bluebooks · December 16, 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)

December 13, 1974 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS

Recent developments (1)

M1 grew at about a 7 per cent annual rate in November,

and data for early December suggest that the growth rate in prospect for November and December combined is about 6½ per cent.

This would

be at the low end of the Committee's two-month range of tolerance.

the case of M 2 , the estimate for November and December combined shows a growth rate of about 8½ per cent, somewhat above the low end of the range of tolerance, as growth in consumer-type time and savings deposits at banks has been strong. has been modest.

Bank credit expansion, as measured by the proxy,

The outstanding volume of large CD's dropped in

November, but growth picked up in early December, partly in anticipation of forthcoming maturities around the tax date.

Growth of Monetary Aggregates and RPD's in November-December Period Reserve and Monetary Aggregates (Growth at SAAR in per cent) M1

M2 RPD

Range of Tolerance

Lat est Estimates

6.4

6½-9½

8-10½

8.7

2½-5½

4.1

Memo: Federal funds rate (per cent per annum)

8½-10

Avg

Avg. for statement

week ending NovNov.20 9.34 27 9.46 9.02 DecDec.4 11 8.86

-2(2)

Evidence that the monetary aggregates were expanding at

annual rates near the low ends of the Committee's ranges of tolerance became available shortly after the November FOMC meeting.

The Desk

moved to a less restrictive reserve management posture, expecting the Federal funds rate to move down to around 9¼ per cent from the 9-3/8-9-1/2 per cent area.

During the statement week ending November 27,

however, the funds rate averaged 9.46 per cent as banks elected to hold a very large amount of excess reserves over the Thanksgiving holiday. In early December, the funds rate finally eased, averaging about 9 per cent in the week ending December 4.

With growth in the monetary aggregates

continuing near the low ends of the Committee's ranges of tolerance, and with the discount rate reduced from 8 to 7¾ per cent on December 6, the Desk has most recently been aiming at a Federal funds rate around 8¾ per cent or a little below. (3)

Shifts in bank demands for excess reserves and borrowings

have complicated the task of monetary management in recent weeks.

Member

bank borrowing at Reserve Banks rose to an average of about $1.4 billion in the two statement weeks ending December 4, which bracketed the Thanksgiving holiday.

Excess reserves were large in both weeks, averaging about $500

million.

In the statement week just ended, member bank borrowings

declined to an average of only $647 million and excess reserves were negative, in part because banks had sizable carry-over reserve surpluses

from the previous week.

-3(4)

Because market participants had widely anticipated a further

easing of money market conditions following the November Committee meeting, the initial tendency for the Federal funds rate to level off at around 9½ per cent was reflected in a snap-back of short- and long-term market rates. When the Federal funds rate resumed its decline, most other market rates also began to move down again; the December 6 cut in the discount rate, to 7¾ per cent, accelerated this process. Recently, rates on Treasury and Federal agency securities have dropped below the levels prevailing at the time of the last Committee meeting. but yields on private market instruments remain somewhat higher, and those on municipal issues have continued to rise. Weakness in the municipal sector has reflected the continuing lack of demand from key investor groups.

(5) Savings flows to non-bank thrift institutions--like those to banks--strengthened further in November and early December.

At the

S and L's, November growth was around an 8½ per cent seasonally adjusted annual rate and at the savings banks it was around 6½ per cent.

At both

types of institutions the November performance was nearly as favorable as in the same month a year ago, and roughly the same pattern of flows appears to be continuing in early December.

The combination of improved

savings flows and a limited supply of mortgages available for immediate delivery has resulted in declining mortgage rates throughout the intermeeting period. (6) The table on the following page shows (in percentage annual rates of change) selected monetary and financial flows over various recent time periods.

Appendix table IV compares money supply growth rates

Average of Past Three

Past Twelve

Past Six

Past Three

Past

Calendar Years

Months

Month

1971 -1973

Nov. '74 over Nov. '73

Nov. '74 over May '74

Nov. '74 over Aug. '74

Nov.'74 over Oct.'74

Total reserves

8.6

5.4

- 3.0

1.5

Nonborrowed reserves

7.7

9.3

13.6

21.3

20.7

Reserves available to support private nonbank deposits

8.8

9.4

7.3

- 3,2

0.8

7.0

5.2

4.1

4.0

6.8

10.4

8.0

7.2

7.1

9.7

M 3 (M2 plus deposits at thrift institutions) 11.7

7,1

6.1

6.2

8.8

10.0

6.6

3.3

6.1

12.8

9.8

4.6

- 1.5

4.2

Large CD's

1.1

1.9

1.2

- 0.7

Nonbank commercial paper

Concepts of Money M 1 (currency plus demand deposits) 1/ 2 (M1 plus time deposits at commercial banks other than large CD's)

Bank Credit Total member bank deposits (bank credit proxy adj.) 10.4 Loans and investments of commercial banks 2/ Short-term Market Paper (Monthly average change in billions)

Other than interbank and U.S. Government.

Based on month-end figures.

Includes loans sold to affiliates and branches.

NOTE: All items are based on average 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-of-month 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.

-5computed on a quarterly-average basis with those computed on a last-monthof-quarter basis. table V for the

Projected figures on the two bases are shown in appendix

four alternatives presented in the next section.

-6Prospective developments (7)

Summarized below for Committee consideration are four

alternative sets of specifications detailed data shown in

for key monetary variables (with more

the table on page 6a.

The length of

to which the longer-run growth rates of the aggregates

the period

apply (November '74-June '75) has been kept the same as in recent blue books, but the period has been shifted forward to encompass the two quarters ahead.

