Bluebook

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MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments In March, following the further move toward restraint in open market policy and the midmonth rise in the Federal Reserve discount rate from 4½ per cent to 5 per cent, money market conditions became tighter, longer-term interest rates rose, and the rate of bank credit expansion moderated further. The average effective rate on Federal funds during the past two statement weeks was about 5¼ per cent, with trading frequently at 5-3/8 -- 5-1/2 per cent; over this period, net borrowed reserves averaged $370 million, and member bank borrowings $660 million. The 3-month bill rate momentarily reached a peak of 5.45 per cent on Thursday March 14, at the height of the gold crisis and at a time when some market participants had come to expect a discount rate hike of more than 1/2 percentage point. Subsequent to the announcement that evening of a 1/2 percentage point rise in the discount rate and following the accord affecting the gold market, the 3-month bill rate declined. The bill was most recently quoted around 5.15 per cent, about 15 basis points above its level just before the March 5 meeting of the Committee. The relatively moderate reaction of bill rates thus far to the recent monetary policy moves has been partly seasonal, reflecting, among other factors, recent and prospective re-investment demand from holders of maturing March and April tax bills not turned in for taxes. Bill rates were also influenced by the continuing demand for liquidity FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE ('onthly averages and, where available, weekly averages of daily figures) arket Indicators Bond Yields Flow of Reserves. Bank Credit and Money Total Bank Corporate Munici- NonBorrow- Federal 3-month Money Free teserves ings (In millions of dollars) Period Period Funds Rate Treasury Bill U.S. Gov't. (20 yr) pal New (Aaa) Issues (Aaa)I/ Reborrowed Reserves serves (I million Desi Credit Money Deposits Supply 2/ Proxy (In billions of dollars) (Seasonally Adjusted) + + + + + + + + + + + + + + + + + + + + + -.67--Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 42 172 199 275 257 311 270 252 212 225 148 366 196 150 94 88 132 86 82 141 124 185 4.99 4.50 4.03 3.94 3.97 3.78 3.88 3.99 3.87 4.14 4.49 4.56 4.26 3.84 3.60 3.53 4.20 4.26 4.42 4.55 4.72 4.96 4.61 4.56 4.64 4.90 4.99 5.01 5.12 5.16 5.36 5.66 5.59 5.18 5.31 5.38 5.62 5.79 5.78 3.86** 5.85** 6.08 6.50 6.51 3.38 3.47 3.50 3.71 3.80 3.86 3.78 3.81 3.88 3.99 4.15 +325 +555 + 92 + 96 + 95 +307 +291 + 96 +250 +223 -292 +218 +415 + 49 - 8 +164 +223 +269 +193 +311 +157 -145 + + + + + + + + + + - 1968--Jan. 4/ Feb. p 4/ 142 21 275 368 4.60 4.68 5.00 4.97 5.39 5.38 6.24 6.25 4.06 4.06 +340 +177 +389 +236 + 1.8 + 2.3 + 0.9 + 0.1 - 0.2 + 1.3 p p p p -174 -311 -327 -410 500 779 733 582 4.85 4.50 5.12 5.35 5.01 5.13 5.33 5.16 5.42 5.62 5.66 5.62 -6.43 6.50 6.64** 4.27 4.28 4.20 4.28 + + - + + 1.5 0.3 0.5 0.4 + + + - Year 1967 First Half 1967 Second Half 1967 195 153 238 173 222 123 4.19 4.36 4.02 Ave ages 5.01 4.29 4.70 4.07 5.31 4.51 5.77 5.45 6.10 3.74 3.56 3.91 rates of increase + +11.6 + 9.8 + +12.1 +10.7 + +10.5 + 8.5 3/ 6.5 6.8 6.0 +15.8 +17.3 +13.1 Recent variations in growth Mar. 29-June 28 June 28-Nov. 29 Nov. 29-Mar. 27 245 254 10 110 112 363 4.00 3.96 4.68 3.66 4.41 5.02 4.83 5.25 5.48 5.63 5.96 6.33 3.68 3.86 4.11 1968--Mar. 6 13 20 27 Annual +11.5 +15.0 + 7.4 3.3 3.0 2.1 1.2 2.0 3.2 3.7 2.3 2.7 1.9 0.1 0.5 1.2 0.9 0.2 +18.8 +12.5 + 4.8 Includes issues carrying 5-year and 10-year call protection; ** issues carry a 5-year call protection. commercial banks. Time denosits adiusted at all specified period or in case of weekly periods, the first week shown. preceding month for change is 3/ Base 4/ Reserve aggregate changes have been adjusted for change in reserve requirements held against net demand deposits effective at mid-month, January 1968. March 29, 1968. p - Preliminary. 