bluebooks · February 19, 1974

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.

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Content last modified 6/05/2009.

(CONFIDENTIAL

FR)

February 15, 1974

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)

February 15,

1974

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1)

The money stock and reserve aggregates have shown a mixed

performance relative to the Committee's ranges of tolerance during the January-February target period.

For most of the period since the last

meeting, M1 and RPD's appeared to be growing at rates well below the low ends of their ranges.

However,

a sharp rise of M1 in

the first

two weeks

of February (with the second week based on preliminary and partly estimated data) brought the growth rate back within the range of tolerance, within its

range for most of the period,

as growth in

M2 remained

consumer-type time and

savings deposits was strong, and moved slightly above the top of the range when the preliminary data for the second week of February became available. Growth of Monetary Aggregates and RPD's in January-February Target Period Reserve and Monetary Aggregates (Growth at SAAR in per cent) RPD's

Latest Estimates

Range of Tolerance 4-3/4--7-3/4

3.4

3--6

4.0

6--9

9.6

Memo: Fed funds rate (per cent per annum)

Avg. for Statement week ending

8-3/4--10

Jan. 23

9.60

Feb. 13

8.93

(2) In January, M1 declined at a 3.1 per cent annual rate, instead of rising slightly as originally indicated.

The sharp rise

-2of M 1 in the first two weeks of February suggests a growth rate for the month Some part of this February increase in private balances

of around 11 per cent.

may be related to a very sharp and considerably greater than anticipated decline in U.S. Government deposits. (3)

Growth of RPD's in the January-February period appears to be

somewhat below the lower end of the Committee's range of tolerance.

shown in the table below, RPD's supporting private demand deposits are declining substantially--rather than rising slightly as expected--reflecting mainly the impact on required reserves, as lagged two weeks, of changes in the weekly pattern of demand deposit flows.

Excess reserves also are running

lower than expected, on average, thus reducing the need to supply reserves through open market operations.

CD's and other time deposits have been

absorbing more RPD's than anticipated. Comparison of Projected Changes in RPD's by Use January-February 1974 (In millions of dollars) Projections as of January 22, 1974 FOMC meeting Change in

PD's 1/ Total RPD's 1/

Current Projection

-113

-162

Change in Category of Use: Private demand deposits Time deposits other than large CD's

120

CD's and nondeposit funds

-38

Excess

-57

-130

128

Change from December 1973 to February 1974 level consistent with midpoint of Committee's range of tolerance for RPD growth on basis of new estimates of deposit data.

(4)

Conditions have eased significantly in the Federal funds

market since the last Committee meeting.

The funds rate had averaged 9.60

per cent in the statement week of January 23 that encompassed the meeting. Shortly after the meeting, in light of the decision taken by the Committee, the Desk began supplying reserves at a pace consistent with a funds rate in a 9¼--9½ per cent range.

Subsequent operations were conditioned by the

Treasury financing then in process.

Shortfalls in growth rates of M1

and

RPD relative to the Committee's ranges of tolerance led to somewhat more active reserve supplying operations, and the funds rate averaged 8.93 per cent in the week ended February 13.

The Desk is currently aiming at a

reserve supply consistent with a funds rate of around 9 per cent. (5)

As the funds market has eased in recent weeks, declines in

other short-term rates have ranged around 100 basis points and the bank prime loan rate has dropped from 9¾ to 9 per cent at some banks.

Reductions

in market rates have occurred even though the volume of directly placed and dealer placed commercial paper coming to market was exceptionally heavy and a sizable amount of large CD's was marketed by commercial banks, given large business loan growth and a favorable market atmosphere.

Despite the

drop in short-term market rates, member bank borrowing at the Fed was maintained, averaging around $1.1 billion during the past four weeks, slightly higher than in the previous four weeks. (6)

Yields in all sectors of the bond market have also been

subject to downward pressure since the January FOMC meeting, notwithstanding a heavy volume of new corporate and municipal issues brought to market and fairly aggressive lengthening of maturities by the Treasury in its midFebruary refunding.

These latest reductions in long-term rates offset a

sizable part of the increases recorded in late December and early January.

-4(7)

The Treasury auctioned three new debt issues totaling $4.05

billion during the last week in January to refinance $4.5 billion of publicly held debt maturing in mid-February.

The issues--$1.5 billion of a 3¼-year,

6-7/8 per cent note; $2.25 billion of a 7-year, 7 per cent note; and $300 million of a 19½-year, 7½ per cent bond--were well received by the market. All were sold at premiums; both the 7-year note and the 19½-year bond are currently trading at prices above their auction averages, while the price of the 3 -year note is close to its average.

However, dealer awards in the

auction were large--amounting to about $1.6 billion in total. since distributed only about one-fourth of these awards,

Dealers have

but they have not

been pressing aggressively thus far to market their remaining holdings. (8)

The table on the next page shows (in percentage annual rates

of change) selected monetary and financial flows over various recent time periods.

Appendix Table III compares money supply growth rates computed on

a quarterly-average basis with those computed on a last-month-of-quarter basis.