Since money supply data for December are still based

mainly on projections, November has been taken as the base month and thus the period is actually seven months.

(In recent blue books August

had been used as the base for longer-run growth rates, which had encompassed the fourth quarter of 1974 and the first quarter of 1975). Alt. A

Alt. B

Alt. C

Alt. D

7¼

6½

5½

9¾

8½

7½

Credit proxy

7½

4½

4¼-6¼

Longer-run growth rates (Nov. '74-June '75)

Associated ranges of tolerance for Dec.-Jan.

5¼-7¼

4¾-6¾

4½-6½

7¾-9¾

7¾-9¼

7-9

6¾-8¾

RPD

9½-11½

8½-10½

8-10

7½-9½

7½-9¼

8-9½

Federal funds rate (inter-meeting range) (8)

6¼-8½

7-9

The longer-run targets adopted by the Committee at its

last meeting involved an M 1 growth of 5¾ per cent from August to March. Expansion since August has fallen below this path. The following chart

-6aAlternative Longer-Run Growth Rates for Key Monetary Aggregates

1974 Nov. Dec. 1975 Jan.

Mar. June

Alt. A

Alt. B

Alt. C

Alt. D

Alt. A

Alt. B

Alt. C

Alt. D

283.3 284.8

283.3 284.7 286.0

283.3 284.7 285.9

283.3 284.6 285.8

612.7 616.9 621.7

612.7 621.2

612.7 616.6 620.9

612.7 616.5 620.7

289.1 294.1

288.8 293.3

288.4 292.4 Growth Rates

633.5 651.8

631.2 647.2

629.8 643.6

628.4 640.0

286.2 289.9 295.3

616.7

Nov.'74--June'75

7.3

6.5

6.0

5,5

10.9

9.7

8.6

1974 4th Q. 1975 1st Q. 2nd Q.

5.7 7.2 7.5

5.6 6.2 6.9

5.6 5.8 6.2

5.4 5.3 5.5

8.8 10.8 11.6

8.7 9.4 10.1

8.6 8.6 8.8

8.5 7.7 7.4

1974 Dec. 1975 Jan.

6.4 5.9

5.9 5.5

5.9 5.1

7.8 7.6 8.8 8.4 Credit Proxy

7.4 8.2

Alt. A

Alt. B

Alt. C

1974 Nov. Dec. 1975 Jan.

951.2 957.7 965.3

951.2 957.4 964.4

951.2 957.3 963.9

Nov. June

983.8 1012.6

979.9 1004.4

977.9 999.2

9.6

8.7

7.9 9.4 10.0

7.8 8.6 8.7

7.8 8.8

7.7 8.3

Nov.'74--June'75 1974 4th Q. 1st Q. 2nd Q. 1974 Dec. 1975 Jan.

11.1 8.0 10.9

11.7 8.2 9.5

8.2 9.3 Alt. D

951.2 957.2 963.5 975.7 994.2 Growth Rates 7.7

7.6 7.9

Alt. A

Alt. B

Alt. C

Alt. D

491.5

491.5 494.2 495.7

491.5 494.1 495.2

491.5 494.0 494.8

500.7 513.4

498.8 509.0

497.0 504.6

7.6

4.6 4.0 2.4 6.1 6.1 1.9

494.4

496.2 502.6 517.3 9.0 4.3 6.6 11.7

4.2 5.3 10.1

6.1 4.1 3.8 8.2

7.1 4.4

6.6 3.6

6.3 2.7

LONGER RUN GROWTH RATES OF MONEY SUPPLY

RATIO SCALE, BILLIONS OF DOLLARS

A-1295 -

53%% Growth Path

285

Growth Rates-Nov. '74 to June '75 To Point A 714% To Point B 61/2% To Point C 6% To Point D 51/2%

275

O 1974

M 1975

-7shows the relationship to this path (extended to June) of the longer-run growth rates for M1 contained in the four alternatives shown above. (9)

The 5½ per cent growth rate in M 1 from November forward,

under alternative D, appears to be consistent with prevailing money market conditions, as typified by a Federal funds rate around 8¾ per cent.

Under this alternative M1 may be expected to grow in a 4¼-6¼ per

cent annual rate range

in the two month December-January period.

This

alternative does not contemplate making up for recent shortfalls in M1 growth. (10)

Alternatives C and B involve growth rates of M 1 of 6

and 6½ per cent, respectively, through the first half of next year. Under alternative B the level of M1 by June is the same as that obtained by extending the 5¾ per cent August-March growth path to June.

This

alternative is consistent with the basic chart show projection, which assumes the same catch-up in M1 growth and also assumes continuation of the 5

per cent basic M1 growth path throughout the chart show projection

period (to mid-1976).

Under alternative C, the catch-up period would

extend into the fall. (11)

Because of the further weakening in GNP growth, pro-

jected by the staff, some further decline in interest rates over the next few months now appears to be required to achieve the monetary aggregate objectives of either alternatives C or B.

Between now and the

next Committee meeting, alternative C would appear to entail a Federal funds rate of around 8-3/8 per cent, and alternative B around 8 per cent-the mid-points of the ranges shown in paragraph (7).

M1 growth in the

December-January period under both alternatives may be on the low side

-8of longer-run growth rates, but growth would be expected to increase somewhat later on as a result of the lagged impact on money demand of the further interest rate declines. (12)

Alternative A encompasses a higher 7¼ per cent annual rate

of growth in M 1 between now and mid-year.