1.2 1.6 0.3 1.6 1.7 1.7 1.2 0.1 1.1 0.9 0.3 + 6.9 + 6.3 + 3.5 2.6 2.6 2.0 1.9 2.5 2.2 2.5 1.7 2.0 1.7 1.3 0.2 0.5 0.4 0.1 +14.3 +14.1 + 5.8 CONFIDENTIAL (FR) March 29, 1968. instruments in view of the variety of uncertainties afflicting international exchange and domestic security markets, and by the absence of strong loan demands on banks that might have forced even more aggressive solicitation of CD funds. The supply of bills available for trading in the market became quite small during the past two statement weeks. At the same time, the System was confronted with an unexpectedly large need to provide reserves because of gold outflows that drained $1.4 billion from reserves during the three statement weeks ending March 27. System net bill purchases in this period, however, amounted to only $440 million (mostly from foreign accounts). In the week ending March 27 some reserve needs were accommodated through purchases of coupon issues in order to avoid accentuating downward bill rate pressures, and a substantial amount of reserves were also supplied by a decline in the Treasury balance at Federal Reserve Banks. System and Treasury operations served to offset only part of the reserve draining effect of gold outflows. In March, nonborrowed reserves declined by about 9 per cent, annual rate. There was only a small increase in total reserves during March, at a 3 per cent annual rate, and this increase was due entirely to an increased use of the discount window by member banks. Although bill rates in the second half of March retreated from their peak levels, other short-term rates moved up somewhat further, on balance, following the discount rate increase. In particular, new dealer loan rates in New York moved generally into a 5-3/8 -- 5-5/8 per CONFIDENTIAL (FR) March 29, 1968. cent range, and the relatively high cost to dealers of financing positions served to keep bill rates from declining even more. Other short-term rates--such as on bankers' acceptances, finance company paper, Federal Agency issues, and CD's--have moved up about 25 to 35 basis points on balance since the March 5 meeting of the Committee. Many short-term rates are currently around previous peaks reached near year-end, with very short rates at these peaks or somewhat higher (except for 3-month finance company paper), and yields in the 6-month to 1-year area somewhat lower. The tightening of monetary policy and rise in short-term rates have made it more expensive and more difficult for banks to roll over maturing CD's and have helped retard growth in bank credit. Over the course of March, outstanding CD's declined by an estimated $550 million, and banks were forced to pay the 5½ per cent ceiling rate for 30-60 day maturities. Net inflows of consumer-type time and savings deposits were somewhat larger than in the previous two months, however, and total time and savings deposits rose at an annual rate of 10 money supply rose by a 4 per cent. The per cent annual rate in March, with currency growth accounting for over half of the increase, and with a relatively small increase in private deposits partly reflecting a reduction in U.S. Government deposits on average in the month. Over the past four months, time and savings deposits and the money supply have risen at annual rates of 6 per cent and 3 per cent respectively, well below the pace of May-November 1967; and experience at nonbank savings institutions has been similar. CONFIDENTIAL (FR) -4- March 29, 1968. The sharp decline in the annual rate of growth of the bank credit proxy, from 10 per cent in February to 4 per cent in March, reflects for the most part the absence of Treasury cash financings during the past month. Overall, since the initiation of a more restrictive monetary policy late last year, the annual rate of growth of the bank credit proxy has dropped to a 5½ per cent annual rate (measured over the 4 months December '67 - March '68 inclusive). The behavior of key monetary variables over the past four months, in comparison with the previous seven months, is shown below: May '67Nov. '67 Total reserves Dec. '67Mar. '68 9.6 6.3 Nonborrowed reserves 10.0 0.3 Bank credit proxy 11.3 5.4 8.4 3.3 14.7 6.5 Money supply Time and savings deposits at banks Savings accounts at thrift institutions 8.6 5.5I NOTE: Dates are inclusive. 