bluebooks · August 17, 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

August 14, 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 (FR) August 14, 1981

CLASS I - FOMC

MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments

(1) M1-B, adjusted for shifts into NOW accounts, expanded at a 3½ percent annual rate in July, after contracting at nearly a 7 percent annual pace in the previous two months.

Available data for the first

two weeks of August are very strong, however; part of that increase, perhaps one-quarter, seems to reflect the transitory influence of demand balances accumulated to pay for stock tendered in connection with mergers.

Even after allowance for this, M1-B in early August appears to be back to a level more nearly in line with the 7 percent June to September target path.

M2 expanded at an 8 percent annual rate in July, as its non-

transactions component rose more rapidly last month than had been previously

anticipated.

Fragmentary data for early August suggest a further strength-

ening in that component.

This strengthening, together with the sizable

increase in M1-B so far this month, suggests that M2 has moved to a level above its third-quarter target path. (2)

Through July, as shown in the last column of the table on

the next page, growth in Ml-B was well below the lower end of its 3½ to 6 percent range for the year, M2 was just below the upper end of its 6 to 9 percent range, and M3--though its growth had decelerated in July--remained well above the 9½ percent upper end of its range.

The early August data

would place M1-B a little closer to the long-run path this month, but still well below it, and would probably place M2 at/or somewhat above, the upper end of its range.

Key Monetary Policy Aggregates (Seasonally adjusted annual rates of growth) March '81 over

Dec. '80

June '81 over March '81

July '81 over June '81

July '81 over

QIv '80

Money and Credit Aggregates

M1-B (shift-adjusted)

1.0

3.4

1.2 8.7

11.8

7.1

8.0

12.8

9.9

8.5

7.7

7.3

5.7

Bank Credit

11.1 8.3

Reserve Measures

Nonborrowed reserves-

Total reserves-Monetary base

5.9 -1.3 4.9

-7.2

20.0

2.8

3.4

8.4

2.7

6.0

9.6

6.2

1/ Growth rates for reserve measures are adjusted to remove the effects of discontinuities from breaks in the series when Regulations D and M are changed. In addition, such measures are adjusted to remove discontinuities associated with the distorting effects of weekend reserve avoidance activities in late 1980.

Memorandum: Target ranges for 1981 (percent increase): M1-B (shift adjusted) M2 M3 Bank Credit

3% to 6 6 to 9

6% to 9% 6 to 9

(3) Credit growth at U.S. banking offices was at a 5¾ percent annual rate in July.

Business loan growth accelerated somewhat, as

businesses chose to meet an increased share of their credit needs at banks rather than in the commercial paper or capital markets, where net issuance slowed.

Merger activity was an insignificant factor in July

loan expansion at U.S. banking offices, since virtually all of such loans were booked offshore by both U.S. and foreign banks.

However, in early

August business loans at large banks expanded sharply, with a little over half the growth reflecting merger loans. (4) In line with the Committee's decision to strengthen growth in M1-B, the reserve aggregates expanded rapidly in July (as shown in

the table on the preceding page). sharply.

Nonborrowed reserves rose particularly

At the same time, borrowings declined, dropping by about

$350 million in July on average and another $500 million in the first half of August, as weakness of M1-B in the latter part of July reduced required

reserves (with a lag) relative to the nonborrowed reserve path.1/ Member bank borrowing averaged about $1.2 billion in the first two statement weeks of August. (5) The federal funds rate, which averaged a bit over 19 percent in June and July, recently has traded in a 17½ to 18½ percent range. Despite this decline, most other interest rates--both short- and long-term-have risen by ½ to 1¼ percentage points on balance since the July Committee meeting.

The upward pressure on interest rates generally

reflected increasing concern about the Treasury's longer-run financing

See Appendix I for adjustments made to the reserves path during the intermeeting period.

-4needs following enactment of the Administration's tax proposals, a slower than expected drop in the funds rate, incoming economic news that has been less weak than many had anticipated, and the market's need to absorb a large amount of new Treasury issues in a relatively short period in late July and early August.

