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 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) March 31, 1967. MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments Since the last meeting of the FOMC, there has been a marked further reduction in short-term rates, with declines of around 35 basis points in bill rates, sizable drops in rates on CD's, and declines of 40 - 50 basis points on Federal Agency issues and bankers' acceptances. The Federal funds rate moved generally into a 4 - 4-3/4 per cent range, as compared with 5 - 5-1/8 per cent in February. And new dealer loan rates during March were most often in a 5 - 5 per cent range at New York banks and 4-3/4 - 5 per cent from sources outside New York. These rate declines have been partly encouraged by market expectations of a discount rate decrease, but they also importantly reflect the further easing of bank reserve conditions during the past month when nonborrowed reserves expanded by a more than 25 per cent annual rate. The rapid expansion in reserves in March, the easing of money market conditions, and the expectations that monetary policy would ease further, have also contributed to declines in long-term rates. But the extremely heavy calendar of new corporate and other issues has limited the declines. As a result, unlike short-term rates, yields on corporate, state and local government, and long-term FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (Monthly averages and, where available, weekly averages of daily figures) Money arket Indicators Free Borrow- Federal 3-month keserves ings Funds Treas(In millions Rate ury Period of dollars) Bill Bond Yields Corporate MuniciU.S. New pal Gov't. Issues (Aaa) (20 yr) Flow of Reserves. Bank Credit and Money NonTotal Bank Money Time borrowed ReCredit upply Deposits Reserves serves Proxy 2 (Aaa)l/ (i o l n dolars) (In billions of dollars) (Seasonally Adjusted) + 57 +1.1 +0.9 +256 +3.1 +1.6 + 6 +1.0 -0.7 +0.9* +0.9 + 3* +224* +2.1* -1.5 -400 -0.7 -+129 -0.1 +0.9 -195 -0.7 -0.9 - 35 -1.1 -0.4 + 21 +0.9 +1.1 +1.0 +1.9 +1.6 +1.5* +1.9* +1.4 +0.4 -0.3 +0.1 +1.2 .966--Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. -210 -277 -339 -352 -359 -374 -390 -425 -235 -196 545 638 653 722 439 740 765 766 605 529 4.64 4.64 4.83 5.13 5.18 5.45 5.30 5.46 5.75 5.39 4.58 4.61 4.63 4.50 4.78 4.95 5.36 5.33 5.31 4.96 4.72 4.65 4.69 4.73 4.84 4.95 4.94 4.83 4.88 4.76 5.09 5.03 5.16 5.35 5.48 5.64 5.82 5.70 5.71** 5.73** 3.55 3.46 3.53 3.60 3.77 3.91 3.93 3.82 3.78 3.79 - 88 +206 + 1 - 16* +135* -302 + 5 -134 +108 + 21 1967--Jan. Feb. p - 60 + 35 476 366 4.87 4.99 4.72 4.56 4.51 4.61 5.43** 5.18** 3.74 3.62 +492 +353 +331 +268 +3.3 +3.1 -0.7 +0.9 +2.4 +2.7 Mar. p +222 200 -- -- -- 5.33** 3.48 +522 +433 +3.1 +2.1 +2.1 - 52 +165 +214 +264 +235 167 202 173 302 135 4.65 4.70 4.55 4.70 4.15 4.56 4.38 4.33 4.18 4.17 4.70 4.60 4.55 4.53 4.57 5.45** 5.31** 5.40** 5.33** 5.21** 3.53 3.48 3.48 3.46 3.46 +0.3 +0.6 +1.3 +2.3 +0.1 -0.8 +0.7 +1.1 -0.3 +0.2 +0.2 +0.7 +0.7 +0.3 +0.3 1967--Mar. 1 8 15 22 29 p p p p p Averages Annual rates of increase 3/ Year 1966 First Half 1966 -283 -228 672 581 5.06 4.69 4.85 4.59 4.77 4.67 5.41** ,5.12 3.67 3.51 + 0.8* + 3.0* + 1.2* + 4.6* + 3.7* + 7.1* + 1.9 + 4.7 + 8.4* +10.3* Second Half 1966 -338 763 5.39 5.12 4.87 5.74** 3.83 - - 2.2* + 0.3* - + 6.1* -345 -320 - 26 738 638 397 5.32 5.46 5.06 4.81 5.27 4.74 4.85 4.91 4.66 5.55 5.78** 5.39** 3.80 3.87 3.58 - 4.2 - 2.7 +13.3 -13.4 + 0.4 + 6.3 1.5* 0.9 Recent Variations in growth July 6-Aug. 10 Aug. 10-Nov. 16 Nov. 16-Mar. 29 I/ Issues carry a 5-year call protection; ** includes issues carrying 5-year and 10-year call protection. Time deposits adjusted at all commercial banks. Base is average for month preceding specified period or in case of weekly periods, the first week shown. Changes have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary. March 31 , 1967. 