-5Past 3 Calendar Years Dec. '73 over

Past 12 Months Jan. '74 over

Past 6 Months Jan. '74 over

Past 3 Months Jan. '74 over

Past Month Jan. '74 over

Dec. '70

Jan. '73

Jul. '73

Oct. '73

Dec. '73

Total reserves

9.0

8.4

10.2

14.3

35.8

Nonborrowed reserves

8.0

9.1

16.7

20.0

45.9

Reserves available to support private nonbank deposits

9.2

8.5

5.9

3.4

7.4

5.1

2.5

4.8

(M1 plus time deposits at commercial banks other than large 11.4 CD's)

8.3

7.9

8.7

6.5

(M2 plus deposits at thrift institutions)

13.1

8.2

7.0

8.4

6.7

11.7

10.9

7.6

6.9

12.3

14.5

12.5

8.4

7.5

15.8

Large CD's

1.0

1.7

0.3

0.6

2.7

Nonbank commercial paper

0.1

0.6

1.4

1.2

2.7

7.0

Concepts of Money M1

(currency plus demand deposits) 1/

-3.1

Bank Credit Total member banks deposits (bank credit proxy adj.) Loans and investments

of commercial banks

Short-term market paper (Monthly avg. change in billions)

Other than interbank and U.S.

Based on month-end figures.

Government. 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 derived from either end-of-month or last Wednesday-ofmonth figures. Growth rates for reserve measures in this and subsequent tables are adjusted to remove the effect of discontinuities from breaks in the series when reserve requirements are changed.

Prospective developments (9)

Three policy alternatives are summarized below for Committee

consideration (with more detailed figures shown in the table on p. 6a ). Alt. A

Alt. B

6½

5¾

10¾

8¾

9¼

8¾

RPD

5½--7½

4½--6½

3½-5½

8¼--10¼

7½--9½

6¾--8¾

11--13

10½--12½

10--12

Federal funds rate range (inter-meeting period)

7½--8¾

8¼--9½

8¾-10

Alt.

Targets (1st & 2nd qtrs. combined)

Credit proxy Associated ranges for February-March

(10)

Alternative B includes the 5¾ per cent annual growth rate

for M1 for the period from December to June adopted by the Committee at its last meeting, which is

depicted in

the chart on the following page.

longer-run growth of M2 implied by this alternative is

The

around 10 per cent,

about 2 percentage points higher than indicated at the last Committee meeting.1/

The increase in M2 growth reflects the greater than expected

strength of recent net inflows of consumer-type time deposits at banks

and

the lower average level of market interest rates that has already developed and is assumed to continue into the months ahead under this alternative. Alternatives A and C contemplate faster and slower rates of monetary growth, respectively. 1/

For M3, the implied growth rate is 9 per cent, about 1½ percentage points higher than indicated at the last meeting.

MONEY SUPPLY AND LONGER RUN TARGET PATH

RATIO SCALE, BILLIONS OF DOLLARS

- 280

53/%

GROWTH

-1270

RATE OF GROWTH DEC. '72 TO DEC. '73

5.9%

260

A 1973

M 1974

-6aAlternative Longer-Run Targets for Key Monetary Aggregates M

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

Alt, A

Alt. B

Alt. C

1973

Dec.

270.4

570.7

893.2

1974

Jan. Feb. Mar.

269.7 272.2 273.9

269.7 272.2 273.5

269.7 272.1 273.2

573.8 579.8 585.4

573.8

898.2 906.2 914.9

898.2 906.1

584.8

573.8 579.8 584.2

913.9

898.2 906.0 912.7

June

279.2

278.2

277.2

601.6

599.8

596.0

940.0

936.9

930.7

Quarters: 1974

1st Q. 2nd C.

Months: Feb. Mar.

11.1 7.5

4.6 6.9

4.1 5.9

11.1 5.7

10.7 4.9

Adjusted Credit Proxy Alt. A Alt. B Alt. C 1973 1974

579.8

Rates of Growth 9.9 10.3 10.3 11.1

9.5 8.1

9.3

9.7 11.0

10.1

8.7 7.9

10.7 11.5

10.6 10.3

10.4 8.9

Total Reserves Alt. C Alt. B Alt. A

Alt. A

RPD Alt. B

Alt. C

12.5 11.6

12.5 10.3

12.5

9.1

Dec. Jan. Feb. Mar.

449.6 454.2 454.6 457.9

449.6 454.2 454.6 457.5

449.6 454.2 454.6 457.1

35,105 35,852 35,132 34,839

35,105 35,852 35,131 34,781

35,105 35,852 35,130 34,727

32,912 32,802 32,800 33,153

32,912 32,802 32,799 33,096

32,912 32,802 32,798 33,041

June

470.5

469.4

467.8

35,812

35,662

35,528

33,791

33,643

33,514

7.4 11.0

7.0 10.4

6.7 9.4

11.2

1.1 8.7

1.1 7.7

1.1 6.6

-24.1 -16.0

Quarters: 1974

1st Q. 2nd Q.

Months: Feb. Mar.

0.4

-0.3 10.1

0,9 9.2

6.6 7.7

5.9 6.6

5.2 5.7

-24.1 -12.0

-24.2 -13.8

-0.1 12.9

-0.1

10.9

8.9

-7(11)

A longer-run 5¾ per cent growth path for M1 is

associated

with lower interest rates than in the previous blue book mainly because of the downward revision in nominal GNP expansion projected by the staff. At the time of the last Committee meeting, economic activity at current prices was projected to expand at a 6½ per cent annual rate in the first half of the year, whereas a 5½ per cent expansion is now projected.

This

would be expected to lower transactions demands for money and therefore to reduce the interest rates associated with a given growth in the money supply. (12)

With short-term interest rates having declined by around

one percentage point since the last meeting, market rates have already moved close to levels that now seem consistent with a 5¾ per cent M 1 growth.

Thus, little or no further decline would be expected under

alternative B.

