bluebooks · June 17, 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.

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

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

Content last modified 6/05/2009.

(CONFIDENTIAL

FR)

June 14,

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

June 14,

CONFIDENTIAL (FR)

1974

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1)

M 1 increased at about a 5 per cent annual rate in May but

there was an acceleration in early June, so that growth for the May-June period now appears likely to fall just under the 7 per cent upper end of

the Committee's range of tolerance. M2 has displayed a generally similar pattern of monthly change, rising at a 5½ per cent annual rate in May and

then at a considerably stronger pace so far in June, when there has been a larger than expected rise in large time deposits other than money market CD's.

For May and June combined, M2 appears likely to grow at a rate

roughly equal to the 7½ per cent top of its range of tolerance.

And RPD

growth is near the upper end of its range. Growth of Monetary Aggregates and RPD's

in April-May Target Period Reserve and Monetary Aggregates (Growth at SAAR in per cent)

RPD's

Range of Tolerance

Latest Estimates

13-20

19.4

3-7

6.7

4½-7½

7.6 Avg. for statement

Memo: Federal funds rate

(per cent per annum)

11-11¾1/

week ending

May 22

10.96

June 5

11.45

June 12

11.60

1/ The range incorporates the increase in the upper limit agreed upon in response to the wire of June 10.

-2(2)

Growth in the bank credit proxy over May and June is

estimated at an average annual rate of 14 per cent, below the extraordinary April pace but still strong.

Banks greatly increased their

borrowings in the CD market in May in view of the continued generally strong loan demands and in anticipation of large maturities in June.

late May and early June, CD growth has slowed substantially, however. Borrowing in the Euro-dollar and commercial paper markets was also relatively strong until late May and then abated. (3)

Deposit growth at nonbank thrift institutions was at only

a 1½ per cent annual rate in May, and available data for early June suggests that inflows have picked up only slightly.

This conforms

generally to the experience of banks with respect to passbook savings and small time deposits.

Time and savings deposit accounts at banks

subject to Regulation Q ceilings have shown little, if any, growth in recent months.

Growth in bank time deposits has been in the form of

money market CD's and other time deposits over $100,000. (4)

Short- and long-term interest rates have fluctuated in

a relatively narrow range in recent weeks.

At times during the inter-

meeting period, market sentiment appeared to be developing that interest rates had reached peak levels and were about to decline. Scattered declines in bank prime loan rates gave credence to this view, and the stock market rallied.

Market interest rates showed little

change, because the money market remained taut and the Account Management sold a large block of bills timed so as to help dampen market expectations of rate declines.

-3(5)

With the potential for a resurgence in bullish sentiment

still present, however, Committee members concurred with Chairman Burns' recommendation of June 10 that the upper limit of the funds rate range be raised to 11¾ per cent, on the understanding that the Desk would use this leeway if market interest rates came under downward pressure or if the monetary aggregates began growing at rates that appeared to be testing the upper limits of their tolerance ranges.

In recent days,

given the latest estimates for the aggregates, the Desk has been aiming at a Federal funds rate in the area of 11½-1l¾ per cent.

The 3-month

bill rate was about 8.30 per cent at the close on Friday, up about 10 basis points from its level at the time of the last Committee meeting. (6)

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.

Projected figures on the two bases are

shown in appendix table IV for the three alternatives presented in the next section.

-4Average of Past Three Calendar Years 1971 -1973

Past Twelve Months May '74

Past Six Months May '74

Past Three Months May '74

Past Month May '74

over

May '73

Nov.'73

Feb.'74

Apr.'74

Total reserves

8.5

9.6

11.5

15.9

20.0

Nonborrowed reserves

7.6

7.7

4.8

-0.1

-9.0

Reserves available to support private nonbank deposits

8.8

10.8

11.6

17.7

20.9

7.0

6.4

7.5

8.2

5.2

M2 (M1 plus time deposits at commercial banks other than large CD's) 10.4

9.0

7.6

5.5

11.7

8.3

8.4

7.0

4.4

Total member banks deposits (bank credit proxy adj.)

10.5

11.0

13.5

20.2

16.8

Loans and investments of commercial banks 2/

12.8

12.1

13.1

14.5

10.2

1.0

1.7

3.2

4.9

5.8

Concepts of Money M 1 (currency plus demand deposits) 1/

M3 (M2 plus deposits at

thrift institutions) Bank Credit

Short-term Market Paper

(Monthly average change in billions) Large CD's

Nonbank commercial paper

-.8

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 average of daily figures, except for data on total

loans and investments of commercial banks, commercial paper, and institutions--which are derived from either end-of-month or last of-month figures. Growth rates for reserve measures in this and tables are adjusted to remove the effect of discontinuities from the series when reserve requirements are changed.

thrift Wednesdaysubsequent breaks in

Prospective developments (7)

Alternatives for Committee consideration are summarized

below (with more detailed figures shown in the table on p.5a). Alt. A

Alt. B

Alt. C

6¾

5¾

4¾

6¾

5¼

Credit proxy

10½

9¾

8¾

13¼-15¼

12½-14½

11½-13½

6½-8½

6-8

5½-7½

7½-9½

7-9

6½-8½

10¾-12¼

11½-13

Targets (3rd & 4th qtrs. combined)

Associated ranges for June-July RPD

Federal funds rate range

10-11½

(inter-meeting period)

(8)

At its last meeting the Committee adopted longer-run

targets for the second and third quarters combined that included a 5½ per cent annual rate of growth in M 1 from the March level.

Extension

of such a growth rate to year-end is illustrated by the dashed line in the chart on the following page.

Rates of growth consistent with

that extended path are shown in alternative C.

These include a 4¾

per cent annual rate of growth in M 1 between June and year-end, which would compensate for the estimated 7 per cent annual rate of growth for M l in the second quarter and would lead to an average 5½ per cent growth for the last three quarters of the year.

