bluebooks · March 22, 1993

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

MONETARY POLICY ALTERNATIVES

Prepared for the Federal Open Market Committee By the staff

Board of Governors of the Federal Reserve System

Strictly Confidential (FR) Class I - FOMC

March 19, 1993

MONETARY POLICY ALTERNATIVES Recent Developments 1 (1)

The degree of reserve pressure was left unchanged over

the intermeeting period.

The intended level of the federal funds rate

remained at 3 percent and the allowance for adjustment and seasonal borrowing at $50 million.

The federal funds rate has averaged 3.03

percent since the early February FOMC meeting, and borrowing has averaged slightly above its allowance.

Short-term market interest rates

were little changed over the intermeeting period. (2) period.

Bond markets, however, rallied strongly over much of the

Prospects for significant reductions in the federal budget

deficit in coming years and the consequences for aggregate demand appeared to be the most important influence sparking the rally.

De-

mands for Treasury notes and bonds also were boosted by municipal defeasance activity and assessments of heightened prepayment risk on mortgage-backed securities.

Toward the end of the period, however,

upturns in inflation readings prompted some backup in yields, but renewed rate declines most recently have erased much of this backup. On balance, most intermediate- and long-term yields have fallen 40 to 50 basis points over the period.

Rate spreads on mortgage-backed

securities and fixed-rate mortgages over comparable Treasuries have widened some; nevertheless, mortgage rates reached their lowest levels in two decades.

The drop in interest rates buoyed stock prices:

Most

major indexes rose 1 to 3 percent, although the NASDAQ index declined somewhat on net, reflecting concerns about future changes in government policy toward certain industries, including health-care firms.

1. Financial market quotations in this bluebook reflect data available through noon, March 19.

(3)

The dollar's foreign exchange value on a weighted-average

basis declined about 1-1/4 percent on balance over the intermeeting period.

During much of the period, the dollar generally rose against

European currencies, amid signs of weakening activity and easier current and prospective monetary policy stances in those countries.

But

the dollar declined against the mark and other European currencies following the Bundesbank's cut in its discount rate on March 18 that embodied less easing than was apparently expected by market participants.

On balance, the dollar fell 1/2 percent against the mark over

the period.

German short-term rates dropped 70 basis points, while the

long-term rate moved down 40 basis points. Europe also decreased.

Interest rates elsewhere in

The dollar depreciated 7-1/2 percent against

the yen, as market attention focused on Japan's growing trade surplus. In Japan, short-term rates and the bellwether bond yield declined about 20 basis points during the intermeeting period.

(4) February.

The broad monetary aggregates continued to contract in

M2 dropped at a 4 percent rate.

Its Ml component fell

slightly last month, continuing its deceleration from the double-digit pace that prevailed over much of 1992.2 ponent of M2 again contracted rapidly.

The nontransaction comOwing mainly to strong flows

into institution-only money funds, the decline in M3 slowed last month, and, at a 2-1/2 percent rate, was more moderate than that in M2.

The

2. In February, total reserves and the monetary base expanded at 5-1/2 and 8-1/2 percent rates, respectively. These figures incorporate revised seasonal factors and are confidential until their publication, which is scheduled for March 25.

available data for the first half of March show a less rapid outflow from M2 but a stepped-up runoff of M3 compared with February.

From

January to mid-March, the broader aggregates, especially M2, were appreciably weaker than anticipated at the time of the last bluebook. As of mid-March, the broad aggregates were well below their target cones and only a little above the lower edges of their parallel bands. (5)

Much of the recent weakness in the monetary aggregates

appears to be due to temporary factors.

Some weakness in M2 associated

with seasonal adjustment distortions and a decline in deposit balances associated with a fall in prepayments of mortgage-backed securities was foreseen in the last bluebook. 3

In the event, prepayments plunged

more rapidly than earlier projected.

But not all of the shortfall of

M2 from expectations is accounted for by larger-than-anticipated temporary factors.

Thus, even abstracting from temporary depressants,

M2 appears to be fundamentally weaker than foreseen earlier, with underlying growth from January to mid-March, while positive, quite modest.

Of the 8-1/2 percent growth rate in M2 velocity that seems to

be in train this quarter, no more than 1-1/2 percentage points can plausibly be attributed to these temporary factors.

Evidently, some of

the other persisting influences that have been boosting velocity in recent years have intensified.

Relatively attractive returns on capi-

tal market instruments likely have prompted households to divert more funds from deposits into bond and stock mutual fund shares, which have posted record inflows in recent months.

Bank credit expansion has

slowed noticeably this year, and banks also have continued to tap

3. The staff's standard seasonal adjustment procedures have attributed strong monetary growth in February in both 1991 and 1992 to evolving seasonal patterns rather than recognizing the stimulative

effects of previous declines in short-term interest rates that resulted from easings of monetary policy around the year-end in 1990 and 1991.

markets for subordinated debt and equity, further depressing their needs for deposit funding.