Since late July the Treasury has announced issues

to raise $7.9 billion of new money, with issues ranging from a 23-day cash management bill to a 30-year bond in the current mid-August refunding. (6) The dollar strengthened further in foreign exchange markets over the intermeeting period, rising on balance 3 percent on a weighted average basis, reflecting relatively high and rising interest rates here and political uncertainties abroad.

Prospective developments (7)

Shown below for Committee consideration are two alternative

monetary policy strategies for the current quarter.

The upper panel of

the table shows growth rates for the June-to-September interval covered by the Committee's short-run targets adopted at the last meeting, while the next panel shows implied July-to-September growth rates, given last month's actual growth. rate also are shown.

Possible intermeeting ranges for the federal funds

More detailed data on these and other aggregates may

be found on pages 6 and 7, and charts indicating the relationship of the alternative two-month targets to the Committee's existing longer-run ranges for 1981 may be found on the next three pages. Alt. A

Alt. B

7 10½

6 10

8½ 11½

7½ 10½

Growth from June to September

M1-B M2 Implied Growth from July to September

M1-B M2 Federal funds rate range

15 to 21

16 to 22

(8) Alternative A retains the Committee's 7 percent June-toSeptember target for M1-B adopted at the last meeting, a target that would

require an 8½ percent annual rate of growth over the two-month July-toSeptember period.

However, in view of the greater than expected strength

of the nontransactions component of M2, it seems likely that attaining the M1 target for the third quarter will result in M2 expansion in excess of the growth rate of 9 percent or less desired by the Committee at its last meeting.

We would now expect growth in M2 from June to September under

Alternative levels and Growth Rates for Key Monetary Aggregates

M1-A

1981--May

M1-B

Alt. A

Alt. B

Alt. A

Alt. B

393.3

422.1

June

390.0

419.0

July August September

390.9 394.5 396.4

390.9 394.2 395.4

420.2 424.1 426.3

420.2 423.8 425.3

-10.1

-8.8

(-9.9)

(-7.5)

2.8 (-0.7) 11.1 (7.6) 5.8 (4.6) 6.6

2.8 (-0.7) 10.1 (4.6) 3.7 (2.3) 5.5

3.4 (4.2) 11.1 (12.0) 6.2 (6.9) 7.0

3.4 (4.2) 10.3 (11.1) 4.2 (5.0) 6.0

(3.9) 8.4 (6.1)

(2.1) 6.9 (3.5)

(7.7) 8.7 (9.5)

(6.8) 7.3 (8.1)

Growth Rates Monthly 1981--June July August September June '81 - September '81

July '81 - September '81 Quarterly Average 1981--QI

NOTE:

-1.7

-0.8

QII

5.1

5.3

QIII

1.0

0.6

1.7

1.3

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

Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) M2

1981--May June July August September

Alt. A

Alt. B

Alt. A

Alt. B

1743.4 1749.3 1761.0 1781.5 1795.2

1743.4 1749.3 1761.0 1780.5 1792.2

2059.0 2076.1 2090.8 2116.7 2134.8

2059.0 2076.1 2090.8 2115.7 2131.8

4.1 8.0 14.0 9.2

4.1 8.0 13.3 7.9

10.0 8.5 14.9 10.3

10.0 8.5 14.3 9.1

Growth Rates Monthly 1981--June July August September

-1

June '81 - September '81

10.5

9.8

11.3

10.7

July '81 - September '81

11.7

10.6

12.6

11.8

8.3 10.6 8.2

8.3 10.6 7.9

12.4 10.5 10.5

12.4 10.5 10.3

Quarterly Average 198 1--QI QII QIII

Chart 1

CONFIDENTIAL (FR) Class II-FOMC

Actual and Targeted M1-B

M1-B

Billions of dollars 1460

Observed Level

**** Level Adjusted for Impact of Nationwide NOW Accounts -

* * Short-Run Alternatives

-4450

S440

3%% ' :::