1/ Dec. '67 through Feb. '68. With investors cautious, bank credit expansion under continuing restraint, and costs to banks of borrowed funds increasing, there has been a noticeable rise recently in long-term interest rates. A recent Aaa-rated utility issue has been marketed at 6.67 per cent (with 5-year call protection), up about 40 basis points from a month ago, and municipal March 29, CONFIDENTIAL (FR) yields have risen further. 1968. Yield increases have been intensified by exchange market uncertainties and continued doubts about the likelihood of effective fiscal action--factors which have led many investors to stay short and have brought a few new borrowers into the bond market. Prospective developments Even with a pick-up in business loan demand around the midApril tax period projected, outstanding bank credit in April is likely to show little change on average in the absence of Treasury cash financings. The average annual rate of change in the bank credit proxy is projected to be within a range of -2 to +2 per cent, given prevailing money market conditions. However the proxy is expected to rise from the last week in March to the last week in April. In view of this rise in bank credit over the course of April (part of which is expected to be repaid in May), and with the Treasury assumed to raise around $2 billion of cash in connection with the mid-May refunding, bank credit on average in May would rise. The annual growth rate may be only in a 2 - 5 per cent range, assuming money market conditions about as stringent as currently prevailing. As best prevailing money market conditions can be defined in view of the still evolving reactions of major banks and dealers to the recent monetary policy moves and to the still unsettled atmosphere surrounding exchange markets and fiscal policy, such conditions may be taken to include the following: net borrowed reserves in a $250 - $400 million range, the Federal funds rate most frequently in a 5-3/8 -5-1/2 per cent range, new dealer loan rates in New York generally March 29, 1968. -6– CONFIDENTIAL (FR) 5-1/2 -- 5-3/4 per cent, and the 3-month Treasury bill rate 5-1/8 -5-3/8 per cent. Relationships among the various money market variables could well continue shifting about during the next few weeks depending on how banks choose to adjust their money positions. For example, major banks ordinarily run a sizable basic reserve deficit around mid-April, and this could, at least temporarily, put further upward pressure on the Federal funds rate, dealer loan rates, and hence the Treasury bill rate. If these money market indicators show signs of firming, net borrowed reserves might be allowed to move more toward the shallow end of the projected range. On the other hand, it is not at all clear that major banks will want to run a large basic deficit this year, or if they do, it is not clear what their attitude toward use of the discount window will be; if banks decide to resort more to the window, pressure on the Federal funds market could be relatively moderate. Our projection of bank credit for April assumes that banks are significantly affected by a diversion to market instruments of negotiable time CD funds and also to some extent consumer time and saving deposits. Attrition in outstanding negotiable time certificates of deposit is projected to be in the order of $750 million to $1 billion, of which about half represents seasonal contraction. Bill rates at the lower end of the range--which could result from continued liquidity demands and seasonal downward rate pressures--may provide enough leeway for banks to make a better showing than this. But any rise in bill rates into the upper half of the range would cause considerable concern among CONFIDENTIAL (FR) -7- March 29, 1968. bankers for the Regulation Q ceiling, especially as it pertains to large CD's and especially on the part of non-prime banks. All things considered, total time and savings deposits in April are expected to rise in only a 2 - 5 per cent annual rate, range, showing a considerable drop-off from the month before. Growth in the money supply may spurt to a 7 - 9 per