bluebooks · March 30, 1981

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.

Strictly Confidential (FR)

Class I FOMC

March 27, 1981

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

March 27, 1981

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS

Recent developments (1)

Abstracting from the effect of nationwide NOW accounts, the

decline of transactions balances that characterized the November to February period appears to have been reversed most recently, with adjusted M-1B estimated to increase at about an 8-3/4 percent annual rate in March, as shown in the table below.

Nonetheless, M-1B's growth over the first

three months of the year remains about 2-1/4 percentage points below the Committee's target for that period.

The weakness in M-1B is significantly

greater than predicted by the Board's quarterly econometric model as well as other models, given actual interest rates and nominal GNP.

On a

quarterly average basis, adjusted M-1B increasedat only about a 1/2 percent annual rate, and the income velocity of this aggregate rose at an annual rate of almost 14-1/2 percent--a record for the period since the Korean war. Monetary Aggregates Seasonally Adjusted Annual Growth Rates First Quarter 1981

M-1B Actual Adjusted 1/

Jan.

Feb.

12.2 2.9

3.5 -2.0

March *

12.4 8.7

QIV '80QI '81

9.3 3.2

5.2 0.4

5.5

Target M-2 Actual Target

Dec.March *

5.7

7.6

16.5

10.0 8.0

7.0

* Partially projected. from the estimated impact of shifts from savings accounts Abstracting 1/ than demand deposits to NOW accounts. other and assets

-2It is possible that the demand for money shifted downwards in response to extraordinarily high levels of interest rates in the fourth quarter and the introduction of nationwide NOW accounts in the first, both of which could have induced the public to review more intensively its cash management techniques. (2)

In contrast to adjusted M-1B, the growth of M-2 is expected

to expand about 2 percentage points above the Committee's December to March short-run target.

The nontransactions component of M-2 was buoyed by

record growth in money market mutual funds (MMMFs), more than offsetting the greater than expected weakness in small time and savings deposits.

March, the level of M-2 was at the upper end of the Committee's longer-run range. (3)

Banks' issuance of large CDs slowed in February and amounts

outstanding have been declining in March as business short-term credit demands at domestic offices of U.S. banks ebbed.

The expansion in total commercial

bank credit moderated considerably in February, and available data suggest further weakening in March.

Growth of large CDs at S&Ls also slowed in the

early months of 1981, even as other deposits weakened, probably reflecting adverse publicity regarding their earnings problems 1/ Despite the recent weakness in CDs, M-3 expanded at about a 10-1/4 percent annual rate over the first three months of the year, placing the level of M-3 in March just above the upper end of the Committee's longer-run range. (4)

Demand for total reserves weakened in February and the first

weeks of March in response to slow growth in reservable deposits and a drop in excess reserves to more normal levels following a sustained period in

In early March, five large S&Ls had their commercial paper ratings downgraded by rating agencies, and investors became more cautious about uninsured liabilities of thrifts.

which they had been unusually high, presumably in response to the Monetary Control Act.

Borrowing in the first two full weeks in February dropped

to $1.1 billion, below the initial assumption of $1.3 billion used in constructing the nonborrowed path, and the funds rate began declining from the over 17 percent level of early February.

By the latter part of February

the funds rate had moved to around the lower end of the 15 to 20 percent range specified by the Committee.

In a telephone conference on February 24,

the Committee agreed to accept some shortfall in the narrow aggregates as consistent with its objectives for the year, resulting in a reduction in nonborrowed reserve targets in the latter part of February and early March that was expected to keep borrowing at the discount window from declining.1/ This path adjustment contributed to a decline in nonborrowed reserves in February roughly in line with the decline in total reserves, as shown in the table below.

In March nonborrowed reserve growth surged, and borrowings and Reserve Aggregates (Seasonally Adjusted Annual Rate of Growth) Jan.

Feb.

March 2/

8.2

-12.4

22.6

Total Reserves

-1.0

-14.7

10.9

Monetary Base

2.7

2.3

7.2

1,303 183

941 299

Nonborrowed Reserves

Memo: ($ mils., n.s.a.) Average level of: Adjustment borrowing Excess reserves

1,347 544

See Appendix I for all adjustments made to reserve paths during the intermeeting period. 2/ March data are estimated for the period after March 25.

the funds rate declined on average from February levels.

