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) June 14, 1968. MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments Yields in debt markets--which had already begun to recede from their extreme May highs at the time of the last Committee meeting-dropped substantially further in late May and early June when optimism about passage of the pending tax bill was revived. Overall declines fron the May highs ranged to about 20 basis points on municipal, new corporate, and U.S. Government bonds, and to nearly 40 basis points on longer maturities of Treasury bills. Since then, as market participants have awaited final confirmation of their general optimism on the tax bill, yields in most debt markets have levelled off, showing little change on balance. The downswing in bill rates carried the yield on 3-month bills to the lower end of the 5.65 -- 6.00 per cent range projected in the last Blue Book, but rates on other short-term debt instruments, such as commercial and finance company paper, have remained at or relatively closer to their recent peaks. While the movement of bill rates to the lower part of the range in part reflects the more optimistic outlook for tax action, it also reflects the less taut atmosphere in day-to-day money markets that has prevailed since the latter part of May. In the latter part of May and early June, Federal funds rates have most frequently been in a 6 -- 6-1/4 per cent area, and at times under 6 per cent, while rates on new loans to dealers posted by New York banks were frequently 6-1/4 -- 6-1/2 per cent--as compared with FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (Monthly averages and, where available, weekly averages of daily figures) Flow of Reserves. Bank Credit and Money 4/ Bond Yields arket Indicators BorrowFederal 3-month Corporate MuniciNonTotal Bank Mone Time Deposits ReCredit Supply pal borrowed New U.S. ings Funds Treasteserves (In millions Rate ury Gov't. Issues (Aaa) Reserves serves Proxy 2 (In billions (In milion (20 yr) (Aaa)/ Bill of dollars) s of dollars) l of dol .rs(n (Seasonally Adjusted) + 42 275 94 3.60 + + 2.0 3.94 + 1.5 4.90 5.62 3.71 + 99 +153 +108 + 2.5 257 88 3.97 3.53 4.99 5.79 3.80 + 2.2 311 132 4.20 3.86 +237 3.78 5.01 5.78 +297 + 2.4 +285 270 86 4.26 3.86** 3.78 +307 3.88 5.12 + 2.2 82 4.42 +159 252 3.99 3.81 +135 5.16 5.85** + 1.2 +335 212 141 3.87 4.55 5.36 6.08 3.88 +299 + 1.4 +154 225 124 4.14 4.72 5.66 6.50 3.99 +122 + ' -122 143 185 4.49 4.96 6.51 4.15 -294 5.59 Money Free Period 1967--May June July Aug. Sept. Oct. Nov. Dec. 1968--May Jun. 0.6 1.1 1.5 0.4 0.5 4.60 4.68 5.02 5.74 6.09 5.00 4.98 5.17 5.38 5.66 5.39 5.38 5.59 5.46 5.55 6.24** 5.29** 6.56** 6.52** 6.66** 4.06 4.01 4.28 4.13 4.28 15 22 29 -314 -355 -394 712 669 764 6.38 5.95 5.98 5.58 5.84 5.73 5.50 5.63 5.60 6.63 6.83 6.68 4.25 4.35 4.42 + 0.2 + 0.1 - 0.1 5 12 -542 -403 759 678 5.88 6.20 5.66 5.69 5.46 5.45 6.62 6.61 4.25 4.25 + 0.3 + 0.2 Aver 4.29 4.07 4.51 ages 5.01 4.70 5.31 5.77 5.45 6.10 3.74 3.56 3.91 3.66 4.41 5.21 4.83 5.25 5.50 5.63 5.96 5.81 3.68 3.86 4.15 II 195 153 238 173 222 123 4.19 4.36 4.02 245 254 -145 110 112 500 4.00 Year 1967 First Half 1967 Second Half 1967 Recent variations in growth Mar. 29-Jun. 28 Jun. 28-Nov. 29 Nov. 29-Jun. 12 I 2/ + + + + + 275 368 649 689 728 4 2/ +345 +208 -266 -197 142 21 -312 -341 -380 1968--Jan. Feb. Mar. Apr. May p 3.96 5.14 I - _ _ _ _ _ _ I _ _ _ _ + 40 +347 +265 + 47 -189 + 82 _ +11.5 +15.2 + 7.2 Annual rates of increase + 6.4 +11.9 + 6.6 +12.2 + 6.0 +10.6 + 9.9 +10.6 + 8.7 +20.4 +12.7 + 3.5 I Includes issues carrying 5-year and 10-year cat i protection, __ issues carry a J-year caii pruLeL-uii. Time deposits adjusted at all commercial banks. Base is change for month preceding specified period or in case of weekly periods, the first week shown. 4/ Revised series. Preliminary. p - June 14, 1968 + 6.7 + 6.6 + 5.6 3/ +16.1 +18.3 +12.6 +17.7 +13.4 + 5.3 CONFIDENTIAL (FR) June 14, 1968. 