The Federal funds rate under

this alternative would be likely to drop to the 7¼-7½ per cent area by mid-January.

The implications for economic activity and prices of moving

on to such a growth path for M1 will be analyzed in the chart show. (13)

Although demands in credit markets are in process of

moderation, they remain fairly strong in particular market sectors. Corporate demands for long-term funds still appear to be quite substantial, and business short-term borrowing may be sustained temporarily by involuntary inventory accumulation.

In the municipal market, demands also remain

sizable, while institutional investor interest appears to be very limited. Moreover, larger than seasonal borrowing by the Treasury can be expected during the winter.

Against this background, it would appear that further

declines in interest rates over the next few weeks may be limited in the absence of a noticeable further decline in the Federal funds rate, and interest rates could back up some. (14)

A drop in the funds rate to aroung 8-3/8 per cent would

probably forestall tendencies for interest rates to back up, and would likely lead to a modest renewal of rate declines.

A drop in the funds

rate to around 8 per cent would have an appreciable downward effect on short-term market rates, would trigger further declines in bank prime loan rates, and would more noticeably ease long-term market conditions.

-9Market expectations of a further decline in the discount rate might begin to develop, but they would become much more pronounced if the funds rate were to drop as much as is implied under alternative A. (14)

Net inflows of time and savings deposits (other than

money market CD's) at banks are likely to continue to be relatively strong under each of the alternatives presented, with growth highest, of course, under the easiest alternative.

The position of thrift institutions

probably also will continue to improve, even under alternative D. However, it would probably require a further decline in market interest rates, and an accompanying more rapid inflow of savings funds,to ensure a significant liberalization in mortgage loan commitment policies by thrift institutions. (15)

Banks are likely to moderate offerings of large CD's

in the period ahead, given the expected availability of funds from other sources, reduced loan demands, and continued conservative bank investment and lending policies.

Offerings could remain on the strong side,

however, until year-end if banks attempt to show a lengthening in their liability structure in their December 31 statement by reducing reliance on Federal funds. Should market interest rates begin to drop sharply,

banks might well step up CD offerings in order to acquire securities in anticipation of capital gains.

-10Proposed directive (16)

Presented below are four 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. Alternative A To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve bank reserve and money market conditions consistent with MORE RAPID[DEL: moderate] growth in monetary aggregates over the months ahead.

Alternative B To implement this policy, while taking account of

developments in domestic and international financial markets, the Committee seeks to achieve bank reserve and money market

conditions consistent with SOMEWHAT MORE RAPIDmoderate] [DEL:

growth

in monetary aggregates over the months ahead. Alternative C To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve bank reserve and money market conditions consistent with moderate growth in monetary aggregates over the months ahead.

-11Alternative D To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve bank reserve and money market moderate] growth in conditions consistent with RELATIVELY SLOW [DEL: monetary aggregates over the months ahead.

CHART 1

STRICTLY CON FIDENTIAL(FR)

12/16/74

RESERVES AVAILABLE TO SUPPORT PRIVATE NONBANK DEPOSITS BILLIONS OF DOLLARS

22% growth

S 1973

J 1974

M 1975

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

0 1974

I .-

STRICTLY CONFIDENTIAL(FR)

CHART 2

12/16/74

MONETARY AGGREGATES NARROW MONEY SUPPLY M1

BILLIONS OF DOLLARS

-300

295

-280

290

9%2% growth for Nov -260

285

ER MONEY SUPPLY M2 280

1974

1975

1974

CHART 3

STRICTLY CONFIDENTIAL(FR) 12/16/74

MONETARY AGGREGATES ADJUSTED CREDIT PROXY

BILLIONS OF DOLLARS 520

-500

-480

- 460

TOTAL RESERVES

1873

1974

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

1975

CHART 4

MONEY MARKET CONDITIONS AND INTEREST RATES INTEREST RATES PERCENT

Short-term

PERCENT

WEEKLY AVERAGES

WEEKLY

INTEREST RATES

Aaa L

MUNICI

I I

e_.

GOVERNMENT 8B 10-YEAR AVERAGES

BILLIONS OF DOLLARS

TREASURY BILLS

MUNICIPAL BOND BI

3-MONTH

THURSDAYS

PRIME COMMERCIAL PAPER 4-6 MONTH SOWED lk i

1973

I I

I l

1974

1973

1974

TABLE

STRICTLY CONFIDENTIAL

DECEMBER 13,

BANK RESERVES (ACTUAL AND CURRENT PROJECTIONS)

1974

- - - -- - - - - -- - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - -- - - - - - - - - - - - - - - _- -__ - _- _ __- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - II RFSERVES AVAILABLE FOR PRIVATF NONBANK DEPOSITS

AGGREGATE RESERVES

REQUIRED RESERVES

I I

SEASONALLY

TOTAL NONBORROWED I-----------------------------I S SEAS ADJ RESERVES RESERVFS I NON SEAS ADJ ii -----------------------------------------'-------- -------

PRIVATE DEMAND

PERIOD

----"--

(1)

(?)

OTHER TIMF DEP

CD'S AND NON DEP

GOV'T AND INTERBANK

' (5)

r4)

(3)

ADJUSTED

(6)

(7)

(8)

MONTHLY LEVELS-$MILLIONSI

--- I

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

3 5,296 3.4,905 (3 4,994) (3 4,680)

1974--SEP. OCT. NOV. DEC. ANNUAL RATES

3 5,133 34,838 13 5,001) (3 4,898)

QUARTERLY: OTR. OTR. OTR. QTR.