Both M2 and M3 have borne the imprint of

these developments, as interest rates on retail deposits have dropped further in recent weeks and as large time deposits have continued to run off.

Moreover, the leveling out of short-term interest rates since

last September, as the stance of monetary policy has held steady, has meant that earlier policy-induced stimulus to growth of the broader aggregates has ended. (6)

Overall private debt growth appears to be expanding

around or a bit faster than its pace over the last few months of 1992. Businesses have drawn heavily on credit markets, as the rally in bond prices set off another surge of corporate issuance, although the proceeds were largely used to repay business loans at banks and commercial paper, both of which have declined a little on balance so far this year.

State and local governments have taken advantage of favorable

market conditions by selling a hefty volume of bonds, with an enlarged proportion of the offerings earmarked to refund debt.

Households seem

to have increased their willingness to take on debt in recent months: Consumer installment credit rose in January for the fifth straight month and, in February, bank consumer loans adjusted for securitization rose at nearly a 9 percent annual rate.

Total domestic nonfinancial

debt is estimated to have grown at about a 4-1/2 percent rate from the fourth quarter through February, leaving this aggregate around the lower bound of its 1993 monitoring range.

MONEY, CREDIT, AND RESERVE AGGREGATES (Seasonally adjusted annual rates of growth)

QIV to Feb.

Jan.

Feb.

7.7

-.5

6.1

-3.1

-4.1

-2.2

-7.1

-2.4

-3.9

Money and credit aggregates

.2 p 5.3 3.8P

4.5 7.5 3.4

-1.6

2.0

1.0

Nonborrowed reserves 2

6.0

8.3

10.0

Total reserves

6.9

5.6

9.4

Monetary base

8.3

8.6

9.1

164

1260

1114

Domestic nonfinancial debt1 Federal Nonfederal Bank credit

3.2 2.9 3.3

Reserve measures

Memo:

(Millions of dollars) Adjustment plus seasonal borrowing Excess reserves

p--preliminary estimates. 1. Debt figures for February are preliminary. 2. Includes "other extended credit" from the Federal Reserve. NOTE:

Data on reserves and the monetary base reflect new seasonal factors and are confidential until their publication, which is scheduled for March 25. Monthly reserve measures, including excess reserves and borrowing, are calculated by prorating averages for two-week reserve maintenance periods that overlap months. Reserve data incorporate adjustments for discontinuities associated with changes in reserve requirements.

Policy alternatives (7) Three policy alternatives are presented below for consideration by the Committee.

Under alternative B, federal funds would

continue to trade around 3 percent in association with the allowance for adjustment plus seasonal borrowing initially remaining at $50 million. The allowance probably will need to be revised upward over the intermeeting period when demands for seasonal credit strengthen during the spring.

Under alternative A, the federal funds rate would decline to

the 2-1/2 percent area.

This alternative could be implemented through a

1/2 percentage point drop in the discount rate, holding the initial borrowing allowance at the same level as in alternative B, or by lowering the initial borrowing allowance to $25 million and leaving the discount rate unchanged.

Alternative C, involving a rise in the federal

funds rate to 3-1/2 percent, could be implemented through a boost in the initial borrowing allowance to $75 million. (8) Market participants are expecting neither tightening nor easing in the stance of monetary policy for some time.

They appear to

anticipate that the recent runup in inflation will subside in large part.

The gains in stock prices and sustained narrow quality spreads

suggest that investors now also believe that the bond market rally, together with the economy's existing forward momentum, will keep the contractionary effects of the deficit-reduction package from derailing the economic expansion.

Thus, under alternative B, short-term interest

rates would stay around current levels.

Intermediate- and long-term

rates will remain sensitive to news on the fiscal front and corresponding implications for the economy, as well as reports bearing on the inflation outlook.

Bond rates could edge lower should incoming news on

prices confirm the extent of moderation in inflation embodied in the

staff economic forecast.

The dollar would be expected to fluctuate

around current levels under alternative B, but could firm somewhat if rate declines in Europe prove to be faster and larger than now expected. (9)

The easing of policy under alternative A would surprise

market participants and would lead to a decline in short-term rates, including the prime rate, commensurate with the 1/2 percentage point drop in the federal funds rate.

In such circumstances, bankers might be

more encouraged to ease lending standards and nonprice terms on business loans.

Rate declines at longer maturities would be muted should market

participants see the easing in the absence of weak economic data as risking a sustained resurgence of inflation.

Conversely, the tightening

of policy under alternative C, which also would come as a surprise to market participants, would induce a rise in short-term rates comparable to the hike in the federal funds rate.

The increase in intermediate-

and long-term rates would be lessened to the degree it were seen as a timely measure to hold inflation in check.

To the extent that market

participants saw dimmer prospects for economic activity, risk premiums incorporated in yields on private obligations would increase.