MONEY SUPPLY AND LONGER RUN TARGET PATH

RATIO SCALE, BILLIONS OF DOLLARS

Or MAR. '74

5V/2% GROWTH

--5

3ROWTH

-285

6.4%

S275

265

N 1973

J 1974

-5aAlternative Longer-Run Targets for Key Monetary Aggregates M1 1974

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

May June July

279.3 281.3 282.8

279.3 281.2 282.5

279.3 281.1 282.3

592.9 597.8 601.4

592.9 597.7 600.9

592.9 597.5 600.3

925.0 931.0 935.9

925.0 930.8 935.1

925.0 930.6 934.3

Sept.

285.6

284.9

284.3

608.9

607.5

605.6

946.0

943.5

941.2

Dec.

291.0

289.4

287.8

622.1

618.1

613.2

963.1

956.7

951.0

6.6 6.4 7.2

6.6 5.5 5.6

6.5 4.6 4.2

7.5 5.5

7.3 4.8

Rates of Growth

Quarters: 1974

2nd Q. 3rd Q. 4th Q.

7.4 6.1 7.5

7.2 5.3 6.3

7.1 4.6 4.9

7.9 7.4 8.7

7.8 6.6 7.0

7.7 5.4 5.0

8.6 6.4

8.2 5.5

7.7 5.1

9.9 7.2

9.7 6.4

9.3 5.6

Months: June July

1974

Alt. C

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

477.8 482,0 484.2

477.8 481.9 483.9

36,500 36,677 37,070

36,500 36,666 37,020

36,500 36,655 36,970

34,246 34,763 35,064

34,246 34,751 35,015

34,246 34,740 34,965

495.5

494.9

494.0

37,497

37,424

37,343

35,655

35,581

35,500

507.4

505.5

503.1

38,995

38,788

38,583

36,567

36,363

36,161

19.7 8.3 14.6

19.5 7.5 13.3

19.9 10.3 10.2

19.7 9.5 8.8

19.6 8.7 7.4

5.5 11.6

5.1

18.1 10.4

17.7 9.1

17.3 7.8

Alt

May June July

477.8 482.1 484.4

Sept. Dec. Quarters: 2nd Q. 3rd Q. 4th Q,

RPD

Total Reserves

Adjusted Credit Proxy

Alt. A

20.1 11.1 9.6

20.0 10.7 8.6

19.9 7.4

19.8 8.9 16.0

10.8 5.7

10.5 5.5

10.3 5.0

5.8 12.9

10.0

Months: June July

10.3

-6(9)

The staff expects that attainment of the alternative C

aggregates would require a further rise in the Federal funds rate between now and the next Committee meeting to a consistent trading range around 12 per cent or a little above.

Projected growth in nominal GNP for the

second half of the year is now slightly slower than at the time of the last Committee meeting, but the growth rates for the third and fourth quarters--annual rate of 8.8 and 10 per cent, respectively--still suggest sizable increases in transactions demands for cash. (10)

A rise in the funds rate over the weeks ahead would be

associated with further increases in interest rates generally.

The

increases could be quite marked as expectations that market interest rates had peaked--already coming into question--turn into expectations of further rise.

If the funds rate rose to the 12 per cent area, the

3-month bill rate might well fluctuate in a 8½-9½ per cent range over the weeks ahead, the 3-month commercial paper rate would rise above its earlier 11 per cent peak, and the prime loan rate would again be under substantial upward pressure.

However, increases in short-term market

rates, particularly in the Treasury bill area, could be tempered if foreign official demand for U.S. Treasury securities were to strengthen. Rising short rates would probably be communicated to longer-term markets also, given sizable corporate and municipal security offerings in prospect. The increase in bond yields, at least on the highest quality issues, would be moderated, however, to the extent that evidence of monetary restraint tends to make investors somewhat less pessimistic about the outlook for inflation. (11)

The rise in interest rates expected under alternative C

would further constrain inflows of consumer-type time and savings

-7deposits to banks and thrift institutions, given current Regulation Q ceilings.

As a result, growth in M 2 and M3 for the second half of

1974 would be reduced to about 5¼ and 4½ per cent, at annual rates, Banks would be forced to raise interest rates offered for

respectively.

CD's and Euro-dollars.

However, we would expect considerable moderation

in the amount of net new funds raised through these instruments; bank loan growth would probably be cut back by tighter lending terms, and banks would probably become increasingly wary of adding to CD holdings at ever higher interest costs.

Marginal financial and business firms might

find it difficult to refinance maturing debts as banks and other lenders become more selective.

Financial strains would increase generally, and

the odds on failure of some of the more vulnerable firms would rise. (12)

Alternative B encompasses a 5¾ per cent growth rate for M1--

and growth rates of 6¾ and 5½ per cent for M 2 and M 3 respectively--in the second half of 1974.

These aggregate growth rates appear to be con-

sistent with a Federal funds rate around 11½-11¾ per cent, close to the center of the range for this alternative.

Thus, upward interest rate

pressure under this alternative would be considerably less than under alternative C. At this writing, interest rates generally appear to be in process of adjusting to Federal funds trading at rates somewhat above 11

per cent.

This process may be completed by, or shortly after, the

forthcoming Committee meeting; and little further, if any, upward rate movement is likely to develop subsequently if the funds rate remains around the center of alternative B range. (13)

Assuming the prevailing money market conditions, M1

growth in the June-July period is likely to be in a 6-8 per cent annual rate range.

On the basis of partial data for the early part of June,

-8we would expect June growth to be on the order of 8 per cent at an annual rate.

