bluebooks · January 16, 1978

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 this document may contain occasional gaps in the text. These gaps are the result of a redaction process that removed information obtained on a confidential basis. 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). 2 A two-step process was used. An advanced optimal 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.

January 13,

Strictly Confidential (FR)

1978

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

January 13, 1978

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) M-1 increased at about an 8 per cent annual rate in December, and incoming data suggest that growth over December and

January will be at about a 7¼ per cent rate, in the upper half of the FOMC's range.

M-2 appears to be increasing at a 6¼ per cent annual

rate over the December-January period, near the lower end of its range. As in November, all of the increase in the interest-bearing component of M-2 occurred in large denomination time deposits.

Flows into

savings and consumer-type time deposits remained weak, apparently reflecting the continued diversion of funds from these deposits to higher yielding market instruments.

Deposit flows at thrift institu-

tions moderated slightly further in December from November's reduced rate.

Commercial bank credit is estimated to have remained about

unchanged in December, on a last-Wednesday-of-the-month basis; over the fourth quarter as a whole, bank credit growth was quite strong. Growth in Monetary Aggregates over December-January Period (SAAR in per cent) Ranges

Latest Estimates

M-1

2½ to 8½

7.2

M-2

6 to 10

Memo: Federal

funds rate (per cent per annum)

Through Jan. 6:

6¼ to 6¾ From Jan. 7: 6½ to 7

6.2 Average for statement

week ending 21 6.54 28 6.65 Jan. 4 6.69 11 6.58 Dec.

(2)

Total reserves are projected to be increasing at about a

14 per cent annual rate over December and January, reflecting the pickup in growth of demand deposits and continued strong expansion in large denomination time deposits.

Growth in nonborrowed reserves is expected

to be even more rapid over this period, as member bank borrowing has declined from its November level. (3)

With the monetary aggregates apparently expanding at

rates well within the ranges specified by the FOMC, the Account Management continued to aim for a Federal funds rate of around 6½ per cent in the last weeks of December and first week of January.

However, reflecting

technical factors,including usual window-dressing pressures around year-end Federal funds generally traded at rates above this level.

On January

6, the Board approved an increase in the discount rate from 6 to 6½ per cent.

On that day, the FOMC also concurred in the Chairman's

recommendation to raise the Federal funds rate range to 6½ to 7 per cent and to instruct the Account Manager to raise the funds rate to around 6¾ over the next few days. (4)

Short-term market interest rates changed little during

late December and early January, though longer-term rates moved up somewhat.

After the discount rate was raised and the System increased

its Federal funds rate target, however, Treasury bill rates increased sharply and, on balance, are up 35 to 45 basis points for the intermeeting period.

At the same time, private short-term rates have

increased more modestly.

Yields on longer-term market securities have

-3risen to 10 to 35 basis points since the last Committee meeting, while rates in the primary mortgage market edged higher. (5)

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 Average

Past Twelve Months Dec. '77 over Dec. '76

Past Six Months Dec. '77 over June '77

Past Three Months Dec. '77 over Sept. '77

Past Month Dec. '77 over Nov. '77

Nonborrowed reserves

1.5

3.6

6.1

7.4

Total reserves

0.4

5.1

7.8

6.6

7.0

Monetary Base

6.4

8.4

9.7

8.9

9.2

5.1

7.4

8.4

6.1

7.9

M-2 (M-1 plus time deposits at commercial banks other than large CD's)

10.0

8.9

8.7

6.9

5.8

M-3 (M-2 plus deposits at thrift institutions)

12.3

11.1

11.5

9.2

7.3

M-4 (M-2 plus CD's)

7.0

9.7

10.6

11.7

10.6

M-5 (M-3 plus CD's)

10.2

11.4

12.5

12.1

10.2

Month-end basis

6.5

10.4

8.5

8.3

-0.7

Average of Wednesdays

6.2

10.5

9.0

8.7

0.7

-1.1

1.0

1.8

3.8

0.0

0.2

0.0

0.1

0.8

17.2

Concepts of Money M-1 (Currency plus demand deposits) 1/

Bank Credit Loans and investments of all commercial banks 2/

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 Wednesday statement date figures. Growth rates for reserve measures in this and subsequent tables are adjusted to

remove the effect of discontinuities from breaks in the series when reserve requirements are changed.

Prospective developments (6)

Shown below for Committee consideration are three

alternative sets of longer-run growth ranges for the monetary aggregates applicable to the QIV '77-QIV '78 period. Alt. A

Alt. B

Alt. C

M-1

4 to 7

4 to 6

M-2

7 to 9

to 9

6 to 8

M-3

to 11

8 to 10

to 10

Bank credit

to 10

7 to 10

to 9

(7)

Alternative B encompasses the ranges for all of the

aggregates adopted by the Committee in October for the QIII QIII '78 period.

'77-

The ranges for M-2 and M-3 now assume an upward

adjustment of one-half percentage point in ceiling rates on small denomination time deposits in the first half of the year.

Without

such an adjustment, the increase in market interest rates thought necessary to restrain M-1 growth to the mid-point of its indicated range would--given associated projections for time deposit flows into banks and thrift institutions--lead to growth in M-2 and M-3 at rates near or below the lower ends of the ranges shown.1 /

Alternatives A

and C represent, respectively, somewhat more and somewhat less expansive

Without an adjustment in deposit ceiling rates, the ranges for M-2 and M-3 for the QIV '77-QIV '78 period consistent with a 4 to 6 per cent growth in M-1 would be 5 to 8 and 6 to 9 per cent, respectively. Projections of the interest-bearing components of M-2 and M-3,with and without an adjustment in ceiling rates, are shown in Appendix V. (Should the Committee wished to retain the existing M-2 and M-3 ranges without an adjustment in deposit ceiling rates, the staff believes that consistency would require an M-1 range of 5 to 8 per cent and associated lower short-term market rates.)

policy alternatives; both also assume the upward adjustment in ceiling rates. (8)

The table below provides perspective on the relationship

between growth rates proposed for the QIV '77-QIV '78 period and for and 18-month periods also ending in QIV '78.

It shows, for instance,

that growth in M-1 at around the 5-1/4 per cent mid-point of the proposed alternative B range would lead to a 5.6 per cent annual rate of expansion over the 15-month period starting with QIII '77 and to a 6.3 per cent annual rate of growth over the 18-month period beginning with QII '77--in both cases within the current FOMC range, but above the midpoint.

This is the case because of the sizable overshoot in M-1 growth in

the third quarter of last year and the slight overshoot in the fourth. M-1 growth at the mid-point of the proposed 4-6 per cent alternative C range would virtually compensate for the slight fourth quarter overshoot, since this would lead to a 5.4 per annual rate of expansion over the 15-month QIII '77-QIV '78 period.1/ Growth Rates in Monetary Aggregates Assuming Growth Over QIV '77-QIV '78 Period at Near Mid-Point of Alternative Ranges (Annual rate, compounded quarterly) Period

Alt. A

Alt. B M-1 5.2 5.6 6.3

Alt. C

QIV '77-QIV '78 QIII '77-QIV '78 QII '77-QIV '78

5.5 5.8 6.5

Memo:

6.0

5.7

5.4

QIV '77-QIV '78

8.7

M-2 8.3

7.8

QIII '77-QIV '78 QII '77-QIV '78

8.5 8.9

8.2 8.6

7.8 8.3

Memo:

8.4

8.1

7.8

QIII '77-QIII '78

5.0 5.4 6.1

Implications of the proposed alternatives for the monetary aggregates for growth over even more extended periods than those shown in the text table are shown in connection with the growth triangles in Appendix IV.

(9) Shorter-run specifications for monetary aggregates and the Federal funds rate

believed consistent with longer-run proposals

are summarized below for Committee consideration.

(More detailed, and

longer-term, data are shown in the tables on pp. 8 and 9.) Alt. A

Alt. B

Alt. C

M-1

3 to 9

2½ to 8½

2 to 8

M-2

5½ to 9

5 to 9

4½ to 8½

6½ to 7

7 to 7½

Ranges for Jan.-Feb.

Federal funds rate (Intermeeting period)

(10)

6 to 6½

A Federal funds rate centered on the recently prevailing

6¾ per cent, as encompassed under alternative B, is likely to be associated with M-1 growth over January-February in a 2½ to 8½ per cent annual rate range.

