)
(8)
Ain reserve categores . req. res. against available res. 5/ U.S,G. and interb. (6)+(7)+(8)-(9) (10) (9)
.aret available
Issues
Issues
(1)
(2)
(3)
(4)
Monthly 1972 - June
748
110
127
-1,205
-221
201
-25
-449
-315
42
15
July
-543
--
-26
--
-570
463
108
- 89
145
337
360
Aug. Sept. Oct. Nov. Dec.
-906 -158 Ill -548
116 -116 -51
- 3 -35 -22 157
816 -816 --- 22 -1,009 205 -442
135 1,370 -378 ,l,76 6p
-60 -403 485 -47 7 p
194 232 320 -1,483p
221 444
-116
-20 --
2,155 -1,380
2,357 -819
993 337
-201 -457
432 208
246 -229
1973 -
Net
(5)
-238 -1,617 1,124 -22 6 p
237 76 59 32p
-114 99
18
-119
--
--
-638
-757
-428
-101
917
158
25
-238
--
- 2
1,989
1,749
-186
331
-688
-423
-120
Nov. I 8
- 75 3
--- - 9 --
-1,028 1,084
-1,111 1,081
117 600
-210 404
242 -1,014
-136 176
285 -186
15 22
- 26 -415
-51 --
-166
-3,311 2,259
-3,389 2,010
-599 -307
-465 -75
-498 -1,211
-204 -217
29
-105
--
-694
-799
-219
I/ 2/ 3/ 4/ 5/
(11)
100 405 335 -760 -255
Tan
Weekly Oct. 4 11
Dec.
reserves 5/
6
229
-
13 20 27
288
--
--- -14
153p
193
422
671p
15p
1,939
2,213
-42 8p
22 0p
2
-
2
7 p
47
1p
287 p
4 8
- 7 p 31
230
-1,358 -1,376 684p
9p
-104p
60p
19p
Represents change in System's portfolio from end-of-period to end-of-period; includes redemptions in regular bill auctions. Represents change in daily average level from preceding period. Includes matched sale-purchase transactions as well as RP's. Sum of changes in vault cash, currency ih circulation, Treasury operations, F.R. float, gold and foreign accounts, and other FR accounts. Reserves to support private nonbank deposits. Target change for November and December reflects the mid-point of the target range adopted at the November 21, 1972 FOMC meeting. Target change for previous months reflects the bluebook patterns that are consistent with the mid-points of target ranges that were adopted during the month,
STRICTLY CONFIDENTIAL (FR)
DECEMBER 15, 1972 Table 4 SECURITY DEALER POSITIONS AND BANK RESERVES Millions of Dollars
U.S. Govt. Security Dealer Positions Bills Coupon Issues
Period
Other Security Dealer Positions Corporate Municipal Bonds Bonds (3) (4)
(1)
(2)
1971 -- High Low
4,733 1,350
2,834 343
337 0
556 30
1972 -- High
4,291
1,585
235
1,916
-93
0
1971 -- Nov.
2,417
2,462
Dec.
2,544
1,761
1972 -- Tan. Feb. Mar.
3,004 2,408 3,489
Apr. May June July Aug. Sept.
Member Bank Reserve Positions Excess Reserves (5)
Borrowings at FRB (6)
590 -61
1,180 84
365
796
40
-133
201
328
170
251
1,416 1,176 604
135 149 101
2,612 2,792 2,694
274 675 205
2,262 2,643 4,099
Net Free Reserves (7)
Basic Reserve Deficit 8 New York 38 Other (8) (9)
202 -988
-4,714 -1,545
-5,499 -2,569
959
380
-5,635
-4,833
12
-835
-1,638
-1,910
263
407
-144
-3,056
-4,063
165
107
50
-2,791
-4,375
206 136 185
173 124 249
20 33 99
153 91 150
-2,667 -3,203 -3,208
-4,192 -3,072 -3,522
46 123 87
99 134 260
136 104 204
109 119 94
27 -15 110
-3,026 -2,625 -2,828
-3,299 -2,652 -2,864
97 692 170
142 114 53
166 176 174
147 255 162
202 438 514
-55 -183 -352
-2,945 -3,913 -3,835
-2,603 -2,801 -4,024
2,887 *3,096
207 *1,039
105 84
132 191
247 418p
574 606p
-347 -188p
-3,637 -4,561
-4,044 -3,622
1972 -- Oct. 4 11 18 25
3,507 2,904 2,452 2,734
170 60 197 282
51 59 145 235
51 166 193 149
230 358 109 150
436 535 434 765
-206 -177 -313 -615
-3,248 -4,292 -4,319 -2,900
-3,354 -4,822 -4,445 -3,858
Nov. 1 8 15 22
3,114 2,520 2,531 *3,116
328 1,095 1,117 *1,079
0 31 36 121
173 254 126 136
205 124 786 189
555 959 494 419
-350 -835 292 -230
-3,272 -4,475 -4,902 -4,727
-3,225 -3,676 -3,707 -3,281
29
*4,158
*1,001
174
249
572p
-218p
-4,329
-3,709
Low
Oct. Nov
Dec. 6 13 20 27 :L
Noces:
e..o . .
