bluebooks · February 27, 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.

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Strictly Confidential (FR)

Class I FOMC

February 24,

1978

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 CLASS I FOMC

(FR)

February 24,

1978

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS

Recent Developments (1)

M-1 increased at a 7-1/4 per cent annual rate in January,

but it appears to be declining at a 1/2 per cent rate in February.

Thus,

growth over January and February combined is projected at around a 3-1/2 per cent annual rate, in the lower half of the FOMC's range.

M-2 appears

to be expanding at a 6-1/2 per cent annual rate over the January-February period, close to the mid-point of its range.

Renewed expansion in savings

and small denomination time deposits at banks and a continued rise in large denomination time deposits included in M-2

helped to maintain growth

in this aggregate in January.1/ At thrift institutions, on the other hand, Growth in Monetary Aggregates over January-February Period (SAAR in per cent) Range M-1

2-1/2 to 7-1/2

3.4

M-2

5 to 9

6.6

Memo: Federal funds rate (per cent per annum)

Latest Estimates

6-1/2 to 7

Average for statement week ending 6.78 Jan. 18 25 6.72 Feb. 1 6.80 8 6.75

6.76

6.78

Much of the January growth in savings and small denomination time deposits at banks occurred early in the month, and appears to reflect inadequate seasonal adjustment for interest crediting. After early January, such flows were considerably weaker.

deposit inflows slowed further in January and seem at a reduced pace in February.

to be continuing

Over January and February, nonborrowed

reserves are expected to increase at a 17

per cent annual rate,

largely reflecting the surge in demand deposits around the turn of the year and a

rise in excess reserves possibly associated with difficulties

in reserve management due to severe weather. (2)

With incoming data indicating that the monetary aggregates

were growing at rates well within the Committee's ranges, the Account Management has continued to seek a Federal funds rate of around 6¾ per cent since the January FOMC meeting.

Under these circumstances, short-term

interest rates generally have changed little on balance since mid-January despite relatively strong short-term credit demands.

The Treasury

has begun to raise new cash in its weekly auctions of 3- and 6-month bills, and short-term borrowing by businesses continued sizable in recent weeks.

Bank loans to businesses accelerated substantially

in January and early February, more than offsetting a decline in commercial paper issuance by nonfinancial corporations. (4)

In long-term credit markets, public bond offerings by

corporations over the intermeeting period were modest, and rates on corporate bonds have changed little on balance since mid-January.

the same time, municipal bond yields have fallen somewhat, as demands for tax-exempt securities have continued to be quite strong.

Mortgage

interest rates in both primary and secondary markets, on the other hand, have edged upward further, reflecting pressures on fund availability resulting from the slowing of deposit inflows to thrift institutions.

(5)

Yields on Treasury coupon securities also have risen

slightly since mid-January. Both the Treasury and Federally-sponsored agencies have been substantial net borrowers over this period.

The

Federal Home Loan Bank System, for example, raised $1.4 billion of new cash in conjunction with its February refinancing, to meet a growing demand for advances from member institutions. about

The Treasury borrowed

$6 billion of cash through regular issues of 2- and 4-year notes

since the last FOMC meeting, and obtained an additional $2 billion in its regular mid-quarter refunding of $5 billion

of maturing issues.1/

Noncompetitive tenders in the refunding auctions came to $2

billion,

about $1 billion above the total in the November refunding.

In the

weeks following the auctions, the new issues have traded below their

average auction prices. (6) The table on the following page shows (in terms of percentage annual rates of change) related monetary and financial flows over various time periods.

1/ In that refinancing, the Treasury sold $2¾ billion of 39-month notes at an average yield of 7.59 per cent, $3 billion of 7-year, 8 per cent notes at an average yield of 7.88 per cent, and $1

billion of reopened 27-year 8¼ per cent bonds at an average yield of 8.23 per cent.

1976 & 1977 Average

Past Twelve Months Jan. '78 over Jan. '77

Past Six Months Jan. '78 over July '77

Past Three Months Jan. '78 over Oct. '77

Past Month Jan. '78 over Dec. '77

Nonborrowed reserves

1.5

4.9

7.9

21.0

25.9

Total reserves

2.1

6.1

8.7

11.1

22.6

Monetary Base

7.6

8.8

10.0

11.1

16.0

6.7

7.5

6.5

4.4

7.2

10.2

8.8

7.3

6.2

8.2

12.2

10.7

10.0

7.6

7.9

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

8.7

9.8

9.9

10.3

9.7

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

11.1

11.2

11.5

10.1

8.7

Month-end basis

9.5

11.1

9.0

7.8

12.1

Average of Wednesdays

9.3

10.9

10.1

15.6

-0.3

1.1

2.3

3.3

1.6

0.2

0.1

0.0

-0.2

-0.9

Concepts of Money M-l (Currency plus demand deposits) 1/ M-2

(M-1 plus time deposits

at commercial banks other than large CD's) M-3 (M-2 plus deposits at thrift institutions)

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 (7)

Shown below for Committee consideration are three

alternative longer-run growth ranges for the monetary aggregates over the QIV '77-QIV '78 period, along with the ranges currently in place. Alt. A

Alt. B

Alt. C

Current

M-1

4 to 7

4 to 6½

4 to 6

4 to 6½

M-2

7 to 9½

6½ to 9

6 to 8½

6½ to 9

M-3

7½ to 10

7 to 9½

6½ to 9

8 to 10½

7½ to 10½

7 to 10

Bank credit (8)

8 to 11

Alternative B continues the ranges for M-1 and M-2

that were adopted by the Committee in October for the QIII '77-QIII '78 period.

Alternatives A and C represent, respectively, somewhat more and

somewhat less expansive policy alternatives.

Under all three

alternatives, the M-3 growth range is projected to be lower than the current range for this aggregate.

Since around year end, net

inflows of deposits to thrift institutions have persisted at a rate considerably lower than previously anticipated, and, as a result, the staff has reduced its projections of such inflows over the year ahead. (9)

Each of the alternatives presupposes an upward adjustment

in deposit ceiling rates at banks and thrift institutions of 50 basis points on small-denomination time deposits; the adjustments in ceiling rates are assumed to occur in April under alternative C, in May under B, and in June under A.

Without such adjustments, the increase in

market rates thought necessary to restrain M-1 growth to the mid-point of the indicated ranges would lead to growth in M-2 and M-3 near the lower ends of the ranges shown.1/ (10)

The table below provides perspective on the relation-

ship among growth rates proposed for the QIV '77 to QIV '78 period and the implied growth rates for more extended periods ending in QIV '78.

2/ It shows, for instance, that growth in M-1 at around the

5¼ 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 mid-point.

The higher growth

rates over these longer periods reflect the sizable overshoot in M-1 growth in the third quarter of last year and the more moderate overshoot in the fourth quarter.

M-1 growth at around the 5 per cent

mid-point of the proposed alternative C range would nearly compensate for the slight fourth quarter overshoot but not for the larger third quarter overshoot.