MONTHLY: 1974--SEP. OCT. NOV. DEC.

WEEKLY -----

r.7 19.1 9.1 2.5)

7.8 -0.7 0.8) 7.4)

NOV.-DFC.

Ft II I II II II II II i! II II i II I' II

OF CHANGE

1974--1ST 2ND 3RD 4TH

1 II

4.1)

37,282 36,874 (36,986) (36,895)

1.3 20.1 8.2 ( 5.2)

34 ,000 35 ,061 1355,733) (38 (35 ;,998)

1.2 0.8 5.6 33.6)

(

20,367 20,409 (20,5191 (20,611 I

I (

5,643 5,224 ( 4,966) ( 4,734)

1,986 1,969 ( 1,992) ( 2,215)

0.4 2.2 0.1 8.2

15.5)

9.7 50.2 20.7) 28.0)

-1.4 4.8 4.1) 15.6)

8.5)

24.6)

9.9)

7.1

-1.2 1.5)

9,092 9,130 ( 9,201) ( 9,1021

LEVELS-SMILLIONS ---------

NOV.

DEC.

6 13 20 27

3 5,044 3 4,824 3 4,733 3 5,353

35,038 3 4,743

4 11

3 5,060 34,390

I 11

,899 ,506 ,462

34,812 3c,348

37,026 36,604 36,829 37,371

35 35 35 35

35,162 34,265

37,269 36,537

36 ,197 35 ,890

,890

20,459 20,458 20,536 20,578

9,170 9,168 9,203 9,241

5,113 4,999 4,927 4,892

1,982 1,779 2,097

20,609 20.499

9,241 9.275

4,855 4,810

2,209 2.147

NOTE: DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. AT THE FOMC MEETING OF NOV. 19, 1974 THE COMMITTEE AGREED ON A RPD RANGE OF 2.5 TO 5.5 PERCENT FOR THE NOVEMBER-DECEMBER PERIOD.

2,018

- -_

STRICTLY CONFIDENTIAL

TABLE

DECEMBER 13,

MONETARY AGGREGATES (ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED)

------------------------------------------------------ -_ PERIOD PERIOD

MONEY SUPPLY NARROW I BROAD (M1) I (M2

ADJUSTED CREDIT PROXY

II II

U.S. GOVT. DEPOSITS I

- - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - (1) MONTHLY ------------------

LEVELS-tBILLTONSI --I 1974--SEP. OCT. NOV. DEC.

(2)

13)

603.6 607.8 (612.7) (616.61

489.1 488.2 (491.5) (494.11

(4)

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

I NONDEPOSIT I SOURCES OF FUNDS I

- - -- - - - - - - - - - - - - - - - - - - - - - - - (7) (5) I (6)

(8)

II 280.8 281.7 (283.3) (284.71

6.3 3.7 (4.7) ( 2.6)

407.6 412.3 (414.9) (419.7)

322.8 326.1 (329.4) (331.9)

15.1 21.3 9.2 (11.9)

12.8 8.6 7.3 (11.3)

6.8 13.8 t 7.61 (13.91

4.9 12.3 (12.1) ( 9.1)

(10.8)

(10.7)

84.8 86.2 (85.5) (87.8)

8.6 7.9 ( 7.6) ( 7.7)

It PERCENT ANNUAL GROWTH

--- -

QUARTERLY --------1974--IST 2ND 3RD 4TH

I I

II II

5.5 6.5 1.6 ( 5.6)

QTR. QTR. OTR. OTR.

9.3 7.7 4.6 (8.6)

8.2 20.4 6.6 ( 4.1)

MONTHLY 1974--SEP. OCT. NOV. DEC. NOV.-DEC.

1.3 3.8 (6.8) ( 5.9)

3.2 8.3 ( 9.7) ( 7.61

( 6.4)

8.7)

3.9 -0.2 I 6.1) ( 6.3) (6.3)

II II II II

WEEKLY LEVELS-SBILLIONS --- ----- -----------NOV.

DEC.

6 13 20 27

282.0 282.8 283.3 283.3

4 P 11 PFI I

285.8 284.5

610.0 612.1 612.6 613.4

488.9 491.3 492.1 492.1

3.2 5.5 5.7 4.7

413.8 414.7 414.4 415.4

328.1 329.2 329.3 330.1

85.7 85.5 85.1 85.3

7.3 7.1 7.8 8.2

615.2 615.6

493.6 494.6

3.6 3.5

416.0 418.8

329.5 331.1

86.5 87.7

7.6 7.7

------ -- - ---- --- - - ---- -- -- ----NOTES DATA SHOWN IN

---- 11---11-_-

------

PARENTHESES ARE CURRENT PROJECTIONS.

------

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

----------- --^--- ----- -I

P - PRELIMINARY PE - PARTIALLY ESTIMATED

-----------------^----^--- ----------------^-- ---------

II----- --------

1974

STRICTLY CONFIDENTIAL (FR) DECEMBER 13, 1974 TABLE 3 RESERVE EFFECTS OF OPEN MARKET OPERATIONS AND OTHER RESERVE FACTORS (Millions of dollars, not seasonally adjusted)

Open Market Operations 1/ Bills Coupon Agency & Accept. Issues Issues (1)

(2)

(3)

RP's Net 3/

Total

(4)

(5)

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

(7)

(8)

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

(9)

Target available reserves 5/ (1)

Monthly 1974 --

May June

653 -544

207 176

185 237

1,111 -984

2,155 -1,115

1,970 -673

866 420

-2,239 74

207 -400

390 221

-130 275

July Aug. Sept.

