bluebooks · September 15, 1980

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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September 12,

Strictly Confidential (FR)

1980

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)

September 12, 1980

CLASS I - FOMC

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1)

Growth of the narrow monetary aggregates accelerated

sharply to record rates in August and thus far in the third quarter is well above the targets established by the Committee for the June to September period, as shown in the first three columns of the table below. Nonetheless, these monetary aggregates are within the Committee's target ranges for the whole year 1980--with growth of M-1A in the lower half and of M-1B in the upper half, as shown in the last two columns of the table. M-2 is also running above the Committee's three-month path, but unlike the narrow aggregates, growth for the year to date is above the Committee's longer-run range.

Monetary Aggregates

Target Growth for June to September (3 months)

Growth from QIV '79 to Aug. '80

Target Range for 1980

July

August

M-LA

7.8

19.6

4.2

3½ to 6

M-1B

11.1

21.9

6.0

4 to 6

M-2

17.7

14.2

9.7

6 to 9

M-3

13.4

13.6

Memo:

Bank Credit

7.6

17.1

9.1 5.3

to 9½ 6 to 9

-2-

(2) Early in the intermeeting period, when evidence of the record increase in M-1A and M-1B for the first week of August first became availabile, it became clear that the growth of the narrow monetary aggregates would probably exceed the Committee's short-term objectives by a

substantial amount and that total reserves would be running well above path as required reserves strengthened.

Adherence to the nonborrowed reserve

path over the intermeeting period led to a rising level of adjustment

borrowing-from the $75 million initially assumed to a peak weekly average level of almost $1.2 billion before falling back to about $535 million in the most recent statement week.

In recognition of the strength in total

reserves, the nonborrowed reserve path was reduced late in the period.

Growth in Reserve Aggregates (SAAR) QII

July

August

7.6

2.3

8.5

12.8

0.7

8.1

Total reserves

1.0

2.7

16.3

Monetary base

5.2

8.4

15.0

750

142

417

534

253

241

Nonborrowed reserves Nonborrowed reserves plus special borrowing

Memo: ($ millions) Average level of member bank adjustment borrowings Average level of special borrowings

(3) The federal funds market firmed significantly following the August Committee meeting, with the rate increasing from around 8

9 percent at the time of the last meeting to the 10¼ to 10½ percent area 1/

See Appendix I for the pattern of reserve targets established over the intermeeting period.

-3-

in early September and to the 10

to 11 percent zone most recently.

Other

short-term interest rates rose over the period as well, responding not only to the tighter funds market and the stronger money growth, but also to further indications of an improving economic outlook and the disappointing

performance of measures of inflation.

Rates fluctuated widely around the

rising trend, reflecting changing market expectations about the duration of the bulge in monetary growth and the System's response to it. On balance, Treasury bill rates and yields on private short-term paper are now 1¼ to 1½ percentage points higher than at the time of the August meeting and 3 to 3-3/4 percentage points above their early summer lows.

The

bank prime rate was raised from 11 to 12¼ percent during the intermeeting period as banks' costs of funds rose. (4) Bond yields rose by ¼ to ½ of a percentage point after the August Committee meeting, while mortgage rates rose by about 3/4 of a percentage point.

As long-term markets tightened, debt offerings by

corporations and State and local governments were reduced somewhat, although remaining quite large.

Treasury coupon issues have been limited

to offerings in regular note cycles since the mid-quarter financing. (5) Bank credit expansion picked up to a 17 percent annual rate in August, the most rapid expansion since early in the first quarter. Banks continued to acquire securities at the rapid pace of other recent months, and lending by banks increased substantially last month.

Loans

to business firms in particular showed renewed strength as increases in bank loan rates lagged those of short-term market alternatives and as corporations relied less on capital markets.

Nonfinancial firms paid

down outstanding commercial paper in August, in sharp contrast to the strong growth of outstanding paper in the first half of the year.

-4(6)

Despite the substantial rise in short-term interest

rates, the dollar has declined somewhat in foreign exchange markets on a weighted average basis since the August FOMC meeting.