cent, annual rate, range on average in April, largely in consequence of a sharp further drop from the March average to the April average in U.S. Government deposits. The inflow of tax receipts will result in some build-up in Government deposits after midmonth, but the Treasury will have to borrow cash in the market some time before the mid-June tax date and in preparation for the large deficit that normally develops in July. As a result, a large amount of Treasury cash borrowing can be expected in the not too distant future, with the mid-May refunding presenting a convenient opportunity for raising some cash, and with further cash borrowing needed in June and July, some of which could be in the form of additional bill issues. Given existing pressures on banks and the money market, longterm interest rates may tend to remain around current advanced levels, unless effective fiscal action suddenly emerges or prospects for peace negotiations improve. In the absence of any move on the fiscal front, the market may begin to react to prospects of large Treasury financings, and if at the same time business loan demands do begin to show a sustained surge, longer-term interest rates could show a sharp further rise. CONFIDENTIAL (FR) March 29, 1968. Policy alternative. If the Committee should wish to achieve more restrictive monetary conditions during the coming period, it may want to consider adjusting open market operations with a view to attaining the following ranges of money market variables: net borrowed reserves, $400 - $500 million; the Federal funds rate most frequently trading 5-1/2 -- 5-3/4 per cent and occasionally higher; new dealer loan rates in New York, 5-3/4 -- 6 per cent; and member bank borrowings, $650 - $850 million. The 3-month bill rate under these conditions is likely to move into and toward the upper end of a 5-1/4 -- 5-1/2 per cent range, partly as expectations of a further discount rate increase begin to take hold in markets. Under the circumstances, the question of Regulation Q ceilings will become of immediate and urgent concern to banks. Without any rise in such ceilings, interest rates could rise sharply further as market participants expect banks to withdraw more or less completely from the municipal market and sense that corporate borrowers may have to move back into the bond markets. The development of pressures in long- term markets, in conjunction with the further diversion of saving flows away from financial institutions, would also likely be accompanied by intensification of short-term market pressures as banks, nonbank institutions and Federal Home Loan Banks reduce their liquidity in order to sustain outstanding loan commitments. Without a rise in the Regulation Q ceiling, and with the foregoing money market conditions, bank credit in April is likely to decline in a 1 to 4 per cent annual rate range, as banks liquidate CONFIDENTIAL (FR) March 29, 1968. securities further in light of greater CD run-offs. The end-of- quarter reinvestment period will generally be over before the full impact of the tighter monetary conditions is felt in markets, but there is likely to be some little further slowing of inflows of consumertype deposits as market yields rise in the course of the month. While time and savings deposits are likely to show only limited, if any, growth, it is possible that demand deposits could expand somewhat more. Anticipatory borrowing at banks and in the market might lead to more demand deposit growth as the proceeds from these loans and security offerings--some of which may have come out of time accounts--are at least temporarily added to demand balances. Table AMARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) V--- Excess reserves Period As -- Member banks borrowings to revised Free --- reserves 1 " date I. Monthly (reserves weeks ending in): 1967--March April May June July August September October November December 1968--January February p March p WeeklyT: 1967-- -Nov. Dec. 1968- -Jan. Feb. Mar. 1 8 15 22 29 368 349 369 196 345 88 449 356 334 353 349 333 132 86 82 141 124 185 172 199 275 257 317 270 252 212 225 148 417 389 343 275 368 649 