The Federal funds rate range for that alternative is

indicated at 8¼--9½ per cent, centering close to the recently prevailing level. (13)

Recent interest rate declines will be working to sustain

money demand in the months ahead, and interest-earning deposits.

including demand for both cash balances

In the February-March period, M1 growth

in a 7½--9½ per cent annual rate range is indicated under alternative B. Because of the sizable shortfall of M 1 in January, such a rate of increase is needed to restore M1 to the desired longer-run growth path. Growth of M1 in February may be particularly large, reflecting perhaps a decline in U.S. Government deposits between January and February that is virtually unprecedented in size.

The Treasury redeemed $800 million

of maturing debt in mid-February and the cash deficit for February also seems to be a little larger than seasonal.

(16)

Growth in consumer-type time and savings deposits at

banks is likely to continue generally strong, perhaps bolstered by a buildup in precautionary balances by consumers.

The growth, however, will

probably slacken a little from that of January, when net inflows (as in October) may have been enlarged somewhat by an increased amount of interest crediting (taking place on the final day of quarters) resulting from the higher ceiling rates.

Under alternative A, growth in consumer-

type time deposits would probably be even more rapid for a while--at least until further declines in market rates lead banks to begin reducing offering rates for consumer-type deposits.

The expected rise of interest

rates under alternative C would reduce the relative attractiveness of consumer-type time deposits, though, judging from recent experience, the effect of higher market rates might be more marked on the specialized thrift institutions than on commercial banks. (17)

With funds available in volume through consumer-type time

deposits, banks are not expected to be aggressive issuers of large CD's in the weeks ahead.

Business loan demand at banks may not moderate

substantially from the January pace until the rate of overall business inventory accumulation slackens, as is projected for the spring.

However,

mortgage and consumer credit demands are likely to be quite modest in the period immediately ahead, given the weakness in home buying and in sales of cars, mobile homes, and recreational equipment. (18)

In time, the recent removal of capital controls and large

international funds flows stemming from the rise in oil prices may come to have an appreciable effect on domestic banking aggregates and market

-9conditions.

Thus far, however, discernible effects have been minor, and

have included mainly reports of offerings of longer-term dollar-denominated CD's to U.S. investors by foreign affiliates of U.S. banks, and reports of strong interest by U.S. and foreign corporations in shifting longer-term borrowing from the Euro-dollar market to U.S. capital markets.

The potential

for investment in the United States of funds from the oil-exporting countries is even more dramatic, but here too there has been little indication of sizable money-flows.

Under the circumstances, we have not yet made any

special allowance for the effects of international financial developments on domestic markets and aggregates.

Proposed directive (19)

Presented below are three alternative formulations for the

operational paragraph of the directive, which are intended to correspond to the similarly lettered policy alternatives discussed in section.

the preceding

In all three alternatives, it is proposed to delete the reference

to Treasury financing because the quarterly refunding announced on January 30

has been virtually completed. Alternative A To implement this policy, while taking account [DEL: the of and] financing Treasury forthcoming

of international and domestic

financial market developments, the Committee seeks to achieve bank reserve and money market conditions consistent with moderate SOMEWHAT GREATER growth in monetary aggregates over the months ahead. Alternative B To implement this policy, while taking account [DEL: the of and] financing Treasury forthcoming

financial market developments,

of international and domestic

the Committee seeks to achieve

bank reserve and money market conditions consistent with moderate growth in monetary aggregates over the months ahead. Alternative C To implement this policy, while taking account [DEL: the of and] financing Treasury forthcoming

of international and domestic

financial market developments, the Committee seeks to achieve bank reserve and money market conditions consistent with QUITE moderate growth in monetary aggregates over the months ahead.

CHART 1

STRICTLY CONFIDENTIAL (FR) 2/15/74

RESERVES AVAILABLE TO SUPPORT PRIVATE NONBANK DEPOSITS REVISED SERIES BILLIONS OF DOLLARS

140

3 growth for Jan.-Feb. 7 %%

42/13/74)

'~A7V\h

N D 1973 r

I I J I j I I M

J 1973

I II S

I I

J 1974

j I

*Break in Series, Actual Level of RPD After Changes in Reserve Requirements

F 1974

-133

CHART 2

STRICTLY CONFIDENTIAL (FR)

2/15/74

MONETARY AGGREGATES REVISED SERIES

NARROW MONEY SUPPLY M1

BILLIONS OF DOLLARS

6% growth for Jan -feb 113/7471

II II

i I iI

I I

IiI I .

i L I.

BROADER MONEY SUPPLY M2 640

620 I

1973

1974

1 I

N O 1973

f 1974

CHART 3

STRICTLY CONIDENTIAL (FR)

MONETARY AGGREGATES ADJUSTED CREDIT PROXY

BILLIONS OF DOLLARS

1490

iII I

1I IB

TOTAL RESERVES

1973 * Break in series, Actual Level of Total Reserves After Changes in Reserve Requirements

4 J.

1974

J 4\

CHART 4

MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDITIONS

RESERVES BORROWED

PER CENT _1 13

PER CENT -1 12

INTEREST RATES Long-term

BILLIONS OF DOLLARS 3 f-

VvvAAAAK, SNET BORROWFD

_LLLL 1973

1 1 1I I I IL I

L_ 1974

iLI 1973

1974

1973

1974

PER CENT -I 11

STRICTLY CONFIDENTIAL

TABLE 1

-mmmme-mmme---mm-em

FEBRUARY 15,

BANK RESERVES (ACTUAL AND CURRENT PROJECTIONS)