Although

market participants also are beginning to show concern that the U.S. recession may be ending with little lasting effect on the rate of inflation, most of the intermeeting decline in the value of the dollar reflected the strength of the yen and sterling against all currencies.

(7)

The table on the next page shows seasonally adjusted

annual rates of change, in percents, for selected monetary and financial flows over various time periods.

Past

Three S/

Past Month

QII '80 over

Months Aug. '80 over

Aug. '80 over

1978-

1979-

OIV '79

May '80

July '80

aborrowed reserves

6.7

0.7

5.5

9.9

8.5

:al reserves

6.6

2.9

2.7

6.1

16.3

aetary base

9.2

7.7

6.5

10.1

15.0

1A (Currency plus demand deposits) 2/

7.4

5.0

0.4

13.1

19.6

13 (M-LA plus other checkable deposits)

8.2

7.6

1.8

16.1

21.9

2 (M-1B plus small time and savings deposits, money market mutual fund shares and overnight RP's and Eurodollars)

8.4

8.9

6.4

16.9

14.2

11.3

9.8

6.8

13.6

13.5

12.3

4.5

7.3

17.1

4.3 0.6 1.3

1.2 1.8 1.0

1.6 -2.2 1.4

-2.9 -4.8 2.0

0.3 -1.8 0.0

0.3

0.9

2.2

0.7

-1.5

acepts of Money

3 (M-2 plus large time deposits and term RP's) nk Credit Loans and investment of all commercial banks 3/ naged Liabilities of Banks (Monthly average change in billions) Large time deposits Eurodollars Other borrowings 4/ imo

Nonbank commercial paper

QIV to QIV. ' Other than interbank and U.S. Government. SIncludes loans sold to affiliates and branches. SPrimarily federal funds purchases and securities sold under agreements to repurchase. )TE: All items are based on averages of daily figures except for data on total loans id investment of commercial banks, commercial paper, and thrift institutions-which :e derived from either end-of-month or Wednesday statement date figures. Growth rates )r reserve measures in this and subsequent tables are adjusted to remove the effect of Lscontinuities from breaks in the series when reserve requirements are changed.

Prospective developments (8)

Shown below are alternative sets of monetary aggregate

targets for the four-month August to December period, and associated federal funds rate ranges for the intermeeting period.

The relationship

of the August to December targets to the Committee's longer-run ranges is

depicted in the charts following page 8.

(Detailed data for these

aggregates are contained in the tables on pp. 7 and 8.) Alt. A

Alt. B

M-1A

5-1/4

3-1/4

M-1B

7-1/2

5-3/4

M-2

8-1/2

Growth from August to December in:

Intermeeting range for funds rate

8 to 14

9 to 14

(9) Monetary growth rates for the final four months of the year proposed under these alternatives represent a substantial deceleration from the summer pace. A considerable slowing in money growth appears in train for September, a not unusual development after a month of exceptionally rapid increase, reinforced by the lagged effect on money demand of the considerable rise in short-term interest rates that has occurred since June.

However, money demand is expected to be relatively strong over

the last three months of the year, as transactions needs rise in reflection of the 11 percent annual rate of increase projected for nominal GNP.

Under

these circumstances, to restrain money growth between now and year-end to the pace specified by either alternative A or B would appear to imply a further rise of interest rates--with the rise under alternative B larger and occurring sooner.