142 21 -306 291 330 518 221 384 150 94 expected at conclusion of each week's open market As first published each week operations _____________________ 9 132 162 127 119 211 198 356 94 265 295 262 348 92 204 312 233 375 131 240 80 6 13 20 27 333 267 442 87 121 185 345 201 214 82 97 228 187 47 100 257 216 56 110 3 10 17 24 31 653 564 157 376 336 495 180 224 233 241 158 384 -67 143 95 71 398 -55 133 44 45 363 -28 7 14 21 28 375 488 362 306 241 384 134 104 -43 -136 85 75 -44 -143 88 89 -57 -148 6 13 20 326 468 406 172 -174 -311 -151 -309 -332 -410 -155 -320 97 p - Preliminary 288 405 442 500 779 733 582 -327 -410 73 35 -289 -407 TABLE A-2 AGGREGATE RESERVES AND RELATED MEASURES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages of daily figures) Res erve Total Reserves Ag gregates 2/ Required reserves Nonborrowed Against Total Demand Reserves Deposits M o n e t arv Va r i ab 1e s Total M Time Money Supply Deposits Private k De its (comm. Total Demand (credit) /2 banks) _ Deposits Annually: 1966 + 1.2 + 0.8 + 1.4 + 0.9 + 3.7 + 8.8 + 2.2 + 1.2 1967 + 9.8 +11.5 +10.2 + 7.0 +11.6 +15.8 + 6.5 + 6.8 Monthly: 1967--Jan. Feb. Mar. +19.2 +11.5 +21.6 +26.0 +17.4 +29.4 +14.4 +12.0 +15.3 +14.0 +11.6 + 9.8 +16.1 +15.9 +14.3 +16.5 +19.3 +19.0 - 0.7 + 8.5 +11.2 - 2.7 + 9.1 +12.7 Apr. May + 2.5 - 0.4 + 4.7 + 4.9 + 8.1 - 1.2 + 5.0 - 2.1 + 9.9 + 5.6 +14.4 +13.5 - 2.8 +12.5 - 5.4 +15.3 June July Aug. Sept. Oct. Nov. + 8.4 +11.3 +13.5 + 9.6 +15.3 + 7.6 + 4.9 +15.2 +14.7 + 4.8 +12.4 +10.9 + 4.8 +16.0 +15.6 + 9.0 +18.0 + 5.5 - 2.8 +15.8 +14.4 + 7.2 +16.1 + 2.8 + 8.8 +15.2 +16.9 +10.3 +12.0 + 7.9 +17.5 +15.2 +17.1 +11.4 +13.3 +11.2 +11.7 +11.6 + 8.1 + 0.7 + 7.4 + 6.0 +13.3 +14.0 +10.4 - 0.9 + 6.9 + 7.7 Dec. - 7.0 -14.2 - 0.3 -10.2 - 0.4 + 8.5 + 2.0 - +18.9 +11.3 + 1.9 +16.7 +10.2 -12.0 +13.8 + 8.3 + 1.6 +17.7 +16.5 - 0.2 + 7.9 +10.0 + 4.0 - 1.2 + 8.4 +10.5 + 5.9 + 0.6 + 4.5 + 6.8 - 0.8 + 3.5 1968--Jan. Feb. Mar. 1/ 2/ 3/ p - 3/ p 3/ p 3/ Includes all deposits subject to reserve requirements. movements in total member bank credit. 0.9 Movements in this aggregate correspond closely with Changes in reserves, total deposits and time deposits have been adjusted for redefinition of time deposits effective June 9, 1966. Reserve aggregate changes have been adjusted for change in reserve requirements held against net demand deposits effective at mid-month, January 1968. Preliminary. Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES OF DAILY FIGURES I I I 1 I I I BILLIONS OF DOLLARS, SEASONALLY ADJL 25.0 24.5 24.0 23.5 TOTAL 23.0 I 22.5 22.0 __ 21.5 M J 1966 S D M J 1967 S D Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES OF DOLLARS BILLIONS 28 6 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1|- TOTAL MEMBER BANK DEPOSITS (CREDIT PROXY] SEAS ADJ. WEEKLY AVERAGE OF DAILY FIGURES 282 278 274 270 266 262 258 254 250 246 242 6 LIABILITIES TO OVERSEAS BRANCHES (WEEKLY REPORTING BANKS) NOT SEAS. ADJ, WEDNESDAYS 4 2 27 -------------------- 1966 j 1967 ------------------- 1968 Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES 190 S190 186 S186 182 192 178 188 174 184 170 180 176 172 TIME DEPOSITS ADJUSTED (All Commercial Banks) 168 164 160 156 NEGOTIABLE CD'S (Unadjusted) J 1966 1967 1968 Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY I I BILLIOI NS OF DOLLARS I I I AVERAGES OF DAILY FIGURES I I I I I I I I I 48 MONEY SUPPLY COMPONENTS: 44 CURRENCY OUTSIDE BANKS 40 36 146 142 DEMAND DEPOSITS M J 138 134 130 12 8 4 0 D 1966 1967 S D M J 1968 S Table B-1 MAJOR SOURCES AND USES OF RESERVES Retrospective and Prospective (Dollar amounts in millions, based on weekly averages of daily figures) = Factors affecting supply of reserves Gold Federal Reserve credit (excl. Period stock float) float) 1/ = Bank use of reserves Excess Required reserves reserves reserves net 2/ net 2/ anks banks Change in total Technical factors Currency outside reserves 3/ Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) -2,243 -2,305 +3,149 +4,718 +1,085 +1,522 +1,111 +1,517 + 26 5 - - - S 52 270 Year-to-date: 221 909 (12/28/66 - 3/29/67) (12/27/67 - 3/27/68) 5/ Weekly: 1968--Feb. Mar. 7 14 21 28 346 35 773 314 6 p 13 p 20 p 410 479 516 323 27 p Y 1968--Apr. May + 993 -1,997 +1,145 - t 29 72 + 1 - 274 - 737 - 388 - 460 453 76 167 199 387 278 395 330 69 229 164 144 272 4. 