greenbooks · March 30, 1987

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 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.

CONFIDENTIAL (FR) CLASS III - FOMC

March 27,

1987

SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS

Prepared for the Federal Open Market Committee

By the Staff Board of Governors of the Federal Reserve System

TABLE OF CONTENTS

Page

THE DOMESTIC NONFINANCIAL ECONOMY Consumer prices

.........

.............

Table Recent changes in consumer prices. .

. .

THE FINANCIAL ECONOMY Tables . . . . . . . . . . . . . . . .... . .. Monetary aggregates Commercial bank credit and short- and intermediateterm business credit . . . . . . . . . . . . . . . . . .. Selected financial market quotations . . . . . . . . . . . .

3 4 5

SUPPLEMENTAL NOTES THE DOMESTIC NONFINANCIAL ECONOMY Consumer prices The consumer price index rose 0.4 percent in February, after a sharper 0.7 percent increase a month earlier.

Prices of gasoline and fuel

oil posted further sizable increases last month-about in line with the expected passthrough of higher crude petroleum costs to the retail level. Other energy prices were again little changed.

Food prices, which were up

0.3 percent, continued to rise at about the same pace that has prevailed since last September.

Prices of fresh vegetables-a particularly volatile

category-jumped again last month, but this was offset by lower prices for meats, eggs, and coffee. Excluding energy and food, consumer prices rose 0.3 percent in February, down a bit from the 0.5 percent rise posted in January.

One

factor was the introduction of price and financing incentives for motor

vehicles.

But, price increases for other consumer goods and services also

averaged somewhat less in February than in January, despite further large markups for apparel and tobacco.

RECENT CHANGES IN CONSUMER PRICES (Percentage change; based on seasonally adjusted data)l Relative Importance Dec. 1986

1986 1985

1986

-Annual rateAll items 2 Food Energy

All items less food and energy Commodities Services Memorandum: CPI-W 3

1987 Jan. Feb. -Monthly rate-

100.0 16.2 7.4

3.8 2.7 1.8

1.1 3.8 -19.7

2.0 8.4 -21.0

2.5 4.1 -9.9

.7 .4 3.0

.4 .3 1.9

76.4

4.4

3.8

3.7

26.1 50.3

2.1 5.7

1.4 5.2

2.6 4.3

1.4 5.1

.6 .5

.0 .4

100.0

3.6

1.7

2.2

1. Changes are from final month of preceding period to final month of period

indicated. 2. Official index for all urban consumers. 3. Index for urban wage earners and clerical workers.

(Based

MONETARY AGGREGATES on seasonally adjusted data unless otherwise noted) 1985:04 to 1986:04 -----

1. 2. 3.

Ml M2 M3

15.3 8.9 8.8

1986 I

Jan.

1987 Feb.

March 27,

Mar.P

1987

Growth frao 04 1986 to e Mar. 1 9 8 7 P

Percentage change at annual rates ----

12.3 7.4 8.3

17.1 10.0 8.9

11.7 9.5 9.1

-0.7 -0.3 1.3

6 3 3

11 5-1/4

5-1/2 Levels in billions of dollars Feb. 1987

Selected components 4.

Currency

7.5

7.0

7.7

Demand deposits

11.6

9.7

12.9

Other checkable deposits

28.6

21.7

32.0

6.9

5.9

7. M2 minus M 2 8. 9.

Overnight RPs and Eurodollars, NSA General purpose and broker/dealer money market mutual fund shares, NSA Commercial banks Savings deposits, SA, plus MMDAs, NSA 3 Small time deposits Thrift institutions Savings deposits, SA, plus MNDAs, NSA3 Small time deposits

10. 11. 12. 13. 14. 15.

13 minus M24 . 18. 19. 20. 21. 22.