A **B '

-1420

-4410

-- 400

SI p

I N

1980

I J

I F

I A

I M

I J

1981

I A

I S

I 0

1390

I N

Chart 2

CONFIDENTIAL (FR) Class -FOMC

Actual and Targeted M 2

Billions of dollars -11840

Actual Level S.. Short-Run Alternatives -11820

-- 1800

1780

-1760

-1740

1720

-1700

1680

-1660

1640 I O

. N

1980

I D

I J

I F

I M

I A

I M

I J

1981

I A

I S

I O

I N

Chart 3

CONFIDENTIAL (FRJ Class I-FOMC

M 3 and Bank Credit M3

Billions of dollars 2150 91/2%

.A*

-Actual Level ... Short-Run Alternatives

2100

6'/a%

-2050

2000

-A and B alternatives are indistinguishable on this scale.

*NOTE:

I O

I1 N

1980

I F

I A

I J

Actual Level

1980

1900 0

Billions of

I O

1981

ANK CREDIT -

1950

J 1981

alternative A to be on the order of 10½ percent.

Alternative B provides

an option that would exert greater restraint on M2 growth, involving a lower target for M1-B growth in the third quarter, one of 6 percent. (9)

Both alternatives call for an acceleration of growth of

M1-B (adjusted for shifts into NOW accounts) from its modest July pace, an increase which appears to be well in train in early August.

Both would

reach a level of M1-B in September below the low end of the Committee's longer-run range for this aggregate, and would imply a very slow annual growth rate on a quarterly average basis, 1¼ to 1¾ percent.

On the other

hand, both alternatives involve an acceleration of M2 over the balance of the quarter that would place this aggregate somewhat above the upper end of its longer-run range in September, though less so under B than A. specifications for alternatives A and B assume that MM

The

growth slows a bit

from its recent extremely rapid pace, while small time deposit growth strengthens relative to July, owing to growth of the 30-month SSC, whose ceiling rate since August 1 can fluctuate in line with Treasury yields. M3 is expected to remain well above its longer-run range under both alternatives, reflecting continued CD growth to finance loan expansion. (10)

To achieve the alternative A specifications, total reserves

probably would have to expand at about a 13 percent annual rate in August and September, considerably more than in July.

Even such a rapid expansion

in reserves, and the associated faster money growth, would likely be consistent with short-term interest rates holding

near current levels.

Nominal GNP is expected by the staff to expand at a 7 percent annual rate in the third quarter, suggesting strong transactions demands for money over the balance of the quarter.

Even with the alternative A target specifi-

cations, income velocity of M-B would rise at a relatively rapid annual

rate of about 5 percent this quarter.

It seems reasonable to expect that

under alternative A the federal funds rate over the next few weeks might be in the area of 18 percent.

With the current level of discount and

surcharge rates, borrowing at the discount window could be in a $1 to $1 billion range. (11)

It is possible that long-term interest rates could decline

some over the next several weeks, as investors become increasingly

interested in bonds at the unusually high level of rates currently prevailing.

However, the projected stability in short-term rates and the

large prospective demands on bond markets would tend to limit the size--

and perhaps the duration--of any drop in rates.

The Treasury is likely

to raise another $7½ billion of new money this quarter, sponsored agency borrowings will also probably continue to be relatively large, and the Treasury and sponsored agencies may need to borrow about $44 billion in cash in the fourth quarter.

In addition, any improvement in rates can

be expected to call forth a substantial volume of corporate issues to fund short-term debt.

Tax-exempt and foreign borrowings in U.S. capital

markets are also projected to remain large.

(12)

The alternative B specifications imply growth of total

reserves from July to September at an 11 percent annual rate.

The federal

funds rate probably would be around 19 percent or higher during the intermeeting period, and, given the present discount rate structure, borrowing would likely run around $1½ to $2 billion.

