bluebooks · July 18, 1977

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.

July 15,

Strictly Confidential (FR)

1977

Class I FOMC

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS

Prepared for the Federal Open Market Committee By the staff

Board of Governors of the Federal Reserve System

STRICTLY CONFIDENTIAL (FR) CLASS I - FOMC

July 15, 1977

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) M-1 growth was at a 4.9 per cent annual rate in

June and,

reflecting the expected effect of the early disbursement of social security checks, appears to have accelerated in July.

For the June-July period, M-1

growth is now projected at about a 6.2 per cent annual rate, just below the upper end of the Committee's desired range.

M-2 appears to be increasing

at about a 9¼ per cent annual rate over June and July, somewhat above the midpoint of the Committee's range.

Growth in the time and savings deposit

component of M-2 in recent weeks has accelerated from its April-May pace, as sharp increases in large denomination non-negotiable CD's have more than offset weakness in savings accounts.

Nonborrowed reserves increased

at a 3.3 per cent annual rate in June but are expected to grow much more rapidly in July, primarily in lagged response to the pickup in deposit growth in late June and early July. Growth in Monetary Aggregates over June-July period (SAAR in per cent) Ranges

Latest Estimates

M-1

2½ to 6½

6.2

M-2

6 to 10

9.2

Memorandum: Federal funds rate (per cent per annum)

Avg. for statement week ending June 22 5.43 29 5.43 5.35 July 6 5.33 13

-2(2)

Throughout the period since the last Committee meeting, growth

of both M-1 and M-2 remained within the Committee's desired ranges, and the Account Management accordingly sought to maintain the funds rate at about 5-3/8 per cent.

With the funds rate remaining slightly above the discount rate, member

bank borrowings from the discount window averaged $257 million, little different from the preceding four weeks, but above the average level of $80 million during the first four months of the year. (3)

Demands on credit markets strengthened in June.

Both financial

and nonfinancial corporations substantially increased their issuance of commercial paper over the month.

Nonfinancial corporations also stepped up their

short-term borrowing at commercial banks, and the volume of publicly offered bonds of domestic financial corporations, public utilities, and foreign issuers expanded significantly.

At the same time, State and local governments marketed

a record volume of long-term securities.

The Treasury auctioned $1.5 billion

of 15-year bonds near the end of the month but paid down a roughly equal amount of short-term bills over the month. (4)

Despite the strengthening in short-term credit demands, rates

on private short-term debt instruments have shown essentially no change since the June FOMC meeting.

Treasury bill rates, however, have moved up about 10

to 20 basis points as the market has begun to adjust to the ending of the period of large cash redemptions of Treasury bills.

In addition, this up-

ward rate adjustment may reflect a slight shift in the market's interest rate outlook in response to recent strengthening in published monetary aggregates data.

(5)

Since the June FOMC meeting yields on corporate and

municipal securities and also on intermediate-term Treasury coupon issues, have advanced 5 to 15 basis points.

Dealers in Treasury securities have

made substantial net sales of coupon issues in recent weeks.

As a result,

they now have large net short positions in issues in the one- to ten-year maturity category and only a modest long position in issues with maturities over 10 years--the latter reflecting mainly the remainder of dealer awards in the recent 15-year bond auction. (6)

Inflows into deposit accounts at nonbank thrift institutions

in June were maintained at about the moderate pace of other recent months, but there appears to have been a pick-up in growth at savings and loan associations in early July.

With demands for mortgages remaining strong,

primary mortgage rates edged higher on balance in recent weeks. (7)

The table on the following page shows (in terms of percentage

annual rates of change) related monetary and financial flows over various time periods.

1975 & 1976

Past Twelve Months June '77 over

Past Six Months June '77 over

Past Three Months June '77 over

Past Month June '77 over

Average

June '76

Dec. '76

Mar. '77

May '77

Nonborrowed reserves

1.4

2.8

1.1

4.7

3.1

Total reserves

0.4

3.2

2.3

6.5

5.0

Monetary Base

6.6

7.0

6.7

8.2

6.5

5.2

6.2

6.1

8.4

4.9

10.4

10.7

8.8

8.1

13.0

12.3

10.0

9.8

9.4

Concepts of Money M

(currency plus demand deposits) 1/ (M plus time deposits a commercial banks other than large CD's) (M plus deposits at Sthrift institutions)

(M2 plus CD's)

7.3

8.9

8.3

9.1

10.0

(M3 plus CD's)

10.7

11.1

9.7

9.9

10.5

Total member bank deposits (bank credit proxy adj.)

4.5

6.0

5.2

7.2

16.1

Loans and investments of all commercial banks 2/ Month-end basis

6.7

10.1

10.5

11.2

8.9

6.2

10.0

10.3

9.3

8.6

-1.1

-0.5

0.1

0.6

1.6

0.0

0.2

0.4

0.7

0.6

Bank Credit

Average of Wednesdays Short-term Market Paper (Monthly average change in billions) Large CD's Nonbank commercial paper

1/ Other than interbank and U.S. Government. 2/ 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.

-5Prospective developments (8)

Shown below for the Committee's consideration are four

alternative sets of longer-run ranges for the monetary aggregates-alternatives A through D--that pertain to the one year period, QII '77QII '78.

In the last column are shown the ranges adopted at the April The growth rates for bank

Committee meeting for the QI '77-QI '78 period.

credit shown under A through D relate to total loans and investments of all

commercial banks.rather than to the bank credit proxy.Alt. A

Alt. B

Alt. C

Alt. D

Current

4½-7

4½-6½

4-6½

3½-6

4½-6½

7-10

7-9½

6½-9½

6-9

7-9½

8-11

8-10½

7½-10½

7-10

8½-11

Bank credit

7½-10½

7-10

6½-9½

7-10

(9)

Under alternative B, the one year growth ranges for M-1

and M-2 are the same as those adopted by the Committee in April. The growth range for M-3, however, is lower by ½ percentage point.

This lower M-3

range now appears more consistent with the ranges shown for M-1 and M-2, given the staff's current projection of deposit flows at thrift institutions over the next four quarters.

Alternative A encompasses a little more

1/ Growth in the bank credit proxy--the sum of all deposits and certain borrowings of member banks--has been consistently below the targets adopted by the Committee, and has in the past year diverged increasingly from bank credit, as may be seen from the table on p. 4. With the relatively rapid growth of nonmember deposits and the greater use by banks of reserve-free borrowings as a source of funds the bank credit proxy (i.e. essentially total member bank deposits) has become a much more imperfect statistical series. Bank credit, as measured by the end-ofmonth series for loans and investments or by a new average series for the month developed by the Board staff, has been closer to the Committee's longer-run ranges for bank credit. The Committee might therefore wish to consider substituting an all commercial bank credit measure for the proxy. The issues are discussed in more detail in Appendix III.

rapid growth in all of the monetary aggregates than B, and alternative C a little slower growth.

The differences among these alternatives are in

line with the size of changes in longer-run ranges that the Committee has actually made in its quarterly reviews of the one-year ranges.

The specifi-

cations of alternative D, however, involve a larger adjustment in the ranges, with the midpoint of the growth range for M-1 reduced to 4¾ per cent over the QII '77-QII '78 period.

This alternative would compensate

for the second quarter overshoot in growth of M-1; that is, it would result in expansion of M-1 over the five quarters, QI '77-QII '78, at a 5½ per cent annual rate--the midpoint of the M-1 range adopted by the Committee in April for the QI '77-QI '78 period.1/

M-2 growth over the five quarter

period under this alternative would be at about an 8 per cent annual rate, however, a shade below the midpoint of the current M-2 range. (10)

Shorter-run specifications for the monetary aggregates and

the Federal funds rate that are thought to be consistent with the various long-run ranges are presented below.