898 862 -594

125 -176

726 235 191

-3,760 2,225 549

-2,011 3,322 322

1,601 141 -32

309 39 -60

-901 -464 99

465 -450 -67

544 166 74

375 180 375

-1,727 1,217

-212

-331

-243 981

-1,970 2,739

-633 327

-1,494 -507

1,990 201

178 -209

-315 230

315 395 450

Oct. Nov. Dec. 1975 --

Jan.

Weekly 2 9 16 23

-100 -338 -391 -665

--- --- 823 -5,869 7,090 -2,027

724 -6,207 6,698 -2,692

563 -1,357 -768 -122

-313 -973 -501 -422

337 1,398 2,123 -455

170 -21 83 -290

417 -911 771 -709

-324

336

161

316

-35

-222

664

'To.

6 13 20 27

-7 -374 835 251

134** -1,341** 1,675 1,388

-511 -29 269 114

469 912 -1,629 -1,231

Dec.

4 11 18 25

554 56

532 -243

-409 -425

-190 -112

1974--Oct.

131* -131* -212 -

--331 --

953 -3,101 1,485 3,088

1,077** -3,607*2,652 3,550

--- -5,269 3,987

-4,715 4,043

1 p 63 .1 p 246p 6 -2 5p

- p -295p 6 9p 536p

119p lllp

-187p -891p

2/ 3/ 4/ 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 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. Reserves to support private nonbank deposits. Target change for Nov. and Dec. reflects the target adopted at the Nov. 19, 1974 FOMC meeting. Target change for previous months reflects the bluebook patterns that are consistent with target ranges that were adopted during the month.

Special certificate.

(Direct Treasury borrowing from F.R.)

Reflects special certificate purchase.

STRICTLY CONFIDENTIAL

(FR)

DECEMBER 13,1974 TABLE

SECURITY DEALER POSITIONS AND BANK POSITIONS Millions of dollars

U.S. Govt. Security Dealer Positions Period Bills ()

Coupon Issues (2)

Dealer Positions Municipal Corporate Bonds Bonds () (4)

Excess** Reserves (5)

Member Bank Reserve Positions Basic Reserve Deficit Borrowing at FRB** Total Seasonal 8 New York 38 Others (6) (7) (8) (9)

3,796

1,299

384

631

2,561

163

-5,243

-10,661

897

-301

-240

688

-1,831

- 4,048

High Low

3,553 -289

2,203 -309

253 0

384 27

628 -189

3,906 647

176 13

-7,870 -2,447

-12,826 - 6,046

1973--- Nov. Dec.

2,804 3,441

793 973

90 105

148 276

239 307

1,393 1,298

84 41

-4,469 -4,682

- 8,186 - 9,793

1974 --

Jan. Feb. Mar.

3,102 2,436 1,986

540 1,619 583

114 120 68

254 263 239

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 June

1,435 408 580

99 -85 9

39 142 66

78 83 124

182 178 204

1,736 2,590 3,020

40 102 134

-3,952 -3,171 -4,445

-11,603 - 9,091 - 9,920

July Aug. Sept.

457 1,758 2,309

-214 398 552

14 33 23

79 108 85

162 197 180

3,075 3,337 3,282

149 164 139

-3,522 -4,231 -4,235

- 9,555 - 9,224 -. 8,250

Oct. Nov.

2,174 *2,900

654 *1,608

25 83

166 268

153p 308p

1,813p 1,253p

117p 6 7p

-4,602 36 3 -6, p

- 8,689 - 9,674p

2 9 16 23 30

1,131 1,269 2,522 2,638 2,677

772 621 566 616 776

171 12 23 6 4

80 117 207 259 202

456 -55 349 -159 319p

3,218 2,245 1,744 1,322 1,638p

142 134 122 107 4 10 p

-3,844 -5,388 -5,295 -4,101 -3,772

- 6,046 - 8,399 -10,020 - 8,696 - 8,383

Nov.

6 13 20 27

2,518 2,962 *2,327 *3,553

534 1,919 *1,903 *1,709

93 60 164 92

202 222 384 329

302p 199p 66p 643p

1,12 p 1,098p 1,367p 1 48 1 , p

79p 70p 6 3p 6 5p

-5,015 -7,688 -6,802 -5,795

- 8,976 -10,046 -10,040 - 9,871

Dec.

4 11 18 25

*2,975 *2,965

*1,630 *1,678

171 159p

167

1,072p 647p

51p 34p

-5,485p -7,445p

-10,095p 10 7 63 - , p

1973 -- High Low 1974

1974--oct.

NOTE:

197

16 7

35 p -189p

Trading positions, which exclude Treasury bills financed by repurchase agreeGovernment security dealer trading positions are on a commitment basis. Other security dealer positions are debt ments maturing in 16 days or more, are indicators of dealer holdings available for sale over the near-term. The basic reserve deficit is excess reserves less borrowing at Federal Reserve less net Federal in syndicate, excluding trading positions. issues still funds purchases. Weekly data are daily averages for statement weeks, except for corporate and municipal issues in syndicate which are Friday figures. *

STRICTLY CONFIDENTIAL

** Monthly averages

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

STRICTLY CONFIDENTIAL (FR) DECEMBER 13,

1974

TABLE 5 SELECTED INTEREST RATES Per cent

Short-Term Treasury Bills 90-119 Day Commercial

Period ----4 -

Q0-nar L

Fedra (2)

-sr e

- r Fuands I

D, .