Under alternative B,

market interest rates, especially short-term rates, are likely to rise, perhaps appreciably.

Pressure on thrift institution earnings would be

more intense under this alternative than under alternative A, and mortgage rates would probably rise further.

Longer-term market rates may also rise,

-10at least temporarily, in reflection of higher costs of financing positions; business credit demands would continue to be centered on short-term markets. The dollar would remain under upward pressure in foreign exchange markets.

-11Directive language (13)

Given below are two alternative operational paragraphs

for the directive.

Alternative I retains the structure of the current

directive, focusing on the June to September growth rate for M1-B, with the proviso adopted at the last meeting related to M2.

The language

would be consistent with either alternatives A or B (with the directive indicating under B that the Committee had lowered its third quarter M1-B target).

In this directive structure, it would need to be recognized,

however, that the proviso clause for M2 might well be promptly triggered given the staff's current expectation of a strengthening in M2 growth. The language of alternative II would be consistent with a decision by the Committee to choose an M1-B growth rate over the balance of the quarter presently thought needed to exert desired restraint on M2, without prejudging that a lower growth in M1-B than earlier targeted for the quarter will in practice be required.

Thus, if this directive included

the July to September growth rate for M1-B in alternative B, the language of the directive would permit the higher growth in M1-B needed to meet the

7 percent quarterly target should M2 remain at or fall below the upper bound of its longer-run range.

This language is similar to the approach

adopted by the Committee at the last mid-quarter meeting on May 18. Alternative I In the short run the Committee seeks behavior of reserve aggregates consistent with growth of M1-B from June to September 7]____ percent after allowance for the impact at an annual rate of [DEL: of flows into NOW accounts (resulting in growth at an annual rate 2]____ percent from the average in the second quarter to of about [DEL:

-12the average in the third quarter), provided that growth of M2 remains around the upper limit of[DEL:, or moves within,] its range for the year.

It is recognized that shifts into NOW accounts will

continue to distort measured growth in M1-B to an unpredictable extent, and operational reserve paths will be developed in the light of evaluation of those distortions.

The Chairman may call

for Committee consultation if it appears to the Manager for Domestic Operations that pursuit of the monetary objectives and related reserve paths during the period before the next meeting is likely to be associated with a federal funds rate persistently outside a range of [DEL: l5 to 21]____

TO ____ percent.

Alternative II In the short run the Committee seeks behavior of reserve aggregates consistent with a pick-up in growth of M1-B from July to September to an annual rate of ____ percent, or somewhat higher, after allowance for the impact of flows into NOW accounts.

Provided that growth of M2 remains around the upper limit of, or moves within, its range for the year, growth of M1-B at an annual rate somewhat higher than the____ percent specified above would be acceptable, in light of the relatively weak growth experienced in July and the objective adopted by the Committee at its July meeting for growth from June to September at an annual rate of 7 percent (resulting in growth at an annual rate of about 2 percent from the average in the second quarter to the average in the third quarter).

It is recognized that shifts into NOW accounts will

continue to distort measured growth in M1-B to an unpredictable

-13extent, and operational reserve paths will be developed in the light of evaluation of those distortions.

The Chairman may call for

Committee consultation if it appears to the Manager for Domestic Operations that pursuit of the monetary objectives and related reserve paths during the period before the next meeting is likely to be associated with a federal funds rate persistently outside a range of [DEL: 21]____ to 15

TO ____percent.

APPENDIX

Reserve Targets and Related Measures Intermeeting Period ($ millions, not seasonally adjusted)

Targets for

3-week Average July 15 to July 29 Total Nonborrowed As of July

Projection of 3-week Average July 15 to July 29 Total Required Excess Adjustmen

Reserves

Borrowing

(1)

(2)

(3)

(4)

(5)

(3)-(2)

(FOMC Meeting) 10 17 24 Actual 3-week Average

41,359 41,359 41,104 1/

39,859 39,859 39,604 1

41,359 41,359 41,136

41,109 41,109 40,967

250 250 169

1,500 1,500 1,532

41,134 -/

39,634

41,126

40,920

205

1,492

41,216

39,548

41,216

40,913

303

1,668

Targets for

3-week Average Aug. 5 to Aug. 19 July Aug.