(Detailed data are shown in the

tables on pp. 7 and 8.) Alt. A

Alt. B

Alt. C (or D)

Ranges for July-August M-1

4½-8½

4-8

3½-7½

M-2

7½-11½

7-11

6½-10½

Federal funds rate (Intermeeting period)

4½-5¼

5¼-5¾

5½-6¼

Appendix I compares various terminal levels of M-1 and M-2 under the proposed alternative with levels implicit in the current ranges.

Alternative Levels and Growth Rates for Key Monetary Aggregates M

Alt. A

Alt. B

Alt. C

Alt. D

Alt. A

Alt. B

Alt. C

Alt.

1977

June July August

322.0 324.0 325.5

322.0 324.0 325.3

322.0 324.0 325.0

772.8 779.4 785.0

772.8 779.4 784.4

772.8 779.4 783.8

1977

QII

321.1 325.7 330.2

321.1 325.4 329.7

321.1 325.3 329.4

321.1 325.2 329.2

768.3 785.1 801.6

768.3 784.6 800.4

768.3 784.1 799.0

768.3 784.1 798.5

334.9 339.5

334.1 338.8

333.3 338.0

332.9 336.3

818.2 834.0

816.2 832.4

814.1 830.6

812.8

10.2 8.6

10.2 7.7

10.2 6.8

QIII QIV 1978

QII Growth Rates Monthly: 1977 July August Quarterly Average: 1977 QII QIII QIV

7.5 4.8

8.5 5.7 5.5

8.5 5.4 5.3

8.5 5.1 4.9

9.2 8.7 8.4

9.2 8.5 8.1

9.2 8.2 7.7

QI QII

5.7 5.5

5.3 5.6

4.5 4.1

8.3 7.7

7.9 7.9

7.6 8.1

Semi-Annual: QII '77-QIV '77 QIV '77-QII '78

5.7 5.6

5.4 5.5

5.0 4.3

8.7 8.1

8.4 8.0

8.0 7.9

Annual: QI '77-QI '78 QI '77-QII '78 QII '77-QII '78

6.5 6.4 5.7

6.3 6.2 5.5

5.9 5.6 4.7

8,9 8.8 8.6

8.7 8.7 8.3

8,4 8.5 8.1

1978

826.5

7.2 6.7

8.2 8.0 7.6

Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) Bank Credit Alt. A

Alt. B

Alt.

Alt. D

Alt. A

Alt. B

Alt. C

Alt. D

June July August

1299.1 1310.5 1321.1

1299.1 1310.5 1320.4

1299.1 1310.5 1319.5

826.7 832.7 838.6

826.7 832.7 838.5

826.7 832.7

826.7 832.7 838.4

QII

QIII QIV

1289.8 1321.1 1351.4

1289.8 1320.5 1349.4

1289.8 1319.6 1347.2

1289.8 1319.6 1345.9

820.6 840.0 859.2

820.6 839.4 857.8

820.6 839.2

857.1

839.2 856.0

QI QII

1380.2 1407.5

1377.3 1405.1

1374.5 1402.9

1371.1 1395.3

877.3 895.2

875.3 893.4

874.1 892.0

872.0 887.2

Growth Rates Monthly: 1977 July August

10.5 9.7

10.5 9.1

10.5 8.2

8.7 8.5

8.7 8.4

8.7 8.2

Quarterly Average: 1977 QII QIII QIV

10.0 9.7 9.2

10.0 9.5 8.8

10.0 9.2 8.4

10.0 9.2 8.0

9.9 9.5 9.1

9.9 9.2 8.8

9.9 9.1 8.0

QI QII

8.5 7.9

8.3 8.1

8.1 8.3

7.5 7.1

8.4 8.2

8.2 8.3

7.9 8.2

7.5 7.0

Semi-annual: QII '77-QIV '77 QIV '77-QII '78

9.6 8.3

9.2 8.3

8.9 8.3

8.7 7.3

9.4 8.4

9.1 8.3

8.9 8.1

8.6 7.3

Annual: QI '77-QI '78 QI '77-QII '78 QII '77-QII '78

9.7 9.5 9.1

9.4 9.3 8.9

9.2 9.2 8.8

9.0 8.7 8.2

9.6 9.4 9.1

9.3 9.3 8.9

1977

1978

838.4

820.6

8.9 8.6 8.1

-9(11)

Under alternative B, the proposed Federal funds rate range

is the same as that adopted by the Committee at its previous meeting.

the funds rate remains near the recently prevailing 5-3/8 per cent level, the staff would expect M-1 growth for the July-August period to be at about a 6 per cent annual rate.

With the public's adjustment to the April bulge

in M-1 now completed, the transactions demand for money is expected to rise more in line with the continued growth in nominal GNP.

Growth in M-2 is

expected to be in a 7-11 per cent annual rate range during the July-August period, as the time and savings deposit component of that aggregate continues to expand at near its recent pace. (12)

Credit demands may remain substantial over the weeks ahead,

although State and local government and business demands may slacken from their exceptional June pace.

While the Treasury is expected to raise about

$3-1/2--4 billionof new money before the next meeting, mainly in conjunction with its mid-August refunding of $3.3 billion of maturing publicly held coupon issues, the Treasury securities market appears to be in a technically strong position.

Thus, there is likely to be little upward interest rate pressure

generated by market demand forces over the next few weeks.

However, in the

late summer and early fall, with Treasury borrowing expanding considerably further and demands for money and liquidity pressing against the available supply, upward pressures on interest rates are likely to develop. (13)

Further increases in interest rates are likely to develop

late this year and in the first half of next year if the midpoints of the

-10-

longer-run growth ranges contemplated under alternative B are to be achieved.

The funds rate might need to rise to about 6 per cent by year-

end and to about 6¼ per cent by the second quarter of 1978.

This would

be an appreciably smaller rise in interest rates than the staff thought likely last month.

It allows for the higher average level of the money stock

over the next year that results from applying an unchanged growth rate to a new base period in which there has been a substantial overshoot.

(The

Federal funds rate projections four quarters ahead are shown in Appendix II). (14)

As noted earlier, both alternatives C and D contemplate

lower longer-run growth ranges for the monetary aggregates than alternative B. While the reduction is substantially larger in the case of alternative D, in either case the Committee may wish to consider a rise in the funds rate between now and the next meeting to around 5-7/8 per cent, the midpoint of a 5½-6¼ per cent range.

Such a funds rate increase is likely to be

accompanied by an increase in short-term rates of interest generally of about ½ percentage point.

Member bank borrowings from the discount window

may rise $50-100 million further, and markets may come to anticipate a rise in the discount rate from its current 5¼ per cent level. (15)

With the funds rate rising over the next few weeks as

specified above, we would expect M-1 in the July-August period to expand in a 3½-7½ per cent annual rate range and M-2 in a 6½-10½ per cent range. Net inflows of shorter-term small denomination time deposits to banks and thrift institutions may slow at the higher interest levels, and there may also be a further outflow of interest-sensitive savings deposits of individuals, businesses, and State and local governments.

-11Banks may be expected to adapt to such developments by more aggressively

offering large denomination time deposits; except for negotiable deposits offered by large banks, these deposits are included in M-2.

Even under the

short-run specifications of alternative C, there would appear to be sufficient leeway between ceiling rates in time certificates maturing in four years or more and yields on market instruments to enable banks to retain the funds involved in maturing "wild card" certificates.

They could, however,

lose some funds to thrift institutions, which can offer somewhat higher rates. (16)

The rise in market rates of interest over the next few weeks

accompanying short-run alternative C (or D) would probably carry the 3-month Treasury bill rate above the 5¼ per cent ceiling rate on thrift institution savings deposits.

This may trigger an increased diversion of these deposits

to market instruments.