AppendixIII shows projections of the interest-bearing components of M-2 and M-3, as well as for the aggregates themselves, with and without an adjustment in ceiling rates.

Implied growth rates for even more extended periods are included in the growth triangles in Appendix IV.

Growth Rates in Monetary Aggregates Assuming

Growth over QIV '77 - QIV '78 Period at Mid-Point of Ranges for Alternatives

(Annual rate, compounded quarterly) Alt. A

Alt. B

Alt. C

Period QIV '77 to QIV '78 QIII '77 to QIV '78 QII '77 to QIV '78

5.5 5.8

M-1 5.2 5.6

5.0 5.4

6.4

6.3

6.1

Memo:

5.8

5.7

5.5

8.2 8.2 8.6

M-2 7.7 7.8 8.2

7.2 7.3 7.9

8.0

7.8

7.5

QIII

77 to QIII '78

QIV '77 to QIV '78 QIII '77 to QIV '78 QII '77 to QIV '78 Memo:

QIII '77 to QIII '78

(11)

Shorter-run specifications for monetary aggregates

and the Federal funds rate believed consistent with the longer-run alternatives 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.

Alt. C

M-1

1½ to 6½

1 to 6

to 5½

M-2

5 to 9

4½ to 8

4 to 8

6 to 6½

6½ to 7

7 to 7½

Ranges for Feb.-March

Federal funds rate (Intermeeting period)

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

1978

January February March

337.4 337.3 339.6

337.4 337.3 339.3

337.4 337.3 339.1

812.0 815.4 821.3

812.0 815.4 820.8

812.0 815.4 820.3

1977

QIV

334.1

802.9

1978

QI QII QIII QIV

338.1 343.1 347.6 352.4

338.0 342.9 347.1 351.6

337.9 342.6 346.6 350.9

816.2 832.5 850.9 869.1

816.1 832.4 849.5 865.1

815.9 832.5 847.0 861.0

-0.4 8.2

-0.4 7.1

-0.4 6.4

5.0 8.7

5.0 7.9

5.0 7.2

Quarterly Average: 1978 QI QII QIII QIV

4.8 5.9 5.2 5.5

4.7 5.8 4.9 5.2

4.5 5.6 4.7 5.0

6.6 8.0 8.8 8.6

6.6 8.0 8.2 7.3

6.5 8.1 7.0 6.6

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

5.4 5.4

5.3 5.1

5.1 4.8

7.4 8.8

7.3 7.9

7.4 6.8

Annual: QIV '77-QIV '78

5.5

5.2

5.0

8.2

7.7

7.2

Growth Rates Monthly: 1978 February March

Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) M-3 Alt. A 1978

Bank Credit

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

January

1383.0

879.9

February March

1389.2 1398.9

1389.2 1398.1

1389.2 1397.3

888.0 894.1

888.0 893.9

888.0 893.7

1977

QIV

1365.6

865.0

1978

QI QII QIII

1390.4 1418.4 1450.7

1390.1 1417.4 1447.5

1389.8 1416.6 1442.2

887.8 909.8 929.0

887.3 908.4 926.5

886.8 907.0 924.0

QIV

1483.8

1475.9

1467.2

945.8

942.7

940.0

February

5.4

11.0

March

8.4

7.7

7.0

8.2

8.0

7.7

Quarterly Average: 1978 QI QII QIII QIV

7.3 8.1 9.1 9.1

7.2 7.9 8.5 7.8

7.1 7.7 7.2 6.9

10.5 9.9 8.4 7.2

10.3 9.5 8.0 7.0

10.1 9.1 7.5 6.9

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

7.7 9.2

7.6 8.3

7.5 7.1

10.4 7.9

10.0 7.6

9.7 7.3

Annual: QIV '77-QIV '78

8.7

8.1

7.4

9.3

9.0

8.7

Growth Rates Monthly: 1978

-10(12)

A Federal funds rate centered on the recently prevailing

level of 6-3/4 per cent, as contemplated under alternative B, is likely to be associated with M-1 growth over February-March in a 1 to 6 per cent annual rate range.

The February weakness in M-l, following several months

of strong growth, is thought by the staff to be transitory.

Money growth

in March is expected to rebound to a little over a 7 per cent annual rate-mainly because of the increase in transactions demands associated with the projected strengthening of economic activity following the recent weatherinduced slowdown.

The expected rebound in M-1 also reflects in some

degree projections indicating that the volume of tax refunds to individuals will be large relative to other recent years. (13)

The February-March growth rate of M-1 shown under alterna-

tive B implies a first quarter expansion of about 4-3/4 per cent, annual rate, well within the Committee's 4 to 6-1/2 per cent longer-run range. However, the staff anticipates that further increases in market interest rates will be required in order to constrain M-1 growth over the oneyear QIV '77 - QIV '78 period to the mid-point of that range.

Even

though the staff has reduced its projection of economic growth this year, nominal GNP is still expected to increase at an 11-1/4 per cent rate over the QIV '77 - QIV '78 period, leading to relatively strong money demand. In addition, the restraining impact on money demand from the relatively sharp 1-3/4 percentage point increase in short-term interest rates that took place between the spring and fall of last year will be exhausted relatively soon; since October short-rates have risen only about another

-111/4 percentage point.

Even assuming some further moderate downward shift

in money demand relative to income, the Federal funds rate would probably have to begin rising again in April and reach 8 per cent by fall in order to constrain M-1 growth for the QIV '77-QIV '78 period to the mid-point of the 4 to 6-1/2 per cent alternative B range.1/ (14)

Growth in M-2 over the February-March period is likely

to be in a 4-1/2 to 8-1/2 per cent annual rate range under alternative B. With market yields above the ceiling rates on savings deposits and all maturities of small denomination time deposits at commercial banks, inflows of such deposits are likely to remain modest in February-March. However, growth in large denomination time deposits included in M-2 are expected to continue to offset slow growth of deposits subject to Regulation Q ceiling as banks aggressively seek funds to finance credit demands. (15)

At thrift institutions the relatively attractive yields

available in the market for shorter-term investments have slowed total deposit inflows so far in 1978, although ceiling rates on the longestterm deposits are still somewhat above those on market instruments. With no further increase in short-term interest rates, growth in deposits at thrift institutions can be expected to remain modest in the near-term. Consequently, S&L's are likely to limit their new commitment activity and also--in financing takedowns of their record level of outstanding commitments--to reduce their own liquidity and further increase borrowing

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

-12from FHL Banks.

Although thrift deposit inflows are expected to rise

from their depressed first quarter pace if ceiling rates are raised in the spring (as we are assuming), inflows will probably remain considerably below the strong pace of expansion of 1977. (16)

With the Federal funds rate remaining near its present

6-3/4 per cent level, as envisioned under alternative B, interest rates generally are likely to fluctuate within a relatively narrow range over the intermeeting period.