However, the staff expects that further increases

in market interest rates will be required relatively soon in order to limit growth in this aggregate over the QIV '77 to QIV '78 period to the mid-point of the longer-run 4 to 6½ per cent range associated with alternative B. Money demand can be expected to be relatively strong over the year.

Nominal GNP is projected to increase at about an 11¾ per cent

rate during 1978, reflecting in part an assumed additional fiscal stimulus from tax cuts.

And the restraining effect of the previous increases in

interest rates will be diminishing with the passage of time.

Moreover,

the evidence of the last three quarters suggests that the depressing effect on money demand of regulatory and innovational factors has been wearing off.

Consequently, the staff has assumed only some moderate

additional downward shift in the demand for money over 1978.

Thus, in

Alternative Levels and Growth Rates for Key Monetary Aggregates M-1

M-2

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

1977 1978

December January February

335.4 337.3 338.8

335.4 337.2 338.5

335.4 337.1 338.2

806.5 811.2 816.6

806.5 810.9 815.7

806.5 810.6 815.4

1977

QIV

334.1

802.9

1978

QI QII QIII QIV

338.9 343.6 348,1 352.6

338.6 342.8 347.1 351.6

338.4 342.2 346.4 350.9

816.6 834.0 853.9 872.9

816.2 834.2 852.1 869.4

816.2 833.0 849.3 865.9

Growth Rates Monthly: 1978 January February

6.8 5.3

6.4 4.6

6.1 3.9

7.0 8.0

6.5 7.1

6.1 7.1

Quarterly Average; 1978 QI QII QIII QIV

5.7 5.5 5.2 5.2

5.4 5.0 5.0 5.2

5.1 4.5 4.9 5.2

6.8 8.5 9.5 8.9

6.6 8.8 8.6 8.1

6.6 8.2 7.8 7.8

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

5.7 5.2

5.2 5.1

4.8 5.1

7.7 9.3

7.8 8.4

7.5 7.9

Annual: QIV '77-QIV '78

5.5

5.2

5.0

8.7

8.3

7.8

-9-

Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) M-3

Bank Credit

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

1977 1978

December January February

1373.9 1382.9 1392.8

1373.9 1382.7 1391.6

1373.9 1382.1 1389.8

868.7 875.2 882.7

868.7 875.2 882.5

868.7 875.2 882.3

1977

QIV

1365.5

865.0

1978

QI QII QIII QIV

1392.8 1424.1 1459.2 1493.9

1392.1 1423.2 1454.8 1485.9

1391.6 1420.3 1448.5 1477.0

883.4 904.4 924.5 944.1

882.9 903.0 922.0 940.9

882.3 901.9 920.2 938.4

Growth Rates Monthly: 1978 January February

7.9 8.6

7.7 7.7

7.2 7.5

9.0 10.3

9.0 10.0

9.0 9.7

Quarterly Average: 1978 QI

8.0

7.8

7.6

8.5

8.3

8.0

QII QIII QIV

9.0 9.9 9.5

8.9 8.9 8.6

8.2 7.9 7.9

9.5 8.9 8.5

9.1 8.4 8.2

8.9 8.1 7.9

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

8.6 9.8

8.5 8.8

8.0 8.0

9.1 8.8

8.8 8.4

8.5 8.1

9.4

8.8

8.2

9.1

8.8

8.5

Annual:

QIV '77-QIV '78

-10order to constrain M-1 growth, the Federal funds rate under alternative B begins to rise next month and reaches an average of 8 per cent in the fourth quarter, as shown in Appendix I.1/ (11)

Under alternative B, growth in M-2 over the January-

February period is likely to be in a 5 to 9 per cent annual rate range.

With the recent increase in market yields, it appears likely

that savings deposits at banks, which were essentially unchanged in the last two months of 1977, will remain weak in the early months of 1978. Moreover, now that yields onmarket instruments are at or above effective ceiling rates on all maturities of small denomination time deposits at banks, growth in such deposits is likely to remain modest at best.

But

relatively strong growth in large denomination time deposits included in M-2 can be expected as banks offer these instruments aggressively to offset slow growth of deposits subject to Regulation Q ceilings. (12)

Thrift institutions too are faced with unfavorable

market rate comparisons, except on their 4 and 6 year maturities where the favorable spread has narrowed to only about 5 and 25 basis points respectively, since the last meeting.

Consequently, growth in deposits

at these institutions can be expected to slow further in January-February. With outstanding commitments at record levels, it seems likely that S&L's will not only be forced to reduce their liquidity and to maintain a high rate of borrowing from the FHLBanks, but also to slow their new commitment activity in early 1978. 1/

The implied increases in the velocity of M-1 and M-2 over 1978 are displayed in Appendix II.

-11(13)

If the Federal Funds rate remains near its present

6¾ per cent level over the intermeeting period, as envisioned under alternative B, short-term market interest rates will probably remain near current higher levels.

And given their increases since November,

bond yields may be fully adjusted to the current level of short-term rates.

Thus, yields in the corporate and tax-exempt bond markets may

remain essentially unchanged, and could even decline somewhat in response to continuing strong institutional investment demands and a recent reduction in new offerings of corporate bonds.

However, on January 25,

the Treasury will announce terms for refunding more than $5 billion of publicly-held issues maturing in mid-February; the Treasury may also take the occasion to raise $1 to $2½ billion of new money. (14)

Beyond the intermeeting period, short-term interest

rates are expected to be under renewed upward pressure as efforts are made to limit M-1 expansion to the 5¼ per cent mid-point of the alternative B longer-run range.

As short-term rates rise, some further

induced increase in intermediate-term rates can be expected.

Thus,

even with the assumed increase in deposit rate ceilings, inflows to thrifts will probably not be sufficient to enable them to meet their mortgage commitments without further increases in borrowings from the FHLBanks.

Under the circumstances, mortgage rates are

likely to come under upward pressure.

Banks would find it necessary

to continue to offer large denomination time deposits in volume to supplement their deposit sources, and to reduce further their portfolio liquidity in order to meet loan demands.

Moreover, with

-12Treasury, corporate, and municipal bond offerings remaining sizable, long-term yields can also be expected to be under renewed upward pressure.

Such increases, however, will be limited by the continued high

cash flows of insurance companies and pension funds. (15)

Alternative C contemplates an increase in the Federal

funds rate over the next few weeks to the mid-point of a 7 to 7-1/2 per cent range.

Under this alternative M-1 and M-2 growth over the

January-February period may be in respectively.

2 to 8 and 4½ to 8½ per cent ranges,

If the Committee followed this course, the 3-month bill

rate would likely increase to about 7 per cent between now and the next meeting, with commensurate adjustments in other short rates.

Member

bank borrowing would begin to rise, and pressures for a discount rate increase would develop.

The increase in short-term interest rates under

the alternative would tend to strengthen the dollar on international exchange markets. (16)

Such adjustments in short-term market conditions,

following so closely on recent discount rate and open market actions, would probably be accompanied by a reappraisal of the basic financial outlook by market participants.

It is likely that banks and thrift

institutions would adopt more restrictive lending policies, while mortgage bankers would take down existing FNMA commitments and aggressively seek new commitments.

Pressures for an upward adjustment in

ceiling rates on time deposits would be likely to emerge. interest rates would probably rise further.

Long-term

At the higher level of

-13rates, corporate and municipal bond offerings would likely be postponed or possibly cancelled, with borrowers turning more toward banks and the short-term sector of the open market. (17)

The tightening of the money market over the next few

weeks would be a step toward reducing longer-run growth in the aggregates to rates within the somewhat lower ranges proposed for alternative C.

However, further interest rate increases appear necessary as

the year progresses, given the underlying strength of money demand. The staff would expect the funds rate under this alternative to average 7-3/4 per cent by the second quarter of 1978 and 8-1/4 per cent in the fourth. (18)

An easing in money market conditions over the next few

weeks under alternative A, which calls for a Federal funds rate of about 6-1/4 per cent, would come as a considerable surprise so soon after the Board's recent discount rate action.

Recent interest rate

increases would be reversed, although perhaps not entirely in long-term markets if the rate decline was considered to be temporary.