40,782 3/

39,282 3/

40,627

40,410

217

1,345

40,954 4/

39,530

40,815

40,522

293

1,285

40,982 1/

39,558 51

40,824

40,518

306

1,266

40,518

6/ n.a. -

Actual 3-week Average / 2/

Projection for 3-week Average August 5 to August 19

n.a.

6/ -

6/ n.a.

6/ n.a. -

Total and nonborrowed reserve paths adjusted downward by $255 million due to multiplier changes. Tdtal and nonborrowed reserves paths adjusted upward by $30 million due to multiplier changes.

3/ Total and nonborrowed reserves paths adjusted downward by $193 million due to multiplier changes. 4/ Total and nonborrowed reserves paths adjusted upward by $142 million due to

5/ 6/

multiplier changes and $30 million to account for the transitory effect of merger activity on deposits in the week of August 5. In addition, the nonborrowed reserves path %as adjusted upward by another $76 million to prevent the unexpectedly low borrowings in the week of August 5 from distorting the nonborrowed reserves path in subsequent weeks. Total and nonborrowed reserves paths adjusted upward by $28 million due to multiplier changes. Not available at time Bluebook was prepared.

Table 1 SELECTED INTEREST RATES (Percent)

ILong-Term

Short-Term Federal

Period eor di

(1)

CDs Secondary Auction Market I 6-mo 3-mo (4) (5)

Treasury Bills MarketPaper Market 3-mo l-yr (2) (3)

STRICTLY CONFIDENTIAL (FR) CLASS II--FOMC August 17, 1981

U.S. Govt. Constant Maturity Yields 3-yr 1-yr 30-yr

Comm. per

Bank Pme Prime ae

(6)

(7)

(8)

(9)

(10)

RHome Mortgages Primary Secondary Market FNMA GNMA Co4 Auc. Sec. (14) (15) (16)

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

Municipal Bond Buyer (13)

14.51 10.53 16.77 14.05

15.03 10.79 16.69 13.98

10.56 7.11 11.94 9.49

16.35 12.18 17.11 14,80

15.93 12.28 17.26 14.84

14.17 10.73 16.55 13.18

1980--High 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

1981--High Low

20.06 13.48

16.72 12.64

14.65 11.83

15.68 12.08

18.70 13.47

18.04 12.87

20.64 17.00

15.83 12.55

14.84 12.27

12.91 9.54 14.10 11.81

1980--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

12.81 15.85 18.90

11.61 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. Mar.