An-8O20"

(5) 10.50 5.38

(6) 10.75 5.50

(7) 8.52 7.29

(8) 8.30 7.26

(9) 5.59 4.99

10.50 5.63

n-.11i o-Ian

nTl .

511

Off

9.63 6.53

9.54

12.25

6.39

7.88

12.25 8.00

12.00 7.88

10.61 8.05

10.52 8.14

10.03 9.95

7.83 7.45

7.40 7.01

9.11 9.28

9.06 9.44

8.91 9.13

7.90 8.00

Feb. Mar.

9.65 8.97 9.35

7.77 7.12 7.97

7.01 6.51 7.34

8.86 8.00 8.64

9.05 8.09 8.69

8.83 7.97 8.56

Apr. May June

10.51 11.31 11.93

8.33 8.23 7.90

8.08 8.21 8.16

9.92 10.82 11.18

9.81 10.83 11.06

July Aug. Sept.

12.92 12.01 11.34

7.55 8.96 8.06

8.04

8.88 8.52

11.93 11.79 11.36

Oct. Nov.

10.06

7.46 7.47

7.59 7.29

11.04 10.43 10.11 9.81 9.72

6.53

8.03 7.63 7.65 7.41

9.63 9.37 9.34 9.46

4 11

-- Nov.

Dec. 1974 -- Jan.

-- Oct.

9 16 23 30 Nov.

6 13

20 Dec.

U.S. Government (10-yr. Constant MB

c1T' Y

(10)

FNMA Auction V4i

(11)

7.54 6.42

9.37 7.69

7.15 5.16

8.14 6.93

10.59 8.43

7.94 8.04

5.18 5.12

6.73 6.74

8.84

8.21 8.12 8.46

8.21 8.23 8.44

5.22 5.20 5.41

6.99 6.96 7.21

8.71 8.48 8.53

9.78 10.90 10.88

8.99 9.24 9.38

8.95 9.13 9.40

5.73 6.02 6.13

7.51 7.58 7.54

9.07 9.41 9.54

11.83 11.69 11.19

11.83 11.91 11.38

10.20 10.07 10.38

10.04 10.19 10.30

6.68 6.69 6.76

7.81 8.04 8.04

10.25 10.58

9.55 8.95

9.35 8.78

9.33 8.72

10.16 9.21

10.23 9.34

6.57 6.61

7.90 7.68

10.22 9.87

10.00

10.13

10.61

9.50

7.50

10.50 10.13 9.56 9.38 8.93

9.50 8.88 8.88

9.25 8.88 8.88

10.44 10.03 9.42

10.52 10.36 10.36 10.02 9.82

6.68 6.52 6.48 6.51 6.65

7.99 7.94 7.87 7.84 7.82

7.76 7.43 7.38 7.45

7.46 7.37 7.20 7.23

9.00 9.00 8.88 8.93

8.88 8.75 8.50

9.00 8.87 9.17 9.68

9.28 9.17 9.29 9.38

6.66 6.55 6.53 6.71

7.76 7.72 7.61 7.63

9.93

9.00

8.88 8.63 8.50 8.88

9.02 8.86

7.45 7.28

7.20 6.95

9.22 9.00

9.25 8.88

9.13 8.75

9.50 9.60p

9.39 9.47p

6.89 7.15

7.61

9.61

8.88

7.48 7.38

7.12 6.75

9.25 9.00

9.45

Municipal V0 A U.-

(4)

Vp e

(3) 8.43 5.42

13.55 8.81

-- High

Low

1974

run

8.95 5.15

Low

1973

(1)

Aas Utility New Recently

10.84 5.61

1973 -- High

1974

PFdPral1

Long-Term CD's New Issue-NYC

6.87 7.72 7.60 7.92

8.78

9.84

10.32 10.11

9.81

7.37p

18 25 Daily -- Dec.

NOTES-

5 12

8.72

7.58 n.a.

For columns 7, 8 and 10 the Columns 5 and 6 are one-day Wednesday quotes. Weekly data for columns 1 to 4 are statement week averages of daily data. weekly date is the mid-point of the calendar week over which data are averaged. Column 9 is a one-day quote for Thursday following the and of the The FNMA auction yield is the average yield Column 11 gives FNMA auction data for the Monday preceding the end of the statement week. statement week. in bi-weekly auction for short-term forward commitments for Government underwritten mortgages.

Appendix Table 1 December

RESERVES AND MONETARY VARIABLES

Period Total

Available to Support Nonborrowed Private Deposits

___

_ments

1974

BANK CREDIT MEASURES

MONEY STOCK MEASURES

RESERVES

13,

Adjusted Credit Proxy

5 6 7 (Per cent annual rates of growth)

Total Loans and Invest-

Total Time

Other Than CD's

Institution Deposits

m e

CD's

Nondeposit Funds

U.S. Gov't. Demand

12 13 14 (Dollar change in billions)

Annually: 1973

7.8

7.2

9.3

6.1

8.8

10.4

13.5

16.2

11.4

8.6

19 9

2.3

-1.7

Semi-annually: 1st Half 1973 2nd Half 1973

6.4 8.9

1.4 13.1

9.8 7.8

7.4 4.7

9.1 8.3

9.6 7.6

13.5 6.8

16.6 9.6

19.8 11.4

10.6 11.6

10.5 6.4

16.7 3 2

0.7 1 6

0.8 -2.5

1st Half 1974

10.6

1.0

12.4

6.0

8.6

7 6

14.5

15.0

18.6

10.8

5.9

17 5

1.8

1.4

Quarterly: IstQtr. 1974 2nd Qtr 1974 3rd Qtr. 1974

1.3 20.1 8.2

1.2 0.8 5.6

5.7 19.1 9.1

5.5 6.5 1.6

9.3 7.7 4.6

8.8 6.4 4.0

8.2 20.4 6.6

17.5 12.0 5.6

15.1 21.3 9.2

12.8 8.6 7.3

7.9 3.9 3.1

4 2 13.3 3.5

0.9 0.9 0.2

-0.7 2.1 1.0

Monthly: 1973--July Aug. Sept. Oct. Nov. Dec.