Given the over-all interest rate increase of the past few months,

and the end of the tax refund period, growth in M 1 is expected to slow in July and subsequent months of the third quarter. quarter as a whole, M

For the third

growth is indicated to be 5¼ per cent at prevailing

money market conditions--though rising to 6¼ per cent in the fourth quarter when nominal GNP growth is projected to expand somewhat more rapidly. (14)

The substantial injection of nonborrowed reserves that

seems necessary to attain the aggregates of alternative A would probably lead to an easing of money market conditions.

A downward movement in the

funds rate--and especially a drop to the 10¾ per cent mid-point of the range shown for this alternative--would be accompanied by a sharp decline in market interest rates as investors came to believe that monetary policy had made a major turn. term markets.

The decline would be especially large in short-

In the Treasury bill market, the 3-month bill rate could

drop to below 7 per cent in view of the limited market supply at the moment and the sizable volume of maturing mid-June tax bills.

Given

the basic strength of credit demands, however, the immediate decline in interest rates would probably be followed by a gradual upward readjustment if the Federal funds rate were to hold around 10¾ per cent.

Proposed directive language (15)

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 the preceding section.

As will be noted, alternative A

refers to growth rates in the monetary aggregates prevailing over recent months.

Growth in M1 was at an annual rate of about 7 per

cent in the first quarter, and including an estimate of 8.2 per cent for June, it is about 7 per cent for the second quarter as well. The comparable rates for M 2 are about 10 per cent for the first quarter and about 8 per cent for the second quarter.

Alternative A To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to [DEL: restrictive] prevailing the about maintain

that] provided ACHIEVE BANK RESERVE AND money market conditions [DEL: CONSISTENT WITH GROWTH IN the monetary aggregates AT ABOUT THE at growing be to appear RATES PREVAILING OVER RECENT MONTHS [DEL: rates within the specified tolerance]. of ranges

-10Alternative B To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to

[DEL: restrictive] prevailing the about maintain

that [DEL: ACHIEVE BANK RESERVE AND money market conditions provided the] THAT WOULD MODERATE GROWTH IN monetary aggregates OVER THE specified the within rates at growing be to appear MONTHS AHEAD [DEL: tolerance]. of ranges Alternative C To implement this policy, while taking account of developments in domestic and international financial markets, restrictive] prevailing the about maintain the Committee seeks to [DEL: that provided ACIIEVE BANK RESERVE AND money market conditions [DEL: the] THAT WOULD SLOW APPRECIABLY THE GROWTH IN monetary aggregates OVER THE MONTHS AHEAD [DEL: the within rates at growing be to appear specified ranges of tolerance]. (16)

In the event that the Committee again wishes to couch

the operational paragraph of the directive in

terms of money market

conditions, the specifications of alternative B might be associated with the language used in the directive adopted at the last meeting-namely, that "...the Committee seeks to maintain about the prevailing restrictive money market conditions, provided that the monetary aggregates appear to be growing at rates within the specified ranges of tolerance."

CHART 1

STRICTLY CONFIDENTIAL (FR)

6/14/74

RESERVES AVAILABLE TO SUPPORT PRIVATE NONBANK DEPOSITS BILLIONS OF DOLLARS

l40

for May-Juine

13% growth

M 1974

1-" ll lI I II I I I M

J 1973

* Break n Se- es Actuo

I 1iif11 M

1974 e o RPD After Cra-ges r Reser\e Reqcnemei's

', ' D

CHART 2

,ONF DENTilr_ iF 6/14/74

STPICT,

MONETARY AGGREGATES NARROW MONEY SUPPLY M1

BILLIONS OF DOLLARS

-61 71/2 % growth for May-June 6,12

1973

1974

M 1974

-','i

STRICTLY CONFIDENTIAL (FR) 6/14/74

CHART 3

MONETARY AGGREGATES ADJUSTED CREDIT PROXY

BILLIONS OF

TOTAL RESERVES

#IMv4f'

1974

1973 Break

seq.e

Actua

ee,* ct Tcta: ResE \e

iter Changes

r Resere Requrements

CHART 4

MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDITIONS

PER CENT 12

INTEREST RATES Short-term

8 B

4 BILLIONS OF DOLLARS

-1

1973

1974

1973

1974

TABLF

STRICTLY CONFIDENTIAL

JUNE

RANK RESERVES (ACTUAL AND CURRENT PROJECTIONS)

14,

1974

I RESERVES AVAILAPLE FOR PRIVATE NONBANK DEPOSTTS

REQUIRED RESERVES I AFGPFGATF RESERVES ---------------------------------------------------I SEASONALLY ADJUSTED

I i--------------------------------------------------------------------------------------------I SEAS ADJ

PEROD

I I MONTHLY LEVFLS-SMILLTONSI ------------I 1974--MAR. I APR. I MAY JUN. ANNUAL

RATFS

fl)

33,117 33,660 34,246 (34,751)

NON SEAS ADJ (7?)

37,888 33,743 34,062 (34,396)

TOTAL RESERVES

NONBORROWED RESERVES

(3)

(4)

34,949 35,902 36.500 (36.666)

33,634 34,166 339,10 (33,720)

CD'S AND NON DEP

I I

PRIVATE DEMAND

OTHER TIME DFP

(51

(6)

(7)

8,654 8,651 8,721 ( 8,794)

4,037 4,416 5,031 ( 5379)

20,291 20,411 20,341 (20.400)

GOV'T AND INTERBANK (8)

1,831 2,242 2,254 (' 1,915)

OF CHANGE I

---OUART!ERLY:

197-- -4TH OTR. 1974- -1ST OTR. 2ND OTR.

6.2 S19.7)

MONTHILY: 1974- -MAR. APR. MAY JUN.

WEEKLY LEVELS- -SMTLLTCNS -------------- -------

MAY

JUN.