2/ 3/ +12.7 + 1.4 +15.4 CONFIDENTIAL (FR) -2- March 31, 1967. U.S. Government securities remain above their earlier lows reached in the late January-mid-February period. A large part of the rapid rise in nonborrowed reserves was absorbed by an increase in excess reserves and a reduction in Excess reserves rose to an average of about $425 million borrowings. during the past four statement weeks from $345 million during the previous four weeks, reflecting in part the initial bank response to the recent reserve requirement reduction. At the same time, member bank borrowings from the Federal Reserve declined from $365 million to $205 million. In consequence, net free reserves averaged $220 million during the past four statement weeks, up sharply from a net borrowed reserve average of around $20 million during the previous four weeks. Required reserves, however, did grow substantially in March and total member bank deposits (the bank credit proxy) expanded at about a 15 per cent annual rate. Borrowings by banks abroad through their foreign branches appear to have shown little change on balance in March. Over the four month December-March period, nonborrowed reserves rose at an 18.5 per cent annual rate, the bank credit proxy at 12.5 per cent (about 11.5 per cent after allowing for the decline in foreign borrowings earlier in the quarter), and the end-of-month series on total loans and investments of banks at an estimated 11.5 per cent annual rate. The rapid rate of bank credit growth reflects in part return flows of funds into time deposits as the decline in market rates permitted CONFIDENTIAL (FR) -3- March 31, 1967. banks to reverse the disintermediation of last summer and fall. Time and savings deposits expanded at about a 15 per cent annual rate in March, and at about a 16 per cent rate over the past four months. The March increase was sparked by a resurgence of growth in passbook savings. Growth in outstanding negotiable CD's has moderated substantially since early in the year. The substantial growth in nonborrowed reserves that has been necessary to ease money markets has also led to considerable expansion in private demand deposits and in the money supply. Money supply rose at a 15 per cent annual rate in March, and the rise over the past four months was at a 6 per cent rate. In part, consumers may be re- building both demand and savings deposits because of uncertainties about the economic outlook. Business demand deposit holdings may also have risen in part in order to prepare for large tax payments to be made in the near future. Prospective developments Money market relationships with no policy shift. Credit markets during the coming month are likely to be affected by sizable, though temporary, demands for short-term credit to help finance large accelerated April tax payments; by a continued relatively heavy bond market calendar; by the need for investors to make payments on the even heavier volume of issues of recent weeks; by the ending of initial bank adjustments to the March reductions in reserve requirements; and by fluctuations in market expectations concerning Federal CONFIDENTIAL (FR) -4- Reserve policy actions. March 31, 1967. Against this near-term background, as best can now be projected, a continuation of prevailing conditions of ease in the money market, assuming no change in the discount rate, would likely require a continued liberal provision of reserve funds if the Federal funds rate were to remain in a 4½ - 4-3/4 per cent range and the 3-month bill rate in a 4.00 - 4.20 per cent range. The April tax date will tend to exert upward pressure on money market rates. Toward the end of April and in early May, however, normal seasonal demands for bills could be augmented if the Treasury undertakes an attractive rights financing in connection with its regular May refunding (which will be announced in late April and books will be open in early May). A Federal funds rate generally in a 4½ - 4-3/4 per cent range would probably keep dealer loan rates by and large at 5 per cent or above in New York, so that marginal dealer borrowing costs would also be high enough to make the cost of carry an important factor