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. July 12, 1968. CONFIDENTIAL (FR) MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments A marginal reduction in market pressures has developed since the last meeting of the Committee in the wake of fiscal legislation and of open market operations. In the market for day-to-day money, the effective Federal funds rate has centered around 6 per cent, as compared with 6-1/8 per cent during the 3 weeks prior to the previous Committee meeting, and dealer loan rates have also eased fractionally. The rate charged on System RP's to dealers was reduced from the 5-3/4 per cent rate prevailing since late April to 5-5/8 per cent. The reserve position of banks also has been under less pressure in recent weeks. After averaging about $735 million in the last two statement weeks of June, member bank borrowings declined to an average of around $450 million in the first two statement weeks ending in July, as major banks accelerated their borrowing from the Euro-dollar market and as the basic reserve deficit of principal money market banks improved seasonally. Net borrowed reserves fluctuated between $100 and $300 million in the past two weeks; country banks first reduced and then increased excess reserves, though the average level was lower than usual for this time of year. Yields on nearly all maturities in the U.S. Government securities market are about 20 basis points below levels prevailing on June 18, with the 3-month bill most recently around 5-3/8 per cent. However, other short-term rates have declined less and some not at all; Period FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (Monthlv averages and, where available, weekly averages of daily figures) Money arket Indicators Bond Yields Flow of Reserves. Bank Credit and Money Bank Total Corporate Munici- NonBorrow- Federal 3-month Free teserves ings Funds TreasU.S. New pal borrowed ReCredit Supy Deost Supply Deposits Proxy p 2 Issues (Aaa) Reserves serves (In millions Rate ury Gov't. of dollars) Bill (20 yr.) (Aaa) I/--__ _ _ _ _ _ _dolr(In t_ _o n (In billions off dollars) dollars) (Seasonally Adjusted) + 1.6 + 2.5 5.79 3.80 +108 +153 + 2.2 257 88 3.97 3.53 4.99 + 2.2 + 2.9 + 1.8 +297 +237 3.86 5.01 5.78 3.78 4.20 311 132 + 1.1 + 2.4 +285 + 3.7 3.78 +307 5.12 3.86** 3.88 4.26 270 86 + 0.2 + 2.2 +135 +159 + 2.3 5.85** 3.81 3.99 4.42 5.16 252 82 + 1.2 +335 + 2.4 + 1.1 6.08 3.88 +299 3.87 4.55 5.36 212 141 + 1.4 +154 + 2.1 + 0.8 3.99 +122 4.72 5.66 6.50 225 124 4.14 + 0.2 + 0.3 + 1.5 4.15 -294 -122 5.59 6.51 185 4.49 4.96 143 d 17--June July Aug. Sept. Oct. Nov. Dec. 1968--June July +347 +265 + 47 -189 + 87 + 93 1.5 2.3 1.0 1.0 0.4 1.4 1.0 0.4 0.7 1.0 1.8 1.1 + + + + + + 0.6 1.1 1.5 0.4 0.5 0.5 4.60 4.68 5.02 5.74 6.10 6.09 5.00 4.98 5.17 5.38 5.66 5.52 5.39 5.38 5.59 5.46 5.55 5.40 6.24** 5.29** 6.56** 6.52** 6.66 6.66 4.06 4.01 4.28 4.13 4.28 4.21 12 p -355 678 6.20 5.69 5.45 6.61 4.25 + 0.1 - 1.4 + 0.2 19 p -403 665 6.22 5.59 5.40 6.67 4.15 - 0.4 + 0.6 - 26 p -241 807 6.05 5.30 5.34 6.78 4.18 + 2.3 + 1.0 - 0.1 3 p 10 p -308 - 92 493 411 5.82 6.03 5.33 5.36 5.35 5.33 -6.56 4.18 4.18 - 1.5 - 0.8 + 1.5 - 0.5 + 0.6 + 0.6 Year 1967 Second Half 1967 First Half 1968 195 238 -204 173 123 567 4.19 4.02 5.37 Recent variations in growth Mar. 29-Jun. 28 Jun. 28-Nov. 29 Nov. 29-Jul. 10 245 254 -158 110 112 512 4.00 3.96 5.27 4.29 4.51 5.29 5.01 5.31 5.46 5.77 6.10 6.25 3.74 3.91 4.16 3.66 4.41 5.24 4.83 5.25 5.44 5.63 5.96 5.69 3.68 3.86 4.16 Annual rates of increase + + 9.9 +11.9 +10.6 + + 8.7 + + 4.0 + 5.2 +11.5 + 7.2 + 2.1 +20.4 +12.7 + 2.9 1/ Includes issues carrying 5-year and 10-year cal 1 protection, ** - issues carry a 5-year call protection. 2/ Time deposits adjusted at all commercial banks. 3/ Base is change for month preceding specified period or in case of weekly periods, the first week shown. p - + + + + + + 275 368 649 689 728 727 Avera es +345 +208 -266 -197 + 45 +125 + + + + + 142 21 -312 -341 -378 -385 1968--Jan. Feb. Mar. Apr. May p June p Revised series. Preliminary. July 12, 1968. 