350 153 147 836 355 784 85 249 391 255 361 210 504 146 427 178 266 117 333 165 408 179 99 .L.L 1 80 510 140 310 50 175 435 105 95 195 175 195 175 1 8 15 150 505 130 150 50 45 90 30 140 90 30 140 .1. 1 1 J. 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. Includes increase in reserve requirements of $360 million effective Jan. effective January 18, 1968. &... 95 A... p - Preliminary. 11, 1968, 109 66 13 142 62 234 L 3 10 17 24 ______________________________________________________________ 1. and $190 million Explanation of Projections in Table B-1 1. Changes in Federal Reserve credit indicate reserves needed to offset projected changes in required reserves and factors affecting the supply of reserves. 2. Projected changes in currency outside banks reflect seasonal movements plus an allowance for growth of about $40 million per week. 3. Projected effects of Treasury operations, included in "technical factors," reflect scheduled and assumed calls in current two weeks and thereafter, maintenance of Treasury balances with Federal Reserve at $1.0 billion. 4. Projected changes in required reserves assume the existing net reserve position of banks and the structure of interest rates in the market, as well as the current economic outlook. On the basis of these assumptions the projections reflect expected movements in bank credit and money in the period ahead, including the effects of such elements as the public's loan demand, repayments of previous loans, bank's investment preferences and willingness to supply loans, bank's desires and abilities to obtain time and savings deposits, and the Government's financing needs. The projections thus encompass normal seasonal developments, temporary bursts of loan demand and expected associated repayments not currently reflected by the seasonals, and whatever cyclical and growth demands for money and credit are expected in the projection period. Assumed Treasury financing operations include: $0. 1 billion increase in the weekly and monthly Treasury bill auctions through May 15; $ 0.7 billion, April 8; $ 2.0 billion, May 15. 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 Period required reserves Supporting U. S. Gov't. demand deposits private deposits _Supporting Total Other than Seasonal changes Demand Time seasonal changes Demand Time Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) +1,111 +1,517 - 87 +261 +1,198 +1,256 Year-to-date: (12/28/66 - 3/29/67) - 784 -202 - 986 -1,000 +118 +390 - 494 - 85 - 12 - 73 -982 + 96 +703 + 11 7 14 21 28 + + 210 504 146 427 +186 -160 - 96 -+587 + - 24 344 50 160 -190 -175 -221 - 58 + 11 + 5 - 5 + 5 +208 -186 +155 -125 + + + 5 12 21 18 6 + + - 165 408 179 99 -172 -361 + 63 +104 + + - 337 47 116 203 +131 + 59 +146 -306 + 5 + 11 - 11 + 11 +198 -130 - 18 +101 + + - 3 13 1 9 + 10 -- 5 + 75 + 45 + 30 + + + 10 5 5 (12/27/67 Weekly: 1968--Feb. Mar. - 3/27/68) 2/ p 13 p 20 p 27 P - 14 + 59 + 4 6 - 5 +1,023 +1,221 + 168-/ PROJECTED 1968--Apr. Mar. -- 3 10 17 + + 95 195 -240 -175 - 85 + + + 240 270 280 +145 +220 +250 24 + 175 +365 - 190 -130 -- - 1 - 90 - 70 - 20 -160 -- +135 + 8 - 30 +195 - 225 -310 -- + 75 + 15 - 140 -115 - 25 - 75 + 5 60 + 45 Reflects reserves requirements changes in July, September 1966, and March 1967. 1968, and $190 million Includes increase in reserve requirements of $360 million effective Jan. effective January 18, 1968. p - Preliminary. 