A little upward rate pressure might develop in

short-term credit markets; the Treasury is expected to raise $10 billion of new money in the bill market prior to the March and April tax dates, and depository institutions are likely to continue liquidating shorterterm Treasury issues to meet loan demands.

However, intermediate- and

long-term market rates might decline a bit in the weeks immediately ahead. Treasury demands in these maturity ranges are not likely to be unusually large.

In addition, the pace of new offerings by corporations and State

and local governments is expected to remain moderate, while the institutional demand for bonds is likely to continue to be quite strong.

Both

primary and secondary mortgage rates will probably continue to be under upward pressure, given the slowing of deposit growth at the thrift institutions. (17)

Over the longer-run both short- and long-term interest

rates are likely to rise.

Given the strength that is projected in

economic activity, rate pressures may become evident in spring and summer as a result of expanding private credit demands and Federal Reserve efforts

-13to restrain money growth.

Further increases in short- and intermediate-

term rates will be accompanied by reduced liquid asset holdings of depository institutions, by increased commercial bank offerings of large denomination time deposits, and by stepped up borrowing demands of Federal housing agencies.

The increases in short- and intermediate-

term rates will probably be transmitted to some extent to long-term markets.

However, as in 1977, such increases will be limited by the

continued high cash flows of insurance companies and pension funds. (18)

Under alternative C the Federal funds rate would rise

over the intermeeting period to the mid-point of a 7 to 7-1/2 per cent range, and the February-March annual rate of growth of M-1 and M-2 would likely be in 1/2 to 5-1/2 and 4 to 8 per cent annual rate ranges, respectively.

The 3-month Treasury bill rate would probably rise to about 7

per cent by mid-March, with commensurate adjustments in other short rates. Member bank borrowings could be expected to rise sharply once again, increasing pressures for a discount rate increase.

At the same time,

the rise in short-term interest rates associated with this alternative would tend to strengthen the dollar on international exchange markets. (19)

The tightening of money market conditions contemplated

under alternative C would further slow the net inflow of deposits subject to rate ceilings in the weeks immediately ahead and thus would increase the need for an adjustment in deposit ceiling rates.

Lending

policies of banks and thrift institutions would become more restrictive. There would be increased pressure on Government support programs in the

-14mortgage area.

The Home Loan Bank System would be expected to turn more

and more to the market to raise cash to support advances to savings and loan associations, and mortgage bankers would increase takedowns of existing FNMA commitments while also aggressively seeking new commitments.

In such an environment, the increase in short-term rates would

probably be rather promptly transmitted to the intermediate- and longterm sectors of the market, where Government security dealers still have a long position of moderate size in Treasury coupon issues.

(20)

The near-term increase in interest rates under alterna-

tive C would work toward a reduction in growth of the longer run.

the aggregates over

However, given the projected strength of money demand,

a further increase in interest rates would be required in order to limit M-1 expansion to the mid-point of the 4 to 6 per cent alternative C range over the QIV '77-QIV '78 period.

The staff would expect the funds rate

under this alternative to average 7-3/4 per cent in the second quarter and to rise to 8-1/4 per cent by fall. (21)

Alternative A involves a reduction in the Federal funds

rate over the intermeeting period to the 6-1/2 per cent mid-point of a 6 to 6-1/2 per cent range.

Such an action would be accompanied by a

reversal of the early January rise in short-term interest rates.

Long-

term rates, on the other hand, might not retrace all of their recent increases if, as appears likely at the moment, market participants concluded that the decline in short-term rates was likely to be temporary. Meanwhile, the dollar would probably tend to soften in international exchange markets.

-15(22)

The approach of alternative A appears most consistent

with a monetary policy that encourages more rapid growth in the monetary aggregates over the longer-run than under either alternatives B or C. Nevertheless, given the strength projected for economic activity, the near-term decline in the funds rate under A would probably soon have to be reversed to restrain growth in the aggregates to rates consistent with the mid-points of longer-run ranges for alternative A.

The funds

rate would have to begin rising again in the second quarter and might reach a high for the year of about 7-3/4 per cent by fall.

-16Directive language (23)

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.

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 February-March 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

-17the 2-month period will deviate significantly from the mid-points of the indicated ranges, the operational objective for the Federal funds rate shall be modified in an orderly fashion within a range for ____ 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. "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 longer-run ranges for monetary aggregates cited in the preceding paragraph.

Specifically, the Committee seeks to maintain the

the current level] weekly-average Federal funds rate at about [DEL: ____ per cent, so long as M-1 and M-2 appear to be growing over

the[DEL: January-February]FEBRUARY-MARCH period at annual rates within

-18ranges of [DEL: 2½ to 7½]____

TO ____ per cent and [DEL: 5-to-9] ____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 beyond the limits of the indicated ranges, the operational objective for the weeklyaverage Federal funds rate shall be modified in an orderly fashion within a range of [DEL: 6½10 7] ____

TO ____ per cent.

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 Alt. A

Alt. B

Alt. C

6-5/8

6¾

6-7/8

QII

7¼

7½

7¾

QIII

7-5/8

7-7/8

8-1/8

QIV

7¾

8¼

1978--QI

Appendix II Implied Velocity Growth Rates Alt. A

Alt. B

6.5

6.6

4.7

4.8

4.9

5.0

6.0

6.1

6.0

4.6

2.6

III

1.4

1.8

3.0

3.8

Vi (GNP/M 1978

IV V2

(GNP/M2 )

1978

Alt. C

Appendix III 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 time deposits.1/

All data in the table are per cent changes at seasonally

adjusted annual rates.

1978--I

III IV

Without a With a 1/ change in ceiling ratechange in ceiling rate A B C A B C Interest-bearing Component of M-2 7.9 7.9 7.9 7.9 7.9 8.8 8.4 9.4 9.5 10.0 7.9 8.9 11.4 10.5 8.6 9.0 8.1 9.2 8.7 8.1 10.6 8.8 7.8

QIV '77 to QIV '78

9.1

8.7

8.2

1978--I II III IV

6.6 7.2 7.2 7.4

6.6 6.9

QIV '77 to QIV '78

10.2

9.5

8.8

7.1 7.1

6.5 6.7 7.2 7.3

6.6 8.0 8.8 8.6

6.6 8.0 8.2 7.3

6.5 8.1 7.0 6.6

7.3

7.2

7.1

8.2

7.7

7.2

1978--I II III IV

8.1 7.3 6.7 6.8

8.0 6.5 6.0 6.0

8.0 7.0 7.7 7.4

QIV '77 to QIV '78

7.6

1978--I II III IV

7.3 7.4 7.2 7.3 7.5

M-2

Thrift Deposits 8.0 8.1 6.3 8.3 5.8 9.4 5.9

9.9

8.0 7.6 9.0 8.6

6.9

6.7

9.2

8.5

7.7

7.2

7.1

6.8 6.8 6.8

6.5 6.6 6.8

7.3 8.1 9.1 9.1

7.2 7.9 8.5 7.8

7.1 7.7 7.2 6.9

7.1

6.9

8.7

8.1

7.4

M-3

QIV '77 to QIV '78 1/

The staff has assumed that the deposit ceiling rate is increased in

June under Alternative A, May under B, and April under C.