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

M-1A Alt. A

Alt. B

Alt. A

Alt. B

379.8 380.3 382.7

379.8 380.2 382.0

401.7 403.2 406.3

401.7 403.1 405.6

1.6 7.6

1.3 5.7

4.5 9.2

4.2 7.4

5.3

3.2

7.6

5.7

4-3/4 -4 9-3/4 7-1/4

4-3/4 -4 9-3/4 5-1/2

6 -2-1/2 12-1/4 9-1/2

6 12-1/4 12-1/4 7-3/4

1979 QIV to 1980 QII

0.4

1.8

1980 QII to 1980 QIV

8-1/2

7-3/4

1979 QIV to 1980 QIV

4-1/2

6-1/2

1980--August September October Growth Rates Monthly 1980

August

September October '80 -

December '80 Quarterly Average 1980--QI QII QIII QIV

10-1/4

Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) M-2

M-3

Alt. A

Alt. B

Alt. A

Alt. B

1628.1 1635.3 1648.2

1628.1 1635.2 1647.2

1886.3 1896.6 1909.3

1886.3 1896.5 1908.8

5.3 9.5

5.2 8.8

6.6 8.0

6.5 7.8

9.2

8.5

9.0

8.7

7-1/4 5-1/2 15 9-3/4

7-1/4 5-1/2 15 9

7-3/4 5-3/4 12-1/4 9-1/2

7-3/4 5-3/4 12-1/2 9

1979 QIV to 1980 QII 1980 QII to 1980 QIV

6.4 12-1/2

6.4 12-1/4

6.8 11

1970 QIV to 1980 QIV

9-1/2

1980--August September October Growth Rates Monthly 1980--September October August '80 -

December '80 Quarterly Average 1980--QI QII QIII QIV

NOTE:

The following annual rates of growth in bank credit for the year and for the quarters are expected under alternative A: year 1980, 5-3/4; QI, 9-1/2; QII, -1/2; QIII, 5-3/4; QIV, 8. Only minor variations in growth rates would be expected under alternative B.

Chart 1

CONFIDENTIAL (FR) Class I- FOMC

Actual and Targeted M-1A and M-1B

M-1A

Billions of dollars

400 -

Longer-Run Range *.. Short-Run Alteratives

-395

375

370

365 --

II N 1979

rBf\

1980

M-1B -

Bilions of dollars -420 Longer-Run Range * Short-Run Alteratives .A -*

.s~.

--380 i 0

1 N 1979

I D

I J

I F

I M

I A

I M

I J

1980

I A

I S

I O

I N

Chart 2

CONFIDENTIAL (FR) F as s Class 11". FOMC

Actual and Targeted M-2 and M-3

1\ A-2

Billions of dollars

.A" 1680

.*;.

Longer-Run Range

-***Short-Run Alternatives

-1660

.;.'*' **'

9% 1640 -1620 6%

- 1600 -1580 -1560

-1540

I O

N S1979

I J

I A

1980

1520

1500

1480 0

Billions of dollars

Nn-3 -

9% %

'.* 1940

Longer-Run Range..

t-****Short-Run

Alternatives

-1920

. .

S**

1900 6Y1/%

1860 1840

S-/ S-

1820

-_ O

I O

I J

I M

1880

I A

1979 * Note: A. and B. alternatives are indiatlnguiahable-on this scale.

I J

1980

I A

I a

I O

*1800

1780

1760 1740

-9(10)

Under alternative A, the expansion in M-A over the

balance of the year at a 5-1/4 percent annual rate would produce growth over the one-year QIV '79 to QIV '80 policy period of 4-1/2 percent, just below the midpoint of the Committee's 3-1/2 to 6 percent range.

The

gap between growth in M-1B and M-1A over the balance of the year is expected to be considerably wider than the 1/2 point implicit in the Committee's longer-run targets, though narrower than the experience of summer when growth in NOW and ATS accounts accelerated in response to the same factors leading to a resurgence of savings deposits.

From August to

December, M-1B under alternative A is expected to expand at a 7-1/2 percent annual rate, leading to growth for the year at the upper limit of its range.

(11)

Growth in M-2 under alternative A is projected to slow

to a 9 percent annual rate over the balance of the year, a rate that would keep growth for the year above the upper end of the Committee's longer-run range.

The expected slowing over the next few months mainly

reflects reduced growth in the narrow money aggregates, but the increase in the nontransactions component of M-2 also is expected to be less rapid than in the summer.

Growth in savings deposits has already slowed, and

money market funds have actually been declining.

The latter are expected

to resume growing over the months ahead, as recent increases in market interest rates augment the average yield on their portfolio, but not at the very rapid pace of late spring and early summer. (12)

To achieve the growth in the aggregates specified under

alternative A, total reserves would have to expand at about a 6 percent annual rate from August to December, and, given the near-term pattern of growth, by about a 7 percent annual rate from August to October.