26.9 3.9 9.4 11.1 -3.5 12.1

24.6 -4.1 21.9 25.7 -0.7 16.1

15.0 11.5 14.1 1,6 -3.4 8.9

3.6 -0.5 -1.4 4.1 12.6 94

5.2 7.0 4.5 9.5 12.0 10.6

5.8 5.4 4.4 8.4 10.6 10.1

8.6 17.8 4.9 2.4 1.6 5.1

14.5 18.2 5.2 7.7 7.4 3.6

11.8 20.7 11.2 6.7 4.0 12.3

6.8 13.4 10.4 14.4 11.0 12.1

6.9 2.7 4.2 6.4 8.3 9.4

1.9 2.8 0.8 -1.4 -1.6 0.7

0.9 0.8 -0.1 -0.1 -0.1 0.1

-1.0 0.3 -0.3 -0.2 -0.1 -1.2

1974--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. p Nov. p

32.6 -23.6 -4.7 31.1 21.2 7.1 21.7 -4.3 7.1 -1.2 1.5

42.6 -29.2 -9.2 17.2 -7.7 -7.1 13.1 -5.9 9.7 50.2 20.7

5.9 2.9 8.2 19.1 21.5 15.7 8.6 10.8 78 -0.7 0.8

-2.7 9.7 9.2 6.1 4.3 9.1 2.1 1.3 1.3 3.8 6.8

6.9 11.1 9.7 8.0 4.3 10.5 5.4 5.2 3.2 8.3 9.7

7.2 9.3 9.5 7.3 3.3 8.5 5.0 4.1 2.9 6.9 8.8

12.3 2.9 9.2 29.6 16.9 13.6 9.2 6.4 3.9 -0.2 6.1

16 5 17.0 18 4 17.9 12.1 5.7 16.0 9.4 -8.6 4.2

21.4 15.8 7.7 26.6 18.0 18.0 13.3 7.4 6.8 13.8 7.6

15.6 12.2 10 1 9.3 5.0 11.5 8.3 8 6 4.9 12.3 12.1

7.8 6.3 9 5 5.8 1.4 4.3 4.7 1.8 2.9 4.7 6.8

2.6 1.8 -0.2 5.9 4.6 2.8 2.3 0.2 1.0 1.4 -0.7

-0.1 0.4 0.6 0.6 0.7 -0.4 0.8 -0.2 -0.4 -0.7 -0.3

1.2 -2.9 1.0 1.4 1.0 -0.3 -1.1 2.0 0.1 -2.6 1.0

I-

NOTES: Reserve requirements on Eurodollar borrowings are

-I -

included beginning October

- -

I-

16, 1969, and requirements on bank-related commercial paper are included

beginning October 1, 1970. I/ Growth rates are based on estimated monthly average levels derived by averaging end of current month and end of previous month reported data. p - Preliminary.

FR 712-S

December

Appendix Table 2

13,

1974

RESERVES AND MONETARY VARIABLES SEASONALLY ADJUSTED, BILLIONS OF DOLLARS BANK CREDIT

AN SURET

MONEY STOCK MEASURES

RESERVES Available

Period Tota

Non

Total M1

borrowed Support borrowed Pvt Deposits

OTHER

Total

pCe Pvt Dep

M3 3

Adl

Credit Proxy

Loan

and and Invest ments

Tme Total

Time

Other

h Than CD's CD's

Thrift Insti-

s sFunds D tution Deposits

CD's

deposit i

Annuallybtec. 1972

31,456

30,406

29,092

255.8

198.9

525.7

823.2

406.4

559.0

313.8

269.9

297.5

43.9

4.3

Monthly: 1973--July Aug. Sept.

33,346 33,923 34,188

31,393 31,758 32,337

31,274 31,990 32,365

266.1 266.0 265.7

206.6 206.2 205.5

551.9 555.1 557.2

866.8 870.7 873.9

437.0 443.5 445.3

612.8 622.1 624.8

348.3 354.3 357.6

285.8 289.0 291.5

314.9 315.6 316.7

62.5 65.3 66.1

5.9 6.7 6.6

Oct. Nov. Dec.

34,930 34,870 35,164

33,454 33,476 33,867

32,832 32,780 32,965

266.6 269.4 271.5

206.1 208.4 209.9

561.6 567.2 572.2

880.0 887.8 895.3

446.2 446.8 448.7

628.8 632.8 634.6

359.6 360.8 364.5

295.0 297.7 300.7

318.4 320.6 323.1

64.7 63.1 63.8

6.5 6.4 6.6

197 -- Jan. Feb. Mar.