reducing dealer willingness to hold relatively large bill positions. Such dealer borrowing costs might also be subject to pressure if the basic reserve deficiency of major money market banks enlarges around mid-April as it did last year when tax-related needs for funds were substantially less than this year. Thus, given these possibilities, it may take a Federal funds rate around 4 per cent, and often shading lower, to keep money market rates and conditions as comfortable over-all as in recent weeks. -5- CONFIDENTIAL (FR) March 31, 1967 Maintenance of prevailing conditions of ease in the money market may still entail a net free reserve position for member banks as high as the recent $200 - $300 million range, especially around the period of peak tax date pressures. There appears to be some scope for a decline in excess reserves over the period ahead, since, as indicated earlier, banks built up excess reserves somewhat as part of their initial response to the recent reserve requirement reduction. However, wide swings in marginal reserve measures are probable in the coming weeks in view of the likelihood of sharp shifts in reserve distribution between money market and other banks during April. Bank credit, deposits and long-term rates with no policy shift. The reserves provided to maintain the market conditions noted in the preceding paragraphs and in light of expected large credit demands over the tax period would probably support bank credit growth in a 10 - 13 per cent annual rate range (as measured on a daily average basis by the proxy). Time and savings deposits are expected to rise further, but the rate of growth--in a 10 - 13 per cent range--is likely to be slower than the exceptional pace of recent months. Consumer-type time deposits and passbook savings are likely to show continued relatively sizable growth unless consumer spending picks up, but it is assumed that net expansion in outstanding CD's will be moderate. Large banks may prefer to finance temporary tax-related loan demands through day-to-day borrowing in the Federal funds market or even from abroad, rather than in the CD market where CONFIDENTIAL (FR) -6- March 31, 1967. they are committed to the funds at somewhat longer term and with relatively little difference in cost. Although the heavy volume of tax payments in prospect in April is expected to boost bank loan demands, some factors may operate to limit the extent of loan rise. For example, recent capital market financing may be used to a substantial extent to reduce indebtedness to banks. Such loan repayments, in conjunction with a large expected growth in U.S. Government deposits as corporate and personal income tax payments are made, probably will reduce private holdings of demand deposits somewhat. Such holdings are projected to decline in a 2 - 5 per cent (annual rate) range in April. With currency continuing to rise, however, the money supply is expected to remain about unchanged. While staff projections of loan growth in April are large and, of course, could be exceeded in actual event, there is the possibility that loan growth could be less rapid than expected, either because we have underestimated loan repayments out of capital market proceeds or because the inventory adjustment gathers momentum. Under these conditions, demand deposits could decline even more. In addition banks might reduce their demands for borrowings, including funds from abroad, and also cut back their demand for time deposits further. But the full force of such developments limiting bank credit expansion is not likely to show up until later in the spring. CONFIDENTIAL (FR) -7- March 31, 1967. Should expectations of a lower discount rate be disappointed, even the sizable bank reserve and credit expansion that is presently the staff's maximum likelihood projection--given maintenance of prevailing money market conditions--may not be sufficient to forestall some back-up in long-term market rates in April. While the odds would appear to favor continued small declines in long-term