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) April 26, 1968 MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments Since the April 18 announcement of the increase in the discount rate (to 5-1/2 per cent) and in Regulation Q ceilings on large denomination negotiable CD's, and in light of the Committee's move toward firmer monetary conditions at the subsequent FOMC meeting, both short- and long-term market yields have risen moderately on balance, and the prime rate has risen 1/2 point. Aside from temporary declines at the end of the double settlement week, Federal funds rates have traded around 6 per cent in recent sessions. The 3- and 6-month bill rates have increased by around 15-20 basis points to 5.50 and 5.65 per cent, respectively. Net borrowed reserves of $536 million were published for the statement week containing the discount rate change, partly reflecting very low excess reserve holdings of country banks in the second half of their reserve periods; this figure compares with average net borrowed reserves of $268 million for the preceding three weeks. Bill rates have shown only moderate increases thus far since the discount rate hike largely because of sizable bill demands. Among these were demands for reinvestment of the proceeds of the $2.3 billion of tax anticipations bills which were not turned in for taxes, and large seasonal demands from public funds. Prior to the move to even greater monetary restraint associated with the discount rate increase, short-term rates had moved gradually FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE ('Monthlv averages and, where available, weekly averages of daily figures) Mov ,I Market. lndicators Federal 3-month Funds Treasury Rate Bill Rnond Yield n __ __ _ BorrowFree ings teserves (In millions of dollars) Period 1 I--Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1968--Jan. Feb. Mar. 4/ 4/ 4/ 1968--Apr. 3 10 17 24 p p p p p Year 1967 First Half 1967 Second Half 1967 Recent variations in growth Mar. 29-June 28 June 28-Nov. 29 Nov. 29-Apr. 24 196 150 94 88 132 86 82 141 124 185 4.50 4.26 4.56 4.03 3.94 3.97 3.78 3.88 3.99 3.87 3.84 3.60 3.53 4.20 4.26 4.49 4.55 4.72 4.96 4.64 4.90 4.99 5.01 5.12 5.16 5.36 5.66 5.59 142 21 -312 275 368 649 4.60 4.68 5.02 5.00 4.98 5.17 5.39 5.38 5.59 -366 -193 -244 -536 696 646 763 651 5.63 5.66 5.70 5.58 5.17 5.28 5.39 5.47 195 153 238 173 222 123 4.19 4.36 4.02 245 254 - 59 110 112 427 4.00 3.96 4.90 4.14 Av e r 4.29 4.07 4.51 3.66 4.41 5.07 ___. - 172 199 275 257 311 270 252 212 225 148 4.42 __ Corporate MuniciU.S. New pal Gov't. Issues (Aaa) (20 yr.) (Aaa)1/ 5.31 5.38 5.62 5.79 5.78 3.86** 5.85** 6.08 6.50 6.51 3.47 3.50 3.71 3.80 3.86 3.78 3.81 3.88 3.99 1n.. .,f T~js'rr ,0 Total Nonborrowed Re(Saoal Reserves serves IRark Cv~~i~ Bank Adused Money Credit Money Proxy 2nr( Mtnau~ Time Deposits 2/l million (In (In billions of dollars) nf doll1ars1 (Seasonally Adjusted) +555 + 92 + 96 + 95 +307 +291 + 96 4.15 +250 +223 -292 6.24** 6.29** 6.56** 4.06 4.01 4.28 +340 +177 -255 5.54 5.41 5.41 5.51 6.58 6.41 6.42 6.66 4.18 4.08 a g e s 5.01 4.70 5.31 5.77 5.45 6.10 3.74 3.56 3.91 4.83 5.25 5.48 5.63 5.96 5.53 3.68 3.86 3.94 +415 + 49 - 8 +164 +223 +269 +193 +311 +157 -145 +389 +236 + 55 + 1.8 + 2.3 + 1.0 + - 4.08 4.18 +11.5 +15.0 + 7.4 + 1.0 + 0.9 + 0.9 0.2 0.9 2.1 1.9 Annual rates of increase 3/ + 9.8 +11.6 + 6.5 +15.8 +10.7 +12.1 + 6.8 +17.3 + 8.5 +10.5 + 6.0 +13.1 +18.8 +12.5 + 3.4 Includes issues carrying 5-year and 10-year call protection,**issues carry , 5-year call protection. ll commercial banks. Time deposits adjusted at week shown Base is change for month preceding specilied period or in case of weekly periods, the first Reserve aggregate changes have been adjusted for change in reserve requirements held against net demand 4/ deposits effective at mid-month, January 1968. April 26, 1968. p - Preliminary. + 6.9 + 6.3 + 5.6 +14.3 +14.1 + 4.4 CONFIDENTIAL (FR) April 26, 1968. higher in response to the early April firming of open market policy. In the early part of April the 3-month