The federal funds

rate averaged around 13-3/4 percent over the past two statement weeks, but trading most recently has been in a 14-1/2 to 15-1/2 percent range. (5)

Private short-term interest rates have fallen 2 to 3-1/2

percentage points on balance since the early February Committee meeting, and with these further declines some are more than 7 percentage points below their In the Treasury bill market, yields have fallen less--3/4 to

December peaks.

2 percentage points since the last meeting and 2 to 4 percentage points since December-as the Treasury has continued to borrow heavily in the bill market. In February and March, the Treasury raised more than $20 billion in new money in bill auctions, including $13 billion in cash management bills maturing in the second quarter.

The bank prime rate was lowered in steps

from 19-1/2 percent at the beginning of February to 17 to 17-1/2 percent. (6)

In contrast to short-term rates, bond yields have risen on

balance since early February-by roughly 30 basis points in the case of Treasury securities.

The Treasury has raised almost $11 billion in note

and bond sales since the mid-quarter financing and next week will auction a $2-3/4 billion 7-year note. relatively large.

Public issuance of corporate bonds has remained

During the intermeeting period, the average commitment

rate on new fixed-rate mortgages at S&Ls rose further to 15.40 percent. (7)

The dollar has fluctuated over a wide range on exchange

markets during the past several weeks, responding primarily to the relative movement of U.S. and foreign interest rates and to tensions in Eastern Europe.

On balance, the weighted average exchange value of the dollar

has risen 2 percent since the February Committee meeting.

-5-

The U.S. authorities have purchased about $3/4 billion equivalent of foreign currencies. (8)

The table on the next page shows seasonally adjusted annual

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

M-1A and M-1B data in parentheses are adjusted for

the estimated impact of nationwide NOW accounts.

1/ 1980----

1978-

197 / 1979-

Nonborrowed reserves

6.3

0.3

7.8

Total reserves

6.2

2.6

7.1

Monetary base

9.2

7.8

8.8

7.4

5.0

Mar. '81 over Dec. '80 --- Mar. '81 over Feb. '81 ----

6.1

22.6

-1.6 4.1

10.9 7.2

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

-20.7 (2.7);'

-3.6 (8.7)-

M-1B (M-lA plus other checkable 8.2

deposits)

M-2 (M-1B plus small time and savings deposits, money market mutual fund shares and overnight RP's and Eurodollars) M-3 (M-2 plus large time deposits and term RP's)

7.7

7.3

9.3 5/ (3.2)-

12.4

(8.7)'

9.0

9.8

10.0

16.5

11.3

9.8

9.9

10.3

9.2

13.4

12.6

8.4

Bank Credit

Loans and investments of all commercial banks 3/

8.0

7.3 p

-2.8 p

1.8

5.1

-2.6

Managed Liabilities of Banks (Monthly average change in billions) Large time deposits

4.2

1.6

0.6 1.4

2.1 1.3

Net borrowing from own foreign

branches Other borrowins

"1.3

-2.0

-3.2 p

-4,7 p

n.a.

1/ QIV to QIV. 2/ Other than interbank and U.S. Government. 3/ Includes loans sold to affiliates and branches. 4/ Primarily federal funds purchases and securities sold under agreements to repurchase. 5/ Adjusted for nationwide NOW accounts. p Preliminary estimate. n.a. Not available. 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 (9)

Shown below for Committee consideration are three alternative

policy strategies for the second quarter.

Since March data for the aggregates

are still partially estimated, the alternatives are specified in terms of the four-month February to June period (with implied growth rates for March to June also shown based on the currently projected March levels).

The M-1B growth

targets abstract from the estimated impact of nationwide NOW accounts, as does the Committee's longer-run target.

(More detailed and longer-run data for

the aggregates, on both an adjusted and unadjusted basis, including those for M-1A, are shown in the tables on pp. 8 and 9.)

The last line of the table

indicates federal funds rate ranges thought by the staff to be consistent with the three alternatives.

Growth from February to June M-1B M-2 Implied growth from March to June M-1B

M-2 Intermeeting federal funds rate range

(10)

Alt. A

Alt. B

Alt. C

8-3/4 12-3/4

6-3/4 12-1/4

5-1/2 12

8-3/4

4-1/2

11-1/2

10-3/4

10-1/4

13 to 19

14 to 20

15 to 21

As shown in the first chart on the following pages, the

alternative A target specifications are designed to return adjusted M-1B by June to the midpoint growth path of the Committee's QIV '80 to QIV '81 longer-run range of 3-1/2 to 6 percent.

Alternative B specifies slower

growth in M-1B that would carry it only to the lower end of the Committee's longer-run range by June but, assuming a continuation of that growth rate, to the midpoint of the longer-run range by September.