rates because of the moderation in the new issue calendar from the record March volume, dealer holdings of municipal issues have been building up and recent new corporate issues appear to have been priced somewhat ahead of the market in anticipation of a further monetary policy easing action. Further ease through open market operations alone. To achieve some easing of monetary policy without a discount rate reduction is likely to require an increase in net reserve availability to a $300 - $350 million range. This could be consistent with a Federal funds rate in a 4 - 4½ per cent range and with increased chances that growth in the monetary aggregates will be closer to or above the upper ends of the ranges indicated earlier. Credit market reactions to such a move are not entirely predictable, however, with some market participants becoming even more convinced that a sizable discount rate cut was imminent and with others perhaps becoming more doubtful. An easing policy carried out only through open market operations might be construed as indicating that the System may foresee the need for reversing monetary policy in the near future and therefore is reluctant CONFIDENTIAL (FR) March 31, 1967. -8- to lower the discount rate; this would tend to limit interest rate declines associated with further ease in open market operations. The 3-month bill rate could fluctuate widely over the near-term under the circumstances as expectations with respect to discount rate change wax and wane. Further ease with discount rate cuts. A 1/4 point decline in the discount rate to 4½ per cent would tend essentially to do little more than confirm current levels of security yields. It would become more likely that the Federal funds rate would move below 4 assuming free reserves in their recent range. per cent, It would also serve to lower dealer lending rates somewhat, and thereby take some potential upward pressure off bill rates in the longer run. Over the short-run, though, the 3-month bill rate may rebound from its very recent 4 per cent level, and perhaps fluctuate in a 3.90 to 4.15 per cent range over the next four weeks. If accomplished soon, a small discount rate cut could also smooth market adjustments around the mid-April tax date. The expansion in reserve and monetary aggre- gates could very well remain within the ranges earlier indicated for an unchanged monetary policy since borrowers and banks have to a great extent already built in a discount rate reduction of at least this size into their decisions. If the discount rate were cut to 4 per cent, the market effects are likely to be more noticeable. The 3-month bill rate might fall into a 3.60 - 4.00 per cent range, as Federal funds and CONFIDENTIAL (FR) March 31, 1967 dealer loan rates declined roughly in line with the discount rate and as the market assumed that supportive open market operations would be forthcoming. Bank lending and time deposit rates--including not only rates on CD's but also on consumer-type time deposits--might tend to move further downwards, especially after the tax period has passed. And such rate movements, or anticipations of them, are likely to reduce long-term market rates somewhat further, to reduce interest rates offered by nonbank depositary institutions, and to encourage additional declines in mortgage rates and easing in mortgage terms. Growth in bank credit with the discount rate at 4 per cent could be a few percentage points more rapid than the 10 - 13 per cent range earlier indicated. This would be particularly the case if banks permitted CD rates to lag behind the decline in bill rates--taking the opportunity to obtain additional CD money. Downward adjustments in bank lending terms would also tend to increase bank credit growth as capital market financing became relatively less attractive. But it is conjectural whether such adjustments would come soon enough to affect April. In any event, a point decline in the discount rate would probably require a follow through over the weeks ahead in the form of somewhat larger free reserve positions, in order to attain the full extent of easing in market conditions likely to be set in motion by the discount rate action. Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Excess reserves Period As Member banks r rev i s e d to reserves Free borrowings date Monthly (reserves weeks ending in): 335 361 315 370 380 366 375 341 370 333 545 638 653 722 739 740 765 766 605 529 -210 -277 -339 -352 -359 -374 -390 -425 -235 -196 417 400 422 476 366 200 - 59 + 34 4 11 18 25 395 628 127 516 565 585 217 538 1 8 15 22 p 340 289 418 553 176 353 456 477 1 p 115 367 387 566 370 167 202 173 302 135 1966--March April May June July August September October November December 1967--January February p March p As expected at conclusion of each week's open market opeations As first published each week +222 Weekly: 1967--Jan. Feb. Mar. 8 p 15 p 22 p 29 D -170 -188 -175 + 43 - 90 - 22 + 67 - 39 - 47 + 61 - 53 +164 +154 - 64 - 45 - 50 - 91 - 38 + 76 - 7 +101 + 2 +117 - 52 + 4 +165 +204 +277 +235 - 17 +165 +214 +264 +235 I p - Preliminary - 62 +216 +217 +290 +253 .1. * - Reflects end of week statistical adjustments increasing F.R. float due to snow storms in the midwest. TABLE A-2 AGGREGATE RESERVES AND RELATED (In per cent, Re s e r Period Total Reserves MEASURES Retrospective Changes, Seasonally Adjusted annual rates based on monthly averages of daily figures) v e A g r e g a t e s Required reserves Against Nonborrowed Nonborrwe Total Demand ReservesDeposits Mo n e t Total Member Bank Deposits (e(omm. ary Va r i a b 1 e s Time Money Supply Private Deposits Total Demand banks) Deposits Annually: 1965 1966 + 5.3 + 1.2 + 4.3 + 0.8 + 5.3 + 1.5 + 2.3 - 0.2 + 9.1 + 3.7 +16.0 + 8.4 + 4.7 + 1.9 + 4.4 + 0.9 Monthly: 1966--January February March April May June 2/ July 2/ August 2/ September 2 October 2/ November 2/ December 2/ + 6.7 + 4.0 + 2.9 +13.2 + 0.3 + 0.2 +11.4 -20.2 + 6.6 -10.0 - 1.8 + 1.1 + 9.5 + 3.1 - 4.6 +10.9 + 0.1 - 0.8 + 7.1 -15.8 - 0.3 - 7.1 + 5.7 + 1.1 + 6.9 + 2.9 + 2.7 +11.9 + 2.1 + 1.6 + 8.4 -14.8 - 0.2 - 1.1 - 7.6 + 4.9 +11.3 + 3.8 + 4.0 +11.7 - 4.8 + 1.3 + 2.9 -16.9 - 3.2 - 2.0 - 8.2 - 1.6 + 8.1 + 3.5 + 5.5 +15.5 + 4.9 + 4.4 +10.3 - 3.4 - 0.5 - 2.9 - 5.4 + 3.9 + 7.4 + 5.7 + 8.1 +15.3 +12.7 +11.8 +14.8 +10.7 + 3.0 - 2.3 + 0.8 + 9.1 + 5.7 + 1.4 + 7.8 +11.3 - 4.9 + 6.3 -10.5 -+ 6.4 - 6.3 - 2.8 + 7.8 + 4.6 -+ 8.2 +12.7 - 7.2 + 7.2 -16.2 - 0.9 + 7.3 - 8.1 - 4.6 + 8.2 1967--January 2/ February 2/r March 2/ p +17.1 +13.6 +21.8 +26.0 +18.4 +26.7 +13.5 +14.2 +14.9 +12.7 + 9.3 +14.8 +16.1 +15.0 +14.8 +18.1 +20.0 +15.3 - 4.9 + 6.4 +14.8 - 9.1 + 5.5 +17.3 Includes all deposits subject to reserve requirements. Movements in this aggregate correspond closely with movements in total member bank credit. 2/ Changes in reserves, total deposits, and time deposits have been adjusted for redefinition of time deposits effective June 9, 1966. Changes in reserves have been adjusted for increases in reserve requirements in July and September, 1966, and reduction in reserve requirments in March, 1967. p - Preliminary. 1/ Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS, SEASONALLY 24.0 ADJUSTED TOT, AL 23.5 RESERVES -REQUIRED RESERVES - 23.0 22.5 NON BORROWED 22.0 NET --BORROWED RESERVES RESERVES 21.5 21.0 _ BILLIONS OF DOLLARS 1.5 10 MEMBER EXCESS 0 LI~ BANK BORROWINGS RESERVES I __i1ji11_._IL S 1965 D M 1966 1967 Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS 260 TOTAL MEMBER BANK DEPOSITS ICREDIT PROXY) SEAS ADJ, WEEKLY AVERAGE OF DAILY FIGURES 256 252 248 244 240 236 6 LIABILITIES TO OVERSEAS BRANCHES [WEEKLY REPORTING BANKS) NOT SEAS ADJ, WEDNESDAYS 2 0 I I I I 1966 I 1967 Chart 3, MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS BILLIONS OF DOLILARS 180 175 MONEY SUPPLY 170 1651 TIME (All 1601 DEPOSITS ADJUSTED Commercial Bank)-- 155 150 145 140 135 130' 125 NEGOQIABLE CD'S (U nzdiu st* d)_ 155 20 ------------- 15 10 S 1965 D M J M 1966 1967 J ICHANGE IN SERIES Chart 4 DEMAND SEASONALLY DEPOSITS AND CURRENCY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIO NS OF DOLLARSl 45 MONEY SUPPLY COMPONENTS: 40 CURRENCY OUTSIDE BANKS 35 30 L 140 DEMAND DEPOSITS 135 130 125 120 15 10 51 0 S 1965 D M J 1966 S D M 1967 J Table B-1 MAJOR SOURCES AND USES OF RESERVES Retrospective and Prospective in millions, based on weekly averages of daily figures) (Dollar amounts Factors affecting supply of reserves Gold Currency Technical Federal Reserve Gold credit (excl. outside factors net 2/ tock float) float) 1/ banks net 2/ Period Period = Change in total reserves reserves = Bank use of reserves Required Excess Excess reserves reserves 3/ 3/ ACTUAL Year: 1965 (12/30/64 1966 (12/29/65 - 12/29/65) 12/28/66) +4,035 +3,149 -1,602 - 627 - 154 51 798 805 -2,143 -2,243 +1,089 +1,085 +1,188 +1,111 - 99 - 26 - - 729 795 -175 25 4285 63 2255 193 -438 +252 + 20 +179 -196 100 105 190 100 30 75 105 145 130 - 25 - 10 +695 + 75 -385 -720 +480 +230 -770 Year-to-date: (12/29/65 (12/28/66 - Weekly: 1967--Mar. 3/30/66) 3/29/67) - 375 + 221 1 p - 449 + - PROJECTED Apr. Mayy 5 12 19 26 33 10 17 24 +1,228 -1,997 + 169 391 - 468 92 + + 284 - 190 + + + - 200 120 260 50 160 110 + + - 200 90 350 413 176 83 404 389 96 100 147 130 354 32 - 12 + 155 ------- + + - 135 305 235 275 35 575 + + - 190 280 390 50 160 110 ---- + + - 30 120 200 + - 145 125 350 904 862 - 67 4/ + + + + + - 125 95 885 175 355 795 375 85 900 + + + + - 31 5/ p - Preliminary. For retrospective details see Table B-4. For factors included, see Table B-3. For required reserves by type of deposits, see Table B-2. See reverse side for explanation of projections. Includes effect of reduction of reserve requirements $425 million on savings deposits and time deposits under $5 million -- effective March 3, and March 16, 1967. Table B-2 CHANGES IN REQUIRED RESERVE COMPONENTS Retrospective and Prospective Seasonal and Nonseasonal Changes (Dollar amounts in millions, based on weekly averages of daily figures) Total required reserves Period Supporting U. S. Gov't. demand deposits ' Supporting private deposits Seasonal changes Total Demand Time Tim Other than seasonal changes Time Time Demand n Dem ACTUAL Year: 1965 (12/30/64 1966 (12/29/65 - 12/29/65) 12/28/66) +1,188 +1,111 - 89 87 +1,277 +1,194 + 115 - 14 - 788 +242 -1,030 -1,000 + + 25 428 63 37 19 i *1 225 - 193 2 308 222 82 428 + + + + 27 -120 -159 +307 +235 - 4 4 +499 - 5 + 677 +1,221 1/ +118 +351 - Year-to-date: (12/29/65 (12/28/66 Weekly: 1967--Mar. - 3/30/66) - 3/29/67) 1 D - 6 386 2/ 31 417 2/ 10 55 + 50 +125 + 71 - 499 29 PROJECTED ./ 2/ Apr. 5 12 19 26 + + + 100 105 190 100 -270 -115 - 95 +255 + + + - 170 220 285 155 + + + - 165 215 345 150 + 5 - 10 - 15 5 May 3 10 17 24 31 + - 30 75 105 145 130 +180 +145 - 30 - 35 -165 + 150 220 75 110 35 - 195 275 180 270 20 --+ + 5 5 -- - 15 -- 60 - 15 + + + + 15 15 15 15 + 30 +45 + 90 +145 +45 + + + + + 15 10 10 10 10 Reflects reserve requirements changes in July and September 1966. Includes effect of reduction of reserve requirements $425 million on savings deposits and time deposits under $5 million -- effective March 2, and March 16, 1967. p - Preliminary. Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Technical facts factors (net) Period Period Treasury operations t Float Foreign deposits and gold loans ACTUAL Other nonmember deposits and F. R. accounts (Sign indicates effect on reserves) Year: 1965 (12/30/64 1966 (12/29/65 - 12/29/65) 12/28/66) + + 798 805 +294 +673 + 171 64 -1,228 +157 - -1,997 -238 + + - 96 100 147 130 354 +119 +124 +211 -349 - 71 + - + + + - 190 280 390 50 160 110 145 125 350 + 10 +140 -------- + 77 - 30 +598 + 98 972 - 2 -411 -1,200 + 9 -568 179 123 88 393 281 + + 1 5 3 2 3 + + - + + - 200 120 260 50 160 110 + 5 5 + 20 +130 -- + + - 200 90 350 Year-to-date: (12/29/65 - (12/28/66 Weekly: 1967--Mar. 3/30/66) - 3/29/67) 1 8 15 22 29 37 96 27 88 5 PROJECTED 1967--Apr. May 5 12 19 26 3 10 17 24 31 --- ----- - 55 -215 Table B-4 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) 'I-- Total Federal Reserve credit Period l Year: 1965 (12/30/64 1966 (12/29/65 - 12/29/65: 12/28/66 Year-to-date: (12/29/65 - 3/30/66) (12/28/66 - 3/29/67) Weekly: 1967--Feb. f1 t- *.'emIn +4,035 +3,149 - 375 + 221 .S. Total v 1 -i ro Government securities Repurchase Other Bills a rpmenta _ities +3,916 +3,069 347 732 +3,145 +2,158 - 257 +1,165 1 8 15 22 606 663 215 129 242 434 105 69 208 230 59 143 Mar. 1 8 15 22 29 449 391 92 284 190 142 368 16* 158* 53 98 313 177 250 100 11 Federal Agency Securities Bankers' acceptances Seu _ +916 +474 -145 +437 +131 +101 -221 -534 + 26 - 20 + 77 + 52 + 42 + 10 - 38 - 78 -413 - 34 +204 + 46 +212 + 21 + 29 + 51 Member banks borrowings + 2 -362 +177 +103 + 21 -240 + 34 +100 -310 + 35 - 28 +129 -167 -204 * - Includes effect of change in special certificates of +$64 million in the week of March 15, million in the week of March 22, 1967. - 29 1967 and -$64 Chart Reference Table C-l TOTAL, NONBORROWED AND REQUIRED RESERVES Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures)- 1965--January February March April May June July August September October November December 21,960 22,157 22,279 22,449 22,436 22,612 22,682 22,689 22,667 22,737 22,748 23,010 21,625 21,771 21,814 21,953 21,994 22,082 22,158 22,186 22,114 22,248 22,341 22,523 21,563 21,713 21,868 22,036 22,109 22,243 22,332 22,299 22,259 22,439 22,402 22,657 20,702 20,765 20,881 20,985 20,962 21,138 21,247 21,331 21,553 21,720 21,803 21,970 15,730 15,717 15,789 15,831 15,750 15,877 15,912 15.916 16,071 16,151 16,168 16,285 1966--January February March April May June 1/ July 1/ August 1/ September 1/ October 1/ November 1/ December 1/ 23,139 23,217 23,274 23,530 23,536 23,539 23,763 23,363 23,492 23,297 23,262 23,283 22,701 22,759 22,671 22,877 22,878 22,862 22,997 22,695 22,700 22,566 22,674 22,695 22,788 22,844 22,896 23,123 23,163 23,193 23,355 23,067 23,064 23,042 22,896 22,990 22,075 22,084 22,269 22,477 22,453 22,582 22,515 22,517 22,597 22,430 22,383 22,522 16,364 16,356 16,510 16,625 15,534 16,626 16,472 16,428 16,497 16,352 16,321 16,411 1967--January 1/ February p 1/ March p 1/ 23,614 23,882 24,315 23,187 23,542 24,064 23,248 23,523 23,816 22,525 22,737 23,043 16,317 16,427 16,656 1/ Reserves have been adjusted for redefinition of time deposits effective June 9, 1966. Table C-2 DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts in billions, based on monthly averages of daily figures) Monthly Total member bank deposits (credit) I/ Time deposits Private demand U.S. Gov't. demand deposits 2/ deposits 1965--January February March April May June July August September October November December 218.4 220.4 222.5 224.6 225.8 227.7 229.1 230.4 231.1 233.5 234.5 236.4 106.0 107.6 108.6 109.9 111.1 112.2 113.8 115.5 116.9 118.7 120.2 121.2 107.4 107.3 107.8 108.1 107.5 108.4 108.6 108.6 109.7 110.2 110.4 111:2 5.0 5.5 6.1 6.7 7.2 7.1 6.7 6.3 4.6 4.5 4.0 4.0 1966--January February March April May June 3/ July 3/ August 3/ Sept. 3/ Oct. 3/ Nov. 3/ Dec. 3/ 238.0 238.7 239.8 242.9 243.9 244.8 246.9 246.2 246.1 245.5 244.4 245.2 121.8 122.1 122.8 124.8 126.2 127.0 128.9 129.8 130.1 129.6 129.3 130.3 111.7 111.6 112.7 113.5 112.9 113.5 112.4 112.1 112.6 111.6 111.4 112.0 4.5 5.0 4.3 4.7 4.8 4.3 5.6 4.2 3.5 4.3 3.7 2.9 1967--Jan. 3/ Feb. 3/ p Mar. 3/ p 248.5 251.6 254.7 132.4 134.6 136.2 111.4 112.1 113.7 4.8 4.9 4.8 Includes all deposits subject to reserve requirements--i.e., the total of time, private demand, and U.S. Government demand deposits. Movements in this aggregate correspond closely with movements in total member bank credit. 2/ Private demand deposits include demand deposits of individuals, partnerships and corporations and net interbank balances. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary. 1/ TABLE C-2a DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts in billions, based on weekly averages of daily figures) Week ending: Total member bank deposits (credit) /2/ Time deposits Private demand 2/ deposits U. S. Gov't. demand 3/ deposits 1966--Nov. 2 9 16 23 30 246.1 245.8 244.5 243.0 243.2 129.5 129.3 129.3 129.3 129.2 111.2 111.1 111.2 111.5 111.3 5.4 5.3 4.0 2.2 2.7 Dec. 7 14 21 28 244.5 244.5 245.5 245.7 129.5 129.8 130.2 131.0 111.9 111.2 113.1 111.5 3.2 3.5 2.2 3.2 1967--Jan. 4 11 18 25 247.3 247.7 247.8 249.2 131.4 131.7 132.1 132.9 112.6 111.6 111.4 110.5 3.3 4.4 4.3 5.8 Feb. 1 8 15 22 250.3 251.4 251.4 251.7 133.7 134.0 134.5 134.8 111.1 111.7 111.5 113.1 5.5 5.7 5.5 3.8 Mar. 1 8 15 22 29 252.0 252.6 253.9 256.1 256.3 134.9 135.6 136.2 136.4 136.7 112.7 112.9 113.8 113.9 113.7 4.4 4.1 3.9 5.8 5.9 p - Preliminary, r - revised. l/ Includes all deposits subject to reserve requirements--i.e., the total of time, private demand, and U.S. Government demand deposits. Movements in this aggregate correspond closely with movements in total member bank credit. 2/ Depits have been adjusted for redefinition of time deposits effective June 9, 1966. 3/ Private demand deposits include demand deposits on individuals, partnerships and corporations and net interbank balances. TABLE C-3 MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally adjusted (Dollar amounts in billions, based on monthly averages of daily figures) Money Supply Monthly Currency 1/ __Deposits'______________ ____~~~~~_________________ 1965--January February March April May June July August September October November December 159.7 159.8 160.3 161.0 160.7 161.7 162.4 163.0 164.1 165.2 165.6 167.2 1966--January February March April May June 3/ July 3/ August 3/ September3/ October 3/ November 3/ Decemberf 1967--January 3/i February3/ March 3/ p 1/ 2/ 3/ 34.5 34.6 34.7 34.8 34.9 Private Demand s Demao / Time Deposits Adjusted 35.3 35.5 35.7 36.0 36.1 36.3 125.3 125.2 125.6 126.2 125.8 126.7 127.2 127.5 128.5 129.3 129.5 130.9 128.7 130.7 132.0 133.3 134.6 136.2 137.9 140.0 141.6 143.7 145.5 146.9 168.0 168.2 169.3 170.9 170.2 171.1 169.6 169.6 170.5 169.6 169.2 170.3 36.6 36.8 36.9 37.2 37.3 37.4 37.7 37.8 37.9 38.0 38.0 38.3 131.4 131.4 132.3 133.7 132.9 133.7 131.9 131. F 132.6 131.7 131.2 132.1 147.8 148.5 149.5 151.4 153.0 154.5 156.5 157.8 158.2 157.9 158.0 159.2 169.6 170.5 172.6 38.5 38.8 39.0 131.1 131.7 133.6 161.6 164.3 166.4 35.0 Includes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. Includes (1) demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S. Government, less cash items in process of collection and Federal Reserve float; and (2) foreign demand balances at Federal Reserve Banks. Deposits have been adjusted for redefinition of time deposits effective June 9, 1966 p - Preliminary. TABLE C-3a MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally Adjusted (Dollar amounts in billions, based on monthly averages of daily figures) Private Week Ending Money Supply Currency / I Demand Deposits Time Deposits auste adjusted 3/ 2/ 1966--Nov. 2 9 16 23 30 168.9 168.8 169.0 r 169.3 169.3 37.8 38.0 38.1 38.0 38.1 131.1 130.9 130.9 131.3 131.2 157.8 157.9 158.0 158.0 157.9 Dec. 7 14 21 28 169.7 169.1 171.9 170.3 38.1 38.2 38.2 38.4 131.7 130.9 133.7 131.9 158.2 158.6 159.2 160.0 4 11 18 25 170.8 170.2 170.3 168.9 38.4 38.6 38.5 38.4 132.4 131.6 131.8 130.5 160.5 160.9 161.3 162.2 Feb. 1 8 15 22p 168.7 169.6 169.9 172.0 38.5 38.7 38.8 38.8 130.2 130.9 131.1 133.2 163.1 163.5 164.2 164.7 Mar. 1 8 15 22 29 171.2 171.9 173.0 172.7 172.9 38.8 38.9 39.0 39.0 39.1 132.4 133.0 134.0 133.7 133.8 164.9 165.6 166.3 166.6 166.9 1967--Jan. __ 1/ 2/ 3/ _ _ _ _ _ __ _ _ _ _ _ _ __ _ _ _ _ __ _ _ _ _ _ *4 Includes currency outside the Treasury, the Federal Reserve, and the vaults of a 11 commercial banks. Includes (1) demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S. Government, less cash items in process of collection and Federal Reserve float; and (2) foreign demand balances of Federal Reserve Banks. Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary r - Revised 

Federal Reserve (1967, April 3). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19670404

@misc{wtfs_bluebook_19670404,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1967},
  month = {Apr},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19670404},
  note = {Retrieved via When the Fed Speaks corpus}
}