6-1/8 -- 6-1/2 per cent for funds rates and 6-5/8 -- 6-7/8 per cent for dealer loan rates in the brief period of extreme tightness in the early part of May. The day-to-day money market has been less tight partly because the very large increase in Euro-dollar borrowings enabled major money market banks to maintain a more comfortable basic reserve position. In addition, the expectational impact on bill rates of restored market confidence as to fiscal legislation reduced banks' concern about an inordinately large CD run-off. Bank credit, as indicated by the proxy, has shown more strength than projected at the time of the last meeting of the Committee. The May bank credit proxy has been revised upward slightly to a 1-1/2 per cent annual rate of growth, and, as will be indicated in the prospective section, the June rate of expansion is now expected to be larger than May (and also larger than earlier projected). Loan demands on banks have strengthened after the mid-April to mid-May lull, while at the same time banks sold somewhat less of the securities obtained in the mid-May Treasury financing than originally anticipated. In financing loans and securities, banks have been able to obtain somewhat more time deposits than expected. And for individual banks, the increased availability of Euro-dollars and more moderate decline in U.S. Government demand balances were also factors providing more funds, net. At the same time, the banking system as a whole appears to have economized on excess reserves in recent weeks in the process of expanding bank credit. CONFIDENTIAL (FR) June 14, 1968. With the central money market tending to ease somewhat, and banks economizing on excess reserves, net borrowed reserves during the past two statement weeks deepened to an average of about $470 million, about $100 million deeper than in May on average. Member bank borrowings averaged $720 million during the past two weeks, about the same as in May. Since mid-May net borrowed reserves have ranged between a low of $355 million and a high of $540 million, with the high number occurring in the week ending June 5, the second half of a double-settlement period. The table below shows the behavior of key monetary variables (as annual rates of increase) during the same periods as shown in the previous Blue Book. Changes in the data reflect the recent experience noted above and also minor revisions in current and back data because of new seasonal factors. May '67Nov.'67 Total reserves 9.5 Nonborrowed reserves 9.9 Dec. '67May '68 3.4 -1.3 Dec. '67Mar. '68 Apr. '68May '68 5.4 -2.5 -0.1 -3.7 -1.5 Bank credit, as measured by: Proxy 11.5 3.2 5.6 Proxy plus Euro-dollars 12.3 4.0 5.6 0.6 8.4 5.6 4.0 8.8 14.2 6.2 7.7 2.9 5.9- 6.1 Money supply Time and savings deposits Savings accounts at thrift institutions 9.1 NOTE: Dates are inclusive 1/ Figures included for S&L's in May are preliminary CONFIDENTIAL (FR) June 14, 1968. Prospective developments With the Congressional decision on fiscal legislation almost at hand, with the dividend and interest crediting period for savings institutions near, and with international financial conditions remaining uncertain, the constellations of money market conditions and monetary variables consistent with alternative monetary policies over the period ahead are even more unpredictable than usual. They will depend in large part on events outside the immediate sphere of monetary policy or of prevailing domestic economic conditions. The course of these events is likely to impinge on demands for bank credit and money, bank behavior with respect to portfolios and time deposits, and movements of Treasury bill rates as well as longterm interest rates in various market sectors. Favorable developments, in the sense of enactment of fiscal legislation and the avoidance of international financial crises, are likely to lead to tendencies for long- and also, in some degree, short-term interest rates to decline and to a greater