Under either of these

Chart 1

CONFIDENTIAL (FR) Class II-FOMC

Actual and Targeted M-1B

M1-B -

Billions of dollars -460 Observed Level

Level Adjusted for Impact of Nationwide NOW Accounts * * * Short-Run Alternatives

....

-- 430

-1420

-- 410

I O

I N

1980

1 D

I j

I M

I A

I J

1981

I A

I S

I 0

CONFIDENTIAL (FR) Class II-FOMC

Chart 2

Actual and Targeted M-2

M-2

Billions of dollars -11840 Actual Level

SShort-Run Alternatives

1820

-1800

-- 1780

1760

1740

-- 1720

-41700 1'

/ / II /7 I

• O

1980

I J

! F

I I

I M

lI J

1981

1680

1660

1640 0

Chart 3

CONFIDENTIAL (FR)

Class II-FOMC

M-3 and Bank Credit M-3

Billions of dollars 2150 Actual Level

S* Short-Run Alternatives 2100

61 2% 2050

2000

' ,00010 -41950 *

j 0

I N

I D

I J

I F

Note: A.8, and C alternatives are indistinguisnable on this scale.

I A

I J

1980

I A

I S

1 N

*4 ul nnf II I~uv

1981

BANK CREDIT r

Billions of dollars -1350

- Actual Level

-- 11300

-1250

SI O

1980

IL I I

II II

1981

I N

1200 12

0 0

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

1981--February March April May June

M-IB

Alt. A

Alt. B

Alt. C

384.6

384.6 387.4 389.3 391.2 393.1

384.6 387.4 388.7 390.1 391.5

387.4 390.2 393.1 396.0

Alt. A

Alt. B

Alt. C

412.2 415.2 418.1 421.2 424.3

412.2 415.2 417.2 419.3 421.4

412.2 415.2 416.6 418.2 419.8

Growth Rates Monthly 1981--April May June

February '81 June '81

8.7 (1.6) 8.9 (5.2) 8.9 (6.5)

5.9 (-1.3) 5.9 (2.0) 5.8 (3.3)

4.0 (-3.3) 4.3 (0.3) 4.3 (1.6)

8.7 (10.5) 8.9

5.8 (7.7) 6.0

(10.2)

(7.4)

8.8 (10.0)

(7.0)

8.9 (2.5)

6.6 (0.1)

5.4 (-1.2)

8.8 (10.9)

(8.7)

8.9 (4.5)

5.9 (1.3)

4.2 (-0.4)

(10.1)

(7.4)

4.4 (6.0)

-0.6 7.5

-0.6 5.5

-0.6 4.4

0.4 7.5

0.4 5.7

0.4 4.6

6.0

6.7

4.3 (6.3)

4.6 (5.9) 4.6 (5.6)

5.5 (7.5)

March '81 -

June '81

8.8

6.0

Quarterly Average 1981--QI

QII

NOTE:

Growth rates shown in parentheses are for the observed levels of the aggregates.

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

M-2 Alt. A

Alt. B

Alt. C

Alt.

1692.0 1715.2 1731.2 1748.6 1764.1

1692.0 1715.2 1730.3 1746.7 1761.1

1692.0 1715.2 1729.7 1745.6 1759.5

1993.3 2008.5 2020.8 2037.3 2054.8

1993.3 2008.5 2020.3 2036.3 2053.1

1993.3 2008.5 2019.7 2035.0 2050.9

1981--April May June

11.2 12.1 10.6

10.6 11.4 9.9

10.1 11.0 9.6

7.3 9.8 10.3

7.1 9.5 9.9

6.7 9.1 9.4

February '81 June '81

12.8

12.3

12.0

9.3

9.0

8.7

March '81 June '81

11.4

10.7

10.3

9.2

8.9

8.4

7.0 12.2

7.0 11.7

7.0 11.5

1981--February March April May June

Alt.

Growth Rates Monthly

Quarterly Average 1981--QI QII

10.6 8.8

10.6 8.6

10.6 8.3

-10-

alternatives M-2 would probably be above the upper end of its range in June, and might well remain above the range over the balance of the year (assuming M-1B growth at its midpoint rate for the year as a whole).

Alternative C is

designed to increase the odds of constraining M-2 growth to within its longer-run range for 1981.

This would appear to involve growth in M-1B.

for the year at the lower end of its longer-run range, and alternative C specifies such a trajectory for M-1B.