(

20.0 5.5) S12.8)

1.5 1.0)

-10.0 19.0 -9.0 (-6.7)

37.7

(

5.8

13.4

-5.4

19.4)

(

-7.P)

1.3 S 2.3)

15.1 7.1 -4.1 ( 4.0) S-0.1)

12.7

(

9.2 6.5)

(

7.4 -0.4 9.7 10.0)

(

9.0)

I-

3 10 17 24 1 8 15 22 29

1.7 19.7)

11.9 10.7 ?0.0 17.7)

MAY-JUN.

APR.

6.1

1.4

I I I

I I

20,263 20,218 20,468

8,652 8,633 8.628 8,657

4,099 4,204 4,369 4,566

2,158 1,923 2,367 2,281

20,705

8,693

20,385 20,239 20,308 20,337

8,698 8,727 8,715

4,702 4,855 4,9(3 5,098 5,172

2,464 2,234 2,468 2,400 2,013

5,316 5,401

1,772 1,720

33,240 33,117 33,794 319722

33,116 32,849 33,835 33,991

35,398 35,040 36,161

36,003

33,895 33,846 34,345 34,064

34,277 34,151 34,104 34,218 34,363

34,701 34,304 34,029 33,822 33,973

36,742 36,385 36,572 36,628 36,376

34,585 34,768 34,595 33,540 32,771

34,743 34,407

34,168 33.849

36,51; 36,127

33,461 33,397

20,487 20,089

8,727

20,359

8,746

8,703

NOTF: DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. AT THE FOMC MFFTING OF MAY 21, TuE COMMITTEE AGREED ON A RPO RANGE OF 13 TO 20 PERCENT FOR THE MAY-JUNE PERIOD.

1974

TABLE

STRICTLY CONFIDENTIAL

JUNE

MONETARY AGGREGATES (ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED)

I I

PERIOD

I MONEY SUPPLY I BROAD NARROW (M2) I (M1) (1)

PERCENT ANNUAL GROWTH --------------------OUARTFRLY 1973--4TH

U.S. GOVT. DEPOSITS

459.1 471.2 477.8 (482.0)

I I I

(4)

TIMF AND SAVINGS DFPOSITS I THER I CD S I THAN CD S I TOTAL (5)

(6)

(7)

310.0 312.1 313.6 ( 316.5)

67.7 75.4

I NONDFPOSIT I SOURCES OF FUNDS I

(8)

II II

I 3.7 4.5 3.8 ( 3.5)

377.7 387.4 394.8 (99.1)

8.6 9.6 10.7 (10.51

81.2 (P2.71

11I 6.1

3.3

11.0

8.9

OTR.

586.2 590.2 592.9 (597.7)

I II

(3)

ADJUSTED CREDTT PROXY

I 276.2 278.1 770.3 (281.21

I I

(2)

I MONTHLY LEVELS-SPTLLTONSI ------------------------I 1974--MAR. APP. MAY JUN.

14, 1974

12.6

I T0R. 1974--1ST 2ND OTR. MONTHLY

----- 1974--MAR. APR. MAY JUN.

7.1 ( 7.21

MAY-JUN.

11.0 8.3 5.2 ( 8.2)

3 17 24

JUN.

15.6 (22.7)

12.5 ( 8.4)

8.9 8.2 5.5 9.7)

11.3 31.6 16.8 (10.5)

9.3 30.8 22.9 (13.1)

7.0 8.1 5.8 (11.1)

(18.1)

( 8.5)

1 8 15 ? 22

5 P 12 PFI I

I I

II II

I I

277.5 77'.7 280.1 277.8

588.1 589.3 592.3 590.2

466.3 468.4 472.9 471.8

4.8 5.0 5.0 4.0

382.0 385.4 387.0 389.2

310.5 311.5 312.2 312.3

776.8 278.6 279.5 280.6 78.1

589.6 591.3 593.1 593.8 592.7

473.8 476.4 476.6 478.5 478.5

4.4 5.3 3.3 3.2 3.0

390.8 392.4 394.2 395.2 397.1

312.7 313.6 313.3 314.6

281.0 781.1

596.5 597.1

482.0 482.4

3.7 4.9

397.7 398.3

315.6 316.0

I I ----- - - - - - - - - - -'---- - - - - - -------------------

(13.8

( 7.6)

I I

MAY

( 6.7)

WFEKLY LEVELS-SPTLLIONS

APR.

8.5 (20.0)

I I I

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

9.9 ( 7.8)

112.8

71.4 73.9 74.8 76.9 78.0 82.2 82.3 79.7 7239I 80.6 82.0 82.5 71.4

I - - - - - -- - - - - - - -- - - - - ---

NOTE: DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS.

9.5 9.3 9.4 9.7 I

10.2 10.4 10.e 11.1

11.0 10.6 10.2

- - - - - -

P - PRELIMINARY PE - PARTIALLY ESTIMATED

STRICTLY CONFIDENTIAL (FR) JUNE 14,

1974

TABLE 3 RESERVE EFFECTS OF OPEN MARKET OPERATIONS AND OTHER RESERVE FACTORS (Millions of dollars, not seasonally adjusted)

Rills & Accept. (1)

Open Market Operations 1/ Coupon Agency RP's Issues Issues Net 3/ (3) (4) (2)

Total (5)

Daily Average Reserve Effect 2/ Open Marker A Member Other 4/ Operations Bank Borrowing Factors (8) (7) (6)

A in reserve categories req. rea. against available res. 5/ U.S.G. and interb. (6)+(7)+(8)-(9) (10) (9)

A Tar1et available reserves 5/ (11)

Monthly 1973 --

Nov. Dec.