The ex-

change value of the dollar would move in the same direction as domestic interest rates under either alternative. (11)

Monetary growth rates for the February-to-June period

thought to be consistent with the three alternatives are shown in the table below.

Despite both stronger nominal income expansion and lower

longer-term interest rates than expected previously, in all three alternatives growth rates of M2 and M3 over this period are roughly 1 percentage point below those in the previous bluebook.

These revi-

sions primarily reflect the weaker-than-expected underlying monetary growth to date and the prospect that the various influences causing a

rechanneling of credit flows away from depositories will remain intense,

even if abating some from their extraordinary strength so far this year. Alt. A

Alt. B

Alt. C

Growth from February to June M2

M3 M1

2-1/2

1-1/4 11

1 9-3/4

3/4 8-1/2

3/4

1/2 -1 8-1/4

1/4 -1-1/4 7-1/2

Implied growth from 1992:Q4 to June M2 M3 M1 (12)

-1 9

Under alternative B, M2 is expected to resume growth over

the February-to-June period.

The projected 2-1/2 percent average rate

implies growth of 1-3/4 percent for the second quarter.

With nominal

GDP in the staff forecast decelerating to a 5-1/2 percent pace, growth in M2 velocity would slow to a 3-1/2 percent annual rate in the second quarter.

Slower velocity growth partly results from the positive ef-

fects on M2 of the turnaround of the temporary factors related to seasonal adjustment and prepayments of mortgage-backed securities.

Their

impact, which represents a diminishing drag on M2 growth in March as a whole, acts as a stimulant to growth in the subsequent months, reflecting a reversal of the effects of seasonal distortions and a resurgence in prepayments.4

On balance, these factors raise money growth per-

ceptibly over the February-to-June period.

Much of the pickup in M2

comes from its M1 component, which would expand at a 10 percent annual

4. Still another factor, related to depressed individual refunds and elevated individual nonwithheld tax payments, is expected to restrain M2 growth in March and May and boost it in April and June, but to have a negligible effect over the February-to-June period as a whole.

Alternative Levels and Growth Rates for Key Monetary Aggregates

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

Alt. A

Alt. B

Alt. C

3488.2 3476.2 3475.0 3487.5 3496.8 3511.1

3488.2 3476.2 3474.8 3485.5 3492.7 3505.0

3488.2 3476.2 3474.5 3483.6 3488.8 3498.9

4142.6 4134.5 4128.5 4137.8 4142.6 4151.9

4142.6 4134.5 4128.3 4136.2 4139.7 4147.9

4142.6 4134.5 4128.1 4134.7 4136.6 4143.6

1033.2 1032.8 1033.6 1047.7 1057.6 1071.1

1033.2 1032.8 1033.4 1046.4 1054.6 1066.3

1033.2 1032.8 1033.2 1045.1 1051.6 1061.5

-3.1 -4.1

-7.1 -2.4

7.7 -0.5

-0.4 4.3 3.2 4.9

-0.5 3.7 2.5 4.2

-0.6 3.1 1.8 3.5

-1.8 2.7 1.4 2.7

-1.8 2.3 1.0 2.4

-1.8 1.9 0.6 2.1

0.9 16.4 11.4 15.3

0.7 15.1 9.4 13.3

0.5 13.8 7.4 11.3

1992 Q1 Q2 Q3 Q4 1993 Q1 Q2

3.2 0.3 0.8 2.7 -1.8 2.1

3.2 0.3 0.8 2.7 -1.8 1.7

3.2 0.3 0.8 2.7 -1.8 1.2

1.9 -0.6 0.1 -0.2 -3.8 0.9

1.9 -0.6 0.1 -0.2 -3.8 0.6

1.9 -0.6 0.1 -0.2 -3.8 0.3

15.5 10.5 11.7 16.8 6.3 9.9

15.5 10.5 11.7 16.8 6.3 8.8

15.5 10.5 11.7 16.8 6.2 7.6

Sep 92 to Dec 92 Dec 92 to Mar 93

2.0 -2.5

2.0 -2.6

-1.5 -3.7

14.7 2.7

14.7 2.6

Mar 93 to Jun 93 Feb 93 to Jun 93

4.1 3.0

3.5 2.5

2.8 2.0

2.3 1.3

1.9 1.0

1.5 0.7

14.5 11.1

12.7 9.7

10.9 8.4 14.3

Levels in billions 1993 January February March April May June Monthly Growth Rates 1993 January February

