Greenbook/Tealbook

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 some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.

1

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 optical 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.

Content last modified 6/05/2009.

CONFIDENTIAL (FR)

SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS

Prepared for the Federal Open Market Committee

By the Staff Board of Governors of the Federal Reserve System

January 31,

1969

SUPPLEMENTAL NOTES The Domestic Financial Situation Bank credit.

Total loans and investments at all

commercial

banks are estimated to have risen $1.3 billion in January, at an annual rate of about 4.1 per cent.

This increase reflects principally

an acceleration in business loan growth, with bank security holdings declining further.

On an end-of-month basis, the credit proxy (adjusted

to include Euro-dollar borrowing)

is

estimated to have declined at about

a 3.4 per cent annual rate over January.

Most of the difference between

these two series can be accounted for by the ^un^usually low credit level on December 31 in the total loans and investments series--due to the temporary withdrawal of Euro-dollars--and a large increase in

other borrowings in

January not reflected in the proxy.

NET CHANGE IN BANK CREDIT All Commercial Banks (Seasonally adjusted annual rate, in per cent)

1968 JulyAug.

Sept.Oct.

Total loans and investments-

24.1

U.S. Government securities

Nov.Dec.

Jan 1/

14.9

7.7

4.1

34.8

2.8

-23.4

-11.7

Other securities

15.0

27.5

17.5

1.7

Total loans

19.5

14.4

13.1

8.6

Business loans

12.1

8.5

12.9

24.1

All other loans

24.2

18.0

13.2

-1.2

2/

1/ 2/

All January figures are preliminary estimates based on incomplete data and are subject to revision. Last-Wednesday-of-the-month data, except for June and December, which are last-day-of-the-month.

-2Treasury February refunding.

On Wednesday, the Treasury

announced the terms of its February refunding.

Two issues will be

offered in a straight "rights" exchange for the February 15 maturities, $5.4 billion of which are publicly-held:

a 15-month 6-3/8 per cent

Note, priced at a discount to yield 6.42 per cent; and a 7-year 6-1/4 per cent Note, also priced at a slight discount to yield 6.29 per cent. Books will be open February 3-5, with payment on the 17th.

In the

press conference at the time of the announcement, Undersecretary Volker also stated that the Treasury plans to raise $2-3 billion of new cash between late February and mid-April, part of which could be raised through a Treasury bill "strip" in late February or early March. The market accorded the Treasury's announcement a very quiet reception.

Trading in the new Notes on a "when-issued" basis has not

been large and has generally taken place at prices barely 1/32 higher than issue price.

Interest in the "rights" for the maturing has also

not been exceptional, and only slight price premiums have developed.

KEY INTEREST RATES

1968-69

1969 Jan. 9

Jan. 30

Low

High

4.56 (1/3)

6.46 (1/22)

6.43 (1/8)

6.27 (1/29)

4.82 5.25 5.43 5.00 5.13

(1/29)

6.29(12/24)

(3/7) (2/2) (2/9) (3/7)

6.62 7.81 6.49 6.38

6.15 6.62 7.56 6.49 6.38

6.17 6.38 7.41 6.41 6.25 6.00 6.40

Short-Term Rates Federal funds (weekly average) 3-months Treasury bills (bid) Bankers' acceptances Euro-dollars Federal agencies Finance paper CD's (prime NYC) Highest quoted new issue Secondary market 6-months Treasury bills (bid) Bankers' acceptances Commercial paper Federal agencies CD's (prime NYC) Highest quoted new issue Secondary market 1-year Treasury bills (bid) Prime municipals

(1/9)

(1/8) (1/9)

(1/9)

5.25 (2/8) 5.20 (1/31)

6.00 (1/30) 6.65 (1/9)

6.00 6.65

4.98 5.38 5.50 5.25

6.41 6.75 6.62 6.62

6.33 6.75 6.62 6.57

6.27 6.50 6.50 6.54

6.25 (1/30) 6.75 (1/9)

6.25 6.75

6.25 6.50

2.72 (8/8)

6.47 (12/24) 4.25 (1/16)

6.06 4.00

6.19 4.10

5.42 (1/12) 5.16 (8/1)

6.43 (1/7) 6.12 (12/24)

6.34 5.99

6.27 6.07

5.95 (9/5) 6.77 (10/3)

6.60 (1/23) 7.37 (1/2)

6.58 7.34

6.59 7.26

6.13 (8/29)

6.93 (1/16) 7.14 (12/5)

6.90 7.05

6.92

3.80 (8/8)

4.91 (1/30) 4.60 (1/30)

4.85 4.58

4.91 4.60

7.12 (5/6)

7.86 (1/27)

7.66 (1/6)

7.86 (1/27)

(1/29) (3/7) (3/7) (2/9)

5.50 (3/7)

5.45 (1/31) 5.05 (8/1)

(12/24)

(1/9) (1/9) (12/26)

Intermediate and Long-Term Treasury coupon issues

5-years 20-years Corporate Seasoned Aaa Baa New Issue Aaa With call protection Without call protection Municipal Bond Buyer Index Moody's Aaa Mortgage--implicit yield in FNMA weekly auction 1/

6.29 (2/2) 4.07 (8/8)

--

1/ Yield on 6-month forward commitment after allowance for commitment fee and required FNMA stock purchase. Assumes discount on 30-year loan amortized over 15 years.