1974

--------------------------------------------------------------------------------------------------------------------------------------REQUIRED RESERVES I AGGREGATE RESERVES II "-------------------------..--------------------------RESERVES AVAILABLE FOR SEASONALLY ADJUSTEU I PRIVATE NONBANK DEPOSITS -).--------------------------------------------------------* GOV*T AND CD'S AND OTHER PRIVATE NONBORROWED I 1 TOTAL ----------------------------INTERBANK NON DEP TIME DEP DEMAND I RESERVES I NON SEAS ADJ II RESERVES SEAS ADJ PERIOD -----------------------------------------------------------------------------------------------------------------------------( ) (7) (6) 5) 1 (4) (3) (2) I (1) I II 1 II MONTHLY LEVELS-SMILLIONSI ------------------------ I 1 11 1 2.142 4.069 8.430 19.976 33,463 34,857 II 32,752 32,714 1973--NOV. 2,193 3,918 8.460 20.227 33.807 35.105 II 1 33.167 32.912 I DEC. I It 1 9 3,050 3,807 8,525 20,305 1 349801 i1 35.852 33.870 32.802 1974--JAN. ( 2,332) ( 3,970) ( 8o588) (34147) 1 (20,065) 135.131) (32.883) 11 432,799) FEH. ANNUAL RATES OF CHANGE ---------------------QUARTERLYS 1973--3RD OTR. 4TH QTR.

I I

I I I9 I

I I (

1 JAN.-FEBe I

7.0 -0.1)

FEB.

------------------

6 13

32,921 32.747 33,075 32.488 32.892

32,618 32.779

I It II II

1 (

4.4)

-0.3)

26,7 -1.6 14.4

12.1 -4.3 10.5

1.4 5.8

15.7 12.7

-1.8)

9 9.6)

3.4 -1.1 15.1

16.2 17.3 4.3

I 9 I

1 2 9 16 23 30

1 I 111

3.4)

WEEKLY LEVELS-SMILLIONS ---------------- 9 -----1974--JAN.

If 99

11.3 13.4

10.6 6.1 (

I 1.0 6.3 9.4

1974--JAN. FEB.

1 111

5.9)

MONTHLY1 1973-OCT. NOV. DEC.

I 14.2 1.4 (

1974--IST QTR.

f 1

35.8 ( -24.1 5.6)

45.9 ( -22.6)

9 1

(

11.4)

33,562 33,482 34.562 33,749 33.878

II 9 II 11 f 11 11 99

35,312 35.752 36,521 35,747 35,640

34,102 34,976 35,533 349565 34,419

33.142 32.914

II II

35,169 35,176

34,171 34,023

1 1

9.2 8.9)

4.6 ( -14.2) -4.8)

9.1)

20361 20,423 20.396 20.211 200212

8,523 8.506 8.530 8.507 8,548

3,649 3,731 3.821 3,853 3,856

2.391 3,005 3,446 3.259 2,748

20033 19,913

8,578 8.566

3,906 3,992

2.551 2,396

-------------------------------------------------------------------------------------------------------------

NOTEI DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. AT THE FOMC MEETING OF JANUARY 22, THE COMMITTEE AGREED ON A RPO RANGE OF 4.75 TO 7.75 PERCENT FOR THE JAN-FES PERIOD.

1974

STRICTLY CONFIDENTIAL

TABLE 2

-FEBRUARY -MONETARY AGGREGATES (ACTUAL AND CURRENT PROJECTIONS* SEASONALLY ADJUSTED)

l-----------------------------------------------*****************************m*----------*m*...........

------------

I I

PERIOD ----

MONEY SUPPLY BROAD I NARROW (M2) 1 (MI)

I I I

TIME AND SAVINGS DEPOSITS I I OTHER CD S I THAN CD S I TOTAL

I U.S. ADJUSTED II I GOVT. II CREDIT II DEPOSITS I PROXY

I NONDEPOSIT I SOURCES OF FUNDS I

mm---------------------------------------------------------------------m-------------------------------1I(I

(1)

MONTHLY LFVELS-$RILLIONSI 1 I I I

197--JAN. FEM. PERCENT ANNUAL GROWTH -------------------

QiIARTERLY

(2)

(3)

268.8 270.4

I 1

269.7 (272.2)

566.7 570.7

I 1

447.5 449.6

573.8 (579.8)

I 1 I

454.2 (454.6)

I I

(4)

II II II

---------------*I 17T1--NOV. DFC.

S.6

II 11 II 11 II

I I

-0.2 7.5

I 1974--IST QTR.

10.1

10.5 3.3

(7)

I 5.8 4.9 6.1 ( 2.1)

297.8 300.3

359.9 363.1 I

304.1 (307.6)

369.6 (375.1)1

II It

14.0 5.8

7.1 7.4

62.0 62.8

7.5 ( 7.5)

II III II

1973--3R0 OTR. 4TM QTR.

(*)

(5)

I I

10.4 12.5

I (

f 9.9)

.6)

(14.7)

(18.0)

MONTHLY 10.8 1973--OCT. NOV. DEC

SI.0 10.4 7.1

1974-JAN. FEB.

3.1 (11.1)

10.9 8.5

4.0)

WEEKLY LEVELS-SBILLIONS ---------------------- I

1974-JAN.

2 9 16 23 30

270,3 269.5 270.0 268.9 268.5

6 P 13 PE

I I

-----------

21.5 (17.9)

( 9.6)

( 6.7)

II II II II

(19.8)

572.5 572.0 573.8 573.7 573.7

452.5 453.1

1 (i

454.5

577.2 580.3

271.0 273.1 I f------------------------

3.4 3.3 10.7

II II S11

I FEB.