1974 --

-1,008 1,862

533 226

71 128

-902 -831

-1,307 1,386

394 1,336

-68 -101

-646 -759

-190 -70

-130 546

860 475

Jan. Feb. March

-397 -32 -64

179 30 190

-10 74 122

-100 -1,531

-328 71 1,780

1,031 9 -74

-254 143 166

698 -1,505 -358

773 -356 -323

702 -997 57

895 -875 -30

April May June

790 653

172 207

312 185

-485 1,111

789 2,155

922 1,970

362 865

-338 2 2 -2, 7 p

173 9 20 p

773 354p

July

Weekly 1974

I/ 2/ 3/ 4/

- Apr.

3 10 17 24

-5 206 -33

---172

--119

251 532 142

251 -5 738 399

494 -785 963 156

-210 -309 622 123

385 653 -331 -480

May

1 8 15 22 29

526 267 176 127 80

-----

193 -201 -15

220 494 446 -2,609 3,808

939 761 622 -2,281 3,873

1,103 483 454 86 -692

218 -540 360 1,111 517

June

5 12 19 26

42 -370

207 --

-72

-6,093 4,068

-5,844 3,626

-23 -1,892

-551 -325

532 -174 268 -357

137 -267 986 156

-531 -364 -592 -1,258 6 -13 p

80 -24 497 146 -462p

710 -397 -275 -207 151p

580p 1,740p

-189p -167p

195o -310p

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 for 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, and other F.R. accounts. Target change for May and June reflects the target adopted at the May 21, 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.

315 -130

STRICTLY CONFIDENTIAL (FR) JUNE 14, 1974 TABLE 4 SECURITY DEALER POSITIONS AND BANK POSITIONS Millions of dollars U.S. Govt. Security Dealer Positions Period

Bills (1)

3,238 94

2,203 -39

Jufne

1,894 2,281

July Aug. Sept. Oct. Nov.

(6)

631 -240

Seasonal

8 New York

(8)

2,561 688

38 Others

(9)

-5,243 -1,831

-10,661 - 4,048 -12,843 - 8,711

421 562

161 234

1,843 1,851

30 75

-3,019 -3,507

- 5,872 - 6,443

1,425 1,690 2,745

265 39 395

285 177 216

1,953 2,165 1,852

155 163 148

-2,460 -2,689 -3,173

- 6,106 - 4,940 - 5,355

2,565 2,804 3,441

484 793 973

227 239 307

1,476 1,393 1,298

126 84 41

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

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

Feb. Mar.

1,102 2,436 1,986

540 1,619 583

162 184 134

1,051 1,162 1,314

18 17 32

-4,753 -5,262 -5,030

-10,893 -10,769 -11,058

Apr. May

1,435 408

99 *85

182 154 p

1,736 2,589p

-3,952 -3,17 6 p

-11,603 - 9 ,159 p

10 17 24

2,264 2,120 1,754 472

263 212 80 -39

226 62 329 139

1,503 1,194 1,816 1,939

48 41 47 54

-4,032 -5,375 -4,739 -2,672

-11,062 -11,470 -12,826 -11,648

1 8 15 22 29

810 616 305 94 333

-15 -17 *384 * 8 * 19

177 213 176 9 7p 108p

2,157 1,617 1,977 3,088p 3,605p

74 82 94 112p 114 p

-2,967 -3,423 -4,002 -2,858 -2,447

* 12 * 76

214p 133p

3,054p 2,729p

131p 136p

-3,5 84 p -5,040p

- 9,340p -10,41 8 p

Jan.

Apr

May

June 5 12 19 26 NOTE:

Total

(5)

-6,189 -2,447

Dec.

----

Reserves

136 13

May

1974 --

197 0

Bonds

Member Bank Reserve Positions Basic Reserve Deficit Borrowing at FRB**

3,605 776

Low

1974 --

(3)

Excess**

394 -83

1974 -- High 1973 --

(2)

1,299 -301

Low

Bonds

Coupon Issues

3,796 897

1973 -- High

Dealer Positions Municipal Corporate

* * *

*1,031 *1,110 ~--~

40 102p

9,712 9,102 9,091 9,329 8,711

Government security dealer trading positions are on a commitment basis. Trading positions, which exclude Treasury bills financed by repurchase agreements maturing in 16 days or more, are indicators of dealer holdings available for sale over the near-term. Other security dealer positions are debt 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 weeks, except for corporate and municipal issues in syndicate which are Friday figures. * **

STRICTLY

OCNFIDENfIAL

Monthly averages for rxcess reserves and borrowings are weighted averages of statement week figures.

STRICTLY CONFIDENTIAL

(FR)

JUNE 14, 1974

TABLE 5 SELECTED INTEREST RATES Per cent

Period

ederal Funds

(1)

90-Day

1-Year

(3) 8.43 5.42

Long-Term

Short-Term 90-119 Day Commercial paper

Treasury Bills

CD's New Issue-NYC 60-89 Day

Aaa Utility New Recently Issue Offered (7) (8)

Municipal Bond Buyer

U.S. Government (10-yr. Constant Maturity) (10)

FNMA Auction Yields

(4)

(5)

90-119 Day (6)

10.50 5.63

10.50 5.38

10.75 5.50

8.52 7.29

8.30 7.26

5.59 4.99

7 54 6.42

(11) 9.37 7.69

High Low

10.84

5.61

(2) 8.95 5.15

1974 --

High Low

11.60 8.81

8.78 7.04

11.00 7.88

11.00 8.00

11.00 7.88

9.34 8.05

9 15 8.14

6.08 5.16

7.66 6.93

9.54 8.43

1973 --

May June

7.84 8.49

6.36 7.19

7.26 8.00

7.44 7.98

7.41 8.13

7.51 7.64

7.50 7.64

5.15 5.18

6.85 6.90

7.98 8.07

July Aug. Sept.