Under alternative C we would expect that thrifts

would become less willing to commit funds to the mortgage market at near the recent pace.

In addition, given the substantial mortgage takedowns

in train, these institutions would have to draw down their liquid assets and borrow more heavily from the FHL Banks; the need for secondary mortgage market support by FNMA would also increase.

But the rise in mortgage rates

may be limited if insurance companies, for example, become more active in the mortgage market as a result of the continuing favorable spread of mortgage rates over corporate bond yields.

In any event, upward pressures

on corporate and tax exempt bond yields are likely to be relatively modest, given the substantial supply of investible funds at insurance companies and other institutional investors.

-12(17)

If the Committee wishes to achieve the midpoints of the

longer-run growth ranges for alternative C--indexed by an M-1 range of 4-6

per cent--the staff expects that the funds rate would need to rise

only a little further and would top out at around 6¼ per cent in the first quarter of 1978.

The greater restraint on growth of the monetary aggregates

over the longer-run under alternative D would require a larger rise of interest rates to levels closer to those projected at the previous FOMC meeting. The funds rate may rise to around 6½ per cent in the first quarter of next year and probably further to a level of 6¾ per cent by the second quarter. (18)

Alternative A contemplates an easing of money market

conditions between now and the next Committee meeting.

Interest rates

may tend to decline rather substantially as the funds rate begins to drop,

particularly in the intermediate-term Treasury area where dealers have a net short position.

But assuming that incoming economic news does not

cast doubt on the fundamental strength of the economy, interest rate declines may be limited over the next month or so as corporations and State and local governments increase market borrowing in anticipation of higher interest rates later on and as the market focuses on the Treasury's large fall cash need.

(19)

We would expect the funds rate to begin rising in the fall

under alternative A if growth in the aggregates is to remain around the midpoints of the longer-run ranges for this alternative.

Given the degree

of near-term ease assumed, the funds rate by spring may have to be at or slightly above the level assumed at that time under alternative B in order to constrain monetary growth in the first half of next year to the indicated

-13-

rate.

Meanwhile, however, for most of the one-year period ahead, short-

term rates would have been lower than under alternative B, with consequent relatively easier credit and liquidity conditions at banks and other institutions.

-14Directive language (20)

Given below are alternatives for the operational paragraphs

of the directive.

The first formulation places main emphasis on near-term

rates of growth in monetary aggregates.

The second formulation, like the

directive adopted at the last meeting, places main emphasis on money market conditions; it shows--in strike-through form--the specifications adopted at the last meeting.

As suggested below, the particular language needed in

the opening lines of the money market formulation would depend on the specific conditions sought; the three alternatives shown--calling, respectively, for somewhat easier, prevailing, and somewhat firmer money market conditions-are intended to be associated with the specifications discussed in the preceding section under alternatives A, B, and C. "Monetary Aggregates" Formulation The Committee seeks to encourage near-term rates of growth in M-1 and M-2 on a path believed to be reasonably consistent with the longer-run ranges for monetary aggregates cited in the preceding paragraph.

Specifically, at present, it expects the annual growth

rates over the July-August period to be within the ranges of ____ to ____

per cent for M-1 and ____

to ____

per cent for M-2.

In the judgment of the Committee such growth rates are likely to be associated with a weekly-average Federal funds rate of about ____ per cent.

If, giving approximately equal weight to M-1 and M-2, it

appears that growth rates over the 2-month period will deviate

-15-

significantly from the midpoints of the indicated ranges, the operational objective for the Federal funds rate shall be modified in an orderly fashion within a range of ____

to____

per cent.

If it appears during the period before the next meeting that the operating constraints specified above are proving to be significantly inconsistent, the Manager is promptly to notify the Chairman who will then decide whether the situation calls for supplementary instructions from the Committee. "Money Market" Formulation At this time, the Committee seeks to maintain about the prevailing money market conditions (OR TO ACHIEVE SOMEWHAT EASIER OR SOMEWHAT FIRMER MONEY MARKET CONDITIONS) during the period immediately ahead, provided that monetary aggregates appear to be growing at approximately the rates currently expected, which are believed to be on a path reasonably consistent with the longerrun ranges for monetary aggregates cited in the preceding paragraph. Specifically, the Committee seeks to maintain the weekly-average Federal funds rate at about[DEL: 5-3/8]_____

per cent, so long as M-1

and M-2 appear to be growing over the[DEL: June-July]JULY-AUGUST period at annual rates with ranges of [DEL: 2-1/2 to 6-1/2]____ per cent and [DEL: 6-to-10]____

TO ____

per cent, respectively.

If, giving approximately equal weight to M-1 and M-2, it appears that growth rates over the 2-month period are approaching or moving

-16beyond the limits of the indicated ranges, the operational objective for the weekly-average Federal funds rate shall be 5-1/4 to 5-3/4] modified in an orderly fashion within a range of [DEL: ____

TO ____

per cent.

Appendix I

Comparison of Levels of M1 and M2 Under Previous and Proposed Longer-run Ranges ($ billion, seasonally adjusted) Level based on growth from: QIV '76

Terminal quarters

Levels based on longer-run growth from QII '77 at rates shown in

QI '77

at 5k

per cent annual rate

Alt. A

Alt. B

Alt. C

Alt. D

Mi QI '78

332.6

331.7

334.9

334.1

333.3

332.9

QII '78

337.2

336.3

339.5

338.8

338.0

336.3

NOTE:

Growth from QIV '76 at an

Growth from QI '77 at an

8k per cent annual rate

QI '78

812.0

813.0

818.2

816.2

814.1

812.8

QII '78

829.3

829.8

834.0

832.4

830.6

826.5

The last four columns assume growth around the midpoints of the proposed ranges is achieved and are the same numbers as shown in the table on p.

The table above facilitates comparison of longer-run paths proposed in the current blue book with the Committee's current (QI '77 to QI '78) and immediately previous (QIV '76 to QIV '77) longer-run paths.

The first

column of the table shows the level of M 1 and M2 implied by the midpoint growth rate of the Committee's QIV '76 to QIV '77 longer-run range extended to the first and second quarters of 1978. of M1

and M 2

The second column shows the levels

in the first and second quarters of 1978 implied by midpoint

I - 2 growth rates of current longer-run paths (which take QI '77 as the base). The last four columns show levels of M1 and M 2 for the first and second quarters of 1978 implied by the alternatives presented in this blue book (which take QII '77 as the base). As may be seen, alternatives A through C imply higher midpoint levels for both M

and M 2 in QI '78 and QII '78 than would be implicit in

extension of Committee ranges based on QI '77 or QIV '76.

For example,

under alternative B, M1 in QII '78 would be $2.5 billion (or .7 of a per cent) above the implied level for that quarter derived by extending the midpoint of the current M1 growth range to the second quarter of 1978 (shown in the second column).

M 2 in QII '78 under alternative B would be

.3 of a per cent above such an implied level. Alternative D would achieve the implied QII '78 level based on 5

per cent growth from QI '77, but it would fall slightly short of

achieving the QII '78 level that would be implied if the base were carried back to QIV '76.

Alternative D would also fall short of achieving the

implied QII '78 levels for M 2 based on the earlier paths.

Appendix II

Projected Federal Funds Rate

1977

1978

Alt. A

Alt. B

Alt. C

Alt. D

QIII

5-7/8

QIV

5½

5-7/8

6-1/8

6¼

6-1/8

6¼

QII

6½

6¼

6¾

Appendix III

Comparison of the Member Bank Credit Proxy and All Commercial Bank Credit In recent years the bank credit proxy--total member bank deposits plus Euro-dollar borrowings and loans sold to affiliates--has become much less useful than it had been as an indicator of the change in bank credit at all commercial banks.