March April May June Quarterly Ave. Growth Rates

Q4 91 to Q4 92

Q4 Q4 Q4 Q4

92 92 92 92

to to to to

Jan Feb Mar Jun

93 93 93 93

1993 Target Ranges:

1.8

0.3

14.3

-1.3 -2.2 -1.8 0.8

-1.3 -2.2 -1.8 0.5

-1.3 -2.2 -1.8 0.2

-4.7 -3.9 -3.4 -1.0

-4.7 -3.9 -3.4 -1.1

-4.7 -3.9 -3.4 -1.3

9.4 6.1 4.8 9.1

9.4 6.1 4.8 8.3

2.0 to 6.0

0.5 to 4.5

9.4 6.1 4.7 7.5

Chart 1

ACTUAL AND TARGETED M2 Billions of Dollars

3776.2 Actual Level

Short-Run Alternatives

-- 3726.2

-- 3676.2

-- 3626.2

3576.2

3526.2

e.*c

-1 3476.2

-1 3426.2

ON 1992

J J 1993

J 1994

3376.2

Chart 2

ACTUAL AND TARGETED M3 Billions of Dollars

4484.5 --0

Actual Level Short-Run Alternatives

-1

4434.5

4.5% - 4384.5

4334.5

4284.5

-1 4234.5

0.5%

4184.5

4134.5

* a

I O

N 1992

I J

I F

I M

I A

. .

1993

J 1994

4084.5

Chart 3

Billions of Dollars

Actual Level Short-Run Alternatives

10%--

1182.8

1132.8

1082.8 *

1032.8

I O

I N

1992

I D

I J

I F

I M

I A

I J

1993

I A

I S

I O

I N

I D

J 1994

982.8

Chart 4

DEBT Billions of Dollars

12999.8

Actual Level

Projected Level

-- 112799.8

12599.8

12399.8

4.5%

--1 12199.8

11999.8

11799.8

-1 11599.8

1I O

N D 1992

1 I1 1 111. 1

I I I 1 1 J

1993

J 1994

11399.8

-10-

rate from February to June.5

Outflows to bond funds from money

market mutual funds and nontransactions retail deposits are seen as moderating over time if bond yields stabilize around current reduced levels and as portfolio adjustments become more complete.

The pickup in

M2 would still be limited by further downward adjustments of deposit rates.

By June, growth in M2 from its fourth-quarter base would be only

1/2 percent at an annual rate. (13)

Even though M3 is seen as expanding at a 1 percent rate

over the February-to-June period, it still would be well below its fourth-quarter base in June.

The resumption in M3 expansion would

partly reflect some anticipated pickup in bank credit.

In the months

ahead, banks may become a little more willing to extend business credit--including loans to smaller firms--and, given their more comfortable capital positions, to retain, rather than securitize and sell, assets.

Improved balance sheet structures also imply less need for

banks to rely on capital markets to raise funds, an important substitute for M3 funding recently.

Even though some businesses are expected to

acquire additional financing from banks, others are likely to continue to rely on bond markets, in some cases paying down bank loans and shortterm paper.

Overall business borrowing is expected to strengthen with

increases in capital spending and moderation in equity financing. Household borrowing will be bolstered by improving housing activity--as suggested by the stronger level of mortgage applications recently--and further advances in outlays for consumer durables.

Nonfederal debt is

expected to grow at about a 4 percent pace from February to June, up a little from growth in recent months.

Federal debt expansion, while

5. With currency growing at a 9-1/2 percent rate from February to June and total reserves at 8 percent, the monetary base is projected to rise at a 9-1/4 percent rate.

-11-

gyrating from month to month, will remain brisk over the second quarter to finance large deficits.6

Total debt of domestic nonfinancial

sectors is projected to grow at a 5-1/2 percent annual rate from February to June.

Such growth would place this aggregate in June 5-1/4

percent at an annual rate above its fourth-quarter base and about 3/4 percentage point above the lower bound of its monitoring range. (14)

Under alternative A, M2 would strengthen to a 3 percent

rate over the February-to-June period.

This speed-up in M2 growth,

coming mainly from its M1 component, would owe to smaller opportunity costs, as deposit rate adjustments lag behind the decline in market rates.

Although M2 in June would still be below the lower bound of its

annual growth cone, it would be on a trajectory to reach the vicinity of the lower bound by year-end, partly because spending would begin to strengthen later in the year in response to the policy easing.

M3 would

grow at a 1-1/4 percent pace over February to June under alternative A, but would remain below its fourth-quarter base even by June.

Under

alternative C, M2 would expand at a 2 percent rate over the February-toJune period, as wider opportunity costs would discourage inflows to more liquid deposits, especially M1 balances.

M2 likely would not move above

the level of its fourth-quarter base until June, and with slower spending growth later in the year, this aggregate probably would increase only marginally over the year as a whole.

M3 would expand at

only a 3/4 percent rate from February to June.

6. Absent Congressional action to raise the $4.145 trillion debt ceiling, the staff forecasts that the Treasury could run out of cash

in early April. However, the staff anticipates that the Congress will raise, at least temporarily, the debt ceiling before that time, in accordance with the Treasury's recent request.

-12-

Directive language (15)

Presented below is draft wording for the operational

paragraph that includes the usual options and updating. are shown for the sentence on the growth of M2 and M3.