0.1 3/ 6.4 6.0 6.5 +16.1 +12.6 + 5.0 + 6.7 + 6.6 + 6.9 +17.7 +18.4 + 5.5 CONFIDENTIAL (FR) -2- July 12, 1968 for example, yields on commercial and finance company paper remain unchanged from their mid-June levels. These yields are typically less sensitive to expectations than yields on Treasury securities, and tend to move more in relation to current flows of funds. Yields in private long-term capital markets showed little change for most of the period since the last Committee meeting, but corporate bond yields declined in the past two days, triggered by the good market reception accorded the key Jersey Standard bond issue. Municipal yields, too, declined in recent days. In the days immediately following the last Committee meeting, bill rates were pushed sharply lower, as a combined result of several factors; demands for bills by holders of maturing June tax bills which had not been turned in for taxes, unusually large System bill purchases to offset the reserve effects of international developments, and initial reactions to the passage of the fiscal package. While all bill rates declined, the 3-month bill fell most sharply, dropping 40 basis points to 4.20 per cent bid on June 21, below the lower end of the range anticipated in the last Blue Book. The 3-month bill rate dropped low relative to other short-term rates largely because of a technical shortage of such bills for trading; the rate rebounded to around the mid 5.30's within two days. Other bill yields, which had not declined quite as much, did not rebound like the 3-month bill. Bank credit expanded at a 6 per cent annual rate in June, the upper end of the range anticipated in the last Blue Book. As bill rates declined, banks were able to rebuild CD's substantially after the midJune tax date. Over the month of June, outstanding CD's declined only CONFIDENTIAL (FR) July 12, 1968 $250 million, which is about half the seasonal decline. Banks reduced offering rates on maturities of 6-months or longer to around 6-1/8 per cent. Rates on 3-month maturities remain at their ceilings. The money supply in June rose at about a 7 per cent annual rate, a shade below the range of expectations. U.S. Government deposits showed a very small increase during the month. The behavior of key monetary variables (as annual rates of increase) is shown for longer time periods in the table below. May '67Nov. '67 Dec. '67June '68 Total reserves 9.5 Nonborrowed reserves 9.9 -0.2 Proxy 11.5 Proxy plus Euro-dollars 12.3 3.6 Dec. Mar. 6.4 '67'68 Apr. June '68'68 -0.1 -0.1 -0.4 3.6 5.6 1.0 4.7 5.6 3.4 8.4 5.9 4.0 8.3 14.2 5.7 7.7 3.0 9.1 6.1 6.1 1/ 5.9- Bank credit, as measured by: Money supply Time and savings deposits Savings accounts at thrift institutions NOTE: Dates are inclusive 1/ Figures included for S&L's and mutual savings banks in June are preliminary. July 12, CONFIDENTIAL (FR) 1968 Prospective developments Bank credit and deposit growth in July and August together will be strongly influenced by the need to supply reserves to the banking system to help finance $7.5 billion of Treasury cash needs (including the $4 billion of tax bills already marketed in July), as well as private demands associated with the tax legislation. If currently prevailing money market conditions--as specified below--are to be maintained under these circumstances, total reserves would have to grow at a 7 - 9 per cent annual rate, on average, during the two months. But nonborrowed reserves are likely to grow more rapidly, reflecting a tendency for member banks to borrow less from the Federal Reserve with market interest rates having moved lower relative to the discount rate. Most of the increase in the reserve aggregates will be reflected in the August figure, but much of the expansion will be underway in the latter half of July and carry through to August. Outstanding bank credit in July, as measured on a daily average basis by the proxy, is expected to be about 1 - 4 per cent (annual rate) above the average amount outstanding in June. The trend of growth in the course of the month is expected to be rising, as banks position or finance the March and April tax bills sold by the Treasury with 100 per cent tax and loan credit (for payment July 11) and as banks help finance the $1 billion or so of additional tax payments to be made by corporations in mid-July in connection with the new tax law. In August, the bank credit proxy may rise in a 10 - 12 per cent annual rate range, on average-assuming the Treasury raises another $3 billion of new cash during the -5- CONFIDENTIAL (FR) July 12, 1968 month, a substantial part of which possibly will be at the time of the mid-August refunding. For the two months taken together, the bank credit proxy may be expected to rise in a 6 - 8 per cent, annual rate, range. It is too early to have a very precise idea of Treasury financing plans for August, however. Apart from the need to raise new cash, the