The decline

in short-term rates, however, would tend to soften the dollar in international exchange markets. (19)

Even though this alternative is consistent with a shift

to higher long-term growth ranges for the aggregates, the decline in the funds rate would soon have to be reversed in order to keep the aggregates within the longer-run ranges of alternative A.

The funds rate

-14would probably have to begin rising late in the first quarter and reach a high of 7-3/4 per cent by fall.

The delayed rise in short-

term rates would postpone the need for a change in deposit rate ceilings.

-15Directive 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 strikethrough form--the specifications adopted at the last meeting (except that the specifications for the Federal funds rate reflect the modifications agreed upon on January 6).

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 preceeding paragraph.

Specifically, at present, it expects the annual

growth rates over the January-February period to be within the ranges of ____ per cent for M-2.

to ____

per cent for M-1 and ____

to ____

In the judgment of the Committee such growth

rates are likely to be associated with a weekly-average Federal

-16funds 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 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.

In the conduct of day-to-day opera-

tions, account shall be taken of emerging financial market conditions, including the unsettled conditions in foreign exchange markets. 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: 6-3/4-percent] ____, so long as M-1

-17and M-2 appear to be growing over the [DEL: December-January] JANUARYFEBRUARY period at annual rates within ranges of [DEL: 2-l/2-to-8-1/2] ____

per cent and [DEL: 6-to 10] ____

TO ____

respectively.

If,

TO ____

per cent,

giving approximately equal weight to M-1 and

M-2, it appears that growth rates over the 2-month period are approaching or moving beyond the limits of the indicated ranges, the operational objective for the weekly-average Federal funds rate shall be modified in an orderly fashion within a range of [DEL: 6-l/2-to-7]

____

TO ____

per cent.

In the conduct of day-

to-day operations, account shall be taken of emerging financial market conditions, including the unsettled conditions in foreign exchange markets. 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.

Appendix I

Projected Federal Funds Rate

1978

Alt. A

Alt. B

Alt. C

6-3/8

6-7/8

QII

7¼

7½

7¾

QIII

7-5/8

7-7/8

8-1/8

QIV

7¾

8¼

Appendix II

Implied Velocity Growth Rates V

(GNP/M

1978

Alt. A

Alt. B

Alt. C

6.4

6.5

6.6

5.3

5.6

5.8

III

5.5

5.4

5.2

6.9

6.5

6.2

5.3

5.1

2.4

1.7

2.1

III

1.2

1.9

2.3

3.2

3.6

V 1 (GNP/M2 1 1978

Appendix III

Expansion in Reserves Over the Period From QIV 1977 to QII 1978 Consistent With Proposed Alternatives (Seas. adj. annual rates) Alt. A

Alt. B

Alt. C

Nonborrowed Reserves

5.9

4.3

2.9

Total Reserves

7.8

6.9

6.2

Monetary Base

8.8

8.5

8.3

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

Appendix Table IV-1 MONEY STOCK--M-1 (Annual rates of growth, compounded quarterly)Base Period

Ending Period

1975

1976

1977

741V

7511

7511I

751V

761

7611

76III

761V

771

7711

77 11

0.7

3.9

7.1

III

5.0

7.2

7.3

4.4

5.6

4.9

2.5

4.1

4.9

4.2

2.7

2.9

4.8

5.6

5.3

4.6

5.6

III

4.7

5.4

5.1

4.5

5.2

4.4

5.0

5.6

5.4

5.0

5.6

6.7

4.9

5.4

5.2

4.9

5.3

5.1

5.5

4.3

5.8

5.6

5.4

5.9

6.0

6.5

8.7

III

5.7

6.2

6.1

5.9

6.4

6.7

7.3

7.5

9.2

9.7

5.8

6.3

6.2

6.0

6.5

6.8

7.3

7.4

8.4

8.3

6.8

6.5

5.8

1978

751

* * * *

IV Alt. A

5.7

6.1

6.0

6.2

6.5

6.3

6.5

Alt. B

5.6

6.0

5.9

6.1

6.4

6.2

6.4

6.3

6.6

6.3

5.6

Alt. C

5.6

5.9

5.8

6.0

6.3

6.1

6.3

6.2

6.5

6.1

5.4

Based on quarterly average data.

77IV

Appendix Table IV-2 MONEY STOCK--M-2 (Annual rates of growth, compounded quarterly)Base Period

Ending Period 1975

1976

1977

74IV

751

7511

75IV

761

7611

76III

76IV

5.8

8.1

10.4

III

8.9

10.4

8.3

9.2

8.5

6.6

8.7

9.4

9.1

8.4

10.2

9.1

9.7

9.6

9.3

10.6

10.9

III

9.1

9.7

9.5

9.3

10.2

9.4

TIV

9,6

10.2

10.1

10.0

10.9

11.1

11.2

13.1

9.7

10.2

10.1

10.8

1o0 9

10.9)

11.7

10.3

9,7

10.1

10.0

10.6

10.7

1 , (6

11.0

9.9

III

9.8

10.2

10.1

10.6

10 7

10.6

10.9

10.2

9.6

9 9

9.8

10.2

10.1

10.3

9.9

771

7711

77IV

10.5

.A*'*

1978

7511

9.6

9.5 10.1 9, ?

10.7 9.2

IV Alt.A

9.4

9.6

9.5

9.6

9.1

8.9

8.5

8.7

Alt. B

9.3

9.5

9.4

8.9

8.6

8.2

8.3

Alt. C

9.2

9.4

9.3

9.2

8.7

8.3

7.8

Based on quarterly average data.

Appendix Table IV-3 MONEY STOCK--M-3 (Annual rates of growth, compounded quarterly)En

Base Period

Ending

Period 1975

1976

1977

1978

74IV

751

7511

75111

751V

761

7611

76III

761V

771

7711

77111

771V

8.0

10.4

13.0

III

11.5

13.3

13.7

11.1

12.2

11.8

9.9

11.3

12.1

11.8

10.9

11.9

11.4

12.2

12.0

11.4

12.1

12.3

III

11.5

12.1

11.9

11.5

12.0

12.1

11.9

12.0

12.5

12.2

12.8

13.1

13.5

15.2

11.9

12.5

12.4

12.2

12.6

12.8

12.9

13.5

11.8

12.2

12.1

11.9

12.2

12.3

12.5

11.1

10.4

III

11.9

12.3

12.2

12.0

12.3

12.4

12.6

11.7

13.0

11.8

12.2

12.1

11.9

12.2

12.3

11.6

11.5

12.1

11.2

Alt.A

11.2

11.4

11.3

11.2

11.3

11.2

11.1

11.0

10.5

10.3

9.8

9.4

Alt. B

11.1

11.3

11.2

11.0

11.1

11.0

10.8

10.7

10.2

10.0

9.9

9.3

8.8

Alt. C

10.9

11.1

11.0

10.8

10.7

10.6

10.4

9.9

9.6

9.5

8.8

8.2

Based on quarterly average data.

APPENDIX V

The following table compares M-2 and M-3 growth patterns (and their respective interest-bearing components) with and without a onehalf percentage point increase in the ceiling rate on small denomination 1/ time deposits. All data in the table are per cent changes at seasonally adjusted annual rates.

1978--I III IV QIV '77 to QIV '78

Without a With a 1/ change in ceiling rate change in ceiling rate ate A B B C A C Interest-bearing Component of M-2 7.7 7.5 7.5 7.7 7.5 7.7 8.0 7.5 10.6 11.6 10.9 11.1 8.8 8.5 12.6 9.9 9.0 8.3 9.4 11.4 10.1

8.9

8.3

11.0

10.5

9.9

M-2 1978--I II III IV

6.8 7.4 7.4 7.6

6.5 6.8 7 7

6.1 6.3 6.8 6.9

6.8 8.5 9.5 8.9

6.6 8.8 8.6 8.1

QIV '77 to QIV '78

7.5

7.1

6.7

8.7

8.3

9.8 9.0 8.4 8.5

9.5 8.0 7.5 7.5

Thrift Deposits 8.7 9.7 7.0 9.6 6.5 10.3 6.6 10.4

9.3

8.4

1978--I II III

IV QIV '77 to QIV '78

10.4

9.5 9.1 9.2 9.2

9.1 8.3 8.0 8.1

9.6

8.6

7.8 8.9 8.9 8.6

7.6 8.2 7.9 7.9

M-3 1978--I II III IV

8.0 8.1 7.9 8.0

QIV '77 to QIV '78

8.2

7.7 7.3 7.3 7.3

7.2 6.6 6.7 6.9

8.0 9.0 9.9 9.5

8.2

1/ The staff has assumed that the deposit ceiling rate is increased in May under Alternative A, March under B, and February under C.