In the mid-1960's, when the credit proxy was

developed, this measure was equal to approximately 80 per cent of the outstanding credit at all commercial banks. had declined to 67 per cent.

By the end of 1976 the ratio

The deterioration of the proxy has reflected

the increasing proportion of total credit extended by nonmember banks and the increasing use by banks of nondeposit sources of funds not included in the proxy, such as borrowings from nonbanks through RP's and Federal funds.1/ The advantages of the credit proxy--its timeliness and its availability on a daily average basis rather than as of a single day--have increasingly been overshadowed by these problems. Because of shifts in sources of credit expansion at all commercial banks, the actual performance of the bank credit proxy has, with one exception, fallen well short of the FOMC's longer-run ranges for bank credit.

The growth in total loans and investments of all commercial banks

has actually been much more consistent, on average, with the FOMC's credit ranges, as may be seen from the table, which compares the Committee's growth ranges for bank credit to the actual growth in the member bank

credit proxy and two measures of all commercial bank credit.

The first

It is estimated that in 1976 such borrowings increased nearly $23 billion --accounting for 3 percentage points of the rise in bank credit last year--and the total outstanding amount of such borrowed funds equalled

roughly 8 per cent of total member bank deposits at the end of 1976.

III - 2 of these measures is the Board's single-day last-Wednesday-of-the-month all commercial bank credit series, and the second is a new "monthly average" bank credit series that is derived by averaging Wednesday data.1/ The staff would recommend that the Committee no longer employ the bank credit proxy in view of its deterioration as an indicator of credit and since direct measures of commercial bank total loans and investments will readily serve as a measure for purposes of establishing longer-run ranges.

Both measures of all commercial bank credit are based on reported data from all member banks and estimated data for nonmember banks. Large member banks report detailed bank credit data for each Wednesday. An abbreviated report showing three credit items

(total loans, U.S. Government securities, and other securities) is also filed by small member banks each Wednesday. Small member banknonmember bank ratios are derived from call report data for the three reported credit items. The credit data reported by small member banks for Wednesdays are multiplied by these call report ratios to derive estimates of nonmember bank credit. The various credit components for large and small member banks and nonmember banks are aggregated to a gross loans and investments total. Interbank loans are estimated, based on reported member bank data and nonmember bank call report data, and subtracted from gross loans and investments to obtain a net total loans and investments measure. Data on loans sold to affiliates are reported for each Wednesday by large banks and are added to the net loans and investments series

to complete the bank credit measure. The monthly average series averages the estimated Wednesday data for all banks. At this point in time the components of bank credit are estimated only monthly, but the staff could develop a monthly average series for the components also.

III - 3

Table 1 Longer-run Bank Credit Targets and Growth Rates (per cent annual rates)

Meeting Adopted

Period

Adopted Credit Proxy Growth Rate Range

Actual Growth Rates Member SAll Commercial Bank Credit

Bank

Credit Proxy

Month-end Basis

Average of Wednesdays

April 1975

March 1975March 1976

6 -9k

3.2

5.4

5.2

June 1975

June 1975June 1976

6 -9

3.2

6.1

6.9

July 1975

QII 1975QII 1976

3.1

6.0

6.1

Oct.

QIII 1975QIII 1976

6-9

3.7

6.7

6.5

Jan. 1976

QIV 1975QIV 1976

6-9

4.3

8.0

7.7

Apr.

QI 1976QI 1977

6-9

5.0

9.1

QII 1976QII 1977

5-8

5.8

9.9

1975

1976

July 1976

Appendix IV

Expansion in Reserves Over the Period From QII '77 to QIV '77 Consistent With Proposed Alternatives (Seas. adj. annual rates) Alt. A

Alt. B

All . C

Alt. D

Nonborrowed Reser ves

5.2

3.4

2.7

1.3

Total Reserves

5.6

5.5

5.3

Monetary Base

7.9

7.8

7.7

Shown above are 6-month growth rates in various reserve measures consistent with the midpoints of the alternative longer-run paths for the monetary aggregates presented in this blue book.

Appendix V Implied Velocity Growth Rates V (GNP/M1

1977

1978

Alt. A

Alt. B

Alt. C

Alt. D

III

6.0

6.3

6.4

6.7

6.9

7.0

5.7

5.9

6.3

6.2

5.2

4.8

4.5

5.6

III

3.3

3.5

3.3

3.9

4.4

4.6

3.4

2.4

V2 (GNP/M2) 1977

1978

7/ 15; 77

CHART 1

MONETARY AGGREGATES NARROW MONEY SUPPLY M1

6%% growth for June-Ju ly /6/77)

BROADER MONEY SUPPLY M 2 growth % growth 2/2%

1976

I I

1977

7/15/77

CHART 2

MONETARY AGGREGATES ADJUSTED CREDIT PROXY

BILLIONS OF DOLLARS

RESERVES

560

550

540

530

520

BILLIONS OF DOLLARS 36

TOTAL

NONBORROWED

1977

CHART 3

7/15/77

MONEY MARKET CONDITIONS AND INTEREST RATES MARKET CONDITIONS

INTEREST RATES Long-term

PER CENT

ERAGES

, F.R. DISCOUNT RATE

FEDERAL FUNDS RATE

J RESERVES

BILLIONS OF DOLLARS 1

1976

1977

1976

1977

1976

1977

Table 1

CONFIDENTIAL (FR)

MONETARY AGGREGATES

JULY

15,

CLASS IT1FOMC

-I

ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED Money Supply Narrow Broad (Ml) (M2)

Period

MONTHLY

Adjusted Credit Proxy

Total U.S Govt. Deposits

Totl To

505.7 509.2 514.8 (518.9)

444.1 446.9 410.8 (455.4)

11.9 212.7 1L.3 (212.8)

232.2 234.2 238.5 (242.6)

320.5 320.7 322.0 1324.0)

764.6 767.6 772.8 (779.4)

546.1 545.4 552.7 (554.0)

Time and Savings Deposits Other Than CD'S Total Savings Other

Nondeposit Member Sources of U S.Govt Funds Deposits 9

7.7 7.A 8.4 8.2)

'.6 Z.1 3.7 2.9)

LEVELS-$BIL

1977--APR. MAY JUNE JULY , ANNUAL

10.8 10.6 10.1 11.5)

(

61.6 62.3 63.9 63.')

(

GROWTH

QUARTERLY 1976-4TH QTR. 1977-1ST QTR. 2ND QTR.

7.2 3.8 8.4

13.4 8.5 8.8

11.5 3.0 7.2

15.7 9.5 9.5

18.1 11.9 9.3

2/.5 15.4 4.0

10.0 8.7 14.1

6.5 4.2 8.5

12.5 9.9 9.2

8.2 5.4 5.2

12.2 12.5 8.3

17.1 14.0 9.8

24.7 21.9 7.9

10.8 7.1 11.6

-18.9 1.9 -1.9

(

6.9 8.3 13.2 9.6)

9.5 7.6 10.5 12.2)

(

9.7 4.5 -2.3 2.8)

(

9.4 10.3 22.0 20.6)

(

-11.6 13.6 30.8 -7.5)

(

11.4)

(

0.3)

(

21.5)

(

11.6)

1.3 -7.0 10.9

QUARTERLY-AV 1976-4TH OTR. 1977-1ST QTR. 2ND QTR. MONTHLY 1977--APR. MAY JUNE JULY JUNE-JULY

(

19.4 0.7 4.9 7.5)

(

6.2)

(

13.5 4.7 8.1 10.2)

7.1 -1.5 16.1 2.8)

9.2)

(

9.5)

WEEKLY LEVELS-$BIL 1977-JUNE

1 8 15 22 29

320.7 321.5 320.9 322.5 322.