Assuming

adjustment borrowing of around $600 million--close to the average of recent

-10weeks but below the level expected for the current statement week--the nonborrowed reserve path would call for growth at little over a 4 percent annual rate from August to October, with the federal funds rate probably around 10-1/2--10-3/4 percent. (13)

Short-term interest rates are not expected to rise

significantly further over the next few weeks under alternative A.

Indeed, some temporary drop in short rates could occur as bank reserve positions under this alternative may be less taut than market participants currently expect.

But business borrowing demand is expected to remain

relatively large as the economy strengthens.

The recent tilt in the

distribution of borrowing toward short- from long-term markets could persist but the continuing need to restructure balance sheets is expected to keep long-term borrowing sizable over the months ahead.

With short-

rates remaining relatively high and the economy apparently strengthening, there appears to be little scope for declines in bond or mortgage rates. Indeed, mortgage rates could drift up a bit more under alternative A, in part reflecting the recent run-up in the cost of deposits. (14)

Alternative B calls for about 2 percentage points less

growth in M-1A and M-1B than alternative A over the last four months of the year.

For the one year QIV '79-QIV '80 period, growth in M-1A

would be 4 percent and M-1B 6 percent, in the lower and upper halves of their respective ranges.

M-2 growth would also be slower under

this alternative, but by considerably less than the narrow aggregates, as the restraining effect of rising market interest rates is blunted by upward adjustments in yields on interest-bearing deposits and other assets in M-2.

Over the

QIV '79-QIV '80 period, M-2 growth would remain above

the Committee's upper limit under this alternative.

-11(15)

The specifications for alternative B would require

total reserve growth from August to October at a little more than a 6 percent annual rate.

Assuming adjustment borrowings of about $800 million,

nonborrowed reserves would expand at about a 1/2 percent annual rate.

Given

this reserve path, the funds rate would probably be 11 percent or a little higher, and other short-term rates might edge up from current levels.

Mortgage rates would probably rise noticeably further, as thrift institutions become increasingly concerned about the cost and availability of deposits. The dollar might take on a stronger tone in foreign exchange markets.

-12Directive language (16)

Given below are suggested operational paragraphs for

the directive consistent with the form of the directive adopted at the August meeting.

The language calls for expansion of reserve aggre-

gates at a pace consistent with the desired rate of monetary growth over the last four months of the year, provided that the weekly average federal funds rate remains within a specified range.

The specifications

adopted at the August meeting are shown in strike-through form. In the short run, the Committee seeks expansion of reserve aggregates consistent with growth of M-1A, M-1B, and M-2 over the [DEL: third quarter 1980] of

AUGUST TO DECEMBER PERIOD at annual rates

of about [DEL: 6½]____ percent, [DEL: 9] ____

percent, and [DEL: 12] ____

percent

respectively, provided that in the period before the next regular meeting the weekly average federal funds rate remains within a 14] ____ percent. 8] ____ to [DEL: range of [DEL: If it appears during the period before the next meeting that the constraint on the federal funds rate is inconsistent with the objective for the expansion of reserves, the Manager for Domestic Operations is promptly to notify the Chairman, who will then decide whether the situation calls for supplementary instructions from the Committee.

APPENDIX I

Table 1 RESERVE TARGETS AND RELATED MEASURES FOR 5-WEEKS ENDED SEPTEMBER 17 ($ millions, not seasonally adjusted)

Targets for 5-Week Averages NonTotal borrowed Reserves Reserves (2) (1)

Projections for 5-week Averages Total Required Excess .Adjustment Reserves Reserves Reserves Borrowing (3)-(2) (3) (5) (4)

As of

August 15

40,111

40,036

40,111

40,036

40,239

40,009

230

203

40,393

40,134

259

357

40,623

40,389

235 291

2/ 29

40,261

40,186 86

Sept.

40,311

40,086

40,596

40,305

40,311

40,086

40,691

40,396

1/ Includes special borrowings. 2/ Reflects $150 million adjustment for multiplier changes. 3/ Reflects $200 million adjustment for multiplier changes. 4/ In addition to the adjustment noted in footnote 4, also reflects a $150 million downward adjustment because total reserves have been running steadily above target.