1/13/7

CHART 1

MONETARY AGGREGATES NARROW MONEY SUPPLY M 1

BILLIONS OF DOLLARS

350

330

310

290

BROADER MONEY SUPPLY M2

840

820

810

800

790 1976

1977

1978

0 1977

J 1978

1/13/78

CHART 2

MONETARY AGGREGATES BANK CREDIT SEND

BILLIONS OF DOLLARS

OF MONTH

-900

-860

-820

-780

RESERVES

740

BILLIONS OF DOLLARS 37

WEEKLY AVERAGES

TOTAL

NONBORROWED

i 1976

1977

1978

CHART 3

1/13/78

MONEY MARKET CONDITIONS AND INTEREST RATES IONEY MARKET CONDITIONS

PER CENT

WEEKLY WEEKLY AVEAGS AVERAGES

-1

INTEREST RATES Short-term

FEDERAL RATE

-1 5

RESERVES

BILLIONS OF DOLLARS

l 1976

1977

1978

2 1976

1977

1978

1975

1977

1978

Table 1

CONFIDENTIAL (FR) CLASS II-FOMC

MONETARY AGGREGATES

JAN. 13,

1978

ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED Money Supply Narrow Broad

Period

(Ml) (Mij

(M2) M2

Total U S Govt.

Time & Savings Deposits Other Than CD's

Total

Deposits 1/ d

_____I

Total Tt

hr Tan I

Savings

ther

CD's

I_____ Other___

Nondeposit Sources of

Funds 2

I_____I

MONThLY LcVELS-sBIL 1977-OLT. NLV. DEC. 1976--JAN. I

333.7 333.2 335.4 (337.2)

799.6 802.6 806.5 (810.9)

10.3 6.7 11.3

247.5 251.1 252.7 (255.0)

66.4 70.9 74.7 ( 77.6)

5.1 9.6 1.1

13.2 11.1 12.9

10.9 -4.4 72.8

8.5 6.6 4.6

10.8 15.0 11.0

-1.9 3.2 48.2

14.6 18.3 12.2 12.3)

3.3 -0.5 0.5 2.21

13.2 17.5 7.6 S10.91

12.3)

1.4)

465.9 469.4 471.1 (473.7)

9.4 10.4 7.3

9.8 10.9 8.1

I 10.5)

532.2 540.3 545.8 1551.4)

218.4 218.3 218.4 (218.8)

57.4 60.0 61.6

ANNUAL GROWTH QUARTERLY 1977--2ND QTR. 3RD OTR. 4TH QTR.

8.2 10.6 6.1

8.8 10.4 6.9

-39.3 22.4

9.5 8.5 15.2

9.2 10.3 7.6

-18.2 15.2 -55.0

8.3 10.0 12.9

23.8

QUARTERLY-AV 1977--2ND OTR. 3RD CTR. 4TH QTR.

8.4 9.3 6.8

MONTHLY 1977--OCT. NOV. DEC. 1978--JAN. DEC.-JAN.

12.0 -1.8 7.9 6.4)

10.1 4.5 5.8 6.5)

7.2)

6.2)

-44.9 -419.4 823.9 -85.0) 340.31

[

9.3)

60.8

81.3 64.3 46.61 56.7)

WEEKLY LEVtLS-BIL 1977-DEC.

1 14 21 28

334.9 333.9 335.4 335.7

806.1 605.1 805.8 807.0

544.1 545.3 545.7 547.3

471.2 471.3 470.4 471.3

218.2 218.4 218.1 218.5

253.0 252.9 252.3 252.8

1976-JAN.

339.8

812.6

549.5

472.7

218.4

254.3

NOTE: 1/ 2/

72.9 74.0 75.2 76.0 76.7

DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. P - PRELIMINARY INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. INCLUDES BORROWINGS FROM UTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, SECURITIES SOLD UNDER MENTS TO REPURCHASE, AND OTHER LIABILITItS FOR BORROWED MONEY, PLUS GROSS LIABILITIES TO OWN FOREIGN BRANCHES (EURDOLLAR BORROWINGS), LOANS SOLD TO AFFILIATES, LOAN RPS, AND OTHER MINOR ITEMS.

AGREE-

Table 1-A

TIME AND SAVINGS DEPOSITS AT ALL COMMERCIAL BANKS SEASONALLY ADJUSTED EXCEPT AS NOTED Total Timenand Savings

Period

JAN.

Individual Nonprofit

Business (NSA)

13,

1978

Time Deposits

Savings Deposits Total

CONFIDENTIAL (FR) CLASS II FOMC

Government (NSA)

Total

Memo: Large Large Small Negotiable CD's Denomination Denomination

Nonpro,,,

6 OUJI1ANDINGb

BILLIONS)

1977--APRIL MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC.

CHANGES

505.7 509.2 514.6 519.5 522.5 525.8 532.2 540.3 545.8

211.9 212.7 212.7 213.6 216.2 217.8 218.4 218.3 218.4

195.3 196.3 196.9 198.6 201.4 203.3 204.2 204.5 204

9.8 9.9 9.9 9.9 10.1 10.1 10.0 10.1 10.1

6.8 6.6 6.0 5.0 4.8 4.4 4.2 3.7 3.6

160.4 162.9 164.2 165.1 165.3 166.0 166.7 165.4 165.6

61.6 62.3 63.9 62.8 63.2 63.2 66.4 70.9 74.7

24.5

13.6

11.4

2.5

-5.6

8.1

-3.1

-1.8 -0.9

4.7 5.9 9.3 14.4

-0.2 -1.4 6.4 13.9

4.9 7.3 3.0 0.4

0.3 -0.3 0.5 7.6

-0.6 -1.0 -0.2 -0.4 -0.2 -0.5 -0.1

5.7 3.8 0.4 1.7 5.9 a.1 5.5

4.4 2.9 0.2 1.0 5.2 9.4 5.3

1.3 0.9 0.2 0.7 0.7 -1.3 0.2

1.6 -1.1 0.4 0.0 3.2 4.5

293.8

133.4

296.4 302.1 305.9 306.3 306.0 313.9 322.0 327.5

133.5 137.9 140.8 141.0 142.0 147.2 156.6 161.9

38.2

(S bILLIuNS) 54.7

16.6

17.5

1.6

1976--1V

14.3

11.8

8.4

1.4

1977--I I11 III IV

15.1 10.4 12.7

10.4 4.4 3.5 2.5

7.1 4.4 4.9 3.4

1.2 0.7 0.1 0.1

0.0 0.9 2.6 1.6 0.6 -0.1 0.1

0.6 1.7 2.8 1.9 0.9 0.3 0.2

0.0 0.0 0.2 0.0 -0.1 0.1 0.0

1977 YEAR

-2.5

QUARTERLY AVERAGE:

16.8

1.9 2.1 -0.5

MONTHLY AVERAGE:

1977--JUNE JULY AUG. SEPT. GCT. NOV. DEC.

5.6 4.7 3.0 3.3 6.4 6.1 5.5

NOTE: COLUMNS (11, (2), ANU (9) ON AGGREGATES. FIGURES IN COLUMNS (1), DERIVED FROM DATA REPOKIlU BY 3MALL AND GOVERNMENTAL UNITS-COLUMNS (4) WEDNESDAY BY LARGE COMMERCIAL BANKS SHIPS.

3.8

ON TAbLE 1-MONETARY THIS TABLE CORRESPOND TO COLUMNS (41, (6), AND (at, RESPECTIVELY, (2), AND (6) REFLECT DAILY DATA REPORTED BY MEMBER BANKS, WITH ESTINATES FUR NONMEMBER BANKS MEMBER BANKS, BENCHMARKED TO NONMEMBER CALL REPORT FIGURES. SAVINGS DEPOSITS OF BUSINESS AND (7)--REFLECT BREAKDOWNS REPORTED EACH (5)-- AND LARGE DENOMINATION TIME DEPOSITS -COLUMN bLOWN UP TU REPRESENT DtPOSITS AT ALL COMMERCIAL BANKS ON THE BASIS OF CALL REPORT RELATION-

CONFIDENTIAL (F.R.) CLASS II FOMC

TABLE 2

BANK RESERVES ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED

IREQUIRED

BANK RESERVES Period

Total Reserves

Nonborrowed Reserves

Monetary Base

JAN.