1/ 2/ 5 10 Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Technical factors factors (net) Period Period ACTUAL Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) Float Float Treasury operations Foreign deposits and gold Other nonmember deposits and loans F. R. accounts (Sign indicates effect on reserves) + - 805 165 +673 - 85 + - 64 389 - 30 7 + 98 +316 Year-to-date: (12/28/66 - 3/29/67) -1,997 -238 -1,200 + 9 -568 (12/27/67 - 460 +158 - 871 - 40 +293 7 14 21 + + 387 278 350 +221 -141 + 34 + + 2 184 467 + 19 + 5 - 3 +145 + 42 -148 28 - 153 + 47 - 178 - - + + + 164 144 272 147 + 49 + 8 + 6 +309 + + - 173 256 195 151 - 4 + 37 - 37 - 39 - 54 + 67 +108 + 28 3 10 + + 50 175 +365 - 20 + 200 50 + 50 -- -165 +145 17 24 + - 435 105 -- + - 300 150 1 - 150 -- - 150 -- - 50 -- + 50 Weekly: 1968--Feb. Mar. - 3/27/68) 6 13 20 27 p p p p 7 15 PROJECTED 1968--Apr. May 8 - 50 -- 15 + 45 -- p - Preliminary. --- -- +135 + 45 - 5 Table B-4 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) Period Total Federal I U.S. Government securities Reserve credit Total Bills Repurchase (Excl. float) agreements holdings Year: + 26 + 52 - - 69 + + -534 - 81 - 20 - 78 - - +2,158 +4,433 221 909 732 691 +1,165 1+ 455 3 10 17 24 31 554 328 75 426 348 135 195 65 409 339 180 7 14 21 28 346 773 314 369 133 763 281 11 110 372 259 + 22 410 479 516 323 344 199 573 219 200 94 631 246 + + + + 95 53 43 27 101 317 19 7 12 Weekly: 1968--Jan. Feb. Mar. 6 13 20 27 514 380 404 159 35 +133 -140 - 17 + + 66 11 - 57 + 34 + 43 - 84 + 1 + 48 - 32 +380 - 28 - 23 + 26 -391 - 27 + 49 + 52 -101 Member banks borrowings Securities +437 -577 +3,069 +5,009 Year-to-date: (12/28/66 - 2/29/67) (12/27/67 - 3/27/68) Bankers' acceptances + 474 +1,153 +3,149 +4,718 1966 (12/29/65-12/28/66) 1967 (12/28/66-12/27/67) Federal Agency - 4 - 1 1 + 2 -203 -413 +237 +150 -315 + 44 + + 9 8 +143 + 21 + 37 + 58 +279 - 46 + 47 -151 Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES 1/ Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures) Period Total reserves reserves Nonborrowed reserves Total reservTotal Required reserves Against private deposits Demand Total 20,626 1965--Jul. Aug. Sept. Oct. Nov. Dec. 21,857 21,923 21,869 21,986 21,976 22,186 21,356 21,417 21,318 21,533 21,589 21,722 21,488 21,533 21,494 21,645 21,671 21,861 1966--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 22,358 22,401 22,452 22,679 22,703 21,899 21,943 21,873 22,027 22,020 22,007 22,028 22,077 22,252 22,308 21,411 21,464 22,707 22,861 22,571 22,655 22,030 22,339 22,431 22,274 22,256 21,883 21,841 21,842 21,860 21,741 21,716 21,772 1967--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept, Oct. Nov. Dec. 22,808 23,026 23,441 23,490 23,482 23,646 23,869 24,138 24,331 24,642 24,799 24,654 22,360 22,685 23,240 23,332 22,442 22,666 22,955 23,110 23,428 23,086 23,523 23,830 24,121 24,217 24,467 24,690 24,398 23,178 23,488 23,794 23 972 24,332 24,444 24,437 21,803 22,044 22,297 22,293 22,559 22,890 23,049 23,275 23.330 23,453 23,605 23,628 Jan. 25,043 Feb. Mar. 25,279 24,738 24,915 24,665 24,718 24,889 24,923 23,751 23,796 23,902 1968 -- 22,524 22,465 22,449 25,320 22,140 21,900 21,864 21,748 21,898 21,885 22,200 22,142 22,175 20,719 20.904 21,073 21,170 21,285 21,600 21,771 21,782 Demand 15,921 15,943 16,065 16,147 16,196 16,266 16,375 16,413 16,506 16,605 16,562 16,606 16,512 16,473 16,475 16,365 16,364 16,378 16,328 16,478 16,647 16,578 16,786 17,024 17.115 17,246 17,237 17,316 17,404 17,386 17,510 17,531 17,598 p - Preliminary. 1/ 2/ une 9, Reserves have been adjusted for redefinition of time deposits effective Ju requirements in reserve Reserve aggregates have been adjusted for change January 1968. mid-month, at effective deposits held against net demand 1 S. 1 Table C-2 DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally Adjusted (Dollar amounts in billions Period based on monthly averages of daily figures) Total member bank deposits (credit) 1/2/ Time deposits 2 Private demand deposits 3/ U.S. Gov't. demand deposits 1966--Jan. Feb. Mar. Apr. May June Jul, Aug. Sept. Oct. Nov. Dec. 238.0 239.0 239.8 242.2 243.9 244.8 246.7 246.5 246.4 245.5 244.8 245.2 121.7 122.0 123.0 124.8 126.1 127.5 128.7 129.7 130.1 129.9 129.3 130.3 111.7 112.0 112.6 113.3 113.0 113.3 112.6 112.4 112.4 111.6 111.6 111.7 4.7 5.0 4.2 4.1 4.8 4.0 5.3 4.4 3.9 4.0 4.0 3.2 1967--Jan Feb. 248.5 251.8 132.2 134.4 111.4 112.4 4.9 4.0 Mar. Apr. 254.8 256.9 136.5 138.0 113.6 113.1 4.8 5.8 May June Jul. Aug. Sept. Oct. Nov. Dec. 258.1 260.0 263.3 267.0 269.3 272.0 273.8 273.7 139.4 141.7 143.3 145.6 147.2 148.2 149.8 150.8 114.5 116.1 116.7 117.6 117.6 118.1 118.7 118.6 4.1 2.2 3.2 3.7 4.5 5.6 5.3 4.4 275.5 150.7 119.4 5.3 277.8 278.7 151.3 152.3 119.6 120.0 6.9 6.4 1968--Jan. Feb. p Mar. p 1/ 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/ Deposits have been adjusted for redefinition of time deposits effective June 9. 