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC

TABLE 1 SELECTED INTEREST RATES (Percent)

Federal funds (1)

Short-term " CDS Secondary Treasury Bill Market IAuction Market 3-mo 1-yr I 6-mo 3-mo (5) (4) (3) (2)

Comm. Paper 3-mo (6)

Bank Prime Rate (7)

3-yr (8)

10-yr (9)

30y-r (10)

Long-term Corp.-Aaa Utility Recently New Offered Issue (12) (11)

U.S. Govt, Constant Maturity Yields

Municipal Bond Buyer (13)

1979--High Low

15.61 9.93

12.60 8.85

11.89 8.64

12.65 8.87

14.53 9.84

14.26 9.66

15.75 11.50

11.68 8.76

10.87 8.79.

10.42 8.82

11.50 9.40

11.45 9.39

7.38

1980--High Low

19.39 8.68

15.61 6.49

14.39 7.18

15.70 6.66

18.04 8.17

17.60 7.97

20.00 11.00

14.29 8.61

13.33 9.51

12.73 9.54

14.22 10.53

14.12 10.79

9.44

1979--Aug. Sept.

10.94 11.43

9.52 10.26

9.16 9.89

9.45 10.13

10.71 11.89

10.43 11.63

11.91 12.90

9.14 9.69

9.03 9.33

8.98 9.17

9.48 9.93

Oct. Nov. Dec.

13.77 13.18 13.78

11.70 11.79 12.04

11.23 11.22 10.92

11.34 11.86 11,85

13.66 13.90 13.43

13.23 13.57 13.24

14.39 15.55 15.30

10.95 11.18 10.71

10.30 10.65 10.39

9.85 10.30 10.12

1980--Jan. Feb. Mar.

13.82 14.13 17.19

12.00 12.86 15.20

10.96 12.46 14.03

11.85 12.72 15.10

13.39 14.30 17.57

13.04 13.78 16.81

15.25 15.63 18.31

10.88 12.84 14.05

10.80 12.41 12.75

Apr. May June

17.61 10.98 9.47

13.20 8.58 7.07

11.97 8.66 7.54

13.62 9.15 7.22

16.14 9.79 8.49

15.78 9.49 8.27

19.77 16.57 12.63

12.02 9.44 8.92

July Aug.

9.03 9.61

8.06 9.13

8.00 9.39

8.10 9.44

8.65 9.91

8.41 9.57

11.48 11.12

9.41 9.26 8.98 8.68 8.98

7.82 8.02 8.02 7.90 8.19

7.84 7.82 7.98 7.89 8.18

8.10 8.11 8.11 7.91 8.28

8.59 8.65 8.72 8.55 8.61

8.30 8.37 8.41 8.37 8.42

9.60 8.85 9.35 10.03 10.47 10.22

8.65 8.60 8.96 9.81

8.87 8.89 9.77 10.25

9.33 9.33 9.82 10.49

9.97 9.92

8.62 8.81 9.41 10.16 10.08 9.97

10.25 10.23

10.05 10.47

9.75 10.14

9.77 10.24

1980--July 2 9

16 23 30 Aug.

6 13 20 27

Sept.3 10 17

Home MortgggE Secondary Primary -FNMA Conv. Auc. (15) (14)