769.5 771.6 771.1 774.1 774.4

546.6 551.0 552.1 555.9 551.9

8.3 7.5 6.5 12.5 12.1

511.7 513.3 513.9 515.6 516.8

448.8 450.1 450.2 451.6 452.0

212.4 212.7 212.3 212.2 211.9

236.4 237.4 237.9 239.4 240.1

62.9 63.2 63.7 64.0 64.8

7.5 7.8 8.0 9.5 8.4

2.6 4.3 4.8 4.6 2.4

JULY

325.6

780.0

555.7

10.8

518.4

454.4

212.4

242.0

64.0

8.7

1.8

NOTE: 1/ P -

DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE PRELIMINARY

BANKS.

CONFIDENTIAL (F.R.) CLASS I-FOMC

TABLE 2

BANK RESERVES ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED BANK RESERVES Period

Total Reserves

MUNTHLY

Monetary Base

34,606 34.517 34,605 (35,064)

120,749 121,376 122,030 (123,261)

15,

1977

REQUIRED RESERVES

Total Required

Private Demand

Total Time Deposits

34,488 34,515 34,714 134.979)

20,608 20,706 20,601 (20.860)

L2,162 12,116 12,306 (12,416)

Gov't. and Interbank

LEVELS-$MILLIONS

1977--APR. MAY JUNE JULY PERCENT

Nonborrowed Reserves

JULY

34,680 34,723 34,868 (35,296)

1t718 1,692 1,807 1,702 1

ANNUAL GROWTH QUARTERLY 1976--4TH OTR.

7.6 -1.8 6.5

1977--1ST QTR. 2ND QTR.

7.7 -2.4 4.7

8.0 5.1 0.2

6.8 -1.1 7.3

1.6 3.7 3.9

8.0 6.9 6.0

4.0 3.0 3.5

3.2 5.0 3.0

-0.7 9.5 4.0

OUARTERLY-Av 4.4 2.7 3.1

4.8 2.6 1.9

7.1 6.8 7.2

(

13.0 1.5 5.0 14.71

14.1 -3.1 3.1 15.91

11.8 6.2 6.5 12.1)

9.9)

9.5)

1976-4TH QTR. 1977-17T QTR. 2ND QTR. MONTHLY 1977--APR. MAY JUNE JULY JUNE-JULY

13.9 0.9 6.9 S9.23 I

9.3)

(

6.1)

12.1 5.7 -6.1 15.1)

(

3.9 -4.5 18.8 10.71

S 4.5)

14.9)

WEEKLY LEVELS-SMILLIONS 1977-JUNE

1 B 15 22 29

34,759 34,507 34,686 34,980 35,184

34,529 34,281 34,463 34,709 34,850

121,878 121,208 121,546 122,217 122,959

34,350 34,474 34,440 34,907 35,014

20,596 20,655 20t448 20,623 20,631

12,207 12,240 12,290 12,348 12,350

1,548 1,580 1,702 1,936 2,033

JULY

6 13

35,764 35,166

35,499 35,007

123,512 123,032

35,216 34,680

20,922 20,743

12,386 12,450

1,908 1t488

1. NOTE:

RESERVE SERIES HAVE BEEN ADJUSTED TO REMOVE DISCONTINUITIES DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS.

.1_

ASSOCIATED WITH CHANGES

RESERVE

REQUIREMENT RATIO.

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JULY 15, 1977

TABLE 3 NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES ($ millions, not seasonally adjusted)

Treasury Bills Within Net Change 2/ 1 year

Period

Treasury Coupons Net Purchases 3/ Over 1 -5 5 - 10 10

Total

Federal Agencies Net Purchases 4/ Over 1- 5 5 - 10 10

Within 1 year

Total

Net Change Outright Holdings Total 5/

Net RP's 6/

-490 7,232 1,280 -468 863

789 579 797 3,284 3,025

539 500 434 1,510 1,048

167 129 196 1,070 642

1,582 1,415 1,747 6,202 5,187

592 400 1,665 824 469

1,059 864 3.082 1,613 891

1,631 9,273 6,303 7,267 6,227

-1,358 -46 -154 1,272 3,607

1976--Qtr. II Qtr. III Qtr. IV

2,067 45 -886

796 881 794

245 345 232

134 160 192

1,284 1,557 1,294

140

240 115

3,371 1,398 436

1.654 392 304

1977--Qtr. I Qtr. II

1,164 2,126

997 526

325 171

165 152

1,680 959

726

2,738 3,666

-4,771 4,175

1977--Jan. Feb. Mar.

2,222 -691 -368

475 348 174

128 151 46

2,908 ---125

-6,877 1.931 175

Apr. May June

1,392 -208 942

2,822 -3,207 4,561 2,779 -2,892 -2,841 -2,697

1977--May

June

July

4 11 18 25

533 245 11 -125

1 8 15 22 29

-702 -1,442 -33 1,023

6 13 20 27

-145 -581

LEVEL--July 13 (in billions)

1,506

192 109

41 S

406

251 S

- -

68 -

-- --

-----

-45

173

138 --

-----

346

233

113

380

2,176 ---254 1,744

173 --

138 --

35 --

346 --

866 227

----

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

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

89 --

200 --

68 --

114 --

470 --

--- 233 --

113 --

33 --

380 --

1,870 1,503

47 -6,501 3,444 7,833 1,066

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

--- --- --- --- -159 -589

-5,780 586

-- --

7.4

-133 -704 -1,445 -58

105.9

Change from end-of-period to end-of-period. Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions. Outright transactions in market and with foreign accounts, and short-term notes acquired in exchange for maturing bills. Excluding redemptions, maturity shifts, rollovers of maturing coupon issues, and direct Treasury borrowings from the System. Outirght transactions in market and with foreign accounts only. Excludes redemptions and maturity shifts. In addition to net purchases of securities, also reflects changes in System holdings of banker's acceptances, direct Treasury borrowings from the System, and redemptions (-) of Agency and Treasury coupon Issues. Includes changes in both RP's (+) and matched sale-purchase transactions (-).

-1.8

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JULY 15, 1977

TABLE 4 SECURITY DEALER POSITIONS AND BANK POSITIONS (millions of dollars)

U.S. Govt. Security Dealer Positions Bills

i1)

Coupon,^ Issues "

,..

Underwriting Syndicate Positions Municipal Corporate Bonds Bonds , ta,

Member Bank Reserve Positions Basic Reserve Deficit** Borrowinq at FRB** Excess** Reserves " 'r

Total P (b)

Seasonal

8 New York

38 Others

(7)

1976--High Low

8,896 3,668

3,046 175

655 -180

242 24

34 8

-8,161 -2,367

-12,744 - 6,908

1977--High Low

7,234 1,729

3,017 *-300

578p -111

339 20

68p 8

-8,742 -4,293

-13,975 - 8,733p

1976--June July Aug. Sept. Oct. Nov. Dec.

4,996

582

214

127

-4,219

- 9,158

5,743 6,174 7,838

904 1,686 1,509

234 207 205

132 100 63

25 31 31

-4,756 -4,624 -5,703

- 9,399 - 9,691 - 9,716

6,271 6,876 8,005

1,832 2,418 2,443

221 257 274

94 72 53

32 22 13

-6,428 -6,289 -7,168

-10,527

1977--Jan. Feb. Mar.

6,406 4,450 4,906

2,320 1,605 972

265 198 214

68 72 103

10 12 13

-6,421 -5,604 -5,661

-11,504 -11,503 -10,912

Apr. May June

4,567 3,072 *4,752

696 123 *206

192 213 162p

73 206 262p

14 30 54

-6,586 -5,693 -5,353p

-11,409 -10,175 -10,998p

4 11 18 25

2,474 2,778 3,232 2,837

421 199 -289 -83

302 46 218 157

215 156 127 311

18 22 28 34

-5,840 -7,349 -5,627 -5,133

- 9,209 -10,843 -11,054 - 9,817

June

1 8 15 22 29

4,172 5,579 5,711 *4,345 *3,477

681 281 164 *-300 *435

409 33 246 104p 170p

230 226 223 271p 334 p

44 50 47 51p 68p

-4,392 -6,163 -5,414 -5,612 -4,269p

- 9,433 -12,044 -12,543 -11,209 - 8,733p

July

6 13 20 27

*4,617 *4,211p

*800 *230p

578p n.a.