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

Ending

Period 1975

1976

1977

1978

741V

751

7511

75111

75IV

761

7611

76111

76IV

771

7711

771V

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

8.5

III

4.7

5.4

5.1

4.5

5.2

6.4

4.4

5.0

5.6

5.4

5.0

5.6

6.5

5.6

6.7

4.9

5.4

5.2

4.9

5.3

6.0

5.1

5.5

4.3

5.8

5.6

5.4

5.9

6.5

6.0

6.5

8.7

III

5.7

6.2

6.1

5.9

6.4

7.0

6.7

7.3

7.5

9.2

9.7

5.8

6.3

6.2

6.0

6.5

7.0

6.8

7.3

7.4

8.4

8.3

7.0

Alt. A

5.7

6.0

5.9

6.2

6.5

6.3

6.5

6.7

6.4

5.8

5.5

Alt. B

5.6

6.0

5.9

5.8

6.1

6.4

6.2

6.4

6.3

6.6

6.3

5.6

5.2

Alt. C

5.6

5.9

5.8

5.7

6.0

6.3

6.1

6.3

6.2

6.5

6.1

5.4

5.0

Based on quarterly average data.

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

g En Ending Period 1975

1976

1977

74IV

751

75111

75IV

761

7611

76111

76IV

771

7711

77 II

5.8

8.1

10.4

III

8.9

10.4

10.5

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

9,6

10.2

10.1

10.0

10.9

11.1

11.2

13.1

9.7

10.2

10.1

10.8

10.9

11.7

10.3

9,7

10.1

10.0

10.6

10.7

10.6

11.0

9.9

III

9.8

10.2

10.1

10.6

10.7

10.6

10.9

10.2

10.1

10.7

9;6

9.9

9,9

9.8

10.2

10.1

10,3

9.6

9,2

9.2

7.8

77IV

9.5

**-*

******** 1978

7511

Alt. A

9.3

9.5

9.4

9.3

9.6

9.5

9.4

8.9

8.7

8.6

8.2

Alt. B

9.1

9.4

9.3

9.2

9.4

9.3

9.2

9.1

8.7

8.4

8.2

7.8

7.7

Alt.C

9.0

9.2

9.1

9.0

9.2

9.1

9.0

8.9

8.4

8.1

7.9

7.3

7.2

Based on quarterly average data.

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

Ending

Period 1975

1976

1977

1978

74IV I

751

7511

75111

75IV

761

7611

76111

761V

771

7711

77111

77IV

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

12.2

12.3

11.6

11.5

12.1

11.2

Alt.A

11.0

11.2

11.1

10.9

11.0

10.9

10.8

10.7

10.1

9.9

9.8

9.2

8.7

Alt. B

10.9

11.1

10.9

10.7

10.8

10.7

10.5

10.4

9.8

9.5

9.4

8.7

8.1

Alt. C

10.7

10.9

10.8

10.5

10.6

10,5

10.3

10.1

9.5

9.2

9.0

8.2

7.4

Based on quarterly average data.

CHART 1

2/24/78

MONETARY AGGREGATES NARROW MONEY SUPPLY

340

335

BROADER MONEY SUPPLY M 2 330

325

820

810

800

1976

1978

N 1977

F 1978

CHART 2

2/24/78

MONETARY AGGREGATES BANK CREDIT

SEND

BILLIONS OF DOLLARS

OF MONTH

900

860

820

780

740

BILLIONS OF DOLLARS 37 WEEKLY AVERAGES

TOTAL

34 NONBORROWED

SI 1976

1977

I 1978

I33

CHART 3

2/24/78

MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDI TIONS

PERCENT

INTEREST RATES Short-term

PERCENT

INTEREST RATES Long-term

PER CENT

WEEKLY AVERAGES

-6

RESERVES

BILLIONS OF DOLLARS 2

----

1976

1977

I 1I I I I

1978

1976

1977

1978

1976

1977

1978

CONFIDENTIAL (FR)

Table 1 , F4 2 EB.

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

Narrow (Ml)

Period

Total

Time & Savings Deposits Other Than CDs Other avin

CD's

Nondeposit Sources of Funds 2/

197 8

LEVELS-$BIL

MONTHLY

1977--NOV. DEC. 1978--JAN. FEB.

Total U.S. Govt. Deposits /

II-FOMC

CLASS

MONETARY AGGREGATES

ANNUAL

333.3 335.4 337.4 (337.3)

802.7 806.5 812.0 (815.4)

8.2 10.6 6.1

8.8 10.4 6.9

8.4 9.3 6.8

9.2 10.3 7.6

469.4 471.1 474.6 (478.11

-39.3 23.8 26.2

9.5 8.5 15.2

9.4 10.4 7.3

5.1 9.6 0.9

13.2 11.1 13.1

10.9 -4.4 72.8

-18.2 15.2 -51.4

8.3 10.0 12.9

9.8 10.9 8.1

8.5 6.6 4.4

10.8 15.0 11.2

-1.9 3.2 48.2

(

81.3 64.3 25.7 47.2)

(

36.9)

9.7 (

70.9 74.7 76.3 ( 79.3)

251.1 252.8 255.2 (258.4)

540.3 545.8 550.9 (557.4)

6.7 11.4 7.5)

218.3 218.3 219.4 (219.7)

60.0 61.6 63.8

GROWTH

QUARTERLY TR. 1977--2ND 3RD OTR. 4TH QTR. QUARTERLY-AV 1977--2ND QTR. 3RD QTR. 4TH QTR. MONTHLY 1977--NOV. DEC. 1976--JAN. FEB.

(

JAN.-FEB.

(

-1.4 7.6 7.2 -0.4) 3.4)

(

4.7 5.7 8.2 5.0)

-419.4 641.8 -178.9 (-272.2)

(

6.6)

(-205.3)

(

18.3 12.2 11.2 14.2)

(

12.8)

(

9.0 4.3 8.9 8.9)

(

8.9)

(

-0.5 0.0 6.0 1.6)

(

17.5 8.1 11.4 15.0)

(

3.8)

(

13.3)

WEEKLY LEVELS-$BIL 1978-JAN.

4 11 18 25

340.2 336.6 337.2 337.4

813.1 810.7 812.0 812.6

10.4 10.4 9.3 9.3

549.6 550.1 550.4 551.5

472.9 474.1 474.8 475.3

218.5 220.0 219.9 219.9

254.4 254.1 254.9 255.4

76.6 76.0 75.7 76.2

65.4 65.2 62.5 64.4

FEB.