*3,899 *3,564
.
* *
-
938 975
-- l
85 75p
--
-
--- ..
.
3
322 36 5p
s..
-- a&
t -
4
5 p
310p 243p
J
-- J
.
.
587p 807p
.
.
4
-277p -564p
..-1
J
.
...
4
- ,28 p -5,635p
.•I
_
t
.
.
Government Security uealer trading positions are of a colmtitment oasis. Lrading posil ons, wnicn excLuoe Ireasury Dills rlnance agreements maturing in 16 days or more, are indicators of dealer holdings available for sale over the near-term. Other security The basic reserve deficit is excess reserves less borrowing at 'n syndicate, excluding trading positions. are debt issues still Weekly data are daily averages for statement weeks, except for corporate and municipal issues less net Federal funds purchases.
are Friday figures. *STRICTLY CONFIDENTIAL
-4,497p -4,707p
oy repurcnase dealer positions Federal Reserve in syidicate which
CONFIDENTIAL (FR) DECEMBER 15, 1972
Table 5 SELECTED INTEREST RATES Per Cent
...
Short-term
Periods
Treasury bills 9T-day [ -year -year -day
Federal Funds (1)
(3)
(2)
New IsMunicipal Ut ey* Aaa Utility*
90-119 day 90-119 day Commercial CD's PoFeerale-nd Prie-NYC Paper I
(4)
Lon -term
_
BMnniBuper Bond Buyer
S. Gov't. (10-Yr. Constant Maturty
FNMA Auction Yi Yields
Maturlty
Pri-NYC
(5)
(6)
(7)
(8)
(9)
1971 -- High Low
5.73 3.29
5.47 3.32
5.94 3.53
5.88 4.00
5.75 3.63
8.26 7.02
6.23 4.97
6.89 5.42
8.07 7.32
1972 -- High Low
5.29 3.18
5.05 3.03
5.52 3.60
5.28 3.75
5.25 3.50
7.60 6.99
5.54 4.96
6.58 5.87
7.72 7.54
1971 -- Nov. Dec.
4.91 4.14
4.22 4.01
4.49 4.40
4.85 4.66
4.78 4.58
7.38 7.28
5.20 5.21
5.81 5,93
7.71 7.62
1972 -- Jan. Feb. Mar.
3.50 3.29 3.83
3.38 3.20 3.73
3.82 4.06 4.43
4.03 3.81 4.10
3.81 3.53 3.98
7.21 7.34 7.24
5.12 5.29 5.31
5.95 6.08 6.07
7.61 7.61 7.55
Apr. May June
4.17 4.27 4.46
3.71 3.69 3.91
4.65 4.46 4.71
4.55 4.45 4.60
4.47 4.33 4.50
7.45 7.38 7.32
5.43 5.31 5.34
6.19 6.13 6.11
7.58 7.63 7.62
July Aug. Sept.
4.55 4.80 4.87
3.98 4.02 4.66
4.90 4.90 5.44
4.83 4.75 5.07
4.75 4.78 5.00
7.38 7.37 7.40
5.41 5.30 5.36
6.11 6.21 6.55
7.62 7.63 7.64
Oct. Nov.
5.04 5.06
4.74 4.78
5.39 5.20
5.21 5.18
5.19 5.13
7.38 7.09
5.19 5.02
6,48 6.28
7.71 7.70
4 LL 18 25
5.15 5.09 4.91 5.01
4.60 4.74 4.81 4.74
5.48 5.41 5.40 5.35
5.13 5.25 5.25 5.25
5.13 5.13 5.25 5.25
7.44 7.48 7.30 7.34
5.22 5.16 5.23 5.13
6.53 6.49 6.48 6.43
7.69
1
5.06
4.74
5.34
5.15
5.13
7.27
5.04
6.37
7.72
8
5.25
4.71
5.17
5.13
5.1J
--
5.10
6.29
15 22 29
4.89 4.97 5.03
4.74 4.79 4.87
5.18 5.17 5.26
5.13 5.23 5.25
5.13 5.13 5.13
7.12 6.99 7.05
5.01 4.96 4.99
6.25 6.26 6.29
6 13 20 27
5.17 5.29
4.94 5.05
5.25 5.27
5,28r 5.28
5.25 5.25
7.15 7 .21p
4.96 5.03
6.31 6.34p
1972 -- Oct.