The three strategies thus not only

imply options for how rapidly the Committee wishes to target a return of M-1B to within its longer-run range, but also for the weight it wishes to place on obtaining an M-2 growth within its own longer-run range. (11)

Demands for transactions balances are likely to expand rapidly

over the second quarter as a whole.

Although real GNP in that quarter is

projected to show no change, nominal spending is expected to increase rather rapidly, and the staff does not anticipate that the sharp downward shift in money demand of the first quarter will be repeated in the second. The resulting anticipated strengthening of M-1B will contribute to a rapid growth in M-2.

Though the expansion of the nontransaction component of

M-2 is expected to slow from its exceptionally strong March pace, it will probably be faster on average over the next three months than in the first quarter. (12)

The projected strengthening of demand for transactions

balances implies that interest rates will probably be under upward pressure over the coming quarter, particularly under the alternative B and C specifications, but also possibly to a degree under alternative A.

Under

alternative A--which involves growth in total reserves from March to June

-11-

at a 9-3/4 percent annual rate-we would expect the funds rate to be in a 14 to 16 percent range over the next few-weeks, with borrowing at the discount window ranging around $1 billion, given the current discount rate structure.

Many market participants appear to be expecting rate declines in

the months ahead.

For example, in the futures market, 3-month bills for

June delivery are quoted at 11-7/8 percent, as compared to the current cash market quote of around 13 percent.

Against this backdrop, a failure of the

funds rate to decline from current levels would tend to exert upward pressure on short-term interest rates generally.

Of course, if money demand tends to

be on the weak side this spring-as could well develop if the economy is even less strong than projected-lower funds rates, borrowing, and market rates generally would occur. (13)

Whatever upward interest pressures develop over the months

ahead are likely to be mainly the product of constraints on money growth relative to demand.

In the credit markets themselves, funds raised are

expected to drop in the second quarter.

This reflects a greater than

seasonal decline in Treasury borrowing, as the combined Federal budget moves from a $37 billion deficit in the first quarter to an $11 billion surplus in the second.

In the projected interest rate environment, corporate

and tax-exempt bond offerings are unlikely to rise further over the spring months, although business demands on banks will probably pick up from the recent depressed pace. (14)

Greater restraint on money growth relative to demand would

be imposed under alternatives B and C, which involve limiting growth in adjusted M-1B to rates of 6 and 4-1/2 percent, respectively, over the next three months-substantially lower rates than the 8-3/4 percent of alternative A.

Growth in total reserves over the period would be at annual rates of

-12-

7-3/4 and 6 percent under alternatives B and C, respectively.

A federal funds

rate in the area of 15 to 17 percent, or somewhat higher, might emerge over the next few weeks under alternative B1/.

would develop under alternative C.

Still greater rate pressures

Borrowing at the discount window might

be around $1-1/2 billion under B and, of course, higher under C.

The upward

response of market interest rates, particularly short-term rates, to the increased pressures on bank reserve positions of alternatives B and C may be quite marked over the period ahead.

Any rise in long-term rates, though,

might be muted as corporate borrowers back away from the market in anticipation of lower rates later. (15)

From the perspective of the year as a whole, the degree of

rate pressure we would foresee over the next several months under alternative C, which is consistent with a strategy of lowering M-1B growth for the year to the bottom of its range, would be likely to weaken the outlook for GNP relative to the current staff forecast (which is based on alternative B). As a result, this alternative carries with it a potential for a drop-off of interest rates from peak levels later in the year, in response to a pronounced cyclical weakening of the economy.

By year-end interest rates

under alternative C thus could be lower than under alternative B. (16)

Under any of the alternatives presented, the interest

rate outlook suggests continued substantial earnings pressures on thrift institutions over the next few months.

Thrifts are likely to continue

employing funds to a great extent to acquire short-term assets both to bolster liquidity and to add to the average return on their assets.

They

probably would continue to be reluctant lenders in the mortgage market.

See Appendix II for interest rate projections for 1981 under alternative B.

-13Directive language (17)

Given below is a suggested operational paragraph for the

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

in early February.

Because monetary aggregates data for the second half

of March are projected, the language calls for expansion of reserve aggregates at a pace consistent with the desired rates of monetary growth over the four months from February to June.

The associated monetary growth

rates on a quarterly average basis are from the fourth quarter of 1980 to the second quarter of 1981.

The specifications adopted at the early

February meeting are shown in strike-through form.