10.40 10.50 10.78

8.01

9.26 10.26 10.31

9.09 10.25 10.31

9.19 10.40 10.50

8.01 8.36 7.88

7.97 8.22 7.99

5.40 5.48 5.10

7.13 7.40 7.09

8.46 8.83 9.32

Oct. Nov. Dec.

10.01 10.03 9.95

7.22

9.14 9.11 9.28

9.15 9.06 9.44

8.08 8.91 9.13

7.90 7.90 8.00

7.94 7.94 8.04

5.05 5.18

6.79 6.73 6.74

9.01 8.84 8.78

Jan. Peb. Mar.

9.65 8.97 9.35

7.77 7.12 7.97

8.86

9.05

8.09 8.69

8.83 7.97 8.56

8.21 8.12 8 46

8.22 8 23 8.42

5 22

8.00 8.64

5.41

6.99 6.96 7.21

8.71 8.48 8.53

10.51 11.31

8.33 8.23

9.92 10.82

9.81 10.83

9.78 10.90

8,98 9.24

8.94 9.13

5.73 6.02

7.51 7.58

9.07 9.41

3 10 17 24

9.93 10.02 10.36 10.78

8.41 8.60 8.13 7.96

9.45 9.63

9.25 9.75

10.03

9.38 9.75 9.88 10.25

8.78 9.13 8.91 8.98

8.75 8.92 8.95 9.08

5.73 5.75 5.61 5.82

7.47 7.48 7.46 7.58

1 8 15 22 29

11.17 11.29 11.46 10.95 11.54

8.65

10.65 10.98 11.00 10.90 10.41

10.75 11.00 10.88 10.88 10.63

10.75 11.00 11.00 11.00

9.15 9.11 9.13 9.10 9.08

5.91

10.75

9.27 9.27 9.23 9.34 9.09

6.08

7.63 7.66 7.55 7.54 7.51

Tune 5 12 19 26

11.45 11.60

10.70 10.85

10.63 10.75

10.50 10.50

9.23 9.28p

9.14 9.12p

6.01 6.04

7.51 7.48p

1973 --

1974 --

Apr. May 1974 --

Apr.

May

--.--

'.-.-.

8.29 7.83 7.45

9.80

8.78 8.15 8.03 7.84

8.03 8.11

9.88 10.25

5.12 '.20

6.00 6.04

6.05

8.95 9 18 9.34 9.48 9.54

Daily -- June 6

NOTES:

8.67

(9)

11.40 11.70p I-

7.93 8.36

7.50

10.88 11.00 L

n.a. A-

Columns ' and 6 are one-day Wednesday quotes. For columns 7, 8 and 10 Column 9 is a one-day quote for Thursday following the end of the weekly date is the mid-point of the calendar week over which data are averaged. Column 11 gives FNMA auction data for the Monday preceding the end of the statement week. The FNMA auction yield is the the statement week. average yield in the hi-weekly auction for short-term forward commitments for Government underwritten mortgages.

Weekly data for columns 1 to 4 are statement week averages of daily data.

APPENDIX TABLE I VARIABLES RESERVES ANDMONETARY

MONEY STOCK MEASURES

RESERVES

Total

Period

(1)

Nnborrowed (2)

Adjusted

Support Pvt. Deposits

Credit Proxy

(4)

(5)

(6)

OTHER

BANK CREDIT MEASURES

Available to

(3)

June 14, 1974

Total Time

Loans and Investments

(7)

Other than CD's

(9)

(8)

(10)

Institution eposits / (11)

(Per Cent Annual Rates of Growth)

CD's (12)

Nondeposit Funds (13)

Gov't Demand (14)

(Dollar Change in Billions) (

(Series revised)

Annually:

U.S.

Thrift

Time

Total

revised

Series

1970 1971 1972 1973

+6.0 +7.2 +10.6 +7.8

+9.3 +7.8 +7.7 +7.2

+8.7 +6.9 +10.1 +9.3

+6.0 +6.3 +8.7 +6.1

+8.4 +11.2 +11.1 +8.9

+8.3 +13.3 +13.0 +8.8

+8.2 +9.4 +11.6 +10.6

+8.1 +11.2 +14.6 +13.5

+17.9 +18.2 +15.7 +16.0

+11.1 +16.7 +13.5 +11.4

+8.0 +17.1 +16.6 +8.6

+14.4 + 7.7

-8.4 -7.6

+ -i

+10.4 +19.4

+0.4 +3.0

1st Half 1972 26d Half 1972

+10.8 +9.9

+11.0 +4.1

+8.3 +11.5

+7.7 +9.4

+10.7 +10.9

+12.4 +12.8

+11.2 +11.3

+13.6 +14.7

+15.4 +14.8

+13.8 +12.3

+15.7 +16.3

+4.4 +6.0

-0.2 +0.6

1st Half 1973 2nd Half 1973

+6.7 +8.6

+1.6 +12.7

+10.3 +7.8

+13.8 +7.0

+16.6 + 9.6

+20.8 +10.2

+10.4 +11.8

+10.7 +6.1

+18.6 + 0.8

+1.2 +1.8

-I -I

Quar&erly: 1st Qtr. 1972 2nd Qtr. 1972 3rd Qtr. 1972 4th Qtr. 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

+13.5 +11.0 +13.3 +12.0

+10.5 +11.6 +10.2 +12.1

+15.7 +11.1 +13.0 +15.8

+14.5 +15.7 +14.3 +14.8

+15.5 +11.7 +12.7 +11.4

+15.9 +14.9 +17.8 +14.2

+0.7 +3.7

-0.3 +0.1

-I

+2.4

+0.3

+3.6

+0.3

1st 2nd 3rd 4th

+6.4 +6.9 +10.6 +6.1

-3.6 +7.0 +11.3 +13.4

+7.8 +12.5 +14.2 +1.4

+8.6 +10.6 +5.1 +9.8

+14.6 +12.6 +10.5 +3.3

+19.9 +12.7 +12.7 + 6.3

+22.7 +17.8 +14.0 +6.1

+ 9.9 +10.6 +10.6 +12.6

+11.4 +9.7 +4.6 + 7.6

+11.2 +7.4 +4.7 -3.9

+0.5 +0.7 +1.7 +0.1

+ -: -I -

+9.4

+8.5

+15.9

+15.6

+12.5

+8.6

+13.7 +11.6 +8.7 +9.0 +9.4 +10.4 +7.3 +2.3 +4.2 +6.8 +7.2 +8.6

+ 1.3

+8.6 +7.8 +9.2 +6.6 +2.5

Qtr. Qtr. Qtr. Qtr.