Nov.
Dec.
NU.O...
0 ..
.
:
....
o .y
l..
ti
~
W UWC
*
L
&
~~~lU
L.~U
t
U
7.72
7.71 7.69
7.67
....
ror columns o an ao Le ee y a a or c. umns 0 are statemeki t wee averages of ail data. IoLumn j is a one-oay weanesuay quote. weekly data is the mid-point of the calendar week over which data are averaged. Columh 7 is a one-day quote for the Thursday following the end of the statement week. Columft 9 gives FIA auction data for the Monday preceding the end of the statement week. The FNMA auction yield is the implicit yield in weekly or bi-weekly auction for short-term forward commitmehts for Government underwritten mortgages. *NCw spries--Corporate New Issues Aaa series discontinued.
Appendix Table I
CONFIDENTIAL (FR)
RESERVES AND MONETARY VARIABLES
Reserves
Period
Total
Nonborrowed
Money Stock Measures
Available to Support Pvt. Deposits
Annually.
M M1 (4)
M 2 (5)
3 (6)
December 15, 1972
Bank Credit Measures
Adjusted Credit Proxy
Total Loans and Investments
Other
Total Time
(7)
Time Other than CD's (10)
Thrift Institution Deposits
+7.6 -1.2 -6.0 +7.3
-5.6 -2.7 +9.2 +8.0
+8.6 -2.7 +8.1 +7.8
+7.8 +3.2 +5.4 +6.2
+9.3 +2.3 +8.1 +11.1
+8.3 +2.8 +7.8 +13.3
+5.2 +10.6
+5.6 +5.2
+5.8 +10.1
+10.9 +4.6
+10.0 +2.4
U.S. Gov't. Demand (14)
(Dollar Change in Billions)
(Per Cent Annual Rates of Growth)
1968 1969 1970 1971
CD's (12)
Nondeposit Funds (13)
+9.7 +0.6 +8.3 +9.5
+11.0 +3.9 +8.1 +11.3
+11.3 -4.9 +17.9 +17.9
+11.1 +1.4 +11.0 +16.2
+17.5
+5.0 +10.3
+4.8 +11.4
+5.2 +10.8
+8.4 +26.3
+6.0 +15.6
+10.6
+15.5 +6.3
+17.0 +8.8
+9.7
+11.5 +10.6
+22.3 +12.2
+21.2 +10.1
+20.1
43,9
+8,8
+13.5
+4.1
+1.8 -0.8
+6.4 +3.4 +7.7
+2.8 -12.6 414.5 +7.9
+2.6 +13.0 -8.4 -7.6
-0.1 +0.3 +1.1 -0.3
+0.7 -9.1 -_ 1
+0.4 +0.7
Semi-Annually: 1st Half 1970 2nd Half 1970
+0.4 +11.6
+3.0 +15.2
1st Half 1971 2nd Half 1971
+9.6 4.7
+9.3 +6.5
1st Half 1972
+11.6
+12.1
+9.0
+7.4
+11.1
+13.4
+11.3
+12.8
+15.6
+14.7
+17.9
+3.7
+8.9 +10.0 +7.2 +2.2 +10 1 +12.8 +3.6
+9.5 +9.0 +6.0 +6.8 +11.0 +13.0 -2.0
+10.8 +10.6 +4.3 +4.8 +10.8 +7.1 +16.0
+9.1 +10.6 +3.7 +1.1 +9.3 +5.3 +8.5
+18.1 +12.4 +4.4 +8.0 +13.3 +8.6 +9.3
+18.9 +14.4 +7.8 +9.6 +15.5 +10.8 +11.6
+10.9 +8.4 +7.6 +9.7
+12.3 +10.3 +9.7 +11.1 +15.7 +9.5 +13.6
+28.8 +14.7
+27.5 +14.0
+21.9
+2.6
-2.4
+17.3 +13.7 +12.8 +20.5 +14.5
+1.3 +2.3
+0.3 +2.3 -0.4
July Aug. Sept. Oct. Nov. Dec.