For simplification,

the Committee may wish to consider not including M-1A in the directive, as is shown with strike-through in the paragraph below. In the short-run the Committee seeks behavior of reserve M-1A aggregates consistent with growth in[DEL:

and]M-1B AND M-2 from

5-to-6] March] JUNE at annual rates of ABOUT [DE: [DEL: December] FEBRUARY to [DEL: ____percent, RESPECT8] in M-2 at a rate ofabout ____ percent and [DEL:

abstracting from] AFTER ALLOWANCE FOR the impact of flows into IVELY, [DEL: NOW accounts.

M-1A,]M-1B, These rates are associated with growth of [DEL:

the first quarter] THE and M-2 from the fourth quarter of 1980 to[DEL: 2-3/4] percent 2 SECOND QUARTER OF 1981 at annual rates of about [DEL: 7]____ percent, respectively. ____ percent, and[DEL:

It is recognized that

shifts into NOW accounts will continue to distort measured growth in [DEL: M-1A-and]M-1B to an unpredictable extent, and operational reserve paths will be developed in the light of evaluation of those distortions.

If it appears during the period before the next meeting

that fluctuations in the federal funds rate, taken over a period

-14[DEL: 15 20]____ of time, within a range of to

TO ____ percent are likely

to be inconsistent with the monetary and related reserve paths, 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

RESERVE TARGETS AND RELATED MEASURES Intermeeting Period ($ millions, not seasonally adjusted) Targets for 4-week average Feb. 11 to March 4 NonTotal borrowed Reserves Reserves (2) (1)

Projection of 4-week average Feb. 11 to March 4

Total Reserves (3)

Required

Excess

Reserves (4)

Reserves (5)

39,396

38,996

400

1,300

39,627

39,227

400

1,131

2/ /

39,671

39,313

358

973

39,622

39,313

309

1,115

Adjustment Borrowin (3) - (2)

As of February 4 (FOMC Meeting)

39,396

38,096

February 6

39,796-1

38,496-

February 13

39,998

February 20

33/ 39,973-/

/ 38,507='

February 27

39,973

38,259-

39,489

39,34Z

147

1,230

Actual 4-week Avg.

39,592

38,292

39,592

39,342

250

1,300

2/ /

38,69

Projection of 4-week average March 11 to Aoril I

Targets for 4-week average March 11 to April 1

As of March 6

40,3005/

39,000 -/

39,819

39,419

400

March 13

40,135- /

38,83561

39,663

39,323

340

/ 7001

March 20

40,010-

38,710-

39,661

39,400

261

March 27

40,010

38,710

39,608

39,366

242

Actual 4-week Avg.

3 9 ,60 8 e

38,710e

39,608 e

39,366 a

24 2 e

1/ 2/ 3/

4/ 5/ 6/ 7/

898

Total and nonborrowed reserves paths adjusted upward by $400 million due to multiplier changes. Total and nonborrowed reserves paths adjusted upward by $202 million to reflect planned phase-in of reserve requirements on foreign-related institutions. Total and nonborrowed reserves paths adjusted downward by $25 million due to weaker than expected demand for excess reserves. In addition, the nonborrowed path adjusted downward further by $166 million in line with FOMC telephone consultation of February 24. Nonborrowed reserves path adjusted downward by $248 million also in connection with earlier consultation. Total and nonborrowed reserves paths adjusted upward by $78 million due to multiplier changes. Total and nonborrowed reserves paths adjusted downward by $165 million due to multiplier changes. Total and nonborrowed reserves paths adjusted downward by $125 million due to multiplier changes.

Appendix II

INTEREST RATES THOUGHT CONSISTENT WITH GREENBOOK GNP FORECAST AND BLUEBOOK ALTERNATIVE B 1/ (Quarterly averages, percent)

Federal funds 1981--1 II III IV

16-7/8 16% 18 19

3-month Treasury bill 14k 14 16 17

Aaa-Utility bond 14 14-5/8 14% 14%

Mortgage Commitment 15-1/8 15% 15-5/8 15%

1/ Assumes that M-1B grows 4% percent, abstracting from the impact of nationwide NOW accounts, from the fourth quarter of 1980 to the fourth quarter of 1981.

TABLE 1 SELECTED INTEREST RATES (Percent)

e dr i o

funds

Market 1-yr. 3-mo. (1)

Short-term CDs Secondary Auction Market 6-mo 3-mo

Treasury Bills

(2)

(3)

(4)

(5)

STRICTLY CONFIDENTIAL CLASS II - FOMC March 30, 1981 Longf

U.S. Govt. Constant Maturity Yields

Comm. Paper 3-mo,.