_ marlke.t GNm A Sec (16

12.90 10.38

13.29 10.42

11.77 9.51

7.11

16.35 12.18

15.93 12.28

14.17 10.73

9.49 9.87

6.20 6,52

11.09 11.30

10.67 11.09

10.31

10.97 11.42 11.25

10.91 11.36 11.33

7.08 7.30 7.22

11.64 12.83 12.90

12.52 12.75 12.49

10.60 12.13 12.34

11.73 13.57 14.00

11.77 13.35 13.90

7.35 8.16 9.17

12.88 13.03 15.28

12.91 14.49 15.64

11.94

11.47 10.18 9.78

11.40 10.36 9.81

12.90 11.53 10,96

12.91 11.64 11.00

8.63 7.59 7.63

16.33 14.26 12.71

14.61 12.88 12.35

12.64

9.27 10.63

10.25 11.10

10.24 11.00

11.60 12.32

11.41 12.31

8.13 8.67

12.19 12.56

12.66 13.92

11. 53 12.34

12.00 11.79 11.50 11.50 11.07

9.17 9.07 9.23 9.16 9.46

10.06 10.11

10.02 10.11 10.22 10.16 10.38

11.50 11.48 11.54 11.64 11.92

11.18 11.26 11.33 11.44 12.00

7.88 7.95 8.03 8.19 8.59

12.18 12.23 12.18 12.18 12.25

12.53

11.42 11.42

12.78

11.45

11.00 11.00 11.00 11.25

9.92 10.07 10.67 11.34

10.73 10.91 11.01 11.17

12.03 12.36 12.48 12.62

11. 99

14.26

12.41 12.46 12.48

11.50

11. 18

12.34 2 6 1 . 0p

8.61 8.53 8.68 8.85 8.78 8.82

13.58

13.03

14.41

11.71

12.10 12.27 12.36 12.68 12.42 12 . 4 7p

12.25 12.55 12.80 12.95

10.93 10.76

9,01 8.96 9.54 10,15 10,61 10.40

10.53 10.85

10.06 10.67

11.50 12.00

10.21

10.17 10.41

11.28 11.00

10.74 10.90 11.07 11.38 11.46 11.20

11.06

10.86 11.27

11.16 11.32

11.02 11.15

6.08

n.a.

9.90 11.25 11.57

11.35 13.16 13.79

11.30 11.07

11. 58 11.67

12.57 12.59

Daily Sept. 4 11

NOTE: Weekly data for columns 1, 2, 3, and 5 through 10 are statement week averages of daily data. Weekly data in column 4 are average rates set in the auction of 6-month bills that will be issued on the Thursday following the end of the statement week. For column 11, the weekly date is the mid-point of the calendar week over which data are averaged. Columns 12 and 13 are 1-day quotes for Friday and Thursday, respectively, following the end of the statement mortgages with 80 percent loan-to-value ratios made by a week. Column 14 is an average of contract interest rates on commitments for conventional first sample of insured savings and loan associations on the Friday following the end of the statement week. The FNMA auction yield is the average yield in a bi-weekly auction for short-term forward commitments for government underwritten mortgages; beginning July 7, 1980. figures exclude graduated payment 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 FilA/VA mortgages carrying the coupon rate 50 basis points below the current FIA/VA ceiling.

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC

TABLE 2 1 1/ NET CHANCES IN SYSTEM HOLDINGS OF SECURITIES(Millions of dollars, not seasonally adjusted)

Treasury Bills Ne BillsNe Change 2/

Treasury Coupons

Federal Agencies

Net Purchases 3/

ithn yar

1 - 5

5 - 10

Over 10

Total

Wiyear

Net purchases 4/

- 5

5 - 10

Over 10

Total

1,272 3,607 -2,892 -1,774 -2,597

371 482

- 1 , 79 57 8,129,

2,542 -2,019

4,839-

-3,801

337 472 517 1,184 603

3,284 3,025 2,833 4,188 3,456

1,510 1,048 758 1,526 523

1,070 642 553 1,063 454

6,202 5,187 4,660 7,962 5,035

191 105 --47 131

824 469 792 45 317

460 203 428 104 5

138 114 213 24 --

1,613 891 1,433 127 454

II III

465 5,363

42 395

640 1,289

309

-310

682 2,302

110 191

258 288

2 3

--- IV

4,164

118

1,101

1,351

-2,945

292.

3,249

1 10

1980--Mar.

1,370

Apr.

2,321

May June

606 322

July Aug.

-3,214 -47 75

1979--Qtr.

1980--Qtr.

217

398

668

6,307

2,373

836

2,201

-705

217

355g

107

836

1,516-

359

410

2,395

292

355

107

109

373

RP 6/

7,267 6,227 10,035 8,724 10,290

-468 863 4,361 870 6,243

1975 1976 1977 1978 1979

Net Change Outright Holdings Ttal 5/

-2,114

362

607

398

668

3,594

-1,012

4051 738-

133 164

216 129

909 878

1,515 1,198

4,655 -1,271

137

-541

236

-320

1,234

--- --

--- -3,216 1,187

-1,307 -985

-530 -530 -1,366

--- ----

--- -----

-----

----

--- ------

75 --532 -530 -1,366

3,162 -2,660 3,908 2,152 -4,476

6 13 20 27

-789 --47

137 -

541 --

236 -

--320 -

--- -----

----

-789 -1,234 -47

-9,456 5,482 4,652 -1,963

Sept. 3 10

-237

--- --

--- -328

-1,929 1,200

1980--July 2 9 16 23 30 Aug.