1 8 15

336.0 337.3 336.1

811.7 814.7 813.6

9.8 10.0 7.4

553.0 555.8 556.6

475.7 477.4 477.5

219.6 219.7 219.9

256.1 257.7 257.6

77.3 78.4 79.1

70.1 65.0

NOTE: I/ 2/

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

AGREE-

Table 1-A

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

Time Period

and Savings

FEB.

Total

ndivdual

d a Nonrot

Nonprofit

Business (NSA)

24,

1978

Time Deposits

Savings Deposits

Total erod

CONFIDENTIAL (FR) CLASS II-FOMC

Government (NSA)

Total

Memo: Large

Large Small Negotiable CD's Denomination Denomination

6 OUTSTANDING

BILLIONS)

525.8 532.2 540.3 545.8 550.9

212.7 212.7 213.6 216.2 217.8 218.4 218.3 218.3 219.4

196.3 196.9 198.6 201.4 203.3 204.2 204.5 204.7 205.8

54.7

16.5

17.5

1976--IV

14.3

11.8

8.4

1977--I II III IV

15.1 10.4 12.7 16.8

10.4 4.4 3.5 2.4

0.9 2.6 1.6 0.6 -0.1 0.0 1.1

1977--MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1978--JAN.

509.2 514.8 519.5 522.5

9.9 9.9 9.9 10.1 10.1 10.0 10.1 10.1 9.7

6.6 6,0 5.0 4.8 4.4 4.2 3.7 3.6 3.9

296.4 302.1 305.9 306.3 308.0 313.9 322.0 327.5 331.5

133.5 137.9 140.8 141.0 142.0 147.2 156.6 161.8 164.9

162.9 164.2 165.1 165.3 166.0 166.7 165.4 165.7 166.5

62.3 63.9 62.8 63.2 63.2 66.4 70.9 74.7 76.3

CHANGES ($ BILLIONS) 1977 YEAR

-2.5

38.2

24.4

13.7

11.4

1.4

1.9

2.5

-5.6

8.1

-3.1

7.1 4,4 4.9 3.4

1.2 0.7 0.1 0.1

2.1 -0.5 -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

1.7 2.8 1.9 0.9 0.3 0.2 1.1

0.0 0.2 0.0 -0.1 0.1 0.0 -0.4

-1.0 -0.2 -0.4 -0.2 -0.5 -0.1 0.3

3.8 0.4 1.7 5.9 8.1 5.5 4.0

2.9 0.2 1.0 5.2 9.4 5.2 3.1

0.9 0.2 0.7 0.7 -1.3 0.3 0.8

-1.1 0.4 0.0 3.2 4.5 3.8 1.6

1.6

QUARTERLY AVERAGE:

MONTHLY AVERAGE:

1977--JULY AUG. SEPT. OCT. NOV. DEC. 1978--JAN.

4.7 3.0 3.3 6.4 8.1 5.5 5.1

COLUMNS (1), (2), AND (9) ON NOTE: FIGURES IN COLUMNS (1)t AGGREGATES. DERIVED FROM DATA REPORTED BY SMALL GOVERNMENTAL UNITS-COLUMNS (4) AND WEDNESDAY BY LARGE COMMERCIAL BANKS SHIPS.

ON TABLE 1--MONETARY (6), AND (8), RESPECTIVELY, THIS TABLE CORRESPOND TO COLUMNS (4), (2)t AND (6) REFLECT DAILY DATA REPORTED BY MEMBER BANKS, WITH ESTIMATES FOR NONMEMBER BANKS SAVINGS DEPOSITS OF BUSINESS AND MEMBER BANKS, BENCHMARKEO TO NONMEMBER CALL REPORT FIGURES. (5)-- AND LARGE DENOMINATION TIME DEPOSITS -- COLUMN (7)--REFLECT BREAKDOWNS REPORTED EACH BLOWN UP TO REPRESENT DEPOSITS 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 BANK RESERVES Period

Total Reserves ,a,'t

Nonborrowed Reserves

FEB.

24,

1978

REQUIRED RESERVES Monetary Base

Total Required

Private Demand

Total Time Deposits

Gev't. and Interbank

MONTHLY LEVELS-SMILLIONS

1977-NOV. DEC. 1978-JAN. FEE.

36,009 36,207 36,869 (37,072)

35 .147 35,637 36,405 136,652)

ii 6,953 127,911 12 9,61 (13 0,312)

35,758 36,017 36,623 (36,691)

21,437 21,454 21,742 (21,885)

12,646 12,854 13,036 (13,072)

(

1,675 1,709 1,843 1,734)

PERCENT ANNUAL GROWTH QUARTERLY 6.5 8.8 6.5

4,6 4.6 7.3

7.3 8.1 6.8

3.9 13.2 3.3

6.1 2.6 15.0

3.0 9.0 5.6

1.9 3.4 2.9

3.5 8.6 5.8

3.0 10.2 4.9

4.0 6.3 8.6

3.7 6.6 22.6 6.0)

19.3 16.7 25.9 S 8.1)

8.0 9.1 10.0 6.5)

(

14.3)

17.1)

11.3)

1977--2N0 QTR. 3RD QTR. 4TH QTR. QUARTERLY-AV 1977--2ND QTR. 3RD QTR. 4TH QTR. MONTHLY 1977-NOV. DEC. 1978--JAN. FEB. JAN.-FEB.

2.4 8.7 20.2 S2.2) (

11.2)

(

3.0 1.0 16.1 7.9)

(

12.1)

18.3 19.7 17.2 3.1) S 10.2)

MEEKLY LEVELS-$MILLIONS 1978-JAN.

FEB.

NOTE:

4 11 18 25

36,892 36,220 37 562 36 934

36,386 35,778 37,144 36,342

129,354 126 516 130,209 129,987

36,605 35,915 37,301 36,619

21,587 21,400 22,039 21,798

12,975 13,039 13,099 13,036

2,043 1,476 2,163 1,785

36,833 37.420 37 296 36 679

36,363 36,925 37,014 36,427

129,928 130,239 130,385 130,310

36,675 36,999 36,926 36,468

21,834 22,108 22,160 21,520

13,011 13,025 13,054 13,114

1,830

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

L A L I ASSOCIATED WITH CHANGES IN RESERVE REQUIREMENT RATIO.

1*666 1,712 1,834

TABLE 3 1/ NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES($ million, not seasonally adjusted)

Treasury Bills Net Change 2/

Within 1 year

-490' 7,232 1,280 -468 863 4,361 1976--Qtr. IV 1977--Qtr. Qtr. Qtr. Qtr.

I II III IV

-886

1,164 2,126 886 186 636 1,385

1977--Aug. Sept.

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

Total

3,025 2,833

53,9 500 434 1,510 1,048 758

167 129 196 1,070 642 553

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

789 579 797 3,284

6,303

7,267 6,227

192

1,294

436

304

165 152

1,680 959

2,738

116

681

128

1,021

628

166

108

1,001

4,273 -643

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

116

681

128

1,021

1978--Jan.

-627

311

100

556

1 8 15 22

115

9,273

325 171

1,001

Feb.