Bank Prime Rate

3-yr.

(6)

(7)

(8)

10-yr.

30-yr.

(9)

(10)

Corp. Ana Utility New Recently Issue Offered (11)

(12)

em Municipal Bond Buyer (13)

(FR)

home Mortgages Primary Secondary tarker Conv. FNMA CGKA Auc. Sec. (14)

(15)

(16)

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 t1.50

11.68 8.76

10.87 8.79

10.42 8.82

11.50 9.40

11.45 9.39

7.38 6.08

12.90 10.38

13.29 10.42

11.77 9.51

1980--(lgh Low

19.83 8.68

16.73 6.49

14.39 7.18

15.70 6.66

20.58 8.17

19.74 7.97

21.50 11.00

14.29 8.61

13.36 9.51

12.91 9.54

14.51 10.53

15.03 10.79

10.56 7.11

16.35 12.18

15.93 12.28

14.17 10.73

1980--Feb. Mar.

14.13 17.19

12.86 15.20

12.46 14.03

12.72 15.10

14.30 17.57

13.78 16.81

15.63 18.31

12.84 14.05

12.41 12.75

12.13 12.34

13.57 14.00

13.35 13.90

8.16 9.17

13.03 15.28

14.49 15.64

13.16 13.79

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

11.47 10.18 9.70

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 11.30 11.07

July Aug. Sept.

9.03 9.61 10.87

8.06 9.13 10.27

8.00 9.39 10.48

8.10 9.44 10.55

8.65 9.91 11.29

8.41 9.57 10.97

11.48 11.12 12.23

9.27 10.63 11.57

10.25 11.10 11.51

10.24 11.00 11.34

11.60 12.32 12.74

11.41 12.31 12.72

8.12 8.67 8.94

12.19 12.56 13.20

12.66 13.92 14.77

11.53 12.34 12.84

Oct.

12.81

Nov. Dec.

15.85 18.90

11.62 13.73 15.49

11.30 12.66 13.23

11.57 13.61 14.77

12.94 15.68 18.65

12.52 15.18 18.07

13.79 16.06 20.35

12.01 13.31 13.65

11.75 12.68 12.84

11.59 12.37 12.40

13.18 13.85 14.51

13.13 13.91 14.38

9.11 9.56 10.11

13.79 14.21 14.79

14.95 15.53 15.21

12.91 13.55 13.62

1981--Jan. Feb.

19.08 15.93

15.02 14.79

12.62 12.99

13.88 14.13

17.19 16.14

16.58 15.49

20.16 19.43

13.01 13.65

12.57 13.19

12.14 12.80

14.12 14.90

14.17 14,58

9.66 10.10

14.90 15.13

14.87 15.24

13.55 14.13

1981--Jan. 7 14 21 28

20.06 19.64 19.35 18.12

14.06 15.10 15.44 15.41

12.15 12.56 12.77 12.90

13.18 14.23 14.47 14.12

16.34 17.19 17.74 17.47

15.63 16.69 17.17 16.84

20.64 20.07 20.00 20.00

12.55 12.98 13.12 13.26

12.27 12.49 12.61 12.78

11.81 12.05 12.21 12.35

14.05 14.07 14.29 14.06

14.10 14.17 14.33 14.08

9.49 9.57 9.68 9.91

14.80 14.85 14.85 15.07

14.89

13.18 13.50 13.62 13.71

4 11 18 25

17.19 16.51 15.81 14.96

14.78 15.32 15.22 14.23

12.71 13.10 13.32 12.81

13.74 14.43 14.76 13.61

16.55 16.50 16.82 15.52

15.98 15.89 16.07 14.75

19.86 19.50 19.50 19.29

13.27 13.65 13.81 13.58

12.84 13.19 13.43 13.14

12.44 12.83 13.00 12.75

9.90 9.99 10.22 10.27

15.00 15.03 15.20 15.30

14.88

14.90

14.30 14.58 14.57 14.85

Mar. 4 11 18 25

15.73 15,53 14.13 13.48

14.35 14.17 13.06 12.64

13.06 12.76 11.96 11.83

14.13 13.43 12.10 12.27

15.59 15.40 14.10 13.47

15.09 14.89 13.64 12.87

19.00 18.71 17.86 17.50

14.01 13.70 13.24 13.33

13 48 13.18 12.80 13.02

13.03 12.76 12.37 12.59

14.53 14.18 13.98

10.40 10.34 9.81 10.09

15.40 15.40 15.40

Daily--Mar. 20 26 27

13.16 14.82

12.36 12.97 13.08

11.53 12.21 12.18

13.25 13.88 14.12

12.68 13.39 13.63

17.50 17.50 17.50

12.99 13.64

12.77 13.34

12.34 12.92

13.66p

13.