13,

1978

RESERVES

Total Required

Private Demand

Total Time Deposits

Gov't. and Interbank

35,686 35,756 36,016 (36,6031

21,384 21,437 21,454 (21,613)

'12,456 12,646 12,854 (13,057)

1,846 1,675 19709 ( 1,933)

MONTHLY LEVELS-$MILLIONS

1977-OC(T. NOV. DEC. 1976-JAN. PERCENT ANNUAL

35,897 36,009 36,219 (36,854)

34,591 35,147 35,650 (36,335)

126,109 126,953 127,922 (129,651)

GROWTH

QUARTERLY 1977-2ND OTR. 3RD QTR. 41H QTR.

7.3 8.1 6.8

3.9 13.2 3.3

7.2 9.6 8.7

3.5 8.6 5.8

3.0 10.2 4.9

6.5 8.8 6.6

4.6 4.6 7.4

8.2 10.2 8.9

3.0 9.0 5.7

1.9 3.4 3.0

6.1 2.6 15.0

QUARTERLY-AV 1977-2ND QTR. 3RD QTR. 4TH QTR.

4.0 6.3 8.6

MONTHLY 1977--OCT. NOV. DEC. 1978-JAN. DEC.-JAN.

(

9.1 3.7 7.0 21.0)

-14.1 19.3 17.2 1 23.1)

9.3 8.0 9.2 16.2)

9.1 2.4 8.7 19.6)

(

14.1)

20.3)

12.8)

14.2)

(

5.9 3.0 1.0 8.91

6.6 18.3 19.7 19.01

4.9)

19.5)

WEEKLY LEVELS-$MILLIONS 1977-DEC.

1978-JAN.

NOTE:

35,861 36,224 36,258 36,228

35,278 35*715 35,731 35,542

127,055 127,654 128,035 128,330

35,846 35,911 36,113 35,940

21,263 21,479 21e586 21,429

12,799 12,828 12,846 12,891

1,784 1,604 1,680 1,621

4 11

36,929 36,295

36,422 35.855

129,354 128.725

36,607 35,939

21,587 21,377

12,975 13,043

2,045 1,519

7 14 21

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

ASSOCIATED

WITH CHANGES

IN RESERVE

REQUIREMENT

RATIO.

TABLE 3

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JANUARY 13, 1978

NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES 1 ($ million, not seasonally adjusted)

m A

Treasury Bills Net Change 2/

Within 1 year

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

Total ,

1972

-490 7,232 1,280

1973 1974 1975 1976 1977

-468 863 4,361 -886

1976--Qtr. 1977--Qtr.

1,164 2,126 886 186

Qtr. Qtr. Qtr. 1977--July Aug. Sept.

-1,136 636 1,385 -1,877 -736 2,798

Oct. Nov. Dec.

1977--Nov.

Dec.

1978--Jan.

2 9 16 23 30

4/ 5/ 6/

539 500 434 1,510 1,048 758

167 129 196 1,070

794 997 526 681 628

232 325 171 96 166

192 165 152

Within 1 year

Over 1

5 -

128

108

681

628

-568 -376

128

166

108

--- --- -360

1,021

1,001 ----

-----

--- -

--- --- --- -569

-- --

-360

145

585 327 1,425 2,145

--- 4.1

1.6

1.3

--- -347

59.4

-2,861 -1,353 1,883

552 4,881

4,474

186

7.1

----1,159

707

1,001

10.4

304 -4,771 4,175 -2,331 34

145

1,438

27.2

436 2,738 3,666 4,273 -643

177

386

42.6

115

--- --

SSS177

425

-1,358 -46 -154 1,272 3,607 -2,892

-- --

Net RP's 6/

1,631 9,273 6,303 7,267 6,227 10,035

707

S S-

Net Change Outright Holdings Total 5/ ----- ~---------

1,059 864 3,082 1,613 891 1,433

726

-116

Total

1,294 1,680 959 1,021 1,001

585 351

4 11 18 25

592 400 1,665 824 469 792

1,582 1,415 1,747 6,202 5,187 4,660

642 553

7 14 21

LEVEL--Jan. 11 (in billions) 1/ 2/ 3/

789 579 797 3,284 3,025 2,833

Federal Agencies Net Purchases 4/

707

------4,380 -736

-376

-9

-347

1.0

8.0

109.9

-9347

-6,530 2,996 3,568 -2,690 -4,479 -1,726 8,439 -1,167 1,317 -4,553 6,709 3,099 -4,526 -7,893

-7.5

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. Excludes redemptions, maturity shifts, rollovers of maturing coupon issues, and direct Treasury borrowing from the System. Outright 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 bankers' 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 (-).

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

U.S . Govt. Security Dealer Positions

Bil:lr

Cnunnn

ues

Is ses

STRICTLY CONFIDENTIAL CLASS II - FOMC JANUARY 13, 1978

Underwriting Syndicate Positions Corporate Municipal Bonds Bonds

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

Borrowing

Excess** Reservs

Trtall

Se aI o Total

a,,i

8 New York York

38 Others 38 ....

1976--High Low

8,896 3,668

3,046 175

655 -180

242 24

-8,161 -2,367

-12,744 - 6,908

1977--High Low

7,234 1,729

3,017 -1,445

513 -111

1,861 20

-9,151 -4,234

-13,975 - 8,206

1976--Dec.

8,005

2,443

274

-7,168

-11,449

1977--Jan. Feb. Mar.

6,406 4,450 4,906

2,320 1,650 972

265 198 214

68 72 103

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

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

Apr. May June

4,567 3.072 4,752

696 123 206

192 213 154

73 206 262

-6,586 -5,693 -5,341

-11,409 -10,175 -10,332

July Aug.

3,899 2,533

4,812

275 200 209

323

Sept.

-309 -933 -313

1,084 626

-6,391 -5,581 -7,333

-11,012 -11,452 -11,120

-360 610 *804r

210 251 203p

1,305 863 570p

-6,480 -6,971 -7,407p

-11,511 -11,825 -11,305p

.04 87 81 84 74

-5,011 -7,494 -7,340 -7,447 -6,165

-11,554 -13,734 -12,638 -10,748 -10,259

70 56 53 53p

-7,424 -9,151 -7,185 -6,165

-12,292 -11,736

30p 26p

-6,717p 8 00 3 - , p

- 8,603p -12,976p

4,142 3,617 *4,257

Oct. Nov.

Dec. 1977--Nov.

Dec.

1978--Jan.

2 9

4,203 3,662

4,428

23 30

3,326 2,818

3,397

21 28

5,059 *4,877 *4,023

*256 *1,375

4 11

*4,416r *5,625

*1,247r *369

-203 547 426

1,113

887 534 879 1,079

575 1,203 1,026 447

0 25p

(FR)

316 26 0p

-12,335 -10,246

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 municipal issues in syndicate which are Friday figures. * ** r

Strictly confidential. Monthly averages for excess reserves and borrowings Revised.

are weighted averages of statement week figures.

TABLE 5 SELECTED INTEREST RATES (per cent)

Treasury Federal Funds (1)

90-Day (2)

_ Short-Term Bills CD's New Comm. Issue-NYq Paper 1-Year 90-Day 0-119 Da (3) (4) (5)

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JANUARY 13, 1978

I Bank Prime [ Rate (6)

U.S. Govt.-Constant Mattrity Yields 3-yr 7-yr 20-yr (7) (8) (9)

ong-Term Corp.-Aaa Utility Municipal Home Mortgages New Recently Bond Primary ISecondary Market Issue Offered Buyer Cony. FNMA AucjGNMA Sec. (10) (11) (12) (13) (14) (15)

1976--High Low

5.58 4.63

5.53 4.27

6.32 4.62

5.75 4.50

5.90 4.63

7.25 6.25

7.52 5.65

7.89 6.33

8.17 7.23

8.95 7.93

8.94 7.84

7.13 5.83

9.10 8.70

9.20 8.31

8.45 7.57

1977--High Low

6.65 4.47

6.27 4.41

6.62 4.67

6.70

6.66

7.39 5.83

7.70 6.59

8.36

8.48r

5.93

9.00

8.98

4.63

7.75 6.25

7.99

4.50

7.26

7.90

7.95

5.45

8.65

8.46

8.39 7.56

1976--Dec.