265p n.a.

58p n.a.

-5,990 p n.a.

- 8,803p n.a.

1977--May

-11,618 -11,449

NOTE: Government security dealer trading positions are on a commitment basis. Trading positions, which exclude Treasury securities financed by repurchase agreements maturing in 16 days or more, are indicators of dealer holdings available for sale over the near-term. Underwriting syndicate positions consist of 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 municiapl issues in syndicate which are Friday figures. * STRICTLY CONFIDENTIAL. ** Monthly averages for excess reserves and borrowings are weighted averages of statement week figures. p Average through close of business Monday.

TABLE 5 SELECTED INTEREST RATES (per cent)

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JULY 15, 1977

Short-term

Treasury Federal 90-Day Funds (1) ' () 1976--High Low

5.58 4.63

5.53 4.27

1977--High Low

5.45 4.47

5.14 4.41

1976--June

5.48

5.41

July Aug. Sept.

5.31 5.29 5.25

5.23 5.14 5.08

Oct. Nov. Dec.

5.03 4.95 4.65

4.92 4.75 4.35

1977--Jan. Feb. Mar.

4.61 4.68 4.69

4.62 4.67 4.60

Apr. May June

4.54 4.96 5.02

4 11 18 25

4.73 5.35 5.39 5.15 5.31 5.34 5.45

June

1 8 15 22 29

5.36 5.31 5.37 5.43 5.43

5.02 5.04 5.04 5.01 4.97

July

6 13

5.35 5.33

5.06 5.14

5.35 5.26

5.11 5.16

1977--May

4.65 4.87 4.99 5.11

Bills Commercial CD's New Paper I ssue-NYC 1-Year 90-119 Day 60-Day 90-Day (3) (4) (5) (6) 5.90 5.63 5.75 6.32 4.63 4.62 4.40 4.50 5.50 5.53 5.30 5.44 4.63 4.48 4.63 4.67 5.83 5.55 5.68 6.12 5.82 5.54 5.30 5.42 4.35 5.23 5.31 5.64 5.33 5.11 5.24 5.50 5.19 5.10 5.04 4.90 4.98 4.84 4.94 5.00 4.64 4.66 4.68 4.50 4.72 4.61 4.68 5.00 4.76 4.70 5.16 4.58 4.75 5.19 4.58 4.72 4.75 5.10 4.57 4.67 5.26 5.16 5.43 5.04 5.42 5.24 5.35 5.41 4.83 5.24 4.65 4.80 5.41 5.05 5.00 5.13 5.35 5.46 5.25 5.28 5.48 5.53 5.25 5.44 5.42 5.50 5.30 5.40 5.46 5.25 5.43 5.38 5.44 5.25 5.41 5.35 5.40 5.20 5.42 5.30 5.39 5.39 5.20 5.30 5.38 5,13 5.25 5.43 5.48 5.38 n.a. n.a.

U.S. Govt.-Constant Maturity Yields 3-yr 7-yr 20-yr (7) Ls) k9) 7. .52 7.89 8.17 5..65 6.33 7.23 6 .58 7.31 7.78 6.59 5 .83 7.26 7..32 7.76 8.03 7 .12 7.70 8.00 7.58 7.91 6 .86 6 .66 7.41 7.78 7.16 7.70 6 .24 6. .09 6.86 7.64 5..68 6.37 7.30 6. .22 6.92 7,48 6. .44 7.16 7.64 6. .47 7.20 7.73 6. .32 7.11 7.67 6..55 7.26 7.74 6.,39 7.05 7.64 7.27 6. .49 7.74 6..58 7.31 7.78 6. .57 7.25 7.74 6. .56 7.21 7.70 6. .49 7.17 7.68 6. .46 7.13 7.68 6. .35 7.01 7.63 6. .35 7.01 7.63 6.98 7.57 6. 32 6. 40 7.08 7.58 7.09p 7.60p 6. 45p

Long- ern Home Mortgages Corp.-Aaa Utilit Municipall New Recently Bond Primary Secondary Market Issue Offered Cony. FNMA Auc. GNMA Sec. Buyer (10r) ( i) (1Z) (13) (14) 15T) 8.95 8.94 7.13 9.10 9.20 8.45 7.93 7.84 5.83 8.70 8.39 7.57 8.34 8.33 5.93 8.95 8.79 8.08 7.90 7.95 5.55 8.65 8.46 7.56 8.72

8.73

6.87

8.85

9.13

8.35

8.63 8.52 8.29

8.63 8.50 8.33

6.79 6.61 6.51

8.93 9.00 8.98

9.05 8.99 8.88

8.37 8.30 8.10

8.25 8.17 7.94

8.24 8.18 7.93

6.30 6.29 5.94

8.93 8.81 8.79

8.75 8.66 8.45

7.98 7.93 7.59

8.08 8.22 8.25

8.09 8.19 8.29

5.87 5.89 5.89

8.72 8.67 8.69

8.48 8.55 8.68

7.83 7.98 8.06

8.26 8.33 8.08

8.22 8.31 8.12

5.73 5.75 5.62

8.75 8.83 8.86

8.67 8.74 8.75

7.96 8.04 7.95

8.33 8.32 8.31 8.28

5.76 5.82 5.70 5.71

8.78 8.83 8.85 8.85

8.70 -8.74 --

8.06 8.08 8.04 8.04

8.22 8.22 8.06 8.06 8.03

5.72 5.65 5.55 5.61 5.56

8.85 8.85 8.85 8.88 8.95

8.79 -8.77 -8.73

7.99 7.99 7.99 7.92 7.90

8.10p n.a.

5.63 n.a.

8.93 'n.a.

-8.72

7.97 7.97

8.32 8.34 8.15 8.11 8.01 8.07 8.14p n.a.

20 27 Daily--July

7 13

5.45 5.49

5.38 5.38

6.39 6.42

7.07 7.05

7.57 7.58

NOTE: Weekly data for columns 1 to 4 are statement week averages of daily data. Columns 5 and 6 are 1-day Wednesday quotes (prior to 1976, figures shown are for 60-89 day and 90-119 day ranges, respectively). For columns 7 through 10, the weekly date is the mid-point of the calendar week over which data are averaged. Columns 11 and 12 are 1-day quotes for Friday and Thursday, respectively, following the end of the statement week. Column 13 is an average of contract interest rates on commitments for conventional first mortgages with 80 per cent loan-to-value ratios made by a sample of insured savings and loan associations on the Friday following the end of the statement week. Column 14 gives FNMA auction data for Monday preceding the end of the statement week. Column 15 is a 1-day quote for Monday preceding the end of the statement week. The FNMA auction yield is the average yield in bi-weekly auction for shortterm forward commitments for Government underwritten mortgages. GNMA yields are average net yields to Investors on mortgage-backed securities for immediate delivery, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying the coupon rate 50 basis points below the current FHA/VA ceiling.