1967. 3/ Private demand deposits include demand deposits of individual, partner- ships and corporations and net interbank balances. 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) Total member bank deposits (credit 1/2/ Week ending: Time deposits 2/ Private demand deposits 3/ U. S. Gov't. demand deposits 6 13 20 27 269.3 269.6 268.8 269.1 146.9 147.0 147.2 147.3 118.3 118.3 116.1 117.4 4.1 4.3 5.5 4.5 Oct. 4 11 18 25 269.7 271.0 273.1 272.3 147.6 148.0 148.4 148.4 118.6 118.9 118.4 117.6 3.6 4.1 6.3 6.4 Nov. 1 8 15 22 29 273.1 273.6 273.5 274.2 273.7 148.9 149.0 149.6 150.1 150.4 117.6 118.9 118.5 118.7 118.6 6.7 5.7 5.5 5.5 4.7 Dec. 6 13 20 27 274.3 273.6 273.2 273.6 150.6 150.9 119.1 118.5 117.9 118.3 4.5 4.1 4.5 4.4 3 10 17 24 31 274.9 274.7 275.5 276.4 275.4 150.5 151.1 120.4 119.6 119.9 119,3 118.5 3.9 4.5 5.0 6.4 5.8 Feb. 7 14 21 28 277.6 276.6 276.6 279.8 150.8 151.2 151.6 151.9 119.8 119.1 120.2 119.2 7.0 6.3 4.9 8.7 Mar. 6 13 20 27 280.3 279.1 278.2 278.0 152.0 152.2 120.3 119.8 119.4 120.0 8.0 7.1 6.4 5.8 1967-- Sept. 1968- -Jan. 150.8 150.7 150.6 15U.6 150.7 152.4 152.2 p - Preliminary. 1/ 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/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. 3/ Private demand deposits include demand deposits of 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) Monthly Money Supply Currency 1/ I Private Demand Deposits 2 Time Deposits Adjusted 1966--Jan. Feb. Mar. Apr. May June Jul Aug. Sept. Oct. Nov. Dec. 167.9 168.3 169.2 170.5 170.2 170.6 169.9 170.1 170.5 170.1 170.1 170.4 36.6 36.7 36.9 37.1 37.3 37.4 37.7 37.8 37.9 38.0 38.1 38.3 131.4 131.6 132.3 133.4 132.9 133.2 132.3 132.4 132.6 132.1 132.0 132.1 147.5 148.3 149.8 151.8 153.4 154.8 156.9 158.1 158.6 158.8 158.5 159.8 1967--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 170.3 171.5 173.1 172.7 174.5 176.2 177.9 179.1 179.2 180.3 181.2 181.5 38.5 38.7 38.9 39.1 39.2 39.3 39.5 39.6 39.8 39.9 40.0 40.4 131.8 132.8 134.2 133.6 135.3 136.8 138.4 139.6 139.5 140.3 141.2 141.1 162.0 164.6 167.2 169.2 171.1 173.6 175.8 178.3 180.0 182.0 183.7 185.0 1968--Jan. Feb. p Mar. p 182.4 182.5 183.2 40.5 40.7 41.1 141.9 141.8 142.2 184.8 186.1 187.7 3/ Includes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. 2/ 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 of Federal Reserve float; and (2) foreign demand balances at Federal Reserve Banks. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, 19 p - Preliminary. 1/ TABLE C-3a MONEY SUPPLY ANL TIME DEPOSITS AT ALL COMMERCIAL DANKS Seasonally Adjusted (Dollar amounts in billions, based on weekly averages of daily figures) Money Supply Week Ending Currency 1/ I Private Demand SDeposits Time Deposits 2/ adjusted 1967--Sept. 6 13 20 27 179.7 180.0 178.0 179.3 39.7 39.8 39.7 39.7 139.9 140.2 138.2 139.5 179.6 179.8 180.2 180.3 Oct. 4 11 18 25 180.3 180.9 180.5 179.6 39.8 39.9 40.0 39.9 140.5 140.9 140.5 139.7 180.7 181.2 182.0 182.3 Nov. 1 39.8 8 15 180.3 181.3 181.3 22 29 181.2 181.1 40.0 40.1 40.1 140.5 141.3 141.4 141.1 141.0 182.8 182.8 183.5 184.1 184.3 Dec. 6 13 20 27 181.5 181.0 180.8 181.8 40.1 40.3 40.3 40.5 141.4 140.8 140.5 141.3 184.9 185.2 185.1 184.7 1968--Jan. 3 10 17 24 31 183.1 182.5 183.1 182.1 181.3 40.4 40.5 142.7 142.0 142.6 141.6 140.8 184.4 184.6 184.7 184.7 7 14 21 28 182.7 40.7 40.7 40.7 40.7 142.0 141.1 185.2 181.9 183.4 182.1 40.9 41.1 41.1 41.1 142.7 Feb. Mar. 6 13 20 27 183.6 183.3 182.8 183.2 40.0 40.5 40.6 40.5 142.6 141.4 142.2 141.7 142: 1 2/ 185.2 185.7 186.2 186.8 187.0 187.5 187.9 187.8 Includes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. 2/ 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. 3/ p - Preliminary 1/ 

Federal Reserve (1968, April 1). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19680402

@misc{wtfs_bluebook_19680402,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1968},
  month = {Apr},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19680402},
  note = {Retrieved via When the Fed Speaks corpus}
}