willingness by banks to purchase securities in the market. Unfavorable developments are likely to be accompanied by a sharp rise in interest rates on a broad front, further withdrawal of banks from securities markets, and a further tightening of mortgage credit conditions as both banks and nonbank savings institutions find themselves severely strapped for funds and with prospects for an easing of conditions dim. The progress of fiscal legislation will also affect demands in the market for day-to-day money and demands by banks for borrowings CONFIDENTIAL (FR) June 14, 1968. -5– from the Federal Reserve and the Euro-dollar market. Passage of the tax increase would tend to tranquilize banks' fears about the availability of deposit and reserve funds in the weeks ahead, although immediate needs for short-term credit are likely to be substantial. On the other hand, a disappointment on the tax front may lead to an immediate and also very intense scramble for short-term funds. Variations in the demands for day-to-day money would lead to differential effects on interest rates more broadly viewed and on monetary aggregates,with the net impact depending on whether or to what extent the System attempts to maintain current money market conditions between now and the next meeting of the Committee. Current money market conditions would appear to encompass a Federal funds rate generally in a 6 -- 6-1/4 per cent range, net borrowed reserves in a $300 - $450 million range, and member bank borrowings averaging around $650 - $700 million. Pressures in the aftermath of the mid-June tax date, any difficulties banks might have in rolling over their very large Euro-dollar holdings, and corporate need to pay $1 billion of additional taxes within a short span of time after the tax bill is enacted are all factors that would put pressure on the central money market and hence may require net borrowed reserves more toward the shallow end of the range if the Federal funds rate is not to rise over the period ahead. Given this set of day-to-day financing costs and pressure on bank reserve positions, the 3-month bill rate can be expected to fluctuate within a 5-1/2 -- 5-7/8 per cent range. The effect on CONFIDENTIAL (FR) June 14, 1968. investor and dealer expectations of a favorable decision on taxes could accentuate any near-term tendency for bill rates to decline and moderate any upward pressure that might develop later. In the days immediately ahead, the bill rate could move toward the lower end of the range in reflection of reinvestment demand from holders of maturing June tax bills not turned in for taxes; in addition, the System is likely to be a sizable buyer for seasonal reasons and also to offset the reserve impact of swap repayments. But the odds suggest upward pressure on bill rates later as the Treasury markets bills to meet its cash need early in July, as businesses seek short-term funds to make tax payments, and as investors tend to lengthen portfolios. The money and short-term market conditions noted above would appear consistent with expansion in the bank credit proxy in a 3 - 6 per cent, annual rate, range in June, and about 3 percentage points would be added for Euro-dollar borrowings, Time and savings deposits in June are expected to rise in a 4 - 6 per cent annual rate range as banks' experience with consumer time and savings deposits and CD's have been more favorable than anticipated. CD run-offs are now pro- jected to be around $600 million, or only a little more than seasonal. The money supply in June is expected to rise in an 8 - 10 per cent, annual rate, range, close to previous projections. Continued declines in U.S. Government deposits appear to be contributing to expansion in private demand deposits, but in addition business loan expansion thus far this month appears to be developing strongly, with consequent growth in private cash balances for transactions purposes. CONFIDENTIAL (FR) June 14, 