1-A MONEY AND CREDIT AGGREGATE MEASURES APPENDIX TABLE

15,

1977

MONEY STOCK MEASURES

BANK CREDIT MEASURES

BANK RESERVES

JULY

Total r iredit

brwd

Base

and ,roxy Invests ments

(Per cent annual rates of growth) ANNPUALLY:

1974 197 1976

7.0 -0.2 1.0

7.7 3.2 1.2

-1.5 3.6

-1.3 3.7

2.4 6.1

6.7 e.0

2.9

2.3

5.3

0:6 7.6

1.3 7.7

e.s

7.1 11.1

10.5

12.8

9.9

1.5 10C. 10.2

5.b 5.5

11.8 13.1

9." 10.3

4 .6 10.4

10.5

0.4

10.8

10.0

10.3

1.8 11.5

7.2 11.2

4.9 7.2

12.9 14.5

9.3 11.8

9.5 11.5

-2.4 4.7

3.0 7.2

9.5 11.2

3.8 8.4

10.0 9.8

9.8 9.5

10.2 9.9

2.7 4.4

2.6 4.8

3.9 R.2

6.9 10.8

4.4 6.5

11.4

9.2 11.1

9.6 10.9

2.7 3.1

2.6 1.9

5.4 5.2

8.8 11.9

4.2 9.5

11.3 10.0

10.5 9.2

10.6 9.7

4.1 2.0 5.9 -6.2 6.0 11.8 4.9

3.7 1.8 7.0 -4.8 4.9 12.6 5.6

13.5 3.2 0.7 1.6 11.9 11.3 10.8

7.9 4.1 9.7 7.6 13.5 11.1 8.6

7.1 12.8

6.2 11.5

1.6 13.7 0.0 7.7

12.3 13.3 16.9 12.6

7.6 8.6 14.0

13.4

10.5

9.2 11.8 7.7 8.7 13.7 10.3 10.2

10.9 -13.1 -3.1 13.0 1.5 5.0

10.4 -13.3 -4.3 14.1 -3.1 3.1

4.5 -2.9 7.6 7.1 -1.5 16.1

3.7 14.7 10.0 14.0 10.3 8.q

5.4 0.8 5.4 19.4 0.7 4.9

11.4

7.3

10.8 11.0 7.2 10.7 7.5

9.4

10.1

5.1

SEMI-ANNUALLY: 1lT HALF 1976 2ND HALF 1976 IST HALF

1977

QUARTERLY: 3RD QTR. 1976 47H QTR. 1976 1ST QTR. 2ND QTR.

1977 1977

-1.8 6.5

QUARTERLY-AV: 3RD QTR. 1976 4TH QTR. 1976 1ST QTR. 2ND QTR.

1977 1977

14.4

MONTHLY: 1976--JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1977--JAN. FEB. MAR. APR. MAY JUNE P NOTESs 1/ 2/ P -

7.1 5.9

ADJUSTED CREDIT PROXY INCLUDES MAINLY TOTAL MEMBER BANK DEPOSITS RELATED INSTITUTIONS, AND EURODOLLAR BORROWINGS OF U.S.BANKS. BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS. BASED ON QUARTERLY AVERAGE DATA. PRELIMINARY

8.9

9.4 12.4

SUBJECT TO RESERVE REQUIREMENTS,

10.7

LOANS SOLD 10 BANK-

11.0 11.3 7.9 11.0 8.2 10.3

JULY

APPENDIX TABLE 1-B

15,

1977

MONEY AND CREDIT AGGREGATE MEASURES SEASONALLY ADJUSTED, BILLIONS OF DOLLARS

Period Total

borrowed

MONEY STOCK MEASURES

BANK CREDIT MEASURES

BANK RESERVES V n a ry Base

Adj. Credit proxy

Total Loans and Investments 5

34,174 34,015 34,465

33,447 33,885 34,412

104,380 110,394 118,054

494.6 513.8 538.8

695.2 725.5 788.2

283.1 294.8 312.4

612.4 664.3 740.3

981.5 1092.6 1237.1

701.4 746.5 803.5

1070.5 1174.7 1300.3

1181.2 1308.3 1438.9

1221.6 1351.1 1488.4

33,776

33,650

114,009

521.4

753.3

303.2

698.2

1156.5

768.4

1226.7

1365.7

1413.2

JULY AUG. SEPT.

33,833 33,998 33,823

33,701 33,897 33,761

114,625 115.252 115,739

522.8 523.1 523.8

755.9 762.0 766.8

305.0 306.5 306.9

705.2 710.4 716.3

1168.8 1180.8 1193.9

774.1 775.4 779.4

1237.7 1245.8 1257.0

1378.8 1387.5 1397.5

1427.1 1436.3 1446.7

OCT. NOV. DEC.

33,992 34,325 34,465

33,898 34,253 34,412

116,424 117,304 118,054

529.0 534.0 538.8

775.4 782.6 788.2

310.4 310.4 312.4

725.9 732.3 740.3

1210.7 1223.4 1237.1

788.2 794.6 803.5

1273.0 1285.6 1300.3

1413.8 1426.4 1438.9

1463.2 1475.8 1488.4

1977--JAN. FEB. MAR.

34,778 34,397 34,308

34,710 34,326 34*204

119,100 119,077 119,572

540.6 539.5 542.9

790.6 800.3 807.0

313.8 314.0 315.4

746.3 750.7 756.1

1248.9 1258.2 1268.1

809.3 814.0 818.2

1312.0 1321.5 1330.3

1451.9 1465.2 1474.0

1502.0 1516.2 1526.2

34,680 34,723 34,868

34,606 34,517 34,605

120,749 121,376 122,030

546.1 545.4 552.7

816.4 823.4 829.5

320.5 320.7 322.0

764.6 767.6 772.8

1281.2 1289.0 1299.1

826.2 829.9 836.8

1342.8 1351.3 1363.1

1487.1 1496.4 1509.0

1540.2 1550.7 1564.0

11 18 25

34,686 34,829 34,277

34.530 34,702 33,966

120,990 121,488 121,061

543.6 545.8 547.2

320.1 321.3 321.5

766.2 768.4 769.1

828.2 830.7 831.8

JUNE

1 8 15 22 29P

34,759 34,507 34,686 34,980 35,184

34,529 34,281 34,463 34,709 34,850

121,878 121,208 121,546 122,217 122,959

546.6 551.0 552.1 555.9 551.9

320.7 321.5 320.9 322.5 322.4

769.5 771.6 771.1 774.1 774.4

832.4 834.9 834.8 838.2 839.2

JULY

35,764

35,499

123,512

555.7

325.6

780.0

844.0

ANNUALLY: 1974 1975 1976

MONTHLY: 1976--JUNE

APR. MAY JUNE P

WEEKLY:

1977-MAY

NOTESZ

ADJUSTED CREDIT PROXY INCLUDES MAINLY TOTAL MEMBER BANK DEPOSITS SUBJECT TO RESERVE REQUIREMENTS, LOANS SOLO TO BANKRELATED INSTITUTIONS, AND EURODOLLAR BORROWINGS OF U.S.BANKS. WEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS. MONTHLY DATA ARE DAILY AVERAGES. WEEKLY DATA ARE NOT AVAILABLE FOR M3, MS, M6, M7, TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS. 1/ BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS. P - PRELIMINARY

JULY

APPENDIX TABLE 2-A

15,

1977

COMPONENTS OF MONEY STOCK AND RELATED MEASURES ITime Currency

Period

Deposits

Mutual Savings Bank &

and Savings Deposits Other Than CD's

Total

______

Savings

CD's

Credit Union

Savings

S&L

BndsJ

Short Term U.S.Gov't Com Securities

Shares-i

Other

Paper

8 5 6 7 (Per cent annual rates of growth)