bill rate rose by around 15 basis points to almost 5.35 per cent. Dealer financing costs rose markedly in this period, partly as a result of the sharp rise in the basic reserve deficit of New York money market banks as the tax period approached. Also, one key money market bank seemed to shift its longer-run money position policy to become more of a borrower in the funds market and less ready a supplier of funds to dealers. In adjustment to the Treasury bill rates and dealer financing costs, repurchase agreements made by the Management in the period April 3-18 were made at 5-1/8 per cent, 1/8 above the then prevailing discount rate. In addition, an earlier scarcity of bills, which had pushed rates sharply lower toward the end of March, was mitigated through moderate net sales of bills by the Desk for foreign accounts, net bill sales of $335 million by the System in the first half of the month, and an announcement by the Treasury of $100 million cash additions to the weekly 6-month bill auction through mid-year. Thus, of the 30 basis point rise in the 3-month bill rate since the April 2 FOMC meeting, about half occurred before the discount rate hike and about half afterwards. Other short-term rates showed mixed changes in the earlier part of April and have generally risen 10 - 20 basis points on balance since the discount rate hike. The progressively tighter conditions in short-term markets put banks at an increasing competitive disadvantage in bidding for CD CONFIDENTIAL (FR) -3- money before the Q-ceiling changes. April 26, 1968. As a result, there were large run-offs of CD's during April, amounting to over $1 billion by around mid-month. The new CD ceiling rates led to a somewhat larger than usual increase in outstanding CD's in the week following the tax date, although a large proportion of these sales apparently were for purposes of resale into the market; there are no strong indications as yet of a widespread bank aggressiveness in seeking new CD funds. For the most part, posted CD rates beyond the 30-59 day area have remained somewhat below the new ceilings, but there are reports that active issuance of 3-month CD's at the 6 per cent ceiling rate. Also in the course of April there was a slackening in inflows of consumer-type time and savings deposits, especially at large banks. A sizable portion of the April CD maturities occurred around the tax date and contributed to heavy bank sales of Treasury bills and to the sharp run-up of bill rates at that point. Banks were experiencing increasing loan demand pressure in the first half of the month as well, though there was apparently some abatement of such demands after the tax period. Bank sales of Treasury securities to meet CD maturities and loan demand have tended to hold down the credit proxy. For April bank credit on average is estimated to decline at about a 3-1/2 per cent annual rate, and time and savings deposits to rise at only a 1/2 of one per cent annual rate. Private demand deposits, on the other hand, expanded at around a 14 per cent annual rate in April, considerably higher CONFIDENTIAL (FR) April 26, 1968. than in March, mainly reflecting large net transfers from U.S. Government deposits. With currency also continuing to grow rapidly, the money supply in April bulged sharply. The behavior of the key monetary variables over the past five months since monetary policy shifted toward restraint is shown below, (at annual rates of increase). May '67Nov. ';7 9.6 Total reserves Dec. Apr. 4.6 Nonborrowed reserves 10.0 Bank credit proxy 11.3 3.7 8.4 5.6 deposits at banks 14.7 5.5 Savings accounts at thrift institutions 9.1 Money supply '67'68 -1.2 Time and savings 6.1- NOTE: Dates are inclusive. 