10,035

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

1,631

232

108

-347 696 -116

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

794

166

4 11 18 25

592 400 1,665 824 469 792

Total

997 526

628

1978--Jan.

5 - 10

Net RP's 6/

585 351 425 1,438

Over 10

Net Change Outright Holdings Total 5/

192 109

-1,877 -736 2,798

7 14 21 28

Within 1 year

FOMC

FEBRUARY 24, 1978

Federal Agencies Net Purchases 4/

Oct. Nov. Dec.

1977--Dec.

STRICTLY CONFIDENTIAL (FR) CLASS II -

-41

3,666

386

--- --- --

177

145

552

-1,353

4,881

1,883

----4,380

-6,530 2,996

--- ---736 4,474

707

1,001

3,568

-71

-7,149

585 327

1,317 -4,553 6,709 3,099

1,425 2,145

-4,526

-860 -275 -1,358 200

-7,893 --

--- -

440

--- -----

--- --- --

-882

556

311

100

--- --- --

--- --- --- --

5,232 -2,239

275

5,009 -5,745

1,358 200

4,629 2,408

LEVEL--Feb. 22 40.5 13.6 29.1 9.6 7.6 59.9 1.3 4.2 1.6 .9 8.0 108.4 (in billions) 1/ Change from end-of-period to end-of-period. 2/ Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions. 3/ 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. 4/ Outright transactions in market and with foreign accounts only. Excludes redemptions and maturity shifts. 5/ 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. 6/ 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. Dealer

Security

Positions

- Member Bank Reserve Positions

Underwriting Syndicate Positions Corporate Municipal Bonds Bonds

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC FEBRUARY 24 , 1978

Borrowing at FRB**

Basic Reserve Deficit**

Excess** Reserves

Total

Seasonal

8 New York

38 Others

Bills

Coupon Issues

1976--High Low

8,896 3,668

3,046 175

334 0

343 34

655 -180

242 24

34 8

-8,161 -2,367

-12,744 - 6,908

1977--High Low

7,234 1,729

3,017 -1,445

295 0

487 116

513 -111

1,861 20

131 8

-9,151 -4,234

-13,975 - 8,206

1977--Jan. Feb. Mar.

6,406 4,450 4,906

2,320 1,650 972

82 72 103

202 226 162

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

101 20 142

173 228 217

192 213 154

73 206 262

14 30 54

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

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

July Aug. Sept.

3,899 2,533 4,812

-309 -933 -313

143 71 128

209 199 230

275 200 209

323 1,084 626

60 102 112

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

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

Oct. Nov. Dec.

4,142 3,617 4,257

-360 610 804

83 36 195

186 210 367

210 251 193

1,305 863 570

112 83 55

-6,480 -6,971 -7,403

-11,511 -11,825 -11,350

1978--Jan.

4,127

327

293

268

484

-6,047

-12,299

1977--Dec.

7 14 21 28

3,397 5,059 4,877 4,023

1,026 447 256 1,375

160 283 121 116

281 420 487 428

15 313 145 245

583 509 527 686

70 56 53 53

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

-12,292 -11,736 -12,335 -10,246

1978--Jan.

4 11 18 25

4,416 5,625 3,565 3,167

1,247 369 -221 365

0 39 72 58

316 284 273 297

287 313 261 315

506 440 418 592

30 26 25 34

-6,675 -7,699 -6,352 -5,496

- 8,533 -13,055 -13,938 -12,729

Feb.

*3,599

*674

154

158

470

-3,993

-11,516

*3,842

*2,043

151

421p

495p

48p

-5,056

-13,137

15 22

*4,128 *3,185

*1,264 * 968

0 20p

251 225p

370p 416p

282p 442p

p 53p

-4, 4p -5,697p

-14,286p -12,455p

Omtt OoverMnt security dealer trading positions are on a comitent basits. Trading positions, Vdich exclude Treasury securities financed by repurchase agrements maturing in 16 days or more, are Indicators of dealar holdings available for sale over the near-ters. Underwriting syndicate positions consist of issues still in syndicate, excluding trading positions. The basic reserve deficit is excess reserves less borrowing at Federal Ieserve less net Federal funds purchases. Weekly data are daily averages for statement weeks, except for corporate and municipal issues in syndicate which are Friday figures. *

Strictly confidential.

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

TABLE 5 SELECTED INTEREST RATES (per cent)

STRICTLY CONFIDENTIAL CLASS II - FOMC FEBRUARY 24, 1978

Short-Term

Long-Term

Treasur

Bills

Federa Funds

90-Day

Issue-NYC Paper 1-Year 90-Day 0-119 Day

(1)

(2)

CD's Ne

(FR)

Comm.

Bank

U.S. Govt.-Constant

Prime Rate

Maturity Yields 3-yr 7-yr 20-yr

Corp.-Aaa Utility Municipal New Issue

Recently Offered

Bond Buyer

Home Mortgages Primary Secondary Market Conv. FNMA AucGNMA Sec.

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(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 8.39

8.45 7.57

1977--High Low

6.65 4.47

6.27 4.41

6.62 4.67

6.70 4.50

6.66 4.63

7.75 6.25

7.39 5.83

7.70 6.59

7.99 7.26

8.36 7.90

8.48 7.95

5.93 5.45

9.00 8.65

8.98 8.46

8.39 7.56

1977--Jan. Feb. Mar.

4.61

4.62

5.00

4.68

4.72

6.25

6.22

6.92

7.48

8.08

8.09

5.87

8.72

8.48

7.83

4.68

4.67

5.16

4.70

4.76

6.25

6.44

7.16

7.64

8.22

8.19

5.89

8.67

8.55

7.98

4.69

4.60

5.19

4.72

4.75

6.25

6.47

7.20

7.73

8.25

8.29

5.89

8.69

8.68

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

6.32 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

5.19

5.57

5.28

5.38

6.75

6.51

7.12

7.60

8.15

8.12

5.63

8.95

8.72

7.96

5.90 6.14

5.49 5.81

5.97 6.13

5.78 6.01

5.75 6.09

6.83 7.13

6.79 6.84

7.24 7.21

7.64 7.57

8.04 8.07

8.05 8.07

5.62 5.51

8.94 8.90

8.76 8.74

8.03 8.02

Oct. Nov. Dec.

6.47

6.16

6.52

6.53

6.51

7.52

7.19

7.44

7.71

8.23

8.22

5.64

8.92

8.82

8.16

6.51

6.10

6.52

6.56

6.54

7.75

7.22

7.46

7.76

8.28

8.25

5.49

8.92

8.86

8.19

6.56

6.07

6.52

6.65'

6.61

7.75

7.30

7.59

7.87

8.34

8.38

5.57

8.96

8.94

8.27

1978--Jan.

6.70

6.44

6.8Q

6.82

6.75

7.93

7.61

7.86

8.14

8.68

8.60

5.71

1977--Dec.