10.3 8.8 9.6

3.6 2.9 4.3

14.7 8.0 8.1

10.1 11.7 15.2

6.5 17.4 25.0

12.7 7.8 1.7

36.5 -6.1 -23.5

5.6 15.5 15.6

12.3 19.4 17.8

4.7 6.2 6.9

13.5 33.4 7.2

29.a -1.0 18.6

10.7 8.0

4.0 4.6

6.3 9.7

14.1 15.2

27.6 19.7

3.0 11.4

-28.9 -21.1

13.8 16.2

16.6 17.6

6.3 7.2

16.6 -2.0

21.6 14.3

1977

8.5

5.7

10.5

12.1

15.1

9.4

0.0

12.2

15.6

6.4

8.2

19.0

1976 1976

8.8 6.6

3.7 7.4

6.2 15.7

14.5 18.1

19.5 27.5

10.3 10.0

-40.5 1.3

16.9 15.9

17.9 18.2

8.1 6.2

0.0 -17.8

15.2 2.4

IST QTR. 1977 2ND QTR. 1977

8.4 8.8

2.2 8.2

9.5 9.5

11.9 9.3

15.4 4.0

8.7 14.1

-7.0 10.9

12.0 10.9

16.4 12.8

6.1 6.6

24.0 6.2

22.6 20.1

3RD QTR. 1976 4TH QTR. 1976

7.8 8.1

3.2 6.0

7.0 12.2

12.8 17.1

13.8 24.7

11.7 10.8

-24.6 -18.9

14.6 17.2

15.9 18.5

7.0 7.4

9.2 -13.0

Z2.6 5.7

1ST QTR. 2ND QTR.

7.5 9.3

3.1 8.3

12.5 8.3

14.0 9.8

21.9 7.9

7.1 11.6

1.9 -1.9

13.3 10.8

16.7 14.0

6.7 6.1

7.0 9.2

14.6 22.7

3.1 9.3 7.7 9.2 9.1 6.0 4.5

-3.2 6.9 5.3 -1.1 15.3 -2.1 8.9

12.0 9.5 -0.3 9.2 13.5 16.1 17.1

9.2 15.2 11.4 16.3 17.9 18.8 16.8

0.0 12.6 23.3 19.6 29.9 31.0

17.0 17.3 2.2 11.0 15.8 9.7 4.3

28.0 -22.2 -67.9 -35.1 -15.2 -1.9 21.2

10.9 13.9 18.0 18.0 18.0 15.3 13.8

13.6 16.8 16.6 19.6 19.3 15.8 18.8

7.0 5.. 6.6 10.3 5.1 6.8 6.7

10.4 29.3 0.0 -28.6 -1.7 -5., -46.8

33.8 20.3 14.9 9.8 4.9 0.0 2.4

8.9 10.4 5.9 13.1 7.2 5 .. 7

4.1 -3.1 5.7 21.6 -1.5 4_..6

11.0 10.7 6.7 6.9 8.3 13.2

12.9 11.7 10.7 9.5 7.6 10..

21.9 13.4 10.4 9.7 4.5 -2.-A3

4.8 10.6 10.5 9.4 10. 22.0-

-3. 3.8 -20.9 -11.6 13.6

14.2 11.4 10.0 10.4 11.1 11-0.

15.4 15.2 18.0 11.8 11.7 14.S.

6.7 6.6 5.0 6.6 6.5 &F-

18.0 60.4 -6.8 6.8 5.1 . -

14.5 24.0 28.2 18.4 I7.1 1

2/ ANNUALLY 1974 1975 1976 2/ SEMI-ANNUALLY: 1ST HALF 1976 2ND HALF 1976 1ST HALF QUARTERLYs 3RO OTR. 4TH QTR.

QUARTERLY-AV:

1977 1977

MONTHLY: 1976--UNt JULY AUG. SEPT. OCT. NOV. DEC. 1977--JAN. FEB. MAR. APR. MAY JUNE P

GROWTH RATES AkE BASED ON ESTIMATED PREVIOUS MONTH REPORTED DATA. 2/ BASED ON QUARTERLY AVERAGE DATA. P - PRELIMINARY. 1/

MONTHLY AVERAGE

21.7

LEVELS DERIVED

30.-

BY AVERAGING

.1.

END OF CURRENT

MONTH

AND ENU UF

APPENDIX TABLE 2-B

15,

JULY

COMPONENTS OF MONEY STOCK AND RELATED MEASURES Period Currency

Demand Deposit

Time and Savings Deposits otal

___ _

Other Than CDs Total 4

Savings| Other 5 6

ShortTerm

D's

Mutual Savings Credit k Union Saings & S&L Shares Bods

Gov't

Conmercial Paper

Shares 8

1977

Total NonGov't Deposit Funds Demand

Deposip

1 10

Sec j 11

63.3 67.3 71.9

47.4

457.8

27.6 33.0 39.0

66.6

40.4 42.8 49.5

422.5

35.7

69.4

69.7

47.4

ANNUALLY

491.1

329.3 369.6 427.9

136.2 161.0 202.4

193.1 208.6 225.5

225.6

465.3

395.1

180.6

214.5

78.1 78.6 79.2

226.9 227.9 227.7

469.0 468.9 472.5

400.1 403.9 409.4

182.5 185.8 189.4

217.6 218.0 220.0

68.9 65.0 63. 1

427.4 433.6 440.3

36.2 36.7 37.3

69.7 70.2 70.b

71.4 71.4 69.7

4u.2 48.8 49.2

OCT. NOV. DEC.

79.8 80.2 80.5

230.6 230.2 21 .9

477.8 484.2 491.1

415.5 422.0 427.9

192.5 197.3 2U2.4

222.9 224.7 225.5

o2.3

446.9 452.6 457.8

37.9 38.4 39.0

71.1 71.5 71.9

69.6 69.3 66.6

49.4 49.4 49.5

1977--JAN. FEb. MAR.

B1.1 81.6 82.2

232.7 232.1 233.2

495.6 500.0 502.8

432.5 436.7 440.6

20b. I 208.4 210.2

226.4 228.4 230.4

63.3 62.2

463.2 467.6 471.5

39.5 40.0 40.6

72.3 72.7 73.0

67.6 71.0 70.6

5U.1 51.1 52.3

83.1 83.6 84.0

237.4 237.1 238.0

505.7 509.2 514.6

444.1 446.9 450.8

211.9 214.7 212.3

232.2 234.2 238.5

61.6 62.3 63.9

475.6 480.0 464.4

41.0 41.4 41.9

73.4 73.0 74.2

71.0 71.3 71.7

53.1 54.3 55.0

11 18 25

83.4 83.6 83.7

236.7 237.6 237.8

508.1 509.5 510.3

446.2 447.1 447.6

21.2 212.9 212.9

232.9 234.2 234.7

62.0 62.4

62.7

511.7 513.3 513.9 515.6 516.8

44B.8 450.1 450.2 451.6 452.0

212.4 212.7 212.3 212.2 Z11.9

236.4 237.4 237.9 239.4 240.1

62.9 63.2 63.7 64.0 64.8

518.4

454.4

212.4

242.0

64.0

END

* n *OF PREVIOUS

67.8 73.7 80.5

215.3

418.3

221.0

451.7

231.9

1976--JUNE

77.5

JULY AUG. SEPt.

1974 1975

197b

n9.0 9 *0 82.1 683.3

341.5 395.2

66.3

MONTHLY:

APR. MAY JUNE

02.d 63.3

63.1

WEEKLY: 1977-MAY

JUNE

1 8 15 22 29P

84.1 83.8 83.8 84.2 84.6

236.7 237.8 237.1 238.3 237.8

JULY

85.0

24U.6

1/ 2/ P -

SS. - SS * - - ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND INCLUDES TREASURY UEPOSIT5 AT MEMBER BANKS AND FEDERAL RLSERVE bANKS. PRELIMINARY

S -

MONTH REPURElt

* UA[A.

Cite this document

APA

Federal Reserve (1977, July 18). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19770719

BibTeX

@misc{wtfs_bluebook_19770719,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1977},
  month = {Jul},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19770719},
  note = {Retrieved via When the Fed Speaks corpus}
}