Two versions The first would

return to the specification of numerical growth rate expectations, as was the Committee's practice prior to the February meeting; the other would retain the approach at the February meeting of not stating explicit monetary growth expectations but rather relying on a qualitative characterization.

OPERATIONAL PARAGRAPH

In the implementation of policy for the immediate future, the Committee seeks to DECREASE SOMEWHAT/maintain/ INCREASE SOMEWHAT the existing degree of pressure on reserve positions.

In the context of the Committee's long-run

objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly (SOMEWHAT) greater reserve restraint (WOULD/MIGHT), or slightly (SOMEWHAT) lesser reserve restraint would (MIGHT) be acceptable in the intermeeting period.

The contemplated

reserve conditions are expected to be consistent with GROWTH OF [DEL: little change in]M2 and M3 AT ANNUAL RATES OF ABOUT ____ AND ____PERCENT RESPECTIVELY over the period from

[DEL: January to March] FEBRUARY TO JUNE.

-13-

Alternative Monetary Growth Sentence

The contemplated reserve conditions are expected to be consistent with a resumption of moderate growth in the broader monetary aggregates over the second quarter.

March 19,1993 SELECTED INTEREST RATES (percent) Short-Term federal funds

Treasury bills secondary market S3-month 6-monh I 1-year 2 3 4

CDs secondary comm. market paper 3-month 1-month 5 6

money market mutual fund 7

bank prime loan 8

U.S. government constant maturity yields 3-year 10-year 30-year 9 10 11

Long-Term corporate conventional home mortgages A-utility municipal secondary primary recently Bond market market offered Buyer fixed-rate fixed-rate ARM 12 13 14 15 I 16