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 5.66

4 11 18 25

6.69 6.58 6.78 6.72

6.16 6.48 6.50 6.46

6.55 6.81 6.87 6.83

6.65 6.87 6.87 6.88

6.68 6.69 6.80 6.79

7.75 7.82 8.00 8.00

7.40 7.71 7.66 7.65

7.72 7.93 7.89 7.89

8.01 8.18 8.16 8.17

-8.70 8.68 --

8.48 8.65 8.65 8.62

5.64 5.75 5.74 5.70

9.00 9.03 8.98 9.05

1 8 15 22

6.80 6.75 6.76 6.78

6.42 6.44 6.46 6.48

6.80 6.83 6.86 6.91

6.81 6.75 6.75 6.75

6.76 6.76 6.76 6.78

8.00 8.00 8.00 8.00

7.58 7.62 7.71 7.74p

7.85 7.91 7.99 8.00p

8.17 8.20

8.65 8.69

8.60 8.64 8.68 8.71p

5.63

9.13

8.62

5.59

9.15

9.27

8.62

5.61

9.15

8.65

5.65

n.a.

9.35

8.68

6.83 6.75p

6.51 6.43

6.94 6.88

--- 6.76 6.77

8.00 8.00

7.74 7.74p

8.01 8.00p

8.27 8.24 p

1978--Jan.

Feb.

)aily--Feb. 16 23

8.25 8.25p

8.73p 8. 73p

9.17 8.89 8.98

-9.13 -9.21

8.43 8.54 8.60 8.59

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, resppectively, 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 short-term forward commitments for Government under written 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.

FEB.

24,

1978

Appendix Table 1-A

MONEY AND CREDIT AGGREGATE MEASURES dt

Bank ReservesU Period Total

Non-

Monetary

borrowed

Base

Invest-

ments rn

Total Loans and

Money Stock Mesures

M1 5

ERCENT

ANNUALLY:

-0.2 1.0 5.2

1975 1976 1977

3.2 1.2 2.7

5.9 6.9 8.3

6 7 ANNUAL RATES OF GROWTH)

3.9 8.0 10.9

4.4 5.6 7.4

8.3 10.9 9.6

11.1 12.8 11.6

9.7 10.3 11.7

10.5 10.0 11.3

10.1 10.2 11.4

M7 7

SEMI-ANNUALLY: 1976

3.6

3.7

6.8

8.9

5.5

10.9

13.1

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

-2.4 4.6 4.6 7.3

5.1 8.2 10.2 8.8

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

2.6 1.9 3.4 2.9

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 10.8

9.3 8.5 9.7 10.5

10.9 9.4 11.9 12.5

10.7 9.5 11.4 12.0

10.8 9.8 11.3 11.8

10.4 -13.3 -4.3 14.1 -3.1 2.9 14.9 -15.4 14.6 -14.1 19.3 16.7

10.6 -0.2 5.0 11.8 6.2 6.4 14.2 8.1 8.2 9.3 8.0 9.1

4.7 15.9 10.9 15.7 12.0 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 18.3 5.9 7.3 12.0 -1.4

9.7 7.1 8.6 13.5 4.7 8.1 16.6 6.4 7.9 10.1 4.7 5.7

11.4 8.9 9.4 12.4 7.3 9.8 16.1 11.5 12.3 12.5 7.5 7.4

8.7 7.0 6.2 11.7 5.4 10.0 13.6 6.5 7.5

10.8 8.7 8.0 11.3 7.6 10.8 14.3 11.2 11.7 14.7 11.0 10.3

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 8.5 10.8 7.9 10.6 13.0 10.6 11.2 13.8 10.5 9.9

25.9

16.0

12.1

7.2

7.9

9.7

8.7

8.6

8.5

2ND HALF

QUARTERLY: 1ST 2ND 3RD 4TH

OTR. QTR. OTR. QTR.

1977 1977 1977 1977

-1.8 6.5 8.8 6.5

QUARTERLY-AV: 1ST Q7R. 1977 2ND QTR. 1977 3RD QTR. 1977 4TH QTR. 1977

2.7 3.0 9.0 5.6

MONTHLY: 1977--JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1978--JAN. 1/ 2/ P -

10.9 -13.1 -3.1 13.0 1.5 4.8 16.9

9.8 -0.5 9.1 3.7 6.6 22.6

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

7.6

REQUIREMENTS.

8.2

13.6

10.5 10.6

FEB. 24,

Appendix Table 1-B

1978

MONEY AND CREDIT AGGREGATE MEASURES SEASONALLY ADJUSTED, BILLIONS OF DOLLARS

Period

Prd Total i

Nonborrowed

Money Stock Measures

Bank Credit

Bank Reserves 1 Monetary Base ......

Tot I Loans and Investments

ANNUALLY: 34,015 34,465 36,207

33,885 34,412 35,637

110,394 118,054 127,911

725.5 788.2 870.0

294.8 312.4 335.4

664.3 740.3 806.5

1092.6 1237.1 1374.0

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

313.8 314.0 315.4

746.3 750.7 756.1

1248.9 1258.2 1268.1

809.3

APR. MAY JUNE

34, 80 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

JULY AUG. SEPT.

35,352 35,641 35,627

35,029 34,560 35,001

123.468 124,297 125,144

841.1 849.7 852.4

326.8 328.4 330.4

OCT. NOV. DEC.

35,897 36,009 36,207

34,591 35,147 35,637

126,109 126,953 127,911

862.0 870.5 870.0

1978--JAN.

36,889

36,405

129,612

878.8

1975 1976 1977

1174.7 1300.3 1448.8

1308.3 1439.1 1601.8

1351.1 1488.8 1657.7

814.0 818.2

1312.0 1321.5 1330.3

1452.2 1466.0 1475.5

1502.4 1517.1 1527.8

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

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

333.7 333.3 335.4

799.6 802.7 806.5

1357.1 1365.6 1374.0

865.9 873.5 881.2

1423.5 1436.5 1448.8

1574.5 1588.5 1601.8

1629.8 1644.1 1657.7

337.4

812.0

1383.0

888.3

1459.3

1613.3

1669.5

746.5 803.5

881.2

MONTHLY:

WEEKLY:

1977-DEC.

21 28

36,258 36,189

35,731 35,503

128,035 128,282

335.4 335.7

805.8 806.9

881.0 882.9

1978-JAN.

4 11 18 25

36,892 36,220 37,562 36,934

36,386 35,778 37,144 36,342

129,354 126,516 130,209 129,987

340.2 336.6 337.2 337.4

813.1 810.7 812.0 812.8

889.8 886.8 887.6 889.0

1 8P 15P

36,833 37.420 37,296

36,363 36,925 37,014

129,928 130,239 130,385

336.0 337.3 336.1

811.7 814.7 813.6

888.9 893.1 892.7

FEB.

aI I I I a aWEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS. MONTHLY DATA ARE DAILY AVERAGES. WEEKLY M3, MS, 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

NOTES:

DATA

a ARE

a NOT AVAILABLE FOR

FEB.