1/ Dec. '67 through March '68. Prospective developments The possibilities of a tax increase, the status of peace negotiations, and uncertainties as to the specifics of a Treasury financing are among the factors which make any projection of a constellation of money market conditions in the period ahead especially subject to unexpected variations. As best can be gauged at this point, the maintenance of prevailing firmer conditions in the money market during CONFIDENTIAL(FR) -5- April 26, 1968. the next four weeks may involve a Federal funds rate fluctuating around 6 per cent, member bank borrowings around $750 million and net borrowed reserves in a $350-$500 million range. Both borrowing and net borrowed reserves might possibly be deeper depending in part on the extent of reserve pressure that develops at central money market banks and on the inclination of banks to borrow from the discount window rather than in the funds market. Persistence of this degree of tautness in such money market indicators may serve to drive the 3-month bill rate up in a 5-1/2 -- 5-3/4 per cent range, partly because of the associated high dealer financing costs (with costs of new money in New York often 6-1/2 per cent or a little above) and also because of the effect on attitudes of market participants who may not have yet fully appreciated the extent of monetary tightness that is in train. If it were not for the possible effect on bill rates of a sustained taut monetary policy, the 3-month bill rate over the next few weeks might show little, if any, tendency to rise further. The ending of mid-April tax period pressures has begun to ease the reserve position of central money market banks, and if past behavior is any guide, the position of such banks is likely to be relatively comfortable in May. Moreover, large bill sales by dealers to the public during the past several days have depleted the trading supply of bills going into a period when System open market operations are likely to be on the buy side at least over the next two weeks. Finally, the weekly additions to the 3-month bill auction are scheduled to come to an end. April 26, 1968. -6- CONFIDENTIAL (FR) The forthcoming mid-May Treasury financing is expected to have relatively little impact on bill rates, unless the whole financing were to be concentratedin a15-18 month issue. Market expectations are that the Treasury will probably seek to avoid the sizable attrition that might accompany a "rights" exchange for the $4 billion of publicly held maturing issues. Rather, a cash exchange is anticipated, possibly with both a short- and intermediate-term offering, with the Treasury perhaps raising some new cash if market conditions are appropriate. A cash exchange has in the past generally been associated with somewhat less bill demand from holders of maturing issues than has a "rights" exchange, in which the appearance of "rights" value on the maturing issue has made it attractive for holders of the issue to sell it and often to reinvest the proceeds in the bill market. A bill rate even at the upper end of the projected range will enable banks to compete fairly effectively for CD funds if they choose. But banks are not expected to be overly aggressive in seeking longerterm CD funds at near ceiling rates unless loan demands are exceptionally strong or unless they become more convinced that the outlook is for considerably higher interest rates in the months ahead--which is a possible development if the recent revived hopes for a tax increase again fade away. The staff expectation is that banks will add somewhat to outstanding negotiable CD's in May, as they make an effort to begin recovering from the approximately $1.5 billion run-off between the midMarch and mid-April tax periods. Net additions to outstanding CD's may be in the order of $300 - $600 million over the month, or just slightly more than seasonal. CONFIDENTIAL (FR) April 26, 1968. This relatively conservative estimate of CD offerings is also based partly on the expectation that immediate bank needs for funds are not likely to be extremely large. Business loan demands on banks during coming weeks are expected to slacken somewhat from their very rapid mid-March to mid-April pace. There may be some pick-up in bank credit demands, however, in connection with the mid-May refunding, as dealers and other temporary holders seek financing. It is not