92 -- High -- Low

4.20 2.86

4.05 2.69

4.22 2.82

4.51 2.91

4.32 3.07

5.02 3.17

4.51 2.74

6.50 6.00

6.32 4.24

7.65 6.30

8.07 7.29

8.99 8.06

6.87 6.12

9.22 7.86

9.03 7.84

6.22 4.97

93 -- High -- Low Monthly Mar 92

3.24 2.91

3.09 2.92

3.26 3.03

3.43 3.17

3.28 3.09

3.39 3.12

2.92 2.66

6.00 6.00

5.06 4.32

6.73 5.89

7.46 6.74

8.28 7.47

6.44 5.69

8.30 7.61

8.14 7.44

5.36 4.78

4.04 3.75 3.63 3.66 3.21 3.13 2.91 2.86 3.13 3.22

4.18 3.87 3.75 3.77 3.28 3.21 2.96 3.04 3.34 3.36

4.40 4.09 3.99 3.98 3.45 3.33 3.06 3.17 3.52 3.55

4.25 4.00 3.82 3.86 3.37 3.31 3.13 3.26 3.58 3.48

4.28 4.02 3.87 3.91 3.43 3.38 3.25 3.22 3.25 3.71

3.73 3.66 3.52 3.45 3.25 3.07 2.91 2.79 2.83 2.82

6.50 6.50 6.50 6.50 6.02 6.00 6.00 6.00 6.00 6.00

6.18 5.93 5.81 5.60 4.91 4.72 4.42 4.64 5.14 5.21

7.54 7.48 7.39 7.26 6.84 6.59 6.42 6.59 6.87 6.77

7.97 7.96 7.89 7.84 7.60 7.39 7.34 7.53 7.61 7.44

8.91 8.82 8.70 8.62 8.38 8.16 8.11 8.40 8.51 8.27

6.86 6.80 6.72 6.66 6.32 6.31 6.40 6.59 6.56 6.43

9.17 8.98 8.85 8.66 8.25 8.04 7.98 8.25 8.48 8.34

8.94 8.85 8.67 8.51 8.13 7.98 7.92 8.09 8.31 8.22

6.11 6.15 6.00 5.87 5.51 5.27 5.11 5.06 5.26 5.45

Apr

May Jun Jul Aug

92 92 92 92

Oct Nov Dec

92 92 92

3.98 3.73 3.82 3.76 3.25 3.30 3.22 3.10 3.09 2.92

Jan Feb Weekly Dec Dec Dec Dec Dec

93 93

3.02 3.03

3.00 2.93

3.14 3.07

3.35 3.25

3.19 3.12

3.21 3.14

2.83 2.72

6.00 6.00

4.93 4.58

6.60 6.26

7.34 7.09

8.13 7.80

6.40 6.12

8.16 7.78

8.02 7.68

5.23 4.98

2 9 16 23 30

92 92 92 92 92

3.37 2.94 2.93 2.94 2.86

3.30 3.26 3.23 3.18 3.17

3.47 3.37 3.39 3.33 3.33

3.66 3.55 3.63 3.52 3.47

3.75 3.60 3.50 3.36 3.34

3.46 3.88 3.78 3.65 3.60

2.77 2.79 2.80 2.83 2.86

6.00 6.00 6.00 6.00 6.00

5.38 5.22 5.26 5.17 5.13

6.94 6.80 6.80 6.71 6.70

7.58 7.48 7.44 7.39 7.38

8.35 8.27 8.24 8.18 8.21

6.48 6.42 6.45 6.41 6.40

8.41 8.35 8.34 8.28 8.30

8.34 8.23 8.19 8.13 8.14

5.52 5.47 5.44 5.38 5.36

Jan Jan Jan Jan

6 13 20 27

93 93 93 93

3.03 2.98 3.10 2.94

3.09 3.05 2.98 2.95

3.26 3.19 3.12 3.08

3.43 3.42 3.33 3.28

3.28 3.24 3.17 3.15

3.39 3.26 3.17 3.15

2.92 2.83 2.77 2.77

6.00 6.00 6.00 6.00

5.05 5.06 4.93 4.84

6.64 6.73 6.61 6.53

7.35 7.46 7.35 7.27

8.28 8.13 8.05 7.95

6.44 6.41 6.40 6.36

8.27 8.10 8.11 8.01

8.07 8.04 8.00 7.86

5.28 5.25 5.20 5.06

Feb Feb Feb Feb

3 10 17 24

93 93 93 93

3.15 2.92 3.06 2.91

2.92 2.92 2.92 2.93

3.09 3.09 3.08 3.03

3.25 3.30 3.29 3.17

3.14 3.13 3.12 3.09

3.15 3.15 3.17 3.12

2.74 2.73 2.71 2.69

6.00 6.00 6.00 6.00

4.73 4.68 4.65 4.41

6.42 6.38 6.34 6.07

7.23 7.20 7.13 6.94

7.88 7.85 7.73 7.63

6.29 6.22 6.06 5.89

7.88 7.88 7.71 7.66

7.80 7.75 7.65 7.53

5.06 5.04 4.95 4.85

Mar Mar Mar

3 93 10 93 17 93

3.24 3.02 3.04

2.95 2.98 2.98

3.04 3.08 3.09

3.17 3.23 3.25

3.11 3.12 3.12

3.12 3.14 3.17

2.71 2.67 2.66

6.00 6.00 6.00

4.32 4.38 4.52

5.97 5.89 6.06

6.85 6.74 6.85

7.47 7.62 --

5.69 5.83 5.90

7.69 7.68 7.61

7.44 7.47 7.57

4.79 4.78 4.82

Daily Mar Mar

12 93 17 93

Mar

18 93

2.93 3.58 3.03

2.97 2.98 2.95

3.09 3.09 3.04

3.26 3.23 3.17

3.12 3.12 3.11

3.17 3.17 3.16

6.00 6.00 6.00

4.56 4.44 4.35

6.11 6.02 5.93

6.86 6.86 6.80

Sep

NOTE: Weekly data for columns 1 through 11 are statement week averages. Data in column 7 are taken from Donoghue's Money Fund Report. Columns 12,13 and 14 are 1-day quotes for Friday, Thursday or Friday, respectively, following the end of the statement week. Column 13 is the Bond Buyer revenue index. Column 14 is the FNMA purchase yield, plus loan servicing fee, on 30-day mandatory delivery commitments. Column 15 is the average contract rate on new commitments for fixed-rate mortgages (FRMs) with 80 percent loan-to-value ratios at major institutional lenders. Column 16 isthe average initial contract rate on new commitments for -year, adjustablerate mortgages (ARMs) at major Institutional lenders offering both FRMs and ARMs with the same number of discount points.

Strictly Confidential (FR)Clas II FOMC

Money and Credit Aggregate Measures Seasonally adjusted

MAR.

Money stock measures and liquid assets Period

Mt 1

ANN. GROWTH RATES (%) : ANNUALLY 1Q4 TO Q4) 1990 1991 1992

M2 2

in M2 3

in M3 only 4

Bank credit M3

Domestic nonfinancial debt

total loans and inveatment'

U.S. government' 8

1993

other'

total'

4.3 8.0 14.3

4.0 2.8 1.8

3.9 1.1 -2.6

-6.5 -6.2 -6.6

1.8 1.1 0.3

1.9 0.3 1.4

5.6 3.5 3.8

10.3 11.0 10.7

5.9 2.2 3.0

6.9 4.3 4.9

QUARTERLY AVERAGE 1992-1st QTR. 1992-2nd QTR. 1992-3rd QTR. 1992-4th QTR.

15.5 10.6 11.6 16.8

3.2 0.3 0.8 2.7

-1.1 -3.4 -3.2 -2.8

-4.1 -4.9 -3.6 -14.3

1.9 -0.6 0.1 -0.2

1.3 1.3 1.1 2.0

3.9 3.3 3.5 4.2

10.0 14.4 10.7 6.0

2.3 2.8 2.9 3.8

4.2 5.7 4.9 4.4

MONTHLY 1992-FEB. MAR. APR. MAY JUNE JULY AUG. SEP. OCT. NOV. DEC.