1973 1973 1973 1973

1st Qtr. 1974

+1.7

+1.5

+6.2

+9.7 +7.5

Monthly: 1973--Jan. Feb. Mar. Apr. May June July Aug. Sept. det. Nov. Dec.

+30.1 -21.1 +10.5 +14.7 +5.4 +0.5 +27.2 -5.1 +9.4 +12.1 -4.3 +10.5

+26.8 -38.5 +1.8 +20.1 +0.5 +0.2 +24.9 -13.5 +21.9 +26.7 -1.6 +14.4

+15.9 -2.9 +10.3 +10.0 +9.9 +17.3 +18.5 +10.1 +13.3 +1.0 -6.3 +9.4

+10.8 +8.1 +6.6 +8.6 +10.9 +11.9 +6.3 +5.0 +3.9 +9.3 +10.1 +9.6

+9.7 +11.1 +22.3 +15.4 +11.0 +11.1 +8.6 +17.0 +5.7 +1.6 +2.7 +5.6

+17.8 +23.7 +17.2 +13.1 +16.6 +8.2 +14.5 +18.2 + 5.2 + 7.7 + 7.4 + 3.6

+16.5 +22.3 +28.2 +22.5 +18.8 +11.2 +12.8 +18.9 + 9.8 + 3.7 + 3.3 +11.3

+12.9 + 7.0 + 9.6 +10.0 +10.8 +10.7 + 7.6 +13.0 +10.8 +16.1 +11.4 +10.1

1974--Jan. Feb. Mar. April May p

+35.7 -24.8 -5.4 +32.7 +20.0

+45.9 -30.4 -10.0 +19.0 -9.0

+6.9 -0.3 +11.9 +19.7 +20.9

+7.5 +11.5 +9.0 +7.6 +4.4

+12.5 +1.3 +11.3 +31.6 +16.8

+14.7 +15.5 +16.8

+21.8 +15.2 +9.3 +30.8 +22.9

+16.0 +14.2 +7.0 +8.1 +5.8

+16. Y +10.2

44.9

+1.2 +0.6

+ 4.4

-0.5

-1

+ 5.5

+0.4

+ 3.8

+0.2

-i

+ 2.9 + 0.7

+0.3 +0.2

+ 1.9

+0.9

+ 2.4 + 0.4

+0.6 +0.2

+ +

- 2.9 - 1.8 + 0.8

-0.4 40.2 +0.3

+ -I -i

42.7

+0.1

+1.1

+0.2

+1.1

+0.9

+7.7 +5.8

+1.0 +1.1

+ -i

I Growth rates are based on estimated monthly average levels derived by averaging end of current month and end of previous month reported data. NOTE: Reserve Requirements on Eurodollar borrowings are included beginning October 16, 1969, and requirements on bank-related commercial paper are included beginning October 1, 1970. p - Preliminary.

APPENDIX TABLE II

June 14, 1974

RESERVES ANDMONETARY VARIABLES (Seasonally adjusted, billions of dollars)

__RESERVES

Period

lotal i

(1)

Nonorrowed (2)

Available to Support i Pv. uposla (3)

__ I

Total

(4)

(5)

(6)

(7)

rrox

OTHER_

(9)

Total Time T, (10)

mvavsme

it.

Time Thrift Other Institution than CD's Denositsll De osit., I CD* th (11) I (12) Series revised) 203.9 217.5 237.9 254.8 269.9 297.2

438.5 487.6 559.0

229.2 270.9 313.3

199.6 200.4 200.1

529.6 532.4 534.7

830.2 835.8 940.4

409.7 413.5 421.2

567.3 578.5 586.8

317.6 323.6 331.2

272.9 274.5 276.6

259.4 262.4 265.5

200.8 203.4 206.2

538.4 543.7 549.5

846.4 854.1 862.6

426.6 430.5 434.5

593.2 601.4 605.5

337.4 342.7 345.9

31,358 32.038 32,394

266.4 266.3 265.5

206.9 206.4 205.3

952.1 555.1 556.8

867.1 870.7 873.5

437.6 443.8 445.9

612.8 622.1 624.8

33,466 33,463 33,807

32,845 32,714 32,912

266.6 269.2 271.4

206.1 208.2 209.7

561.9 567.3 572.1

880.3 887.7 894.8

446.5 447.5 449.6

35,850 35,108 34,949 35,902 36,500

34,799 33,916 34,166 33,910

32,799 32,791 33,117 33,660 34,246

270.8 273.7 276.2 278.1 279.3

208.9 211.1 212.9 214.1 214.8

575.4 581.9 586.2 590.2 592.9

900.4 909.0 915.8 921.6 925.0

454.3 454.8 459.1 471.2 477.8

3 10 17 24

35,398 35,040 36,161 36,003

33,895 33,846 34,345 34,064

33,240 33,117 33,794 33,722

277.5 277.7 280.1 277.8

214.1 213.6 216.0 213.9

588.1 589.3 592.3 590.2

1 8 15 22 9 2 p

36,742 36,385 36,572 36,628 36,376

34,585 34.768 34,595 33,540 32,771

34,277 34,151 34,104 34,218 34,363

276.8 278.6 279.5 280.6 278.1

213.0 214.1 215.1 216.0 213.5

36,515

33,461

34,743

281.0

216.4

27,099 29,965 29,053

221.2 235.2 255.7

1973--Jan. Feb. Mar.