expected that banks, in terms of their longer-run portfolio choices, will be able, or willing, to do much more than roll over the maturing mid-May issues. Given these prospective credit demands, and with the Treasury assumed to raise only about $400 million of new cash through overallotments in the mid-May refunding, outstanding bank credit is likely to show little change in the course of May, and, on average, move only in a +2 to -2 per cent annual rate range. Bank credit would, of course, show a larger increase if the Treasury raised more new cash than assumed around mid-May, and particularly so if tax and loan crediting were granted on the cash portion. Assuming the bulk of the Treasury's cash financing is accomplished in June, bank credit might grow at a 4-6 per cent annual rate; loan demands are also likely to be stronger, and banks may begin to press CD offerings more strongly on the market. If the mid-points of these ranges are realized, bank credit expansion (as measured by the proxy) would be at about a 4 per cent annual rate over the first half of the year. CONFIDENTIAL (FR) -8- April 26, 1968. The anticipated moderate recovery in CD's is likely to lead to growth in time and savings deposits during May in a 5 - 7 per cent annual rate range, with inflows of consumer time and savings deposits remaining sluggish given the existing structure of market interest rates. Money supply growth in May is expected to drop off from April, though to remain relatively rapid, at around an 8 - 10 per cent annual rate. The net new cash expected to be raised by the Treasury in May will not be sufficient to forestall a further sizable decline in the Treasury's cash balance (seasonally adjusted), and this will result in further shifting of funds from U.S. Government to private demand deposits. The quite rapid growth in currency of the past two months is projected to slow down; the staff does not yet have any very convincing explanation for the surge in currency growth, and, similarly, no strong reason to assume the growth will continue. The constrained growth in bank credit in May, and also in June when compared with other periods of Treasury cash borrowing, is likely to contribute to additional upward pressures on longer-term interest rates, barring a tax increase or the psychological impact of a break-through in Vietnam peace negotiations. There is no evidence yet of large-scale anticipatory capital market borrowing by corporations and state and local governments, but there are signs of a growing calendar in both markets that will tend to add to market pressures in a period when the Treasury will be marketing coupon issues and possibly a PC. Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) " Period Excess reserves As Member banks borrowings revised to Free 349 369 1968--January February March p April p Weekly: 1968--Jan. Feb. Mar. &pr. 150 -- date Monthly (reserves weeks ending in): 1967--April May June July August September October November December reserves As first published each week As expected at conclusion of each week's open market oper titons 345 88 449 356 334 353 349 333 132 86 82 141 124 185 199 275 257 317 270 252 212 225 148 417 389 337 354 275 368 649 689 142 21 -312 -335 3 10 17 24 31 653 564 157 376 336 495 180 224 233 241 158 384 398 363 - 67 - 55 - 28 143 95 133 44 73 35 7 14 21 28 375 488 379 313 241 384 405 442 134 104 85 75 88 89 - 26 - 44 - 57 -129 -143 -148 6 13 20 27 316 458 414 161 500 779 733 582 -184 -321 -319 -421 -151 -309 -332 -410 -155 -320 -289 3 10 17 24 330 453 519 115 696 646 763 651 -366 -193 -244 -536 -328 -173 -230 -536 -340 -198 -220 -557 p - Preliminary 94 71 45 -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) Reserve Total R Ag se r v e s ______Deposits(credit) a Monet l M Total Member Bank Deposits Nonborrowed R e _______________ regates 2/ Required reserves Against / 1/2/ De oits v Variables Time Money Supply Deposits Private ______ banks)Dost Deposits Annually: 1966 1967 + 1.2 + 9.8 + 0.8 +11.5 + 1.4 +10.2 + 0.9 + 7.0 + 3.7 +11.6 + 8.8 +15.8 + 2.2 + 6.5 + 1.2 + 6.8 Monthly: 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. +19.2 +11.5 +21.6 + 2.5 - 0.4 + 8.4 +11.3 +13.5 + 9.6 +15.3 + 7.6 - 7.0 +26.0 +17.4 +29.4 + 4.7 + 4.9 + 4.9 +15.2 +14.7 + 4.8 +12.4 +10.9 -14.2 +14.4 +12.0 +15.3 + 8.1 - 1.2 + 4.8 +16.0 +15.6 + 9.0 +18.0 + 5.5 - 0.3 +14.0 +11.6 + 9.8 + 5.0 -2.1 - 2.8 +15.8 +14.4 + 7.2 +16.1 + 2.8 -10.2 +16.1 +15.9 +14.3 + 9.9 + 5.6 + 8.8 +15.2 +16.9 +10.3 +12.0 + 7.9 - 0.4 +16.5 +19.3 +19.0 +14.4 +13.5 +17.5 +15.2 +17.1 +11.4 +13.3 +11.2 + 8.5 - 0.7 + 8.5 - 2.7 + 9.1 +12.7 - 5.4 +15.3 +13.3 +14.0 +10.4 - 0.9 + 6.9 + 7.7 - 0.9 1968--Jan. 3/ Feb. Mar. p Apr. p +18.9 +11.3 + 2.6 + 2.5 +16.7 +10.2 -12.3 - 4.5 +13.8 + 8.3 + 1.7 - 3.5 +17.8 +16.3 + 0.3 - 6.0 + 7.9 +10.0 + 4.3 - 3.5 - 1.3 + 8.4 +11.0 + 0.5 - A A & II. I +11.2 - 2.8 +12.5 +11.7 +11.6 + 8.1 + 0.7 + 7.4 + 6.0 + 2.0 + 6.6 + 5.9 +13.0 I + 6.8 - 0.8 + 4.2 +14.5 ____________ Includes all deposits subject to reserve requirements. Movements in this aggregate correspond closely withh movements in total member bank credit. 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 BILLIONS OF OF DAILY FIGURES DOLLARS, SEASONALLY ADJUSTED 25.0 24.5 24.0 23 5 R 23.0 e omm m* REQUIRED RESERVES 22.5 22.0 21.5 BILLIONS OF DOLLARS MEMBER .5 e e -- - BANK " --- SS M BORROWINGS J 1966 5 / - D M D M J 1967 S D Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF 2 86 DOLLARS I I I I I I I I I I I I I I I 282 278 274 270 266 262 258 254 250 246 242 6 LIABILITIES TO OVERSEAS NOT SEAS ADJ, BRANCHES [WEEKLY REPORTING BANKS) WEDNESDAYS 4 2 0 1966 1967 1968 I I Chart 3 MONEY SUPPLY AND BANK EPOSITS SEASONALLY OF DAILY FIGURES ADJUSTED WEEKLY AVERAGES BILLIONS OF DOLLARS I BILLIONS OF DC)LLARS 190 190 186 186 182 192 MONEY SUPPLY 178 - 188 174 184 170 180 176 172 TIME DEPOSITS ADJUSTED (All Commercial Banks) 168 164 160 24 NEGOTIABLE (Unadjusted) 156 CD'S 20 16 1 12 D 1966 M J 1967 S D M J 1968 S Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY I -F AVERAGES OF DAILY FIGURES I I I I I I II I I I I BILLIOr NS OF DOLLARS I I| MONEY SUPPLY COMPONENTS: CURRENCY OUTSIDE BANKS 40 IA, 146 142 ----- DEMAND 138 DEPOSITS A + 134 130 12 U.S. GOVT. (Member 1966 DEMAND DEPOSITS Banks) 1967 1968 ~ 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 Federal Reserve Gold Currency Technical outside factors k credit (excl. Period flostock float) 1/ bans banks Change in total = Bank use of reserves Required reserves Excess reserves nt 2/ net 2/ r s reserves + 805 165 +1,085 +1,522 +1,111 - +1,517 + 26 5 314 - 780 158 + 589 169 - 191 327 164 144 272 164 + + - 161 249 124 346 + + - 158 391 168 93 40 271 441 623 + + + - 137 5 605 544 + - 32 118 539 140 345 40 45 30 350 - 15 - 60 140 - 260 15 - 15 60 140 260 15 50 50 + + 65 135 3/______ Year: ,6 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) +3,149 44,718 - Year-to-date: (12/28/66 - 4/26/67) (12/27/67 - 4/24/68) 5/ + 690 +1,237 51 -1,950 Weekly: 1968--Mar. Apr. -2,408 - 412 313 + + 76 199 + 236 544 29 + 497 + 25 15 22 29 305 555 210 330 230 + 655 25 + + 100 105 + + - 5 12 435 325 - 450 240 + 3 10 17 24 p p p D 1 8 Jun. -2,243 -2,305 - 410 479 516 323 6 13 20 27 332 280 134 418 PROJECTED 1968--May 627 725 _______________________ - 274 737 - 388 1 / J ______________LJ 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 reverso side for explanation. Jan. Includes increase in reserve requirements of $360 million effecLive January 18, 1968. i p - 11, 65 135 1________ Preliminary. 