II IIIS67 II II If

12.3 S1.1)

6.5 (12.5)

I JAN.-FEB.

453.S ( 1. 1.6 ) 2.7 5.6

I I

6.8 6.5 6.2 4.5

455*7 455.5

16.1 11.0 10.1

15.2 (13.8)

373.4 374.6

26 1 -----

NOTE: OATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS.

II I

(14.6)

I.0 366.5 367.3 368.4 370.6 372.3

I I

197

FEBRUARY 159 1974

302.2 302.5 303.7 304.8 305.2 306.2 307.2

1 I

64w3 648 64.7 65 8 67.1 672 67.4

7.0 7.1 7.3 7.7 7.8 7.2 7.7

1 --------------P - PRELIMINARY PE - PARTIALLY ESTIMATED

-------------------------------------------------------------------------------------

--------

--- STRICTLY CONFIDENTIAL (FR) FEBRUARY 15,

1974

Table 3 RESERVE EFFECTS OF OPFN MARKET OPERATIONS AND OTHER RESERVE FACTORS (Millions of dollars, not seasonally adjusted) _

Bills A -ran* 1 1C. p

ny. e

Marke t Coupon T Ifpie ___

nrtHnna Agency TIssPs

RP's 6r.l

Daiv

Ne-

Araverao e

Tntlr

Onnpratnn V

l-Lrve

ffert

_________

nvown O

_rr

[ [n I

i .A

1 1

Other 41

Member

Open Marketl 3/

____a_=

-d

-~--tYI

L_^

~e~

reserve ca teories -

available res. 5/ (6)+(7+(8 -(9'

req. res. against uT.S.C. and Interb.

a,---

(4)

--- (11)

Monthly 1971 --

July Aug. Sept Oct.

1,073 -753 -494 1,972 -1,008 1 ,862

NOv.

Dec. 1974 --

-397

Jan Feb. March

533 726

1,148 -143 531 295 -902 -831

179

-100

2,416 -915 7 2,440 -1,307 1,386 -328

394 1,336

263 93 -282 -395 -68 -101

1,031

-253

697

773

702

-27 61 167 -286

501 -519 517 604

2,090

-818 -583 1,986

-850 978 1,150 -678 -646 -759

343 -337 -149 379 -190 -70

1,160 590 434 534 -130

546

795

680 475

1,005 860

475 895

-875

Weekly 1973 --

1974 --

Dec.

Jan.

Feb.

5 12 19 26

-304 -33 1,002 420

2 9 16 23 30

659 205 -201 -159 148

6 13 20 27

-382 394

73 50 205

_____________

593 -1,393 2,752 -5,874

288 -1,510 3,900 -5,404

710 -824 868 613

188 -172 186 -447

-424 538 -370 152

5,124 -3,819 2,187 213 503

6,110 -3,616 1,986 44 747

705 -25 -155 -459 803

168 -434 213 193 39

-874 1,014 1,394 -795 -1,272

-1,864 2,288

-2,285 2,683

-685 269

-223 155

192 -502

_____________________-

-304 -165 1,126 -782p 158p

303 720 326 -279p 8 8 -5 p 30

-746p

146

-.-

-218

--- ~L-

STprget available reserves 5/

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 in circulation, Treasury operations, F.R. float, gold and foreign accounts, ad other F.R. accounts. Target change for January and February reflects the target adopted at the January 22, 1974 FOMC meeting. Reserves to support private nonbank deposits. Target change for previous months reflects the bluebook patterns that are consistent with target ranges that were adopted during the month.

STRICTLY CONVIDENTrAL (FR) FEBRUARY 15, 1974 TABLE 4 SECURTTY DEALER POSITIONS AND BANK POSITIONS Millions of dollars

U. S. Govt. Security Dealer Positions __

Period

Bills__

Coupon Issues

Member. Bank Reserves Position

Dealer Positions Corporate

Municipal

Excess*

Bonds

Reserves

Total (6)

Borrowing at FRB**

Sesnal

Basin Reserve De

8 New York

38 Others

(1)

(2)

(3)

(4)

(5) 796 -133

1,223 12

-5,635 -1,638

-5,720 -1,910

(7)

(8)

(9)

1972 --

High Low

4,291 1,916

1,585 -93

235 0

383 40

1973 --

High

3,796

1,299

197

384

631

2,561

-5,243

-10,661

897

-301

-240

688

-1,831

-4,048

Jan. Feb. Mar.

3,407 2,132 2,490

720 562 -50

27 77 24

177 123 125

289 207 177

1,161 1,594 1,825

-4,550 -4,187 -4,273

-5,469 -5,436 -5,847

Apr. May

2,457 1,894

106 421

12 66

60 151

255 161

1,688 1,843

-3,293 -3,019

-6,577 -5,872

June

2,281

562

120

234

1,851

-3,507

-6,443

Ituly

1,425

265

139

285

1,953

155

-2,460

-6,106

Aug. Sept.

1,690 2,745

39 395

0 6

70 80

177 216

2,165 1,852

163 148

-2,689 -3,173

-4,940 -5,355

Oct. Nov. Dec.

2,565 2,804 3,441

484 793 973

44 90 105

226 148 276

227 239 307

1,476 1,393 1,298

126 84 41

-3,814 -4,469 -4,682

-6,090 -8,186 -9,793

1974 --

Jan.

*3,102

*540

114

254

165p

1,051p

18p

-4,753

-10,893

1973 --

Dec.