1968. -7- Assuming passage of the tax increase and with the Treasury raising $4 billion of new cash in July, largely early in the month through tax anticipation bills, growth of the bank credit proxy in that month might be in a 1 to 4 per cent annual rate range. This projection assumes maintenance of the current constellation of day-to-day money rates and net reserve position of banks. Whether the proxy is toward the lower or upper end of the range will depend in large part on expectational reactions affecting market interest rates and the ability, or willingness, of banks to secure deposits. If banks are in a position, or willing, to obtain deposits they will not have to liquidate securities now in portfolio or rapidly sell securities obtained during the projected financing in order to accommodate expected relatively strong loan demands. With or without a tax increase, demand deposits are not likely to be a significant source of funds to banks in July as Government and private deposits show complicated but generally offsetting movements on average. U.S. Government deposits are expected to decline further, on average (seasonally adjusted), but to rise in the course of the month from the exceptionally low end of June level. With large Federal expenditures continuing to create sizable transfers to private deposits, the money supply is likely to show a continued vigorous expansion on average for the month, but during the course of the month money growth should slow considerably. Growth in time deposits in July will depend greatly on the course of short-term rates and the ability of banks to obtain CD's. CONFIDENTIAL (FR) -8- June 14, 1968. Consumer-type time and savings deposits are not likely to add significantly to the availability of funds even if short-term rates decline moderately since over-all interest rate levels would still be relatively high in the critical late June-early July period, and since consumers are likely to reduce their savings rate somewhat in the wake of a tax increase. If the 3-month bill rate should move into the upper half of the range noted above, and other short-term rates should remain close to recent levels, run-offs of CD's might be fairly substantial given current Regulation Q ceilings. Developments under alternative policy assumptions. Bill rates may well tend to decline for a time, for seasonal reasons and following affirmative tax action. But part of this decline--if it occurs--may be in anticipation of monetary policy changes. Under such conditions, for the bill rate to hold at a significantly lower level-say, in a 5-3/8 -- 5-5/8 per cent range--would probably require a reduction in the Federal funds rate to below 6 per cent and also an associated reduction in pressures on banks' net reserve positions (with net borrowed reserves at times as low as $200 million). If the Com- mittee adopted a directive thus permitting day-to-day money market rates to decline in accommodation of reductions in other market interest rates, the resulting less restrictive over-all money and credit market conditions should lead to increased willingness on the part of banks to expand credit. Bank credit expansion in July would likely be toward the upper end of the range indicated above, or larger, depending in part on how eager banks are to recapture CD funds and on the availability of such funds in view of expected sizable business and Treasury needs for credit. CONFIDENTIAL (FR) -9- June 14, 1968. As noted earlier, it is possible that market pressures might be such as to prevent or limit a prompt response in short-term market rates following affirmative tax actions. Given this possibility, the Committee might wish to adopt a policy to lead market rates down, which would be implemented by Desk action to lower the Federal funds rate to below 6 per cent, say, initially around 5-3/4 per cent, with an associated reduction in net borrowed reserves to a $200 to $300 million range. Prompt System