35,820 35,115 34,978

34,769 33,924 33,664

32,824 32,904 33,130

270.9 273.1 275.2

208.9 210.4 211.9

575.5 580. 8 585.5

900.7 907.7 914.9

453.3 454.4 457.9

643.3 652.4 662.4

371.0 375.9 378.3

304. 6 307.7 310.3

325.2 326.9 329.5

66.4 68.2 68.0

6.5 6.9 7.5

Apr. May June

35,884 36,519 36,736

34,147 33,929 33,729

33,658 34,260 34,708

276.6 277.6 279.7

212.8 213.2 215.0

589.4 591.5 596.7

920.5 923.0 929.5

469.2 475.8 481.2

672.3 679.1 682.9

386.7 392.5 398.4

312.7 314.0 317.0

331.1 331.5 332.7

73.9 78.5 81.3

8.1 8.8 8.4

July Aug. Sept.

37,399 37,266 37,282

34,098 33,930 34,000

34,958 35,272 35,296

280.2 280.5 280.8

215.4 215.1 215.0

599.4 602.0 603.6

933.4 936.6 938.9

484.9 487.5 489.1

692.0 697.3 692.3

402.8 405.3 407.6

319.2 321.5 322.8

334.0 334.5 335.3

83.6 83.8 84.8

9.2 9.0 8.6

Oct. p Nov. p

36,874 36,986

35,061 35,733

34,905 34,994

281.7 283.3

215.2 216.2

607.8 612.7

944.3 951.2

488.2 491.5

692. 3 693.2

412.3 414.9

326.1 329.4

336.6 338.5

86.2 85.5

7.9 7.6

37,578 36,682 37,301 36,375 36,916

34,360 34,437 35,557 35,053 35,278

35,174 34,762 35,232 34,510 35,021

280.7 280.8 282.4 282.0 281.2

214.8 214.6 215.8 215.6 214.5

604.2 605.4 608.2 608.8 608.3

488.5 487.4 488.2 489.2 487.2

409.5 411.0 411.9 413.0 413.1

323.5 324.6 325.8 326. 8 327.0

86.0 86.4 86.1 86.2 86.1

7.8 7.8 7.5

p 13p 20p 27p

37,026 36,604 36,829 37,371

35,899 35,506 35,462 35,890

35,044 34,824 34,733 35,353

282.0 282.8 283.3 283.3

215.0 216.0 216.2 215.9

610.0 612.1 612.6 613.4

488.9 491.3 492.1 492.1

413.8 414.7 414.4 415.4

328.1 329.2 329.3 330.1

85.7 85.5 85.1 85.3

7.3 7.1 7.8 8.2

37,269

36,197

35,060 1285.8

218.0

615.2

416.0

329.5

86.5

7.6

Weekly: 1974--Oct.

2 9 16 23 30 6

Nov.

Dec.

493.6

8.2 8.0

ETLaimated monthly average levels derived by averaging end of current month and end o prevous month reported data. Reserve requirements on Eurodollar 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 Weekly data are daily averages for statement weeks. Monthly data are daily averages except for nonpaper and Eurodollar borrowings of U. S. banks. bank commercial paper figures which are for last day of month. Weekly data are not available for 13, total loans and investment and thrift FR 712-T institution deposits. p - Preliminary.

NOTES:

Gov't e Demand

Appendix Table III Money Supply Growth Rates

,M 1 less Foreign Official Deposits

Ml less Foreign Official Deposits and Deposits due to Foreign Commercial Banks

5.2

5.7

February

4.7

5.2

March

0.5

0.9

April

6.5

6.1

1973 - January

May

13.4

13.0

12.2

June

13.7

13.8

13.5

July

3.6

3.2

August

- 0.5

September

- 1.4

1.8

October

4.1

4.5

November

12.6

11.8

2.3

1.4

3.7 11.0

9.0

7.7

- 2.7

- 4.1

February

9.7

9.8

10.0

March

9.2

9.7

9.4

April

6.1

3.9

4.0

May

4.3

5.7

4.9

June

9.1

7.8

8.0

July

2.1

3.5

1.8

August

1.3

1.7

2.2

September

1.3

0.4

0,4

October

3.8

4.7

4.8

November -

6.8

6.9

7.0

December 1974 - January

9.4

Appendix Table IV

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

1973

1974

8.6

10.3

8.9

7.7

5.2

7.5

8.9

9.8

7.9

9.3

9.6

8.8

9.1

7.2

7.7

8.2

6.4

7.3

3.6

4.6

6.2

4.0

5.2

3.4

6.8

7.3

11.3

7.3

10.6

III

0.6

5.5

5.6

8.7

5.0

10.8

5.5

5.8

6.5

III

1.6

9.1 8.6

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.

Appendix Table V Growth Rates in Money Supply for Alternatives

M M

Alt. A

6.3

1974

5.7

4.0

8.8

7.2

8.0

1975

I II

7.2 7.5

6.6 7.8

10.8 11.6

9.8 11.7

10.2

9.8

11.7

Alt. B 1974

5.6

3.9

1975

I II

6.2 6.9

6.1 7.1

8.7

7.1

7.9

9.4

9.0

9.4

10.1

10.0

8.9 10.0

Alt. C 1974

5.6

3.9

8.6

7.8

1975

I II

5.8 6.2

8.6 8.8

8.6 8.7 Alt. D

1974

3.8

8.5

7.1

7.8

1975

I II

5.6 5.4

7.7 7.4

7.9 7.6

7.7 7.6

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.

7.8 7.6

Cite this document

APA

Federal Reserve (1974, December 16). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19741217

BibTeX

@misc{wtfs_bluebook_19741217,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1974},
  month = {Dec},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19741217},
  note = {Retrieved via When the Fed Speaks corpus}
}