APPENDIX TABLE 2-A

1978

24,

COMPONENTS OF MONEY STOCK AND RELATED MEASURES Period

CurrncyDemand Deposits

Other Than CD's SavingCD's

Total STotal

Mutual

Time and Savings Deposits

P d C

Savings

Other

Savings

Credit

Bank & S&L

Union Shares /

Other

Short Term Savings Bonds/

Private

U.S.Gov't Short-term Securities Assets _U

IShares

(Per cent annual rates of growth)

ANNUALLY:

9.5

2.9 4.3 6.7

4.6

8.8

1975 1976 1977

9.6

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 17.8 20.3

33.4 7.5 9.9

-1.0 19.2

11.4

11.7 15.2 11.1

9.7

15.2

19.8

11.3

-21.1

16.2

17.6

-1.4

15.2

15.0 5.6

9.5 13.3

0.0 25.9

12.2 15.2

16.1 22.7

12.5 6.8

16.5 7.1

8.0

8.1

12.1

SEMI-ANNUALLY: 2ND HALF

1976

6.0

1ST HALF 2ND HALF

1977 1977

B.5 10.0

5.7 7.5

10.5 11.6

12.1

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

16.3 5.1 9.6 0.9

8.1 13.2 11.1 13.1

-7.0 10.9 -4.4 72.8

12.0 11.2 17.3 11.9

16.4 13.8 23.8 21.6

31.1 8.3 4.9 8.1

20.9 15.3 5.2 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 4.4

8.0 10.8 15.0 11.2

1.9 -1.9 3.2 48.2

13.3 10.9 15.2 14.6

16.7 15.0 19.3 24.8

11.1 13.6 5.5 8.1

12.9 19.5 7.4 6.6

1977--JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC.

8.9 10.4 5.9 13.1 7.2 5.7 15.7 5.6 12.6 9.7 9.6 8.2

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

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

-3.8 3.8 -20.9 -11.6 13.6

8.9 3.3 -0.5 0.0

4.2 9.5 10.5 8.3 10.3 20.5 24.7 0.0 8.4 13.2 17.5 8.1

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 18.2

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

21.5 28.2 18.4 15.8 11.2 2.2 6.6 6.6 6.5 6.5 6.5

1978--JAN.

10.9

5.8

11.2

8.9

6.0

11.4

25.7

12.8

7.9

9.6

QUARTERLYS 1ST 2ND 3RD 4TH

OTR. QTR. 07R. QTR.

1977 1977 1977 1977

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

QTR. QTR. QTR. OTR.

1977 1977 1977 1977

MONTHLY:

14.6

30.8

-20.7 7.6 0.0 60.8 81.3 64.3

6.5

I & .1 d. I & I __________ I __________ 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.

__________________

12.1

6.4 I

___

APPENDIX TABLE 2-B

FEB. 24, 1978

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

Period

Total

Other Than CD's

Tta

Total 1

Mutual Bank & S&L

_Savings

CD's

I Savings I Other

Credit

ShortTerm

Other Private

Union Savings Shares Bonds

U.S. Gov't

Shortterm

har

Assets

221.0 231.9 247.0

451.7 491.1 545.8

369.6 427.9

209.1 226.0 252.8

82.1

471.1

160.5 201.8 218.3

395.2 457.8 520.7

232.7 232.1 233.2

495.6 500.0 502.8

432.5 436.7 440.6

205.7

226.8

208.2

228.6 230.6

63.1 63.3 62.2

505.7 509.2 514.8

444.1

211.9 212.7 212.7

232.2

446.9 450.9

Total NonGov't Deposit Funds Demand

i/ 9

Sec y

_ts

33.0 39.0 46.9

67.3 71.9

42.8

77.0

66.3 66.9 76.0

463.2

39.5

467.6

40.0

471.5

40.6

72.3 72.7 73.0

67.9 71.8 72.1

61.6 62.3 63.9

475.6 480.0 484.7

41.0 41.4 42.0

73.4 73.8

72.3 73.0

74.2

490.8 498.3 505.7

42.7 43.4 44.5

Deposit

Deposits

ANNUALLY: 73.7 80.5

1975 1976 1977

88.4

63.3

74.7

33.7 51.4 61.6

8.3 11.2 11.4

50.2 51.1 52.3

49.9

10.0 11.7 11.2

73.6

53.1 53.8 54.3

50.8 54.6 53.5

10.1

74.6 75.0 75.5

73.6 74.0 74.5

54.4 54.7 55.0

53.3 55.6 57.7

11.6 10.2 10.7

49.7

55.9

MONTHLY: 1977--JAN. FEB. MAR.

81.1

APR. MAY JUNE

83.1 83.6

84.0

237.4 237.1 238.0

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

62.8 63.2

OCT. NOV. DEC.

87.1

246.6 245.5 247.0

532.2 540.3 545.8

465.9

247.5 251.1 252.8

70.9 74.7

512.0 516.8 520.7

45.5 46.2

471.1

218.4 218.3 218.3

66.4

87.8 88.4

46.9

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 11.4

1978--JAN.

89.2

248.2

550.9

474.6

219.4

255.2

76.3

523.5

47.4

77.5

76.5

56.2

63.6

9.7

21 28

88.5

246.9 246.9

545.7 547.3

470.4 471.3

218.1 218.5

252.3 252.7

75.2 76.0

0.0 0.0

59.3 66.4

13.7 L-2.0

4 11 18 25

88.7 88.7 89.2

251.5 247.9 248.0 247.8

549.6 550.1 550.4 551.5

472.9 474.1

254.4 254.1 254.9 255.4

76.6 76.0 75.7 76.2

0.0 0.0 0.0 0.0

65.4 65.2 62.5 64.4

10.4 10.4

475.3

218.5 220.0 219.9 219.9

1 8P 15P

89.7 89.8 89.9

246.3

553.0 555.8 556.6

475.7 477.4 477.5

219.6 219.7 219.9

256.1 257.7 257.6

77.3 78.4 79.1

0.0 0.0 0.0

70.1 65.0

9.8 10.0

81.8 82.2

469.4

210.0

234.2

238.2

63.2

50.3

51.4

10.8 10,6

WEEKLY: 1977-DEC.

1978-JAN.

FEB.

1/ 2/ 3/

4/ P -

88.7

89.6

247.4

246.2

474.8

ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA. INCLUDES PRIVATE DOMESTIC NONFINANCIAL INVESTORS' HOLDINGS 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 BORROWINGS), LOANS SOLD TO AFFILIATES, LOAN RPS, AND OTHER MINOR ITEMS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. PRELIMINARY

9.3 9.3

Cite this document

APA

Federal Reserve (1978, February 27). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19780228

BibTeX

@misc{wtfs_bluebook_19780228,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1978},
  month = {Feb},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19780228},
  note = {Retrieved via When the Fed Speaks corpus}
}