19.4 11.5 7.8 14.0 0.5 13.5 15.2 18.0 19.1 15.7 8.8

5.8 0.0 -1.0 0.9 -1.9 0.6 3.0 2.7 3.9 2.3 -0.3

0.9 -4.2 -4.3 -4.0 -2.8 -4.4 -1.6 -3.3 -2.2 -3.2 -4.0

0.2 -7.0 -6.7 -1.5 -7.1 -4.6 1.7 -6.3 -24.4 -13.8 -18.7

4.8 -1.2 -2.0 0.5 -2.8 -0.3 2.8 1.2 -0.9 -0.4 -3.3

5.0 2.7 -0.2 0.4 0.9 -0.5 3.1 2.7 1.3 3.1 -0.9

4.0 3.1 5.2 0.5 3.1 1.7 6.5 6.2 3.4 3.0 2.5

8.3 17.1 15.0 13.0 14.6 9.9 9.5 5.0 -1.1 10.5 16.3

4.6 2.8 2.7 2.4 2.4 2.8 3.3 3.9 4.2 4.0 2.7

5.5 6.4 5.8 5.0 5.5 4.6 4.9 4.2 2.8 5.7 6.2

7.7 -0.5

-3.1 -4.1

-7.6 -5.7

-27.8 7.3

-7.1 -2.4

-2.4

-1.6 1.9

2.9

3.3

3.2

1005.9 1019.1 1026.6

3491.5 3498.1 3497.3

2485.6 2479.0 2470.7

688.3 680.4 669.8

4179.8 4178.5 4167.1

5042.1 5055.0 5051.3

2926.9 2934.1 2940.1

3001.4 3027.6 3068.8

8650.8 8679.9 8699.4

11652.2 11707.6 11768.2

1033.2 1032.8

3488.2

2455.0 2443.3

654.3

2936.2 2940.9

3076.3

8723.5

658.3

4142.6 4134.4

5041.1

11799.7

3476.2

1034.5 1030.0 1031.2 1034.6

3479.5 3475.2 3475.0 3477.5

2445.0 2445.2 2443.8 2442.9

659.0 651.9 665.7 654.7

4138.5 4127.2 4140.7 4132.2

1036.1 1032.5

3476.9 3475.0

2440.8 2442.5

660.9 652.1

4137.8 4127.0

1993-JAN. FEB. p LEVELS ($BILLIONS) : MONTHLY 1992-OCT. NOV. DEC. 1993-JAN. FEB. p

WEEKLY 1993-FEB.

MAR.

1. 2.

nontransactions components

22,

1 p 8 p

Adjusted for breaks caused by reclassifications. Debt data are on a monthly average basis, derived by averaging end-of-month levels of adjacent months, and have been adjusted to remove discontiruities. p-preliminary pe-preliminary estimate

Strictly Confidential (FR)ClassII FOMC

Components of Money Stock and Related Measures seasonally adjusted unless otherwise noted

Period

Currency

Demand deposits

Other checkable deposits

Overnight RPs and Eurodollars NSA'

Savings deposits'

Small denomination time deposits'

MAR.

Money market mutual funds Institugeneral lions purpose only and broker/

Large denomination time deposits'

Term RPs NSA'

Term Eurodollars NSA'

Savings bonds

Shortterm Treasury securities

Commercial paper'

22,

1993

Bankers acceptances

dealer'

LEVELS (SBILLIONS) : ANNUALLY 14TH QTR.) 1990 1991 1992

245.4 265.8 290.0

277.7 287.0 338.8

293.1 329.6 380.2

78.8 73.4 74.7

919.8 1028.8 1178.9

1171.6 1081.0 883.0

348.2 362.9 344.1

131.5 175.6 207.5

496.8 432.3 361.9

93.6 74.7 80.5

68.0 60.7 47.0

125.2 137.0 154.5

329.9 319.4 330.0

356.2 336.3 369.5

33.7 24.4 20.4

MONTHLY 1992-FEB. MAR.

270.8 271.9

303.3 308.0

344.3 347.5

77.9 74.7

1080.7 1094.3

1021.5 1004.0

362.3 358.0

192.0 192.2

413.6 407.4

72.6 74.3

56.1 58.0

140.2 141.3

320.0 325.1

327.3 336.7

22.5 22.2

APR. MAY JUNE

273.6 275.1 276.6

310.8 314.7 312.3

349.0 354.7 355.9

72.8 69.4 72.3

1107.5 1119.6 1126.0

986.1 969.6 955.7

354.5 354.9 353.5

195.9 202.2 206.3

402.1 395.9 389.3

74.1 76.4 76.4

54.9 52.8 51.8

142.4 143.5 144.6

325.9 329.4 330.1

341.0 336.4 348.1

21.8 22.0 22.0

JULY AUG. SEP.