+4.4 +4.1 +12.9 -7.4 +3.4 +10.7
-7.6 +2.8 +22.9 -2.8 +2.0 +21.4
+6.8 +6.9 -0.8 +3.6 +5.9 +4.8
+10.1 +3.2 -2.1 +0.5
+7.5 +2.9 +2.9 +7.1 +6.5 +10.2
+10.5 +6.6 +6.2 +9.1 +8.7 +11.0
+10.7
+6.2 +11.9 +10.9 +11.9 +6.2 +14.9
+9.4 +4.2 +10.7 +17.1 +9.1 +20.8
Jan. Feb. Mar. Apr. May Juihe July Aug Sept. Oct. Nov. p
+20.2
+23.1 -3.6 +13.3 +22.2 +7.5 +8.8 -1.6 +3.4 -7.8 +14.7 + 9.3
+9.2 +7.4 +15.6 +7.0 +6.2 +7.9 +8.6 +7.5
+3.2 +12.6 +11.9 +7.7 +7.6
+13.4 +14.3 +11.6 +7.2 +7.7 +10.6 +11.3 +8.0 +8.4 +7.7 +7.6
+15.4 +16.7 +13.8 +10.9 +9.7 +11.5 +13.5 +10.7 +10.4 +10.4 +9.1
+9.9
+14.2 +12.4 +19.9 +5.4 +70.0 +2.3 +10.2 +18.3 +11.9 +11.4 +20.6
+20.0 +16.2 +7.8 +12.4 +17.8 +16.3 +11.6 +13.9 +13.7 +11.6 +9.9
+4.7
+2.6 +11.9
-2.1
Quarterly, 1st 2nd 3rd 4th 1st 2nd 3rd
1971:
1972:
NOTE:
Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr.
1971 1971 1971 1971 1972 1972 1972
-5.9 +15.8 +22.9 +6.9 +8.4 +2.9 +8.8 -0.8 +15.4 +11.5
+13.7
+2.8 +13.7
+2.6
+5.6 +14.2 +5.5 +5.5 +3.5 +6.4
Reserve requirements on Eurodollar borrowings are included beginning October 16, October 1, 1970.
+11.3 +11.1
+10.7
+4.1 +7.9
+4.8 +11.2 +13.1
+5.9 +17.7 +13.5 +14.7 +4.7 +12.2 +9.3 +10.2 +8.9 +11.8
1969,
ahd requirements
+8.2 +15.9 +14.8
+15.7 +13.2
+5.3 +14.7 +17.1 +11.8 +10.1
+4.8 +3.2
+7.9 +13.7
+13.0 +17.0
+24.4 +15.4 +10.8 +7.8
+12.6 +14.8
+8.5 +9.9 +11.6 +11.5 +8.7
+15.7
+1.8 -0.1 +3.7 +3.2
+16.7 +10.3 +13.8 +13.0 +11.4 +13.7
+1.1 +0.4 +0.8 +1.1 -0.5
+23.9 +17.6 +19.0 +15.8
-0.2 +0.6 -0.4 +1.3 +1.6 +0.8 +1.0 +1.2 +1.0 +0.4
+10.6
+16.6 +18.3 +12.3
+15.8 +13.5 +10.4
+1.2
+0.6
on bank-related commercial paper are included beginning
-0.1 -0.8
+0.8 +0.6 +0.9 -1.9
+0.7 +0.8 +0.1
-2.6 +2.4 +1.3 -2.1 -0.7 +0.7 +0.7 +1.7
Appendix Table II
CONFIDENTIAL (FR)
RESERVESANDMONETARY VARIABLES (Seasonally adjusted, billions of dollars) Money Stock Measures
Reserves
Period
Total (1)
Annually: nee. 1968
Available to Support pvt. Nonborrowed Deposits (3) (2)
M1 Total IPvt. De. (4) (5
December15, 1972
Other
Bank Credit Measures
M2 (6)
3 (7)
Adusted Credit Proxy (8)
Total Loans and Investments (9)
Total Time (10)
Time Other than CD's (11)
Thrift Institution Deposits (12)
CD's (13)
27.249 27.977 29.132
26.471 26.829 28.764
24.963 25.245 26.747
197.4 203.7 214.8
378.0 368.8 418.2
572.6 588.3 634.0
304.6 305.4 330.6
29.390 29.600 29.779
28.958 29,240 29.445
26.930 27.132 27.470
215.3 217.7 219.7
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
219.2 223.0 226.8
26.6 27.5 28.1
29.991 30.327 30.527
29,859 30.106 30.106
27.735 27.935 28.199
221.2 223.8 225.5
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
231.0 234.4 237.2
27.8 28.5 29.4
30.639 30.743 31.073
29.915 29.985 30.556
28.358 28.521 28.503
227.4 228.0 227.6
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
240.4 243.1 245.6
30.4 30.8 31.6
30.882 30.970 31.246
30.485 30.535 31.079
28.588 28.728 28.844
227.7 227.7 228.2
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
248.3 250.8 253.4
32.7 32.2 33.4
1972--Jan. Feb. Mar.