1968 and $190 million effective 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 Currency Technical Gold Federal Reserve credit (excl. t outside factors Period fla ~~~____~~_______float) I/ stockt 1/ _____banks b s = 2/ Change in total net 2/ reserves + 805 - 165 +1,085 +1,522 = Bank use of reserves Required Excess reserves 3/_____ reserves Year: ,6 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) 627 725 -2,243 -2,305 51 989 868 -2,408 -1,950 - 314 412 313 76 199 + 164 274 737 388 - 144 + + 272 164 236 544 29 497 + + + 40 271 441 - 623 +3,149 +4,718 - + 690 +1,237 - +1,111 +1,517 Year-to-date: (12/28/66 - 4/26/67) (12/27/67 - 4/24/68) 5/ Weekly: 1968--Mar. Apr. 410 479 516 323 6 13 20 27 3 10 17 24 p p p p - 332 280 134 418 1 25 655 25 + 345 40 15 22 29 + + + 45 + + 100 105 - 30 350 5 12 435 325 - 450 240 + 50 50 J ________________________ L 1 ________ in 589 169 161 249 124 346 + + - 158 391 168 93 137 5 605 544 + - 32 118 539 140 15 60 140 260 15 reserve requirements of $360 million effective J.n. - 15 60 140 260 - 15 - - 65 - 65 + 135 + 135 II 1 - I ________ p - Preliminary. For retrospective details see Table B-4, For factors included, see Table B-3 For required rcserves by type of deposits, see Table B-2. See revers, side for e-planation. Includes increase January 18, 1968. + I 305 555 210 330 230 8 Jun. 780 158 III PROJECTED 1968--May - 11, 1968 and $190 million effective 191 327 FINANCIAL MARKET RELATIONSHIPS ('Monthlv averages and, where available, Money arket Indicators Free Borrow- Federal 3-month Funds Treasings eserves (In millions Rate ury of dollars) Bill Perd IN PERSPECTIVE weekly averages of daily figures) Bond Yields Corporate Municipal U.S. New Gov't. Issues (Aaa) (20 y.) (Aaa)l/ Flo. of Reserves. Bank Credit NonTotal Bank y ReCredit S borrowed Reserves serves Proxy (In million of billions of (In billions ollarsl -_f and Money Desi 2/ dollars) dollars) (Seasonally Adjusted) /--Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1968--Jan. Feb. Mar. 4/ 4/ 4/ p 1968--Apr. 3 10 17 24 p p p p Year 1967 First Half 1967 Second Half 1967 Recent variations in growth Mar. 29-June 28 June 28-Nov. 29 Nov. 29-Apr. 24 172 199 196 150 4.50 4.03 4.26 3.84 4.56 4.64 5.31 5.38 3.47 3.50 +555 + 92 +415 + 49 + 3.0 + 2.1 + 1.6 - 0.3 + 2.6 + 2.0 275 257 311 270 252 212 225 148 94 88 132 86 82 141 124 185 3.94 3.97 3.78 3.88 3.99 3.87 4.14 4.49 3.60 3.53 4.20 4.26 4.42 4.55 4.72 4.96 4.90 4.99 5.01 5.12 5.16 5.36 5.66 5.59 5.62 5.79 5.78 3.86** 5.85** 6.08 6.50 6.51 3.71 3.80 3.86 3.78 3.81 3.88 3.99 4.15 + 96 + 95 +307 +291 + 96 +250 +223 -292 8 +164 +223 +269 +193 +311 +157 -145 + + + + + + + - + + + + + + + + + + + + + + + + 142 21 -312 275 368 649 4.60 4.68 5.02 5.00 4.98 5.17 5.39 5.38 5.59 6.24** 6.29** 6.56** 4.06 4.01 4.28 +340 +177 -255 +389 +236 + 55 + 1.8 + 2.3 + 1.0 + 1.0 -+ 0.9 - 0.2 + 1.3 + 1.7 -366 -193 -244 -536 696 646 763 651 5.63 5.66 5.70 5.58 5.17 5.28 5.39 5.47 5.54 5.41 5.41 5.51 6.58 6.41 6.42 6.66 4.18 4.08 4.08 4.18 + - + + - + + - 195 153 238 173 222 123 4.19 4.36 4.02 a g e s 5.01 4.70 5.31 5.77 5.45 6.10 3.74 3.56 3.91 245 254 - 59 110 112 427 4.00 3.96 4.90 4.83 5.25 5.48 5.63 5.96 5.53 3.68 3.86 3.94 A v e r 4.29 4.07 4.51 3.66 4.41 5.07 +11.5 +15.0 + 7.4 1.2 2.0 3.2 3.7 2.3 2.7 1.9 0.1 0.2 0.9 2.1 1.9 1.6 1.7 1.7 1.2 0.1 1.1 0.9 0.3 0.5 0.2 2.9 1.8 Annual rates of increase 3/ + 6.5 + 9.8 +11.6 + 6.8 +10.7 +12.1 + 6.0 +10.5 + 8.5 +18.8 +12.5 + 3.4 Includes issues carrying 5-year and 10-year call proLection,**issues carry a 5-year call protection. Time deposits adjusted at Sa11 commercial banks. week shown. 3/ Base is change for month preceding specified period or in case of weekly periods, the first net demand against hel requirements reserve in change for Reserve aggregate changes have been adjusted 4/ 1968. January deposits effective at mid-month, April 26, 1968. p - Preliminary. + 6.9 + 6.3 + 5.6 1.9 2.5 2.2 2.5 1.7 2.0 1.7 1.3 0.1 0.1 0.1 0.5 +15.8 +17.3 +13.1 +14.3 +14.1 + 4.4 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 of 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: $0.2 billion increase in the weekly and monthly Treasury bill auctions through June 5; $0.4 billion, May 15; $2.0 billion, June 7. 