5 12 19 26

3,090 3,737 3,796 3,312

746 910 1,144 1,096

100 136 108 74

275 225 327 277

446 -28 316 476

1,475 1,303 1,489 1,038

57 45 40 35

-3,625 -4,881 -5,017 -4,757

-8,594 -10,051 -10,661 -9,281

1974 -- Jan. 2

2,890

858

238

388

1,210

-4,418

-9,541

9 16 23

3,079 3,117 *3,238

611 533 *553

141 183 161

210 134 316

86 328 -83

776 988 1,182

19 20 13

-5,135 -6,189 -4,870

-10,615 -11,252 -11,987

*3,087

*420

371

2 6

1,221p

17p

-3,229

-10,651

Low 1973 --

Feb. 6 13 20 27 NOTE!

*2,759 *2,781

*898 *2,203

88 250p

226 150p

7 p

tOlp 319p

998p 1,15 3 p

3 30

18p 15p

- ,115p -5,621p

-10,501p -10, 46 1p

Government security dealer trading positions are on a commnitent basis. iraaing positions, wnicn excluoe Treesury obils I nanceda y repurcnase agreOther security dealer positions are debt ments maturing in 16 days or more, are indicators of dealer holdings available for sale over the near-tenr. issues still in syndicate, excluding trading positions. The basic reserve deficit is excess reserves less borrowing at Federal Reserve less net Federal funds purchases. Weekly data are daily averages for statement wreks, except for corporate and municipal issues in syndicate which are Friday figures.

* STRICTLY CONFIDENTIAL ** Beginning with January 1973, monthly averages for excess reserves atid borrowings are weighted averages of statement week figures.

CONFIDENTIAL (FR)

FEBRUARY 15, 1974 TABLE 5 SELECTED INTEREST RATES Per cent

Short-Term Federal Funds

Period

Treasury Bills 90-Day I-Year _

Paper

Long-Term

CD's New IAsue-NC 90-119 Day 60-89 Day

A a Utiit Rently New l_ssue

(7)

5.54

6.58

7.72

5.87

7.54

8.52 7.29

8.30 7.26

5.59 4.99

7.54 6.42

9.37 7.69

5.75 6.28 6.75

7.38 7.40 7.49

7.35 7.41 7.51

5.05 5.13 5.29

6.46 6.614 6.71

7.69 7.72 7.78

6.75 7.41 8.13

7.46 7.51 7.64

7.48 7.50 7.64

5.15 5.15 5.18

6.67 6.85 6.90

7.89 7.98 8.07

7.40

3.50

6.99

8.95 5.15

8.43 5.42

10.50 5.63

10.50 5.38

10.75 5.50

5.94 6.58 7.09

5.41 5.60 6.09

5.58 5.93 6.53

5.76 6.17 6.76

5.63 6.16 6.78

Apr. May June

7.12 7.84 8.49

6.76 6.36 7.19

6.51 6.63 7.05

7.13 7.26 8.00

7.04 7.44 7.98

3.03

1973 --

High Low

10.81 5.61

1973 --

Jan. Feb. Mar.

Yields

4.96

5.50

3.13

5.13

3.18

Maturity)

7.12

5.38

3.75

5.38

Low

Bond Buyer

7 46

5.50

3.60

High

Offered

FNMA Auction

(11)

5.52

(3)

U.S. Government (10-yr. Constant

(10)

(5)

(2)

Municipal

(9)

(6)

(4)

(1) 1972 --

90-119 Day Commerc

(8)

July

10.40

8.01

7.97

9.26

9,09

9.19

8.01

7.97

5.40

7.13

8.46

Aug. Sept.

10.50 10.78

8.67 8.29

8.32 8,07

10.26 10.31

10.25 10.31

10.40 10.50

8.36 7.88

8.22 7.99

5.48 5.10

7.40 7.09

8.83 9.32

Oct. Nov. Dec.

10.01 10.03 9.95

7.22 7.83 7.45

7.17 7.40 7.01

9.14 9.11 9.28

9.15 9.06 9.44

9.08 8.91 9.13

7.90 7.90 8.00

7,94 7.94 8.04

5.05 5.18 5.12

6.79 6,73 6.74

9.01 8.84 8.78

1974 --

Jan.

9.65

7.77

7.01

8.86

9.05

8.83

8.21

8.22

5.22

6.99

8.71

1973 --

Dec.

5 12 19 26

10.17 10.04 10.18 9.52

7.36 7.55 7.44 7.40

7.31 7.27 6.77 6.79

9.33 9.48 9.18 9.16

9.50 9.50 9.38 9.38

9.25 9.13 9.13 9.00

8.06 7.97 7.98 --

7.98 7.97 8.05 8.10

5.15 5.06 5.11 5.16

6.72 6.69 6.71 6.87

-8.78

2 9 16 23 30

9.87 9.76 9.77 9.60 9.47

7.48 7.57 7.89 7.93 7.79

6.88 7.01 7.09 7.04 6.96

9.16 8.98 8.88 8.98 8.65

9.38 9.13 9.13 9.00 8.63

9.00 8.88 8.88 8.88 8.50

-8.17 8.27 8.24 8.11

8.14 8.25 8.21 8.26 8.19

5.18 5.22 5.24 5.26 5.20

6.94 6.98 6.99 7.01 7.01

6 13

9.13 8.93

7.16 7.08

6.59 6.47

8.25 8.03

8.13 8.13

8.00 8.00

7.95 8.02

8.14 8.13

5.16 5.18

6.94 6.93

1974 --

Jan.

Feb.