initiative in achieving such money market conditions would provide greater assurance (than in the preceding alternative) that bill rates would adjust down in the 5-3/8 -- 5-5/8 per cent range, or perhaps a bit lower depending on the strength of expectational forces. Table A-i MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Excess reserves -"---~-- Period As 4 Member banks borrowinen I '-----~ --- ~- revised to -- Free date - U Monthly (reserves weeks ending in): 1967--May June July August September October November December 369 345 449 356 334 353 349 333 94 88 132 86 82 141 124 185 275 257 317 270 252 212 225 148 1968--January February March April May p Weekly: 1968--Jan. 3 10 17 24 31 417 389 337 348 348 275 368 649 689 728 142 21 -312 -341 -380 653 564 157 376 336 495 180 224 233 241 158 7 14 21 28 375 488 379 313 241 384 405 442 Mar. 6 13 20 27 316 458 414 161 Apr. 3 10 17 24 Feb. May Jun. reserves As first published each week As expected at conclusion of each week's open market operations 384 71 398 45 363 - 67 - 55 - 28 143 133 44 73 35 85 75 88 89 95 134 104 - 26 - 44 - 57 -129 -143 -148 500 779 733 582 -184 -321 -319 -421 -151 -309 -332 -410 -155 -320 -289 -407 331 406 527 126 696 646 763 651 -355 -328 -173 -230 -536 -340 -198 -220 -557 1 8 15 p 22 p 29 p 276 381 398 314 370 674 823 712 669 764 -398 -390 -428 -308 -390 -445 -408 -377 -307 -378 -438 5 p 12 p 217 275 759 678 -542 -590 -403 -592 -392 p - Preliminary. -240 -236 -525 -442 -314 -355 -394 -403 TABLE A-2 AGGREGATE RESERVES AND RELATED MEASURES (In per cent, Retrospective Changes, Seasonally Adjusted annual rates based on monthly averages of daily figures) Reserve Total Reserves Annually: A g Nonborrowed ReervDema ERIE 1966 2/ 1967 Monthly: 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. May p I (SEASONAL + 3.8 +11.9 + 8.7 +16.9 +13.1 +20.3 + 2.1 + 2.1 + 7.7 +11.8 +14.0 + 7.7 +26.1 +17.8 +29.1 + 5.4 +14.5 + 5.9 -14.0 +10.1 +15.7 + 9.8 - 0.3 - 0.9 + 1.2 +10.2 +18.7 + 5.7 +13.5 + 8.3 -10.5 +15.2 +16.0 +14.3 + 8.5 + 6.6 +10.7 +13.4 +16.9 +10.4 +10.7 + 9.3 + 1.3 +22.0 +18.6 +16.2 +14.6 +13.6 +12.9 + 7.5 + 0.1 + 6.6 +15.2 +15.0 + 9.5 +17.6 + 6.6 +15.3 +19.2 + 0.2 -11.1 + 1.5 + 6.6 +10.0 + 4.3 - 4.7 + 1.7 +14.9 +15.2 + 6.6 5.8 - +16.7 + 9.9 -12.6 +11.4 +11.4 + 0.6 - 9.4 - + 2.0 _ 1.6 __ _ _ _ _ 6.0 1.8 _____ I di_ _ _ __ +16.1 +17.6 +15.9 +14.3 +17.6 +15.3 +16.5 +14.9 + 8.0 + 9.3 + 9.9 + 3.9 + + + + _ _ _ _ I Total Demand Deposits REVISED) + 2.2 + 6.4 + 1.2 + 6.7 FACTORS - 0.2 + 7.0 + 5.0 + 5.4 Private Bank Deposits Deposits (comm. (credit) 1/ -banks) banks) + 1.5 +10.2 +16.6 +12.5 + 2.2 - 8.8 + 3.8 Mar. Apr. Against Demand Deposits E VIS S Va r i able s Time Money Supply Deposits Against Total a + 0.8 +11.5 - Feb. Moneta Total Member + 1.3 + 9.9 + 7.4 1968--Jan. r e ga t e s Required reserves 7.2 9.7 2.6 3.2 I - 0.7 - +10.6 + 9.8 +10.9 +11.7 2.7 - 4.9 - +18.2 +11.0 +12.3 + 7.4 + 1.3 + 7.4 + 5.3 + 2.0 +16.2 +12.4 +14.9 + 8.7 7.1 + 6.6 + 2.6 + 4.6 + 6.5 +11.1 + 6.8 + 1.7 + 2.5 + 6.8 +12.6 + 6.9 + 6.8 - 0.9 I. 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. p - Preliminary. 1/ Chart 1 MEMBER BANK RESERVES MONTHLY OF DAILY AVERAGES I I II BILLIONS OF DOLLARS, I I FIGURES I SEASONALLY I ADJUSTE 26.0 25.5 25.0 NONBORROWED RESERVES 24.5 REQUIRED ERVES RE / _ I 23.5 23.0 22.5 1 ~_ I - 24.0 __ r 22.0 ADJUSTED BILLIONS OF DOLLARS, NOT SEASONALLY BANK BORROWINGS -MEMBER 1.0 .5 0 0 EXCESS RESERVES "-- ________""*I -- -I- II _______________ J 1967 1968 \ ____ Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS 286 282 278 274 270 266 262 258 254 250 246 242 6 -LIABILITIES TO OVERSEAS BRANCHES IWEEKLY REPORTING BANKS) NOT SEAS ADJ., WEDNESDAYS ~NY/~ 4 I 1966 1967 ~~~ I 1968 Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES .LAR; BILLIONS OF DOLLARS 190 19C 186 184 182 192 178 18E 174 184 170 18C 174 171 TIME DEPOSITS ADJUSTED (All Commercial Banks) 161 164 16( 154 24 NEGOTIABLE (Unadjusted) CD'S 20 16 12 1966 1967 1968 Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY I, I , I I BILLIONS OF DOLLARS I I AVERAGES OF DAILY FIGURES I I I I I I I i 48 44 40 36 146 142 138 134 130 12 U.S. GOVT. (Member DEMAND DEPOSITS Banks) 8 ----- \ 4 0 1966 1967 1968 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 sup ly of reserves Period Year: 1966 (12/29/65 1967 (12/28/66 - Federal Reserve credit (excl. float) 1/ 12/28/66) 12/27/67) Gold k Currency outside banks 627 725 -2,243 -2,305 + - stock = Technical factors net 2/ Change = Bank use of reserves in total reserves Required reserves 3/ Excess reserves +1,085 +1,522 +1,111 +1,517 + 26 5 +3,149 +4,718 - +1,034 +2,257 51 -2,067 + - 16 444 -1,949 66 - 952 320 - 870 153 - 82 167 ---- 112 679 8 36 113 + + - 442 291 82 9 221 + + + - 15 180 325 4 72 + + - 135 75 342 88 128 + + + + 150 105 17 84 56 + 153 58 805 165 Year-to-date: (12/28/66 (12/27/67 Weekly: 1968--May June 6/14/67) 6/12/68) 5/ 1 8 15 p 22 p29 p + + + 347 568 238 23 121 - 14 86 + + + 5 p 12 p + + 23 222 - 2 15 - 472 381 + + 486 201 + + 34 28 + - 187 30 + 135 65 --- + + 185 150 + - 170 155 + + 220 60 + + 220 60 + + + 545 495 385 375 315 ------ + + + 315 620 250 260 100 + + + - 250 100 340 85 500 + - 20 25 205 30 85 + - 20 25 205 30 85 PROJECTED 4/ 1968--June 19 26 July 3 10 17 24 31 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. Includes increase in reserve requirements of $360 million effective Jan. 11, 1968 and $190 million effective Tannarv 18. 1968. 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 $50 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: $0.1 billion increase in the weekly Treasury bill auction through July 31; $0.5 billion, June 19;$3.6 billion, July 8. 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) Supporting Total Period required reserves rese_ Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) private deposits _Supporting U. S. Gov't. demand demand Total Total +1,111 +1,517 + 87 261 (12/28/66 - 6/14/67) - 880 - (12/27/67 - 153 - 1 8 15 p 22 p 29 p + + - 135 75 342 88 128 5 p 12 p + - s +1,198 +1,256 + 14 59 + 4 6 412 - 468 - 910 + 418 + 265 - 512 + + + + - 91 226 225 125 77 - 226 151 117 37 51 - 273 271 143 255 114 + + 187 30 - 182 89 + -369 + 59 + + 319 244 + + 220 60 + 55 455 + - 275 395 + - Time Demand Time Demand deposits __ Other than sea l chan seasonal changes Seasonal changes 5 +1,023 +1,221 1/ + 168 1/ 104 + 604 - 306 220 + 572 - 15 --- 6 + + + + + 19 123 13 220 71 + + - 28 3 6 2 14 - 6 7 + - 49 190 + + 7 12 155 290 - 15 10 + - 120 105 + + 15 10 5 Year-to-date: - 6/12/68) 2/ Weekly: May June 7 -- PROJECTED 1968--June 19 26 July 3 - 20 - 410 + 390 + 145 + 15 + 225 + .10 - 25 - 5 - 20 - 10 - 10 + 15 - 17 24 + - 205 30 + + 120 235 + - 85 265 + - 45 175 + - 30 105 + + o 15 31 - 85 - 95 + 10 + 30 - 45 + 15 --+ 10 /1 Reflects reserves requirements changes in July, September 1966, and March 1967. 11, 1968, and $190 million 2/ Includes increase in reserve requirements of $360 million effective Jan. effective January 18, 1968. p - Preliminary. Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) PeriodPeriod Technical factors factors (net) Foreign deposits Float and gold loans (Sign indicates effect on reserves) Treasury operations ACTUAL Other nonmember deposits and F. R. accounts Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) + - 805 165 + - 673 85 + - 64 389 - 30 7 + + 98 316 -1,949 66 + 7 265 -1,397 - 820 + + 37 6 + 582 483 Year-to-date: (12/28/66 - 6/14/67) (12/27/67 - 6/12/68) Weekly: - 442 - 32 - 380 - 34 + 4 8 15 p + - 291 82 + - 149 120 + + 6 26 + + 45 15 + - 91 3 22 p 29 p + - 9 221 + 123 156 + - 368 360 - 13 20 + 223 3 5 p 12 p + + 486 201 + - 305 36 + + 39 28 + 144 152 + + 286 57 1968--June 19 + 170 - 140 + 225 -- + 85 26 - 155 -- - 150 -- - 5 3 10 17 24 31 + + + - 250 100 340 85 500 ------ + + + - 250 100 250 20 500 1968--May June 1 PROJECTED July p - Preliminary. -- --- - + + 90 65 -- Table B-4 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) Total