4.65

4.35

4.64

4.50

4.66

6.35

5.68

6.37

7.30

7.94

7.93

5.94

8.79

8.45

7.59

1977--Jan. Feb. Mar.

4.61 4.68 4.69

4.62 4.67 4.60

5.00 5.16 5.19

4.68 4.70 4.72

4.72 4.76 4.75

6.25 6.25 6.25

6.22 6.44 6.47

6.92 7.16 7.20

7.48 7.64 7.73

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

Apr. May June

4.73 5.35 5.39

4.54 4.96 5.02

5.10 5.43 5.41

4.67 5.16 5.35

4.75 5.26 5.42

6.25 6.41 6.75

6.37 6.55 6.39

7.11 7.26 7.05

7.67 7.74 7.64

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

July Aug. Sept.

5.42 5.90 6.14

5.19 5.49 5.81

5.57 5.97 6.13

5.28 5.78

5.38 5.75

6.01

6.09

6.75 6.83 7.13

6.51 6.79 6.84

7.12 7.24 7.21

7.60 7.64 7.57

8.15 8.04 8,07

8.12 8.05 8.07

5.63 5.62 5.51

8.95 8.94 8.90

8.72 8.76 8.74

7.96 8.03 8.02

Oct. Nov. Dec.

6.47 6.51 6.56

6.16 6.10 6.07

6.52 6.52 6.52

6.53 6.56

6.51 6.54

6.65

6.61

7.52 7.75 7.75

7.19 7.22 7.30

7.44 7.46 7.59

7.71 7.76 7.87

8.23 8.28 8.34

8.22 8.25 8.38

5.64 5.49 5.57

8,92 8.92 8.96

8.82 8.86 8.94

2 9 16 23 30

6.50 6.58 o.42 6.51 6.55

6.14 6.17 6.10 6.06 6.04

6.55 6.58 6.51 6.48 6.49

6.55

7.32 7.24 7.17 7.19 7.22

7.56 7.47 7.41 7.42 7.45

8.35

8.32

5.55

8.90

8.86

6.57 6.56 6.52 6.53

7.75 7.75 7.75 7.75 7.75

7.81

6.60 6.55 6.55 6.55

7.80 7.74 7.73 7.75

8.29 8.24 8.23 8.26

8.26 8.24 8.19 8.23

5.51 5.45 5.45 5.47

8.93 8.93 8.93 8.95

8.16 8.19 8.27 8.18 8.21 8.17 8.18 8.18

7 14 21 28

6.51 6.49 6.54 6.65

6.05 6.06 5.99 6.14

6.50 6.51 6.49 6.58

6.55 6.70 6.70 6.65

6.54 6.60 6.64 6.66

7.75 7.75 7.75 7.75

7.27 7.27 7.33 7.39

7.54 7.56 7.63 7.70

7.81 7.84 7.92 7.99

8.35 8.36 --

8.34 8.38 8.41 8.48

5.54 5.55 5.62 .66

8.95 8.95 8.95 9.00

4 11 18 25

6.69 6.58

6.16 6.48

6.55 6.81

6.65 6.87

6.68 6.69

7.75 8.00

7.40 7.72p

7.72 7.95p

8.01

8.48

5.64

9.00

5.75

n.a.

5 12

6.56 6 .75 p

6.20 6.56

6.58 6.94

6.64 6.74

7.75 8.00

7.39 7.72p

7.71 7 .96p

8.00 8.18p

1977--Nov.

Dec.

1978--Jan.

Daily--Jan.

8.18p

8.70p

8.6 6p

8.86 8.85

8.98

8.23 8.24 8.29 8.39

9.13

8.43 8.54

8.89

--- NOTE: Weekly data for columns 1, 2, 3, 5, and 6 are statement week averages of daily data. Data in column 4 are 1-day Wednesday quotes. 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 birweekly auction for short-term forward commitments for Governamet 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.

JAN. 13,

1978

Appendix Table 1-A

MONEY AND CREDIT AGGREGATE MEASURES Bank ReervesY Period Total .

Nonborrowed f± I 2

Monetary Base 3

Ban Credit Total Loans and Investments n 4

ANNUALLY: ANNUALLY

Money Stock Measures

6 7 5 (PER CENT ANNUAL RATES OF GROWTH)

-0.2 1.0 5.2

3.2 1.2 2.8

5.9 6.9 8.3

3.9 8.0 10.9

4.4 5.6 1.4

8.3 10.9 9.6

11.1 12.8 11.b

6.5 7.1 9.8

9.7 10.3 11.7

10.5 10.0 11.3

10.1 10.2 11.4

2ND HALF 1976

3.6

3.7

6.8

8.9

5.5

10.9

13.1

8.0

11.1

10.3

10.4

1ST HALF 1977 2ND HALF 1977

2.9 7.4

2.3 3.2

7.0 9.2

11.6 9.7

6.4 8.2

9.7 9.0

10.8 11.7

9.0 10.2

10.3 12.4

10.2 11.9

10.4 11.7

-1.8 6.5 E.8 6.6

-2.4 4.6 4.6 7.4

5.1 6.2 10.2 8.9

10.6 12.6 8.6 8.3

3.8 8.2 10.6 6.1

8.5 8.8 10.4 6.9

10.0 9.9 13.4 9.2

7.3 9.1 9.3 11.7

9.2 10.0 12.6 12.1

10.1 9.7 11.9 11.7

10.5 9.9 11.7 11.5

2.7 3.0 9.0 5.7

i.6 1.9 3.4 3.0

6.8 7.2 9.6 8.7

9.5 13.3 9.8 9.3

4.2 8.4 9.3 6.8

9.9 9.2 10.3 7.6

11.3 10.0 12.4 10.7

9.3 8.5 9.7 10.5

10.9 9.4 11.9 12.4

10.7 9.5 11.4 12.0

10.8 9.8 11.3 11.8

1975 1976 1977 2/ SEMI-ANNUALLY:

OUARIERLY: 1ST OTR. 2ND UTR. 3RD TR. 4TH (TR.

1977 1977 1977 1977

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

QTR. QTH. QTR. QTR.

1977 1977 1977 1977

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

4.9

5.6

7.7

8.6

7.7

13.1

13.4

13.7

10.5

10.3

10.9 -13.1 -3.1 13.0 1.5 4.8 16.9 9.8 -0.5 9.1 3.7 7.0

10.4 -13.3 -4.3 14.1 -3.1 2.9 14.9 -15.4 14.6 -14.1 19.3 17.2

10.6 -0.2 5.0 11.8 6.2 6.4 14.2 8.1 8.2 9.3 8.0 9.2

4.7 15.9 10.9 15.7 1 .0 9.6 9.5 12.3 3.8 13.5 11.8 -0.7

5.4 0.8 5.4 19.4 0.7 4.5 16.3 5.9 7.3 12.0 -1.6 7.9

9.7 7.1 8.6 13.5 4.7 8.1 1 .6 6.4 7.9 10.1 4.5 5.8

11.4 b.9 9.4 12.4 7.3 9. 16.1 11.5 12.3 12.5 7.5 7.3

8.7 7.0 6.2 11.7 5.4 10.0 13.6 6.5 7.5 13.6 10.5 10.6

10.8 8.7 8.0 11.3 7.b 10.8 14.3 11.2 11.7 14.7 11.0 10.2

10.9 11.4 7.8 10.6 7.7 10.5 13.3 10.8 11.4 14.0 10.7 10.0

11.0 11.7

bASEU ON DATA ADJUSTED FOR CHANGES IN BASED ON QUARTERLY AVERAGE DATA. PRELIMINARY

RESERVE

REQUIREMENTS.

8.5

10.8 7.9 10.6 13.0 10.6 11.2 13.8 10.5 9.