32.199 31,634 31,910

31,017 30.040 10,089

29,439 29,368 29,621

256.7 257.9 258.1

Apr. May June

32,300 32,445 32,459

10,589 30,602 30,608

29,867 30,114 30,548

July Aug. Sept.

33,576 33,906 34,173

31,622 11,741 32,321

Oct. Nov. Dec.

34,942 34,857 35,105

1974--Jan. Feb. Mar. April May

I Pyt, Dep.

Total Loans &

332.9 364.3 406.4

28,861 31,173 30,160

June

Adjusted Credit

642.7 727.9 822.8

29,193 31,299 31,410

May

BANK CREDIT MEASURES

(Series revised) 425.2 172.2 182.6 473.0 525.5 198.7

ANNUALLY: 1970 Dec. Dec. 1971 1972 Dec.

Wb .Y: 1974--April

MONEYSTOCK MEASURES

33,634

CD'^I a

(13)

NonDeposits I F.~Jj u[ s U I

(14)

25.3 33.0 43.4

11.6

300.6 303.5 305.7

44.7 49.1 54.6

5.0 4.5 4.9

278.9 281.4 283.9

308.0 310.4

313.1

58.4 61.3 62.0

5.1 5.4 5.6

349.6 355.1 358.0

285.7 288.8 291.4

315.0 315.6 316.7

63.9 66.3 66.7

6.5 7.1 7.3

628.8 632.7 634.6

359.1 360.1 363.5

295.3 298.1 300.6

318.5 320.4 322.7

63.8 62.0 62.8

6.9 7.1 7.4

642.4 650.7 659.8 668.6 674.3

370.1 374.8 377.7 387.4 394.8

304.6 308.2 310.0 312.1 313.6

325.0 327.1 329.6 331.4 332.1

65.5 66.6 67.7 75.4 81.2

7.5 7.7 8.6 9.6 10.7

466.3 468.4 472.9 471.8

382.0 385.4 387.0

389. ?

310.5 311.5 312.2 312.3

71.5 73.9 74.8 76.9

9.5 9.3 9.4 9.7

589.6 591.3 593.1 593.8 592.7

473.8 476.4 476.6 478.5 478.5

390.8 392.4 394.2 395.2 397. 1

312.8 312.7 313.6 313.3 314.6

78.0 7° 7 80.6 82.0 82.5

10.2 10.4 10.8 11.1 11.0

596.5

482.0

397.7

315.6

82.2

10.6

U.S. Gov't D mIn t-H

emn

S (15)

4.0 4.4

Eatimated monthly average levels derived by averaging end of current month and end of previous tmonth reported data. p - Preliminary. NOTE: Reserve requirements on Eurodollar borrowings are included beginning October 16, 1969, and requirements on bank-related coamercial paper are included beginning October 1, 1970. Adjusted credit proxy includes mainly total member bank deposits subject to reserve requirements, bank-related coemercial paper and Eurodollar 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 M3, total loans and investments and thrift institution deposits.

Appendix Table III

Growth Rate in Money Supply (Per cent change at an annual rate) M1

9.0

5.3

12.3

11.0

13.5

12.5

6.2

8.2

8.9

9.8

11.0

11.7

III

8.7

8.2

10.8

13.3

13.0

9.9

8.4

10.6

10.2

12.0

12.2

3.8

7.0

8.6

10.2

1972

1973

11.5

III

1974

7.0

8.8

7.5

11.1

8.8

10.6

9.0

5.6

5.3

7.9

5.1

7.5

8.9

4.5

11.0

8.9

9.8

7.9

7.1

6.7

9.9

9.4

lie

7.2

8.6

7.8

8.5

6.6

7.7

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.

e = Estimated.

Appendix Table IV

Growth Rates in Money Supply for Alternatives

Alt. A 1974

III IV III & IV Combined

6.1 7.5 6.8

6.6 6.8 6.7

7.4 8.7 8.0

7.7 8.2 7.4

6.4 7.2 6.8

6.4 7.0 6.6

5.5 5.6 5.5

5.8 5.5 5.6

4.6 4.2

5.2 4.4

4.4

4.8

Alt. B 1974

III IV III & IV Combined

5.3 6.3 5.8

6.0 5.6 5.8

6.6 7.0 6.8 Alt.

1974

III IV III & IV Combined

4.6 4.9 4.7

5.4 4.5 4.9

5.4 5.0 5.2

7.1 6.8 6.9 C

6.4 5.1 5.7

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

Appendix Table V Money Supply Growth Rates

M1 1973

M 1 less Foreign Official Deposits and Deposits due to Foreign Commercial Banks

January

4.7

5.2

5.3

February

5.6

6.7

March

0.9

0.5

0.9

April

6.0

6.5

6.6

May

13.9

13.0

11.8

June

14.2

14.7

14.4

July

4.1

3.6

August

-0.5

September

-3.6

-3.7

5.0

5.5

4.6

October

1974

M1 less Foreign Official Deposits

2.8

10.1

November

11.7

December

9.8

9.9

8.2

January

-2.7

-3.6

February

12.9

12.5

13.1

March

11.0

11.9

11.2

April

8.3

5.7

5.8

May

5.2

7.0

6.2

10.9

Cite this document

APA

Federal Reserve (1974, June 17). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19740618

BibTeX

@misc{wtfs_bluebook_19740618,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1974},
  month = {Jun},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19740618},
  note = {Retrieved via When the Fed Speaks corpus}
}