155. -153-

----1,234 ----

17 24 131.1 -4.6 0.7 8.8 4.8 1.2 75.5 2.0 13.1 14.8 11.5 36.0 46.9 LEVEL--Sept 10 (in billions) 1/ Change from end-of-period to end-of-period. Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions. 2/ 31 Outright transactions in market and with foreign accounts, and short-term notes acquired in exchange for maturing bills. Excludes redemption, 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. In addition to the net purchases of securities, also reflects changes in System holdings of bankers' acceptances, direct Treasury borrowings from the 5/ System and redemptions (-) of agency and Treasury coupon issues. 6/ Includes changes in both RPs (+) and matched sale-purchase transactions (-). T/ $640 million of 2-year notes were exchanged for a like amount of cash management bills on April 3, 1979. On April 9, 1979, the bills were exchanged tor new 2-year notes. 8/ On October 1, 1979, $668 million of maturing 2- and 4-year notes were exchanged for a like amount of short-term bills, because the note auctions were On October 9 and 10, the bills were exchanged for new 2- and 4-year notes, respectively. delayed. 9/ Maturing 2-year notes were exchanged on June 2 for special 2-day bills. At their maturity the bills were exchanged for new 2-year notes.

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC

TABLE 3 SECURITY DEALER POSITIONS AND BANK POSITIONS (Millions of dollars)

U.S. Govt. Security Dealer Positions

Underwriting Syndicate Positions

Member Bank Reserve Positions Bprrowin Excess**

Reserves

Seasonal

Total

at FRB**

Special*

Adjustment

Bills

Coupon Issues

8,091 138

902 -2,569

726 -122

2,960 628

2,866 510

8,838 1,972

2,263 -1,482

1,080p -228p

3,439 2 15p

3,298 12

-- Aug. Sept.

996 2,392

-179 -1,608

222 191

1,085 1,340

.906 1,167

Oct. Nov. Dec.

2,289 4,427 5,760

-1,576 -514 -1,901

272 244 441

2,023 1,911 1,473

1,863 1,763 1,390

1980--Jan. Feb. Mar.

4,380 2,937 2,964

-944 -212 -659

251 211

204

1,241 1,644 2,823

1,167 1,558 2,573

7,838 4,008 3,724 4,581 *5,108

167 1,372 1,429 634 *798

204 190

2,455 1,018

552 743

2,321 3,103 3,691 5,853 5,630

858 843 213 63 1,140

5,332 5,278 *6,304 *4,264

849 2,263 *229 *41

1979--High

Low 1980--Highl Low 9 7 9

Apr. May June July Aug. 1980--July 2 9 16 23 30 Aug.

Sept.

6 13 20 27 3 10

*4,274 *3,988

*170 *-279

Corporate Bonds

Municipal Bonds

p 253p 2 41p

1p 506p 4 3 0p -16p 239p

348 2 5 1 p 33 2 p 354 p 629p

27 p 198p 211p 309p 286p

82 8

3 33

8p 89p 335p 89p

89 150

30 7

p p 8 65 p

223p

3 5p

379

489p 338p

39 5

p 390p

25 p 2 73p 2 61p 201p

1,3 8p 594

198p 57 p

344 00

1,748 212 61p 1 36 p 4 8 0 p 69p 12p 116p 38p p

336

563

p lllp 7 7 p 4 89 p 1,130p 5 23 p

17 24 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. 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 fLgures.

Cite this document

APA

Federal Reserve (1980, September 15). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19800916

BibTeX

@misc{wtfs_bluebook_19800916,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1980},
  month = {Sep},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19800916},
  note = {Retrieved via When the Fed Speaks corpus}
}