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 resquired reere Supporting private deposits Supporting U. S. Gov't. d demand Other than De d seasonal changes e Seasonal changes Total Time Demand Time Demand deposits ar: 1966 (12/29/65 1967 (12/28/66 - +1,111 +1,517 + 87 261 +1,198 +1,256 + 14 59 + 4 6 + 589 169 + - 111 322 + 700 491 - 423 499 + + + + - 158 391 168 93 + + 173 368 71 92 + + - 331 23 97 185 + + + - 131 59 146 306 + - 32 118 539 140 + 223 212 126 263 + + + - 191 94 655 403 + + + - 1 8 - 15 60 + + 85 205 - 100 265 15 22 29 - 140 260 15 + 140 20 35 5 12 + 65 135 - 325 70 12/28/66) 12/27/67) Year-to-date: (12/28/66 - 4/26/67) (12/27/67 - 4/24/68) 2/ Weekly: 1968--Mar. Apr. 6 13 20 27 3 10 17 24 p p p p 5 +1,023 +1,221+ 168-1 95 85 + + 50 820 + 422 85 + + + 5 11 11 11 + + 192 106 37 116 + + - 3 13 1 6 145 221 248 131 + - 5 5 10 + + - 47 122 427 249 - 6 + - 1 23 - 160 310 + 5 + + 40 30 + + 15 15 - -240 50 - 75 280 100 + + 5 5 + + + 60 25 40 + + + 10 10 10 + + 260 205 + + 175 175 - 5 10 + + 80 30 + + 10 10 -- PROJECTED 1968--May Jun. -- -- 1/ 2/ Reflects reserves requirements changes in July, September 1966, and March 1967. Includes increase in reserve requirements of $360 million effective Jan. 11, 1968, and $190 million effective January 18, 1968. p - Preliminary. TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) --Foreign deposits and gold loans reserves) Technical factors (net) Period ACTUAL Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) + - 805 165 + - Year-to-date: (12/28/66 - 4/26/67) (12/27/67 - 4/24/68) -2,408 - 314 - Weekly: 1968--Mar. Apr. 6 13 20 27 3 10 17 24 p p p v Other nonmember deposits and F. R. accounts 673 85 + - 670 34 -1,284 164 144 272 164 49 8 6 309 173 256 195 134 54 67 108 28 40 271 441 623 308 22 94 616 85 188 167 31 206 47 160 26 - - - 30 - 7 64 389 98 316 + 553 503 268 PROJECTED 196 8--May Jun. p - 1 8 15 22 29 + + - 345 40 45 30 350 5 12 + 50 50 Preliminary. + 60 90 ------ + + 300 50 50 300 350 + 50 50 - 5 + 20 -- --- - - 5 330 -- Table B-4 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) T t Total Federal Reserve credit (xcl- float) Period fv l I overnment securities Total Repurchase Bills Other holdines aereements U.S. I I fl a Federal Agency Securities Bankers' acceptances Member banks borrowings I Year: 1966 (12/29/65 - 12/28/66) +3,149 +4,718 +3,069 +5,009 +2,158 +4,433 + 474 +1,153 + 437 - 577 + - 26 19 + 690 +1,237 +1,218 997 +1,618 + 504 217 574 - 617 81 - 23 7 346 35 773 314 369 133 763 281 110 372 259 22 13 20 27 410 479 516 323 344 199 573 219 200 94 631 246 95 53 43 27 3 10 17 24 332 280 134 418 177 346 68 285 132 234 1 54 145 82 1967 (12/28/66 - 12/27/67) + - 52 69 + - 2 203 S 55 S 59 - 450 + 306 Year-to-date: (12/28/66 (12/27/67 Weekly: 1968--Feb. - 4/26/67) - 4/24/68) 7 14 21 28 Mar. Apr. 6 _______________________ ___________ + + - 11 - -__________- 28 26 27 - 4 1 1 + 1 29 -- 47 - 4 + - 20 49 14 _________ Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES 1/ Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures) Nonborrowed Total reserves reserves s reservesTotal Period Required reserves Aainst private deposits Demand Total Demand Total 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 20,626 20,719 20.904 21,073 21,170 21,285 15,921 15,943 16,065 16,147 16,196 16,266 1966--Jan. Feb. Mar. Apr. May June Jul. Aug. Sept. Oct. Nov. Dec. 22,358 22,401 22,452 22,679 21,899 21,943 21,873 22,027 22,020 22,007 22,028 22,077 22,252 22,308 22,030 22,339 22,449 22,140 21,900 21,864 21,748 21,898 21,885 22,431 22,274 22,256 22,200 22,142 22,175 21,411 21,464 21,600 21,771 21,782 21,883 21,841 21,842 21,860 21,741 21,710 21,772 16,375 16,413 16,506 16,605 16,562 16,606 16,512 16,473 16,475 16,365 16,364 16,378 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 21,803 22,044 22,297 22,293 23,523 23,830 24,121 24,217 24,467 24,690 24,398 22,442 22,666 22,955 23,110 23,086 23,178 23,488 23,794 23 972 24,332 24,444 24,437 16,328 16,478 16,647 16,578 16,786 17,024 17.115 17,246 17,237 17,316 17,404 17,386 25,043 25,279 25,334 24,738 24,915 24,660 24,718 24,889 24,924 23,753 23,796 23,904 25,279 24,563 24,850 24,108 1968 -- 22,703 22,707 22,861 22,571 22,655 22,524 22,465 2/ Jan. 2/ Feb. Mar. Apr. p 2/ 22,685 23,240 23,332 23,428 22,559 22,890 23,049 23,275 23.330 23,453 23,605 23,628 I 17,512 17,530 17,599 17,721 I p - Preliminary. 