Feb.

15.lop

14.55 14.42 15.06p

14.69p

1.a.

14.84

15.59

15.88 15.39

13.76 14.08 14.41 14.26 14.46 14.17 13 96 14.23

12.94p

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 folqwing the end of the statement week. For colum 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 week. Column 14 Is an average of contract interest rates on commitments for conventional first mortgages with 80 percent loan-to-value ratios made by a 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 bl-weekly auction for short-term forward commitments for government underwritten mortgages; beginning July 7, 1980, figures exclude graduated payment mortgages. GCKA yields are average net yields to investors on mortgage-backed securities for immediate delivery, assuming prepayment in 12 years on pools of 30-year FllA/VA mortgages carrying the coupon rate 50 basis points below the current FUIA/VA ceiling.

TABLE 2 1 NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES1/ (Millions of dollars, not seasonally adjusted)

Treasury

Federal Agencies Net Purchases 4/

Loupon

Net Purchases 3/

Period

Bills Net Cange 2/

W thiln 1-year

1 - 5

5 - 10

Over 10

Total

1976 1977 1978 1979 1980

863 4,361 870 6,243 -3,052

472 517 1,184 603 912

3,025 2,833 4.188 3.456 2,138

1,048 758 1,526 523 703

642 553 1,063 454 811

5,187 4,660 7,962 5,035 4,564

4,164

118

1,101

292./ 110137 100

355,1 1,156541 --

107 359 236 --

541 --

1979--Qtr. IV 1980--Qtr. 1 II III IV 1980--Aug. Sept.

-2,945 3,249 -3,298 -58 -47 -37

STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC March 30, 1981

137 --

Within I-year

Net Change Outright

Net

Total

Ioldings Total 5/

RPs 6/

891 1,433 127 454 668

6,227 10,035 8,724 10,290 2,035

I - 5

5 - 10

105 --47 131 217

469 792 45 317 398

203 428 104 5 29

114 213 24 -24

1,351

81 410 320 --

836 2,395 1,234 100

-217 --- -398 --- -29 --- -24 --- -668 --- -2,114 6,307 -2.157 -1

362 2,373 -1,381 1,107

236 --

320 --

1,234 --

--- --- --

--- 1,187 -128

-985 911

--100

--- ----

--- --

----

-261 -1,100 1,360

1,267 332 -492

Over 10

4,839-

3,607 -2,892 -1,774 -2,597 2,462 -3,801

Oct. Nov. Dec.

-241 -1,100 1,282

100

--- 1981--Jan. Feb.

-3,764 -357

--23

--- --- --

--23

--- --- --- --

--- -3764 -32

-1,696 832

198L--Jan. 7 14 21 28

-268 -98 723 -2,477

-----

----

-----

--- --

-268 -98 723 -2,477

-5,031 4,339 -8,482 3,802

Feb. 4 It 18 25

-1,738 -100 -163 --

---23 -

----

--23 --

--- ----

-----

----

-1,738 -100 -186 -3

3,779 67 954 -1,291

--- ----

-----

--- --

--..

----

-----

209 -4 1,399 --

-1,019 459 1,892 730

tar. 4 11 18 25

209 -1,399 ....

--- --

.2 128.8 8.7 0.7 1.0 4.6 2.5 75.6 15.3 13.8 34.7 11.8 44.5 LEVEI.--Har. 25 (Ln billions) 1/ Change from end-of period to end-of-period. auctions. 2/ Outright transactions Id market and with foreign accounts, and redemptions (-) In bill Excludes redemptions, 3/ Outright transactions In market and with foreign accounts, and short-term notes acquired in exchange for maturing bills. maturity shifts, rollovers of maturing coupon issues, and direct treasury borrowing from ihe System. Excludes redemptions and maturity shifts. 4/ Outright transactions in market and with foreign accounts only. 5/ In addition to the net purchases of securities, also rdfiects changes in System holdings of bankers' acceptances, direct Treasury borrowing from the System and redemptions (-) of agency and I'reasury coupon issues. 6/ Includes changes In RPs (4), nmtched sale-purchase transactions (-)I and matched purchase-sale transactions (1). 7/ 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 delayed. On October 9 and 10, the bills were exchanged for new 2- and 4 -year notes, respectively. aturing 2-year notes were exchanged on June 2, 1980, for special 2-day bills. At their maturity the bills were exchanged for new 2-year notes.