Federal Reserve credit (Excl. float) Period U.S. Government securities Total Bis O r Repurchase agreements holdings I Year: 1966 (12/29.65 - 12/28/66) 1967 (12/28/66 - 12/27/67) +3,149 +4,718 +3,069 +5,009 +2,158 +4,433 + 474 +1,153 Year-to-date: (12/28/66 - 6/14/67) (12/27/67 - 6/12/68) +1,034 +2,257 +1,675 +1,940 +1,792 +1,116 541 644 344 199 573 219 200 94 631 246 95 20 27 410 479 516 323 53 43 27 3 10 17 24 332 280 134 418 177 346 68 285 132 234 1 54 145 82 1 29 + 164 + + - 30 66 260 1 8 15 22 29 347 176 97 131 333 117 + + 130 272 238 23 121 306 369 89 33 43 + - 42 300 144 5 12 23 222 30 251 30 10 Weekly: 1968--Mar. Apr. May June 6 13 568 " 70 Federal Agency Securities Bankers' Member banks acces 52 + 2 - 69 - 203 - 110 38 + + 437 + 26 - 577 - 19 - 658 180 + 26 22 - + + 49 + 9 + 52 + 2 - 1 1 + + 58 279 - 101 + 47 - 46 151 45 36 - 2 7 + 4 20 + 114 - 50 - 49 14 + 117 - 112 + 5 + 13 + 23 + 10 - 7 - 5 - 3 + 40 + 149 31 - 8 - 14 - 11I - + - - - + 261 + + 29 29 + 2 23 505 333 111 - 43 95 + - 5 81 Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures) (SERIES REVISED) Period 1966--Jan. Feb. Mar. Apr. May June 1/ July Aug. Sept. Oct. Nov. Dec. 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1968--Jan. Feb. Mar. Apr. May 2/ Total reserves reserves 22,785 22,857 22,888 23,118 23,192 23,149 Nonborrowed reserves reserves Required reserves Against private deposits Total Demand Total Total 23,293 23,029 23,065 22.954 22,915 22.895 22,325 22,376 22,331 22,490 22,486 22,472 22,552 22,336 22,319 22,243 22,303 22,286 22,456 22,507 22,512 22,714 22,773 22,A80 22,864 22,710 23,217 23,471 23,869 23 910 23,952 24,105 24,342 24,627 24.786 25.121 25.275 25.153 25,500 25,765 25,812 25,623 25,705 22,689 22,629 22,593 22,600 21,936 21,996 22,115 22,283 22,331 22,361 22,344 22,320 22,349 22,229 22,198 22,262 16,822 16,877 16,957 17,043 17,030 17,043 16,963 16,908 16,922 16,827 16,810 16,825 22,770 23,107 23,668 23,775 23,874 23,982 24,279 24.586 24,721 25,020 25,142 24,848 22,875 23,134 23,383 23,529 23,531 23,660 23,960 24,259 24,452 24,810 24,947 24,914 22,298 22,559 22,785 22,779 23,071 23,387 23,578 23,776 23,850 23,995 24,122 24,157 16,774 16,959 17,101 17,015 17,244 17,472 17,582 17,701 17,704 17,805 17,879 17,860 25,193 25,401 25,135 24,938 24,978 25,151 25,389 25,402 25,276 25,238 24,270 24,333 24,429 24,491 24,752 17,974 18,025 18,080 18,136 18,390 .1. A A p - Preliminary. 1/ Break in series due to redefinition of time deposits effective June 9, 1966, which reduced required reserves by $34 million. 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) (SEASONAL FACTORS REVISED) Private Total member Period bank deposits Apr. May June 3/ July Aug. Sept. Oct. Nov. Dec. 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1968--Jan. Feb. Mar. Apr. May p demand U.S. Gov't. demand deposits deposits deposits 2/ 238.0 239.0 239.8 241.9 243.9 244.4 245.8 245.6 245.5 244.4 244.0 244.6 121.8 121.9 122.8 124.8 126.2 126.6 128.1 128.8 129.2 128.6 128.3 129.4 111.7 112.1 112.6 113.2 113.1 113.2 112.6 112.3 112.4 111.7 111.6 111.7 4.5 5.0 4.4 4.0 4.6 4.6 5.1 4.5 3.7 4.0 4.1 3.5 247.7 251.0 254.0 131.5 133.3 135.3 137.2 138.7 140.8 142.8 111.4 112.6 113.6 113.0 114.5 116.0 116.7 117.5 117.6 118.2 118.7 118.6 4.8 5.1 5.1 5.6 4.0 2.6 2.9 4.0 4.5 5.2 5.6 4.6 119.4 119.7 120.1 120.4 122.1 5.4 7.1 6.7 5.2 3.7 (credit) I/ 1966--Jan. Feb. Mar. epis 255.8 257.2 259.5 262.4 266.1 268.4 270.8 272.9 273.2 274.7 277.0 278.0 276.9 277.3 144.6 146.3 147.4 148.6 149.9 149.9 150.2 151.2 151.3 151.5 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 2/ bank credit. Private demand deposits include demand deposits of individuals, ships and corporations and net interbank balances. partner- 3/ Break in series due to redefinition of time deposits effective June 9, 1966, which reduced total member bank deposits and time deposits by $850 million. TABLE C-2a DEPOSITS SUPPORTED BY REQUIRED RESERVES AT ALL MEMBER