1/ 2/ effective June 9, 1966. Reserves have been adjusted for redefinition of time deposits in reserve requirements Reserve aggregates have been adjusted for change 1 OA . . held against net demand deposits errective at mo-monUii, .au~L LCL y Table C-2 DEPOSITS SUPPORTED By REQUIRED RESERVES AT ALL MEMBER BA Seasonally Adjusted (Dollar amounts in billions Period based on monthly averages of daily figures) Total member bank deposits (credit) 1/2/ Private demand Time depsits2 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. Mar. Apr. May June Jul. Aug. Sept Oct. Nov. Dec. 248.5 251.8 254.8 256.9 258.1 260.0 263.3 267.0 269.3 272.0 273.8 273.7 132.2 134.4 136.5 138.0 139.4 141.7 143.3 145.6 147.2 148.2 149.8 150.8 111.4 112.4 113.6 113.1 114.5 116.1 116.7 117.6 117.6 118.1 118.7 118.6 4.9 4.0 4.8 5.8 4.1 2.2 3.2 3.7 4.5 5.6 5.3 4.4 1968--Jan. 275.5 277.8 278.8 278.0 150.7 151.3 152.3 152.1 119.4 119.6 120.0 120.9 5.3 6.9 6.5 5.0 Feb. Mar. Apr. 1/ 2/ 3/ 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. Deposits have been adjusted for redefinition of time deposits effective June 9. 1966. Private demand deposits include demand deposits of individual, partnerships and corporations and net interbank balances. TABLE C-2a DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollair amounts in billions Week ending: based on weekly averages of daily tig ures) Total member bank deposits (credit)l/ 2 / Time deposits 2/ Private demand deposits 3/ U. S. Gov't. demand deposits 6 13 20 27 274.3 273.6 273.2 273.6 150.6 150.9 150.8 150.7 119.1 118.5 117.9 118.3 4.5 4.1 4.5 4.4 1968--Jan. 3 10 17 24 31 274.9 274.7 275.5 276.4 275.4 150.5 150.6 150.6 150.7 151.1 120.4 119.6 119.9 119.3 118.5 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 27 280.2 279.2 278.2 278.3 152.0 152.3 152.5 152.3 120.3 119.9 119.4 120.4 8.0 7.1 6.4 5.7 Apr. 3 10 17 24 278.2 277.3 279.4 277.5 152.3 152.3 152.3 151.7 120.5 119.7 122.2 120.6 5.5 5.3 4.9 5.2 1967--Dec. 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) Private Money Supply Monthly Currency I/ Demand Deposits 2/ Time Deposit Adjusted 3 1966--Jan. Feb. Mar. Apr. May June Jul Aug. 167.9 168.3 169.2 170.5 170.2 170.6 169.9 170.1 36.6 36.7 36.9 37.1 37.3 37.4 37.7 37.8 131.4 131.6 132.3 133.4 132.9 133.2 132.3 132.4 147.5 148.3 149.8 151.8 153.4 154.8 156.9 158.1 Sept. Oct. Nov. 170.5 170.1 170.1 37.9 38.0 38.1 132.6 132.1 132.0 158.6 158.8 158.5 Dec. 170.4 38.3 132.1 159.8 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. Mar. p 182.5 182.5 183.4 40.5 40.7 41.1 141.9 141.8 142.3 184.8 186.1 187.8 185.4 41.4 144.0 187.9 Apr. p 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. Deposits have been adjusted for redefinition of time deposits effective June 9, 196 3/ p - Preliminary. 1/ TABLE C-3a MONEY SUPPLY AND TIM DEPOSITS AT ALL COMMERCIAL BANKS Seasonally Adjusted (Dollar amounts in billions, based on weekly averages of daily figures) Week Ending 1967--Dec. 1968--Jan. Feb. 6 13 20 27 181.5 181.0 180.8 181.8 40.1 40.3 40.3 3 10 17 24 31 7 14 21 Private Demand Time Deposits a ste / adjusted 40.5 184.9 185.2 185.1 184.7 183.1 182.5 183.1 182.1 181.3 40.4 40.5 40.5 40.6 40.5 142.7 142.0 142.6 141.6 140.8 184.4 184.6 184.7 184.7 185.2 182.7 181.9 183.4 182.1 40.7 40.7 40.7 40.7 142.0 141.1 142.6 141.4 185.2 40.9 27 183.6 183.4 182.8 183.8 41.1 41.1 41.1 142.7 142.3 141.7 142.6 187.0 187 6 188.0 188.0 3 10 17 24 184.3 184.1 187.0 185.2 41.2 41.4 41.5 41.3 143.1 142.7 145.5 143.9 188.1 188.2 188.1 187.6 6 13 20 Apr. / 141.4 140.8 140.5 141.3 28 Mar. Money Supply Currency 11Deposits2/ 185.7 186.2 186.8 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 commerical 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. 3/ Deposits have been adjusted for redefinition of time deposits effective June 9, 1966. p - Preliminary. 1/ 

Federal Reserve (1968, April 29). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19680430

@misc{wtfs_bluebook_19680430,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1968},
  month = {Apr},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19680430},
  note = {Retrieved via When the Fed Speaks corpus}
}