JAN. 13,

Appendix Table 1-B

1978

MONEY AND CREDIT AGGREGATE MEASURES SEASONALLY ADJUSTED, BILLIONS OF DOLLARS

Bank Reserve 1/ Perd Total

Nonborrowed

Bank Credit

PeTotd Monetary Base 3

Total Loans and Investments 4

Money Stock Measures

ANNUALLY: 1975 1976 1977

34,015 34.465 36,219

33.885 34.412 35.650

110,394 11b,054 127,922

725.5 788.2 870.0

294.6 312.4 335.4

664.3 740.3 806.5

1092.6 1237.1 1373.9

746.5 803.5 681.2

1174.7 1300.3 1448.7

1308.3 1439.1 1601.7

1351.1 1488.8 1657.6

1976-DEC.

34,465

34,412

1168054

786.2

312.4

740.3

1237.1

803.5

1300.3

1439.1

1488.8

1977--JAN. FEB. MAR.

34*778 34,397 34,308

34.710 34,326 34,204

119,100 119,077 119,572

791.3 801.8 809.1

313.6 314.0 315.4

746.3 750.7 756.1

1248.9 1258.2 1268.1

609.3 814.0 818.2

1312.0 1321.5 1330.3

1452.2 1466.0 1475.5

1502.4 1517.1 1527.8

APR. MAY JUNE

34,660 34,723 34,862

34,606 34,517 34,599

120,749 121,376 122,027

819.7 827.9 834.5

320.5 320.7 321.9

764.6 767.6 772.8

1281.2 1289.0 1299.5

826.2 829.9 836.8

1342.8 1351.3 1363.5

1488.5 1498.1 1511.2

1541.6 1551.8 1565.5

JULY AUG. SEPT.

35,352 35,641 35,621

35,029 34,580 35,001

123,468 124,297 125,144

641.1 849.7 852.4

326.8 328.4 330.4

783.5 787.7 792.9

1316.9 1329.5 1343.1

846.3 850.9 856.2

1379.8 1392.7 1406.3

1528.0 1541.7 1556.3

1582.4 1596.4 1611.3

OCT. NOV. DEC. P

35,897 36,009 36,219

34,591 35,147 35,650

126,109 126,953 127,922

862.0 870.5 870.0

333.7 333.2 335.4

799.6 802.6 806.5

1357.1 1365.6 1373.9

865.9 873.5 881.2

1423.5 1436.5 1448.7

1574.5 1588.5 1601.7

1629.8 1644.1 1657.6

36,013

MONTHLY

MEEKLY:

1977-NOV.

DEC.

1976-JAN.

9 16 23 30

36,158 35,908 35,926

35,126 35,624 35,027 34,853

126,503 127,038 126,840 127.456

333.8 334.1 331.5 333.2

601.6 803.0 801.8 803.8

871.2 873.6 873.6 876.3

7 14 21 28P

35,861 36,224 36,258 36,228

35,278 351715 35,731 35,542

127,055 127,654 128,035 128,330

334.9 333.9 335.4 335.7

806.1 805.1 805.8 807.0

879.0 879.1 881.0 683.0

36,929

36,422

129,354

339.6

812.6

889.3

WEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS. MONTHLY DATA ARE DAILY AVERAGES. WEEKLY M3, M, M6, M7, TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS. 1/ BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS. DATA SHOWN IN MILLIONS OF DOLLARS. P - PRELIMINARY

NOTESt

DATA ARE NOT AVAILABLE

FOR

JAN.

APPENDIX TABLE 2-A

13, 1978

COMPONENTS OF MONEY STOCK AND RELATED MEASURES Mutual

Time and Savings Deposits ------

Period

Currency

Demand Deposits

Total

8.8 9.6 9.5

2.9 4.3 6.7

8.0 8.1 11.4

11.7 15.2 11.1

17.5 25.0 10.5

7.8 7.7 11.7

-6.1 -23.5 12.9

2ND HALF 1976

8.0

4.6

9.7

15.2

19.8

11.3

1ST HALF 1977 2ND HALF 1977

8.5 10.0

5.7 7.5

10.5 11.6

12.1 9.6

15.0 5.6

8.4 8.8 11.4 9.3

2.2 8.2 10.1 4.9

9.5 9.5 8.5 15.2

11.9 9.4 10.4 7.3

7.5 9.3 10.0 9.8

3.1 8.3 9.1 5.8

12.5 8.3 10.0 12.9

4.5

8.9

6.9 10.4 5.9 13.1 7.2 5.7 15.7 5.6 12.6 9.7 9.6 6.2

4.1 -3.1 5.7 21.6 -1.5 4.6 18.7 6.0 5.4 12.8 -5.4 7.3

Other Than CD's Savings Other ....

CD's

Other

Savings

Credit

Bank & S&aL Shares1

Union Shares /

Private

Savings U.S.Gov't Short-term BondslJ Securities Assets1 i

15.5 15.6 14.2

19.4 17.6 20.1

6.2 6.9 7.0

33.4 7.5 9.9

-1.0 19.2 12.1

-21.1

16.2

17.6

7.2

-1.4

15.2

9.5 13.2

0.0 25.9

12.2 15.2

16.1 22.2

6.4 7.3

12.5 6.8

16.5 7.1

16.3 5.1 9.6 1.1

8.1 13.2 11.1 12.9

-7.0 10.9 -4.4 72.8

12.0 11.2 17.3 11.9

16.4 13.8 23.8 19.8

6.1 6.6 7.0 7.9

31.1 8.3 4.9 8.1

20.9 15.3 5.2 6.5

14.0 9.8 10.9 8.1

21.1 8.5 6.6 4.6

8.0 10.8 15.0 11.0

1.9 -1.9 3.2 48.2

13.3 10.9 15.2 14.6

16.7 15.0 19.3 23.9

6.7 6.1 6.5 8.0

11.1 13.6 5.5 8.1

12.9 19.5 7.4 6.6

17.1

16.8

26.1

8.0

21.2

13.8

18.8

6.7

-44.9

4.8

11.0 10.7 6.7 6.9 8.3 13.2 11.0 6.9 7.6 14.6 18.3 12.2

12.9 11.7 10.7 9.5 7.6 10.7 15.4 6.8 8.6 8.6 9.0 4.3

23.2 14.6 10.4 10.9 4.5 0.0 5.1 14.6 6.9 3.3 -0.5 0.5

4.2 9.5 10.5 8.3 10.3 20.5 24.7 0.0 8.4 13.2 17.5 7.6

-3.8 3.8 -20.9 -11.6 13.6 30.8 -20.7 7.6 0.0 60.8 81.3 64.3

14.2 11.4 10.0 10.4 11.1 11.8 15.1 18.3 17.8 14.9 11.3 9.1

15.4 15.2 18.0 11.8 11.7 17.4 20.0 19.7 30.4 27.0 18.5 13.0

6.7 6.6 5.0 6.6 6.5 6.5 6.5 6.4 8.0 7.9 7.9 7.8

17.9 68.9 5.0 3.3 11.6 9.9 0.0 6.5 8.1 8.1 8.0 7.9

12.1 21.5 28.2 18.4 15.8 11.2 2.2 6.6 6.6 6.5 6.5 6.5

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

Short Terr

ANNUALLY: 1975 1976 1977 2/ SEMI-ANNUALLY:

QUARTERLY 1ST 2ND 3RD 4TH

OTR. QTR. QTR. QTR.

1977 1977 1977 1977

QUARTERLY-AVt 1ST 2ND 3R0 4TH

QTR. QTR. QTR. QTR.

1977 1977 1977 1977

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

1/ GROWTH RATES ARE BASED ON ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA. 2/ BASED ON QUARTERLY AVERAGE DATA. P - PRELIMINARY.

APPENDIX TABLE 2-B

JAN.

13,

1978

COMPONENTS OF MONEY STOCK AND RELATED MEASURES Time and Savings Deposits Currency Demand Deposits

Period

Other Thn CD's

Total

CDs

CD's

Mutual Savings ank & S&L ans

teSharescI /I

73.7 80.5 88.4

221.0 231.9 247.0

451.7 491.1 545.8

369.6 427.9 471.1

160.5 201.8 218.4

209.1 226.0 252.7

82.1 63.3 74.7

395.2 457.8 520.7

33.0 39.0 46.7

67.3 71.9 77.0

1976--DEC.