31.772 31.616 32.032
31.678 31.582 31.931
29.0642 29.244 29.625
228.8 231.2 233.5
469.9 475.5 480.1
727.3 737.4 745.9
364.9 366.7 372.1
494.4 499.5 507.8
274.4 278.1 279.9
257.4 261.8 265.8
33.2 33.8 33.4
Apr. May June
32.643 32.830 33.059
32.525 32.728 32.967
29.798 29.951 30.148
235.0 235.5 236.6
483.0 486.1 490.4
752.7 758.8 766.1
376.3 380.9 382.4
510.1 518.6 519.8
282.8 287.0 290.9
269.7 272.6 275.7
34.7 36.3 37.1
July Aug. Sept.
33,138 33,382 33.360
32.924 33.016 32,802
30.365 30.555 30.903
239.4 240.5 241.6
495.0 498.3 501.8
774.7 781.6 788.4
386.3 389.3 392.6
524.2 532.2 537.5
293.7 297.1 300.5
279.7 283.3 286.6
38.1 39.3 40.3
33.788 31.843
33.205 31.191
30.975 29.313
242.3 243.6
505.0 508.2
795.2 801.2
395.5 399.4
542.6 551.9
303.4 305.9
290.1 293.0
40.7 41.3
33.775 32.765 33.370 33.398
32.938 32,617 32.586 32.815
31.397 30.457 31.025 30.794
242.6 241.5 241.6 241.1
502.2
i
Dec.
1969
Dec. 1970
204.2 194.1 228.9
NonDeposit Funds
U.S. Gov't. Demand
(14)
(15)
23.6 11.0 25.5
Monthly: 1971--.Tan. Feb.
Mar. Apr. May June July
Aug. Sept. Oct. Nov. Dec.
Oct. Nov.
p
Wekly: 1972--Sept. 6 13 20 27 Oct.
4 11 18 25
33.806 33.828 33.802 33.764
33.379 33.276 33.388 32.837
30.925 31.099 30.772 31.076
241.8 242.7 242.2 242.3
Nov.
1 8 15 22 29 p
33.741 33.788 31.966 30.630 30.807
33.141 32.742 31.474 30.147 30.202
30.984 30.991 29. 203 28. 118 28.763
242.1 242.7 244.3 244.3 242.8
31.208
30,579
28,878
246.1
Dec.
6
p
:ii::::i
390.9
:::::::::::: 299.4
li)
391.9
300.1 300.3 301.2
501.2 501.6
ii':::;
501.5
iiiiiiii 392.4
504.0 504.8 504.9 505.4
[ii;!;
505.4 505.4
:::::::::: 97 397.5 iiiiiiii
::::::::::::: 303.9
506.0 508.5 509.4 508.3
397.7 387:: iiiiiiii 396.6 ::::: 400.4 400.9
304.4 305.1 306.7 307.3 308.4
512.2
393.2
!!) liiii iii ::: :::::: iiiiiii
iiiH
395.1 394.0 394.6 396.3
402.8
39.7 40.4 40.3 40.8
::I::::::::::
302.6 302.6 303.8 304.1
. :::::: * ::::I: ' ::::::
iiiiiiiiiii
.iiiii!! 111. 111:!::: ..1 :::::::: I.
40.4 40.5 41.0 41,0 40.6 41.1 40.8 41.6 41.8 42.3
::i::: '
iiiiiiiiiii :::::::::
iiiiiii11 ,.:::::
:
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, bank-related 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 3 , total loans and investments and thrift institution deposits. p = Preliminary.
NOTE:
Cite this document
Federal Reserve (1972, December 18). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19721219
@misc{wtfs_bluebook_19721219,
author = {Federal Reserve},
title = {Bluebook},
year = {1972},
month = {Dec},
howpublished = {Bluebooks, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/bluebook_19721219},
note = {Retrieved via When the Fed Speaks corpus}
}