279.5 282.4 286.3

317.5 322.5 329.0

358.6 362.8 366.7

72.7 76.2 73.8

1134.5 1145.7 1158.9

941.5 926.9 912.7

350.4 348.9 343.9

212.5 220.9 220.7

382.5 378.1 373.7

75.1 75.7 77.5

51.0 51.4 49.4

145.8 147.4 149.3

324.9 323.1 321.3

351.2 355.0 362.7

21.7 21.1 20.7

OCT. NOV. DEC.

288.0 289.8 292.3

336.0 339.5 340.9

373.7 381.6 385.2

75.0 75.1 73.9

1170.5 1180.3 1186.0

896.6 881.9 870.5

346.3 343.7 342.3

210.9 209.2 202.3

367.0 361.3 357.5

79.5 81.3 80.6

48.0 47.2 45.9

151.9 154.7 156.8

321.9 329.3 338.8

368.0 372.2 368.2

20.5 20.3 20.4

294.8 296.9

342.0 341.9

388.5 386.1

72.8 73.2

1184.4 1182.5

861.4 855.2

340.0 334.2

197.7 201.9

350.7 347.3

79.8 82.4

43.9 46.0

158.9

350.6

368.7

20.3

1993-JAN. FEB. p

1. 2. 3. 4. 5.

Net of money market mutual fund holdings of these items. Includes money market deposit accounts. Includes retail repurchase agreements. All IRA and Keogh accounts at commercial banks and thrift institutions are subtracted from small time deposits. Excludes IRA and Keogh accounts. Net of large denomination time deposits held by money market mutual funds and thrift institutions. p-preliminary

March 19, 1993 Treasury bills Period

1990

Net purchases

Redemptions (-)

Nt change

Treasurycoupons Net purchases 3 urchasesRedemptions 1-5 5-10 over 10 )

17,448 20,038 13,086

13,048 19,038 11,486

425 3,043 1.096

50 6,583 13,118

-100 1,280 2,818

1,160 4,356 7,664 5,858

800 900 1,165 178

2,950 550 650 2,433

400

---04

2,160 4,356 7,664 5,858

1992 ---Q1 ---Q2 ---Q3 ---04

-1,000 4,415 867 8,805

-2,600 4,415 867 8,805

2,452 2,193 3,900 4,572

505

1,425

4,110 306

200 1,993

271 595 4,072 1,064 3,669

400 3,500 200 4,172 200

1991

1992 1991 ---Q1 ---Q2 --Q3

1992 March April May June July August September October November December 1993 January February Weekly December 16 23 30 January 6 13 20 27 February 3 10 17 24 March 3 10 17 Memo: LEVEL (bil. $) 6 March 17

STRICTLY CONFIDENTIAL (FR) CLASS II-FOMC

NET CHANGES IN SYSTEM HOLDINGS OF SECURITES 1 Millions of dollars, not seasonally adjusted

3,136

Net Change

Federal agendes redemptions -)

Net change outright holdings total 4

Net RPs

375 2,333

375 11,282 19,365

13,240 27,726 30,219

11,128 -1,614 -13,215

880

375

4,150 1,450 1,815 3,867

5,310 5,698 9,419 7,299

-16,864 992 152 14,106

597 945 1,276

655 731 947

2,452 3,730 5,927 7,256

-233 7,896 6,617 15,939

-14,636 1,137 14,195 -13,912

1,425

1,930 -49 4,149 3,796 -85 812 5,890 4,272 7,820 3,848

248 345 -1,203 1,996 -914 5,371 9,739 -19,267 2,425 2,929

-103 -85

-6,128 4,788

3,051

1,353 11,480 -7,487 11,371 -16,595 10,941 -10,279 6,232 -9,727 6,075 -228 3,576 -5,137 -1,152

200 3,530

597 195 750

595 5,332 200 6,756 300

1,176 100

3,136

--- -37

--- --

.---

-65 -38

--- -

-50

--- --- --

-35 -60

--- --- --- 150.2

1. Change from end-of-period to end-of-period. 2. Outright transactions in market and with foreign accounts. 3. Outright transactions in market and with foreign accounts, and short-term notes acquired in exchange for maturing bills. Excludes maturity shifts and rollovers of maturing issues.

34.3

70.8

19.6

28.1

308.6

-6.4

4. Reflects net change in redemptions (-) of Tre asury and agency securities. 5. Includes change in RPs (+), matched sale-pu rchase transactions (-), and matched purchase sale transactions (+). 6. The levels of agency issues were as follows:

March 17

within 1 year 1.9

1-5 2.4

5-10 0.7

over 10 0.1

total 5.1

Cite this document

APA

Federal Reserve (1993, March 22). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19930323

BibTeX

@misc{wtfs_bluebook_19930323,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1993},
  month = {Mar},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19930323},
  note = {Retrieved via When the Fed Speaks corpus}
}