80.5

231.9

491.1

427.9

201.8

226.0

63.3

457.8

39.0

1977--JAN. FE6. MAR.

81.1 81.8 82.2

232.7 232.1 233.2

495.6 500.0 502.8

432.5 436.7 440.6

205.7 208.2

210.0

226.8 228.6 230.6

63.1 63.3 62.2

463.2 467.6 471.5

APR. MAY JUNE

83.1 83.6 64.0

237.4 237.1 238.0

505.7 509.2 514.8

444.1 446.9 450.9

211.9 212.7 212.7

232.2 234.2 238.2

61.6 62.3 63.9

JULY AUG. SEPT.

85.1 85.5 86.4

241.7 242.9 244.0

519.5 522.5 525.8

456.7 459.3 462.6

213.6 216.2 217.8

243.1 243.1 244.8

OCT. NOV. DEC.P

87.1 87.8 88.4

246.6 247.0

532.2 540.3 545.8

465.9 469.4 471.1

218.4 218.3 218.4

9 16 23 30

87.6 87.7 87.7 88.1

246.2 246.4 243.8 245.1

537.4 539.5 542.2 543.2

466.0 468.9 470.3 470.7

DEC.

7 14 21 28P

88.0 88.1 88.5 b6.7

246.9 245.7 246.9 247.0

544.1 545.3 545.7 547.3

1978-JAN.

88.7

251.2

549.5

Tota s

Ote Iiv

Credit Union Savings Shares Bonds i

Short. Term U.S. Gov't -y

Other Private Short term Assets

1/2/ --

I Non-

Total Gov't Deposit Fund Demand Deposits / I1 A

66.3 66.9 76.0

42.8 49.7 55.9

33.7 51.4 61.8

11.2 11.3

71.9

66.9

49.7

51.4

11.2

39.5 40.0 40.6

72.3 72.7 73.0

67.9 71.8 72.1

50.2 51.1 52.3

49.9 50.3 51.4

10.0 11.7 11.2

475.6 480.0 484.7

41.0 41.4 42.0

73.4 73.8 74.2

72.3 73.0 73.6

53.1 53.8 54.3

50.8 54.6 53.5

10.8 10.6 10.1

62.8 63.2 63.2

490.8 498.3 505.7

42.7 43.4 44.5

74.6 75.0 75.5

73.6 74.0 74.5

54.4 54.7 55.0

53.3 55.6 57.7

11.8 10.2 10.7

247.5 251.1 252.7

66.4 70.9 74.7

512.0 516.8 520.7

45.5 46.2 46.7

76.0 76.5 77.0

75.0 75.5 76.0

55.3 55.6 55.9

57.4 60.0 61.6

10.3 6.7 11.3

218.2 218.3 218.2 217.9

249.8 250.6 252.2 252.7

69.4 70.5 71.8 72.5

56.1 58.1 63.4 63.3

6.6 6.3 6.5 6.1

471.2 471.3 470.4 471.3

218.2 218.4 218.1 218.5

253.0 252.9 252.3 252.8

72.9 74.0 75.2 76.0

62.4 58.1 59.3 66.4

10.0 9.2 13.7 12.0

472.7

218.4

254.3

76.7

ANNUALLY: 1975 1976 1977

8.3

MONTHLY:

245.5

WEEKLY: 1977-NOV.

I/ 2/ 3/

4/ P -

ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA. INCLUDES PRIVATE DOMESTIC NONFINANCIAL INVESTORS' fOLDINGS OF COMMERCIAL PAPER, BANKERS ACCEPTANCES, SECURITY RP'S AND MONEY MARKET MUTUAL FUND SHARES. BORROWINGS BY BANKS FROM OTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE, AND OTHER LIABILITIES FOR BORROWED MONEY, PLUS GROSS LIABILITIES TO OWN FOREIGN BRANCHES (EURODOLLAR BDRROWINGS), LOANS SOLD TO AFFILIATES, LOAN RPS, AND OTHER MINOR ITEMS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. PRELIMINARY

10.5

13, 1978

JAN.

APPENDIX TABLE 2-A

COMPONENTS OF MONEY STOCK AND RELATED MEASURES Corrected Copy

Mutual Savings Bank & S&L Shares

Time and Savings Deposits Currency

Period

Demand Deposits

Credit Union Shares-

andsls Bo

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

Other Than CD's

Total Total

Savings

CD's

Other

Other Short Term Private U.SGov't Short term Securities Assets 11/ 12

6.8 9.6 9.5

2.9 4.3 6.7

8.0 8.1 11.4

11.7 15.2 11.1

17.5 25.0 10.5

7.8 7.7 11.7

-6.1 -23.5 12.9

15.5 15.6 14.2

19.4 17.6 20.1

33.4 7.5 9.9

-1.0

2ND HALF 1976

8.0

4.6

9.7

15.2

19.8

11.3

-21.1

16.2

17.6

-1.4

15.2

1ST HALF 1977 2ND HALF 1977

8.5 10.0

5.7 7.5

10.5 11.6

12.1 9.6

15.0 5.6

9.5 13.2

0.0 25.9

12.2 15.2

16.1 22.2

12.5

16.5 7.1

8.4 8.8 11.4 9.3

2.2 8.2 10.1 4.9

9.5

16.3 5.1 9.6 1.1

8.1 13.2 11.1 12.9

-7.0

10.9

12.0 11.2

8.5 15.2

11.9 9.4 10.4 7.3

-4.4

17.3

72.8

11.9

16.4 13.8 23.8 19.8

31.1 6.3 4.9 8.1

20.9 15.3 6.2 6.5

7.5 9.3 10.0 9.8

3.1 8.3 9.1 5.8

12.5 8.3 10.0 12.9

14.0 9.8 10.9 8.1

21.1 8.5 6.6 4.6

8.0 10.8 15.0 11.0

3.2 48.2

13.3 10.9 15.2 14.6

16.7 15.0 19.3 23.9

11.1 13.6 5.5 8.1

12.9 19.5 7.4 6.6

4.5

6.9

17.1

16.8

26.1

8.0

21.2

13.8

18.8

-44.9

4.8

8.9 10.4 5.9 13.1 7.2 5.7

4.1 -3.1 5.7 21.6

11.0

12.9 11.7 10.7 9.5 7.6 10.7 15.4 6.8 8.6 8.6 9.0 4.3

23.2 14.6 10.4 10.9 4.5 0.0 5.1 14.6 8.9 3.3 -0.5 0.5

4.2 9.5 10.5 8.3 10.3 20.5 24.7 0.0 8.4 13.2 17.5 7.6

-3.8

14.2

3.8 -20.9 -11.6

11.4 10.0 10.4 11.1 11.8

15.4 15.2 18.0 11.8 11.7 17.4 20.0 19.7 30.4 27.0 18.5 13.0

ANNUALLY: 1575 1976 1977

19.i

1e.1

SEMI-ANNUALLY:

QUARTERLY: IST 2ND 3RD 4TH

1977 1977 1977 1977

QTR. OTR. QTR. QTR.

9.5

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

1977 1977 1977 1977

QTR. QTR. QTR. QTR.

1.9 -1.9

MONTHLY: 1976--0EC. 1977--JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. P

10.7

6.7 6.9 8.3 13.2 11.0 6.9 7.6 14.6 18.3 12.2

-1.5

4.6 18.7 6.0 5.4 12.8 -5.4 7.3

15.7

5.6 12.6 9.7 9.6 6.2 I

13.6 30.8

-20.7 7.6 0.0 60.8 81.3 64.3 -

15.1

18.3 17.8 14.9

11.3 9.1 a

17.9 66.9 5.0 3.3 11.6 9.9 0.0 6.5 8.1 8.1 8.0 7.9 &

1/ GROWTH RATES ARE BASED ON ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND ENL OF PREVIOUS MONTH REPORTED DATA. 2/ BASED ON QUARTERLY AVERAGE DATA. B

TMTMAODV

12.1 21.5 28.2 18.4 15.8 11.2 2.2 6.6 6.6 6.5 6.5 6.5 a

Cite this document

APA

Federal Reserve (1978, January 16). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19780117

BibTeX

@misc{wtfs_bluebook_19780117,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1978},
  month = {Jan},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19780117},
  note = {Retrieved via When the Fed Speaks corpus}
}