BANKS Seasonally adjusted (Dollar amounts inbillions, based on weekly averages of daily figures' (SEASONAL FACTORS REVISED) Week ending: Total member Time bank deposits deposits (credit)1/ 2/ 2/ Private demand deposits 2/ U. S. Gov't. demand deposits 24 31 274.1 274.0 274.7 275.5 274.9 150.1 149.9 150.1 149.8 149.9 119.6 119.5 119.5 119.1 119.0 4.4 4.6 5.1 6.6 5.9 Feb. 7 14 21 28 276.0 276.1 276.1 279.3 149.8 150.0 150.3 150.6 119.3 119.6 119.8 119.8 6.8 6.5 6.1 8.9 Mar. 6 13 20 27 279.1 278.4 277.3 150.1 151.1 151.0 151.3 119.8 120.0 119.9 120.3 9.2 7.3 6.5 6.0 3 277.4 10 276.6 278.6 276.7 151.6 151.5 151.4 151.0 120.3 120.1 121.7 120.0 5.5 5.0 5.5 5.7 151.5 151.5 151.5 151.6 151.3 120.0 120.9 121.3 122.8 123.3 4.8 4.8 3.8 3.1 3.1 151.5 151.8 123.4 122.2 3.3 4.4 1968--Jan. 3 10 17 Apr. 17 24 May June 277.5 1 8 15 22 29 276.3 5 12 278.2 277.2 276.6 277.4 277.7 278.3 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/ Break in series due to redefinition of time deposits effective June 9, 1966, which reduced total member bank deposits and time deposits by $850 million. 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) (SEASONAL FACTORS REVISED) __ _ ________ Private Demand Currency I/ Money Supply Monthly Deposits _____________Deposits Time Deposits Adjusted / LI Adjusted 1966--Jan. Feb. Mar. Apr. May June 3/ July Aug. Sept. Oct. Nov. Dec. 167.9 168.6 169.2 170.3 170.3 170.5 169.9 170.0 170.5 170.2 170.2 170.4 36.6 36.7 36.9 37.1 37.3 37.4 37.6 37.8 37.9 38.0 38.2 38.3 131.4 131.9 132.3 133.2 133.0 133.1 132.3 132.2 132.6 132.1 132.0 132.1 147.7 148.3 149.6 151.8 153.6 154.1 155.9 156.9 157.7 157.3 156.9 158.1 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. 170.3 171.8 173.2 172.5 174.4 176.0 177.8 178.9 179.1 180.2 181.0 181.3 38.5 38.7 38.9 39.0 39.1 39.3 39.4 39.5 39.7 39.9 131.8 133.0 134.3 133.5 135.3 136.7 138.4 139.4 139.4 140.2 141.0 140.9 161.0 163.5 165.9 168.1 170.1 172.6 174.8 177.2 179.4 180.6 182.0 183.5 182.3 182.7 183.4 184.4 186.1 40.6 40.7 41.1 41.4 41.6 141.7 184.1 185.2 186.7 187.1 187.6 Dec. 1968--Jan. Feb. Mar. Apr. May p I 40.1 40.4 I 141.9 142.2 143.0 144.5 I 1 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 aidFederal Reserve float; and (2) foreign demand balances at Federal Reserve Banks. 3/ Break in series due to redefinition of time deposits effective June 9, 1966, which reduced time deposits adjusted by $1,140 million. p - Preliminary. TABLE C-3a MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally Adjusted (Dollar amounts in billions, based on weekly averages of daily figures) (SEASONAL FACTORS REVISED) Private Money Supply Week Ending Currency 1/ Deposits 1968--Jan. Time Deposits Demand 2/ adjusted 3 10 182.3 182.4 40.5 40.5 141.8 141.8 183.9 183.9 17 24 31 182.7 182.2 182.1 40.6 40.6 40.6 142.1 141.6 141.5 184.0 184.0 184.3 Feb. 7 14 21 28 182.4 182.7 182.8 182.9 40.7 40.8 40.8 40.8 141.8 141.9 142.0 142.1 184.5 185.0 185.3 185.7 Mar. 6 13 20 27 183.1 183.6 183.3 183.6 40.9 41.0 41.1 41.2 142.2 142.5 142.2 142.4 186.0 186.7 186.8 187.0 Apr. 3 10 17 24 183.9 183.9 186.0 183.8 41.2 41.3 41.3 41.4 142.7 142.6 144.7 142.4 187.3 187.0 187.1 186.9 May 1 8 15 p 22 p 29 p 183.7 184.8 185.1 186.9 187.5 41.5 41.5 41.6 41.8 41.8 142.3 143.3 143.4 145.1 145.8 187.3 187.4 187.6 187.7 187.6 June 5 p 12 p 187.6 186.6 41.8 42.1 145.8 144.5 187.9 188.1 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 and Federal Reserve float; and (2) foreign demand balances of Federal Reserve Banks. Break in series due to redefinition of time deposits effective June 9, 1966, which 3/ reduced time deposits adjusted by $1,140 million. Preliminary. p 1/ 

Federal Reserve (1968, June 17). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19680618

@misc{wtfs_bluebook_19680618,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1968},
  month = {Jun},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19680618},
  note = {Retrieved via When the Fed Speaks corpus}
}