-8.71

8.53

20 77

iNtes:

ColuMhs 5and 6 re one-day Wednesday quotes. For Columns 7, 8 and 10 o 4 are statement week averages of daily data. Colul 9 is a ohe-day quote for Thursday following the end of the weekly date is the mid-point of the calendar week over which data are averaged.

Weekly datA for rcoluiis 1 the statement week. average yield

Column 11 gives PNNA suction data for the Monday preceding the end of the statehet week.

In the bi-weekly auction tor short-term forward commitments for Oovernment underwritten mortgages.

The FNMA auction yield is the

Appendix Table I RESERVES AND MONETARY VARIABLES _ 7

.-.

-1

Pero

I I

P 9t. I*IMVrieL

... L,,,,, Re ry..

... outal

" (1)

Mcne

aon.oroueu

(2) .

February 15, 1974

Availdble to Support Pvt. Iinoiti --..I -

(3)

Ilnrs ck W.w"res

M C i

| (4)

L ' I-

I (5) I (6)

Link Clredit ilesnral

Adj usted edit S PCoxv I 11)

Other

Thrift Time Other than Institutiou CD'a Ueposits-' I () (10)

Total

Total Loans and 1 Investments I Time 1 1 ( a1 (8)

[(12)

Nondeposit

U.S. CGv't

VFunds

i Damnl

iii;

+9.3 78 7 +7.7 +7.2

+8.7 +6.9 +10.1 +9.3

+8.2 +9.4 +11.6 +10.6

+8.1 +11.2 +14.6 +12.6

+11.1 +16.7 +13.5 +11.3

+7.1 +17.5 +16.9 + 8.6

+14.4 + 7.7 +10.4 +19.4

-8.4 -7.6 +0.4 +J.0

+10.8 + 9.9

+11.0 + 4.1

+8.3 +11.5

+11.2 +11.3

+13.6 +14.7

+13.8 +13.8

+17.3 +15.4

+4.4 + 6.0

-0.2 +0.6

1st Half 1973 2nd Half 1973 &gu0rterly

+ 6.7 + 8.6

+ 1.6 +12.7

+10. + 7.8

+13.8 + 7.0

+16.6 + 8.0

+10.3 +11.6

+11.7 + 5.3

+18.6 + 0.8

+1.2 +1.8 -0.4 +0.1 +0.3 +0.3

+6.0 +7.2 +10.6 + 7.8

~ 4~

(Dollar Change in Billions)

(Per Cent Annual Rdtes of Growth)

1970 1971 1972 1973 Smt-Annu ly isL Hll 1972 2nd lldlf 1972

1st 2nd 3rd 4th

QCr. Qtr. Qtv. Qtr.

1972 1972 1972 1972

+ 8.7 +12.6 + 4.4 +15.1

+ 9.1 +12.6 - 0.9 + 9.2

+ 9.6 + 6.9 +10.4 +12.2

+10.5 +11.6 +10.2 +12.1

+15.7 +11.1 +13,0 +15.8

+15.5 +11.7 +12.7 +11.4

+18.9 +14.7 +16.2 +13.9

+ 0.7 + 3.7 + 2.4

Ist 2nd 3rd 4th

Qtr. QCr. Qtr. Qtr.

1973 1973 1973 1973

+ 6.4 + 6.9 +10.6 +6.1

- 3.6 + 7.0 +11.3 +13.4

+ 7.8 +12.5 +14.2 +1.4

+14.6 +12.6 +10.5 +3.3

+19.9 +12.7 +11.4 +4.4

+ 9.9 +10.4 +10.4 +12.5

+13.6 +9.4 +3.1 +7.5

+11.2 + 7.4 +4.7 - 3.9

+0.5 +0.7 +1.7 +0.1

+30.1 -21.1 +10.5 +14.7

+26.8 -38.5 +1.8 +20.1 +0,5 +0.2 +24.9 -13.5 +21.9 +26.7 -1.6 +14.4 +45.9

+15.9 -2.9 +10.3 +10.0 +9.9 +17.3 +19.5 +9.0 +13.3 +1.0 -6.3 +9.4 +7.0

+9.7 +11.1 +22.3 +15.4 +11.0 +11,1 +8.6 +17.0 +5.7 +1.6 +2.7 +5.6 +12.3

+17.8 +23.7 +17.2 +13.1 +16.6 +8.2 +13.3 +16.7 +4.1 +6.7 +5.0 +1.5 +15.8

+12.9 + 7.0 + 9.6 +10.0 +10.3 +10.7 + 7.6 +13.0 +10.4 +16.1 +11.0 +10.1 +15,2

+15.8 +14.4 +10.2 +9.4 +7.8 +1I.8 +6.5

+ 1.3 + 4.4 + 5.5 + 3.8 + 2.9 +0.7 + 1.9 + 2.4 + 0.4 - 2.9 - 1.8 + 0.8 + 2.7

+0.6 -0.5 +0.4 +0.2 +0.3 +0.2 +0.9 +0.6 +0.2 -0.4 +0.2 +0.3

3.6

Monthly 1973--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1974-Jan.

+5.4

+0.5 +27.2 -5.1 +9.5 +12.1 -4.3 +10.5 +35.8

p - Preliminary NOTE: Reserve Requirements October 1, 1970. I/

Growth rates

on Eurodollar borrowings are included beginning October 16,

are based on estimated

monthly average

+2.7 +6.4 +7.2 +8.6 +7.1

I----

t---.I

+0.1

I.-

1969, and requirements on bank-related commercial paper are included beginning

levels derived by averaging end of current

_.___

Other

Bank Credit Keasurai

month end end of previous

month reported

data.