Large time deposits At comercial banks, net 5 At thrift institutions Institution-only money market mutual fund shares, NSA Term Ps, NSA Tern urodollars, USA

16.3

187.2

-17.3

-4

300.7

39.8

13.5

242.7

7.6

8.8

-0.2

1.5

27.4

99.4

-55.9

17.3 6.8

19.7 6.6

13.6 6.7

8.1 10.6

10.3 -1.1

7 2

210.8 905.4

16.0 -4.2 4.3

11.6 0.7 4.4

19.3 -9.0 4.2

18.0 0.0 4.6

2.9 -7.2 5.1

9 -7 6

542.8 362.5 899.8

12.0 -1.2

6.8 2.6

16.5 -4.9

16.0 -4.7

16.7 -4.7

15 -2

415.1

8.3

11.7

4.6

7.8

7.4

698.1

-1.2 -0.6 -2.3

7.0 16.0 -10.1

-4.8 0.0 -14.0

24.5 20.1 -2.5

-1.4 -19.0 46.2

10.0 38.6 56.9

30.3 28.6 2.3

32.1 33.7 7.2

-12.5

7.7

-29

2084.1 79.8

484.7

447.8

295.8 152.0 6 -10 31

84.7 83.5 90.5

-- Average monthly change in billions of dollars -ME MORANDA: 23. Managed liabilities at commercial banks (24+25) Large time deposits, gross 24. Nondepoait funds 25. Net due to related foreign 26. institutions, USA 6 Other 27.

0.6 0.9

0.4 0.7

0.8 1.0

13.8 4.5 9.3

4.9 0.9 4.0

n.a. 3 n.a.

509.3 351.1 158.2

4.0 5.2

3.1 0.9

n.a. n.a.

-11.9 170.1

U.S. government deposits at csmmercial 7 banks 0.4 0.2 0.6 0.1 1.9 -5 1. Semi-annual growth rates are computed on a quarterly average basis. Dollar mounts shown under memovanda are calculated on an end-month-of-quarter basis. 2. Nontransactions M2 is seasonally adjusted as a whole. 3. Growth rates are for savings deposits, seasonally adjusted, plus money market deposit accounts (MIDAs), not seaCommercial bank savings deposits excluding MHDAs increased during February and March 1987 at rates sonally adjusted. of 34.5 percent and 27 percent, respectively. At thrift institutions, savings deposits excluding MMDAs increased during February and March 1987 at rates of 33.2 percent and 26 percent, respectively. 4. The non-M2 component of M3 is seasonally adjusted as a whole. t of large-denomination time deposits held by money market mutual funds and thrift institutions. sists of borrowings from other than commercial banks in the form of federal funds purchased, securities sold agreements to repurchase, and other liabilities for borrowed money (including borrowings from the Federal rve and unaffiliated foreign banks, loan RPs and other minor items). Data are partially estimated. 7. Consists of Treasury demand deposits and note balances at commercial banks. pe--preliminary estimate n.a.--not available 28.

COMMERCIAL BANK CREDIT AND SHORT- AND INTERMEDIATE-TERM BUSINESS CREDIT 1 (Percentage changes at annual rates, based on seasonally adjusted data)

1986 02

1987 04

Dec.

-------------------------

1. 2.

Total loans and securities at banks Securities

Jan.

Feb.

March 27,

Levels in bil. of dollars February

Commercial Bank Credit -------------------

3.9

13.5

;.5

17.4

18.4

2.2

2114.5

4.9

31,,9

6.0

7.0

0.1

7.2

505.6

20.1

16.9

18.6

8.8

316.2

-29.2

4.5

189.4

U.S. government securities

7.9

28.4

Other securities

0.7

37.3

3.6

7.8

10.6

20.7

24.2

0.7

1608.9

19.4

38.5

32.0

-1.7

550.4

38.6

34.3

39.6

24.7

24.2

12.8

501.5

7.3

5.0

0.4

314.4

30.7

-27.7

203.0

Total loans

-14.5

Business loans

2.0

2.8

Security loans

-62.7

18.8

-64.7

Real estate loans

13.6

17.1

Consumer loans

10.

13.3

Other loans

12.

Business loans net of bankers acceptances Loans at foreign branches Sum of lines 11 & 12 Commercial paper issued by 3 nonfinancial firms

15.

Sums of lines 13 & 14

16.

Bankers acceptances: related4,5

17.

U.S.

-R3.8

5.6

5.4

-1.6

9.2

-1.6 Short-

1.0

-8.6

6.7

--------

11.

1987

7.1

and Intermediate-Term Business Credit ---

19.8

39.4 -61.4

31.8

-1.3

545.5

70.1

16.3

-21.5

-28.9

0.2

18.1

36.0

28.0

-12.7

-19.1

-39.3

3.0

-42.1

77.1

-4.7

638.9

-93.4

0.6

--- 561.8

-1.6

3.5

13.0

25.9

24.8

17.6

3.6

-27.4

-37.2

-11.5

n.a.