19.08 15.93 14.70

15.02 14.79 13.36

12.62 12.99 12.28

13.88 14.13 12.98

17.19 16.14 14.43

16.58 15.49 13.94

20.16 19.43 18.05

13.01 13.65 13.51

12.57 13.19 13.12

12.14 12.80 12.69

14.12 14.90 14.71

14.17 14.58 14.41

9.66 10.10 10.16

14.90 15.13 15.40

14.87 15.24 15.74

13.55 14.13 14.18

Apr. May June

15.72 18.52 19.10

13.69 16.30 14.73

12.79 14.29 13.22

13.43 15.33 13.95

15.08 18.27 16.90

14.56 17.56 16.32

17.15 19.61 20.03

14.09 15.08 14.29

13.68 14.10 13.47

13.20 13.60 12.96

15.68 15.81 14.76

15.48 15.48 14.81

10.62 10.79 10.67

15.58 16.40 16.70

16.54 16.93 16.17

14.59 15.31 15.02

July

19.04

14.95

13.91

14.40

17.76

17.00

20.39

15.15

14.28

13.59

16.30

15.73

11.14

16.83

16.65

15.76

1981--June 3 10 17 24

18.40 19.33 19.10 19.20

15.46 15.30 14.16 14.69

13.44 13.31 12.96 13.27

14.49 14.00 13.36 13.94

17.25 17.13 16.35 17.03

16.63 16.68 15.86 16.24

20.43 20.00 20.00 20.00

14.39 14.26 14.04 14.40

13.53 13.42 13.21 13.54

13.09 12.95 12.72 12.97

14.93 15.01 14.35

15.03 14.74 14.59 14.80

10.59 10.63 10.73 10.74

16.76 16.69 16.71 16.62

July 1 8 15 22 29

18.84 19.93 18.76 19.05 18.54

14.25 14.68 14.74 15.17 15.23

13.23 13.51 13.58 14.15 14.24

13.62 14.05 14.23 15.32 14.79

17.00 17.52 17.64 17.90 18.01

16.28 16.80 16.89 17.16 17.21

20.00 20.07 20.50 20.50 20.50

14.48 14.71 14.82 15.39 15.48

13.79 13.98 14.05 14.41 14.51

13.23 13.35 13.38 13.68 13.77

15.72 16.41 16.73

14.94 15.04 15.67 16.05 16.55

10.85 10.97 11.09 11.34 11.44

16.64 16.79 16.74 16.88 17.11

Aug. 5 12 19 26

18.25 18.29

15.21 15.23

14.47 14.46

15.57 15.12

17.94 17.91

17.22 17.23

20.50 20.50

15.83 15.64

14.84 14.67

14.10 13.89

15.55p

16.50 16.08p

11.63 11.94

17.13 n.a.

18.51 17,92 17.55p

15.44 15.42 15.50

14.73 14.54 14.66

18.09 17.92 18.02

17.40 17.21 17.27

20.50 20.50 20.50

15.79 15.83 15. 9 1p

14.83 14.65 14.67p

14.07 13.88 13 .9 5p

Oct. Nov. Dec.

Daily--Aug.

7 13 14

16.17 16.17

16.43 16.87

17.26 --

14.97 14.96 14.75 15.09 15.33 15.35 15.56 16.17 15.96 16.55 16.04

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 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 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 FHA/VA mortgages carrying the coupon rate 50 basis points below the current FHA/VA ceiling.

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

Period

Treasury Bills Net Chane 2/ 863 4,361 870 6,243 -3,052

1980--Qtr. II III IV

3,249 -3,298 -58

1981--Qtr. I II

-2,514 2,135

Treasury Coupons Net Purchases 3/ Within 1 year 472 517 1,184

603 912 1107 137 100

1981--Feb. Mar.

-357 1,607

Apr. May June

1,141 790 204

115

July

1,225

122

1981--June

July

Aug.

STRICTLY CONFIDENTIAL (FR) CLASS II--FOMC August 17, 1981

Total

Net Change Outright Holdings Total 5/

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

891 1,433 127 454 668

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

410 320

2,395 1,234 -100

6i68

164

----89

23 836

--- --

-23

1- 5

3,025 2,833 4,188 3,456 2,138 1,156 7 541

Federal Agencies Net Purchases 4/

Over 10

Total

1,048 758 1,526 523 703

642 553 1,063 454 811

359

236

469

Within year5

5 -

182

0 Over 10

836 -

607

S-

SS --

1 8 15 22 29 5 12 19 26

LEVEL--Aug. 12

347 978 -100

-2,555 2,944

-1,694 -1,352

-588 -2,166 1,502

2,200

1,768

-90

295

4,272 -4,921 4,597 -1,986

2,373 -1,381 1,107

1,975 790 179

976

6,307 -2,157 --

-382 -------1,592

3 10 17 24

1,322 978 -100

917 5,241 -4,104 3,894 -4,105

915

-710 -898

0.6

8.7

----13 -

-- ---S

915

48,8

14.6

33.8

13.1

2.4

4.6

1.0

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

134.8

1/ Change from end-of-period to end-of-period. 2/ Outright transactions in market and with foreign accounts, and redemption (-) 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 the net purchases of securities, also reflects changes in System holdings of bankers' acceptances, direct Treasury borrowing from the System and redemptions (-) of agency and Treasury coupon issues. 6/ Includes changes in RPs (+), matched sale-purchase transactions (-), and matched purchase-sale transactions (+). 7/ Maturing 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 CONFIDENTIAL (FR) CLASS II-FOMC August 17, 1981