February 15,

1974

Appendix Table 11 RESERVES 4ND MONETARY VARIABLES (Seasonally adjusted, billins of dollars)

RESERVES

Available to Support Pvt. Depo ts

NonPertod

Total

sANK

MONEYSTOCK MEASURES

borrowed

(2)

M De.

Pvc.

Total

adjusted Credit Proxy

(3)

(6)

(7)

ESU4SW HAIIT

Total Loan 6 In ents

OTBIR

Total Time

(9)

(19)

Time Other than CO's

uDepositta

Thrift I Institution Deposita-

(11)

COund (14)

1970 1971 1972

29,193 31,299 31,410

28,861 31,173 30,160

27,099 23,94U

29,053

221 2 235.2 255.7

172.2 182.6 198.7

425.2 473.0 525.5

641.2 726 9 822.4

332.9 364.3 406.4

438,5 487.6 559.D

229.2 270.9 313.3

216.1 253.9 296.9

1973--Jan. Feb Hir.

32,199 31,634 31,910

31,037

30,040 30,085

29,439 29, 368 29,621

256.7 257.9 258.1

199.6 200.4 200.1

529.6 532.3 534.6

830.4 836.7 841.7

409.7 413.5 421.2

567.3 578.5 586.8

317.6 323.5 331.1

300.8 304.4 307.0

6.7 6.1 7.6

Apr. May June

32,300 32,445 32,459

30,589 30,602 30,b08

29,867 30,114 30,548

259.4 262.4 265.5

200.8 203.4 206.2

538.3 543.6 549.4

847,7 855.0 863.5

426.6 430.5 434.5

593.2 601,4 605.5

337.3 342.6 345.8

309.4 311.4 314.2

7.1 5.2 5.3

July Aug. Sept.

33,576 33,906 34,173

31,622 31,741 32,321

31,385 .2,039 32,394

266.4 266.2 265.4

207.0 206.4 205.2

552.0 554.9 556.6

867.9 870.9 873.2

437.6 443.8 445.9

612.2 620.7 622.8

349.4 355.0 357.9

315.9 315.9 316.6

3.9 4.8 5.0

Oct. Nov. Dec.

34,942 34,857 35,105

33,466 33,463 33,807

32,845 32,714 32,912

266.5 268.8 270.4

206.1 207.9 208.8

561.6 566.7 570.7

879.8 886.9 893.2

446.5 447.5 449.6

626.3 628.9 629.7

358.9 359.9 363.1

318.3 320.2 322.5

6.0 5.8 4.9

35,852

34,801

32,802

269.7

207.9

573.8

898.2

454.2

638.0

369.6

324.4

6.1

Dec. Dec. Dec.

1974--Jan.

Weekly: 1973--Dec.

1974--Jan.

Feb.

11.6

5 12 19 26

35,108 34,623 35,211 35,330

33,633 33,321 33,722 34,292

33,041 32,561 32,869 33,209

269.1 270.7 270.9 271.0

208.1 209.2 209.4 208.9

568.2 569.7 571.8 571.6

447.6 447.9 449.3 452.5

299.1 298.9 300.9 300.7

7.2 7.6 7.6 7.3

2 9 16 23 30

35,312 35,752 36,521 35,747 p 35,640

34,102 34,976 35,533 34,565 34,419

32,921 32,747 33,075 32,488 32,892

270.3 269.5 270.0 268.9 268.5

208.8 207.8 208.2 206.9 206.6

572.5 572.0 573.8 573.7 573.7

452.5 453.1 453,5 454.5 454.1

302.2 302.5 303.7 304.8 305.2

7.0 1. I 7.3 7.7 7.8

p 35,169

34,171

32,618

271.0

208.6

577.2

455.7

306.2

7.2

p - Preliminary NOTE: Reserve requirements

on Eurodollar borrowings

dre included beginning QOtler

-~_____ 16,

1969,

and requirements

on bank-related

commercial paper are included beginning

October 1, 1970. Adjusted credit proxy includes mainly total member bank ilepositb subject to reserve requirements, bank-related commercial paper and Eurodollar borrowings of U.S. banks. Weekly data ole daily averages for btatemetL weeks. onthly data are daily averages except for nonbatk coamercial paper figures which are for last day of month.

U.S. ov't Dpen

Estimated monthly

average

Weekly data ate not

avuilable

for MN

total

loans

and investments and thrift institution deposits.

levels derived by aver.ing end of current month and end of previous month reported data.

6.5 6.1 6.1

Appendix Table III

Growth Rate in Money Supply (Per cent change at an annual rate) *1 M

M 1972

1973

M2 M

9.0

5.3

12.3

11.0

14.6

13.2

6.2

8.2

8.9

9.8

10.9

12.0

III

8.7

8.2

10.8

12.8

12.6

9.9

8.4

10.6

10.2

11.8

3.8

7.0

6.9

8.8

9.4

10.7

II III IV

11.5

7.5

11.1

8.7

10.4

9.1

-0.2

5.5

5.2

7.9

4.5

7.2

7.5

3.9

10.1

8.5

9.2

7.3

M = Annual rates of growth calculated from average levels in the final months of the quarters. Q = Annual rates calculated from average levels in all three months of the quarters.

Cite this document

APA

Federal Reserve (1974, February 19). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19740220

BibTeX

@misc{wtfs_bluebook_19740220,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1974},
  month = {Feb},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19740220},
  note = {Retrieved via When the Fed Speaks corpus}
}