30.9 (Jan)

-0.6

3.5

10.9

22.8

22.9

n.a.

672.3 (Jan)

11.4

3.4

10.5

8.4

6.3

n.a.

172.6 (Jan)

1.9

3.4

10.9

20.0

19.5

n.a.

844.9 (Jan)

trade

Line 15 plus bankers acceptances: U.S. trade related

18.

Finance company loans to business

19.

Total short- and intermediateterm business credit (sum of lines 17 & 18)

U.a.--ot available. p-prel iinary 1. Average of Wednesdays for dometically chartered banks and awerage of current and preceding ends of months for foreign-related institutions. 2. Loans at foreign branches are loans made to U.S. finma by foreign branches of dmestically chartered banks. 3. Average of ednesdays. 4. Based on average of current and preceding ends of month. 5. Consists of acceptances that finance U.S. imports, U.S. exports and domestic shipment and storage of goods.

SELECTED FINANCIAL MARKET QUOTATIONS 1/

(percent)

1984

1985

1987

Qage frun:

March

June

11.63

8.58

6.90

6.18

6.11

-0.79

-0.07

10.67 10.77

6.52

11.13

8.80 9.13 9.25

6.57 6.62

5.86 5.84 5.77

5.57 -0.95 5.60 -0.97 5.70 -0.92

-0.29 -0.2 -0.07

11.42

8.94

629

6.31

11.35

6.81

6.18

-. 56

9.12

6.23 -0.58

0.02 0.05

Lare negotiable CD's 3/ 1-conth 11.52 3-nth 11.79 6-ath 12.30

8.89 9.29 9.92

6.88 6.91 6.97

6.18 6.17 6.17

6.25 -0.63 6.22 0.69 6.22 -0.75

0.07 0.05 0.05

Eurodollar deposits 4/ 1-month 11.89 12.20 3-onth

8.89 9.58

7.01 7.01

6.21 6.24

6.38 -0.63 6.36 -0.65

0.17 0.12

10.50

8.50

7.50

7.50 -1.00

U.S. Treasury (costant aturity) 11.22 13.49 -year 12.02 1year 30-5ear 11.97

7.86 8.39 7.93

6.74 7.37 7.64

6.61 -1.25 7.24 -1.15 7.56 -0.37

-0.13 -0.13 -0.08

Mnicipal revenue 5/ (Bond Buer index)

11.44

10.25

8.57

6.98

7.11 -1.16

0.13

Cbrpoate-A utility Rently offered

15.30

13.23

9.70

8.94

8.87 -0.83

-0.07

14.68 12.31

13.2

10.76

8.65

9.11 7.58

.08 -1.68 7.55 -1.10

-0.03 -0.03

198

1919

Highs

highs

FPC

highs Feb 11

June

'ar 26 highs

FMC

Feb 11

Short-term rates Federal fris 2/ revasury bills 3/

Cmercpial paper

1-nth 3-onth

Bnk price rate

13.00

Interediate- and lag-tean rates

1:0

Hne mtgage rates 6/ S&L fix rate S&L AM, 1-yr.

1984 Lws

11.14 1985

1987 Percent dange rwm:

1986 PC Feb 11 Mar 26 igbs

arcabhIMgbs lows

FOC Feb 11

Stock prices w-Jaoes Industrial NYSE Ccposite AM Cmposlite NASDAQ (MTC)

108.57 5.13 187.16 225.30

1217.35 102. 222.28 276.18

1955.57 145.75 281.19 411.16

2171. 2372.59 21.32 158. 170. 17.17 314.45 .41 1.66 '408.25 438.71 6.70

1/ One-day quotes except as noted.

2/ Averages fbr two-week reserve maintenance period closest to date shown. Last observation is the average

for the maintenanoe period endirg March 25, 1987. 3/ Seoonary arket.

9.24 7.7 7.2 7.46

4/ Averages for statement week closest to date ahown.

5/ 'ursday quotes.

/Friday quotes.

S--estizate

Cite this document

APA

Federal Reserve (1987, March 30). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19870331_part2

BibTeX

@misc{wtfs_greenbook_19870331_part2,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1987},
  month = {Mar},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19870331_part2},
  note = {Retrieved via When the Fed Speaks corpus}
}