Security Dealer Positions and Bank Positions Millions of dollars

U.S. government securities dealer positions bco.Period ns ues ad dsyndicate cash

bills

coupons

futures bills

1980--Righ Low

8,838 1,972

2,263 -1,482

1981--High Low

15,668 1,273

4,633 1,105

-12,865 -5,930

4,581 5,108 3,681

634 798 -416

Oct. Nov. Dec.

2,447 3,047 4,287

1981--Jan. Peb. Mar.

nd forwards I coupons

Underwriting positionseess

corporate bonds

municipal bonds

reserves

Member bank reserve postone brrowing at FRB me

seasonal

special

adjustment

total

881 19

174 5

3,298 12

3,438 215

-3,599 -2,560

741 -165

309 105

2,614 581

2,923 768

2,438 3,081 414

-1,015 -1,974 -1,185

284 302 256

6 9 25

136 408 1,196

395 658 1,311

143 149 20

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

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

206 498 552

66 97 116

1,244 1,963 1,574

1,310 2,059 1,690

9,985 13,317 13,579

1,584 1,812 3,415

-11,976 -12,203 -11,561

-2,884 -2,798 -3,251

544 183 381

120 148 196

1,226 1,156 804

1,395 1,303 1,000

Apr. May June

8,518 1,676 5,547

3,149 2,745 3,278

-7,277 -6,486 -9,934

-3,050 -2,822 -2,925

144 263 333

162 269 291

1,176 1,959 1,746

1,338 2,228 2,037

July

2,950*

3,314*

-8,340*

-3,012*

370

247

1,432

1,679

June 3 10 17 24

3,004 4,675 8,857 6,425

3,101 3,105 2,939 3,317

-2,838 -2,897 -3,221 -2,858

245 249 289 364

287 277 279 306

1,667 1,930 1,616 1,999

1,954 2,207 1,895 2,305

July 1 8 15 22 29

3,046 3,224 3,349 2,756* 2,732*

4,255 4,385 3,380 2,285* 3,367*

-2,799 -3,111 -3,053 -3,089* -2,930*

488 501 129 3 30 p 4 49 p

306 242 241 244p 257p

1,429 1,624 1,054 1,721p

1,735 1,866 1,295 1,730p 1 978 , p

37 9

228p 223p

890p 1,012p

1,11 8 p 1,271p

1980--July Aug. Sept.

Aug.

5 12 19 26

2,985* 4,215*

2,064* 2,696*

-8,643 -9,022 -11,500 -10,465 -9,416 -8,462 -7,339 -8,712* -8,528* -7,606* -8,879*

-2,794* -2,828*

p 288p

1,486p

NOTE: Government securities dealer cash positions consist of securities already delivered, commitments to buy (sell) securities on an outright basis for immediate delivery (5 business days or less), and certain "when-issued" securities for delayed delivery (more than 5 business days). Futures and forward positions include all other commitments involving delayed delivery; futures contracts are arranged on organized exchanges. Underwriting syndicate positions consists of issues 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. Monthly averages for excess reserves and borrowing are weighted averages of statement week figures. Monthly data for dealer futures and forwards are end-of-month figures for 1980. *Strictly confidential FO 1RAQ I7AIR1

Cite this document

APA

Federal Reserve (1981, August 17). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19810818

BibTeX

@misc{wtfs_bluebook_19810818,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1981},
  month = {Aug},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19810818},
  note = {Retrieved via When the Fed Speaks corpus}
}