TABLE 3

STRICTLY CONFIDFNTIAL (FR) CLASS II - FOMC March 30, 1981

SECURITY DEALER POSITIONS AND BANK POSIIONS (Millions of dollars)

flember Bank Reserve Positions

U.S. Covt. Securities Dealer Positionss __utures & Forwards

Cash)

ills 7

Underwriting

ons

Coupons lls

Syndicato Corporate

'ositions Huniclpal

Bonds

Borrowlng at rRi Excess Reserves

Total

Seasonal

726 -122

2,960 628

207

2,866

510

3,439

177

215

816 0

1,644

97 150

19 9--11ghli L.ou

8,091

902

138

-2,569

19d0--IlhhI, Low

8,838 1,972

2,263 -1,682

1980--F.b. MHr.

2,937 2,964

-212 -659

-4,873 -7,665

-1,036 -1,135

211 186

2,823

7,838

167

1,372 1,429

-5,227 -77. 3,526

-1,40/.8 -1,563 -1,880

197 178 203

2,455 1,018 379

155

4,0)08

634 798 -416

2,438 3,081 414

-1,015 -1,97h4 -1,185

204 302 256

395 658 1,311

-1,556 -7,068 -9,812

-1,685 -2,663 -2,751

206 498p 552p

Apr. Mliy June

3,724

1,080p1 -228p

July Aug. Sept.L.

4,581 5,108

Oct.

2,447

Nov.

3,047

Dec.

4,287

143 149 20

198L--Jaj. Feb.

9,985 13,317

1,584 1,812

-11,976 -12,203

-2,884 -2,798

7,878 9,762 12,048

1,608 1,513 1,105 2,030

-10,987 -11,898 -11,727 -11,003

-2,837 -2,806 -2,941 -2,824

12,789 11,683 11,624 15,668

1,750 2,068 1,393 1,538

-12,176

-3,137 -2,901 -2,560 -2,676

3,681

1981--Jan. 7 14

8,823

21 28 feb.

4 11

18 25 Mar. 4 11 18 25

14,314" 14.9441, 13.662* 12,1831

-12,843 -11,697 -12,055

2.736* ,378* 2,641'

-12,436*

4,213"

-10.498*

-11.203*

-12.865*

-2,753A -3,160* -3,387* -3,237*

Special

552 743

63 12

9 25

Adjustment

3,298 12

1,558 2,575

307

1,748 212 61

253 241

136 408

1,196

1,310 ,0 59 p 1,690p

97p l16 p

0 0 0

1,244 1,963p

554p 183p

1,395p

120p

48p

1,226p I,11 6 p

4p 741 p 507p 400p 2281) 1701p

298p -1651 697p 219p 3430 10 7p

14 8

1,117p 1,332p

112p 105p

0 0

1,419p 1,793p

123p

137p

1,201p l,113 p 1,145p 1,713p

125p 131p 154 p 160p

0 0

1,303p

1,299p 76 8p 774p 888p

176p 185p 193p 20 0p

0 0 0 0 0 00 0

1,574p

1,005p 1,227p 1,082p 1,6 56p 1,07 6 p 98 2 p 991p 55 3 1,

1 23

583p 581p 688p

NOfr: (.overnr'Lnt securities dealer cjhli position' consist of securities already delivered, coninltments to buy (sell) securities on an outright basi for incrtdl.ite delivery (5 business days or less), and certain "when-issucd" securities for delayed delivery (more than 5 business days). Futures an forward positions Includa all other comnitLments Involving delayed delivery; futures contracts are arranged on organized exchanges. Undbr rlting syndicate poitions consist of issues In syndicate, excluding trading positions. UWetkly data are daily avetages for ntatement weeks, except for corpornLe and municipal issues in syndicate, which are Friday figures. Honthly averages for e/cess reserves and borrowing are welglitrd averages of statement week figures. Honthly data for dealer futures and forwards are endof-month figures for 1980. * Strictly confidential

Cite this document

APA

Federal Reserve (1981, March 30). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19810331

BibTeX

@misc{wtfs_bluebook_19810331,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1981},
  month = {Mar},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19810331},
  note = {Retrieved via When the Fed Speaks corpus}
}