Treasury will have to roll over $3.7 billion of publicly held securities maturing in mid-August. It is possible that all of the financing need (apart from continued cash additions to the weekly bill auctions) could be satisfied through a combination of relatively shortand longer-term notes; however, depending on the market outlook and other factors, some of the cash could be raised through a PC, and/or through additional tax bills. The specific nature and timing of the financing(s) will, of course, affect the credit proxy measure. Euro-dollar borrowings may add about 2 percentage points to the above bank credit figures in July, but it is not expected that such borrowings will be sufficient to add significantly to bank credit growth in August. It is even possible that liabilities of U.S. banks in the Euro-dollar market will decline by August, if confidence is restored in the franc and sterling and if domestic funds remain somewhat more readily obtainable. This bank reserve and credit outlook for the weeks immediately ahead assumes that the Federal funds rate remains around 6 per cent, but is not infrequently below that rate; that net borrowed reserves are generally in a $200 - $350 million range; that member bank borrowings are in a $500 - $600 million area (as borrowings remain below their May-June average, but rise from recent seasonally low levels); and CONFIDENTIAL (FR) July 12, 1968 -6- that the 3-month bill rate is most frequently in a 5.30 -- 5.55 per cent range. Bill rates would not be expected to decline much from recent levels; and they might rise, because the pressure on bank reserve positions implicit in the specifications above would probably be sufficient to keep dealer financing costs fairly high, with 6-1/8 -6-3/8 per cent the most frequent charge for new money in New York. Dealer bill positions in the longer bill area have built up substantially in recent days as dealers have bought from banks a fairly sizable proportion of the new tax bills. Dealers have been willing buyers in the expectation that monetary conditions would probably ease in the weeks ahead. But continued relatively high financing costs are likely to erode dealer willingness to position bills unless private demand for bills is unusually strong. Mainly for seasonal reasons, the System is not expected to be a very large net buyer in the market between now and the next meeting of the Committee, in contrast to its large net purchases of securities over the past few weeks. The System is likely to have to absorb a moderate amount of reserves during the next two weeks, and will return to the buying side of the market in late July and early August; but foreign operations may be a factor continuing to complicate domestic open market operations. With bill rates remaining around or somewhat above recent levels, banks would be able to add to outstanding negotiable CD's. Under these conditions, we expect such CD's outstanding to rise by around $1 billion in July, which would be about twice the seasonal increase. Such a pace of expansion may not be sustained in August, however, CONFIDENTIAL (FR) -7- July 12, 1968 partly because banks might bid less aggressively if loan demands diminish after the July tax borrowing has passed. Consumer-type time and savings deposits are expected to recover in July and August from their sharply reduced growth rate of the second quarter. But their rate of expansion is expected to remain moderate, mainly because the combination of prevailing money market conditions and further Treasury financings are likely to inhibit declines in both short- and long-term market interest rates. The tax increase may also absorb some funds that would otherwise flow into savings accounts. Over-all, total time and savings deposits of banks may rise in a 7 - 10 per cent annual rate range in July, and about the same in August. The money supply in July is expected to expand in a 8 - 10 per cent, annual rate, range. This high average rate of expansion for the month in large part reflects the accelerated growth in private demand deposits during the three statement weeks ending July 3, a period when U.S. Government deposits were declining sharply. Money supply growth is expected to slow sharply in the latter part of July and in August, when Treasury cash balances are expected to rise substantially on balance. For August the money supply may show little change on average. While deposit growth is likely to pick up in the weeks ahead, such growth may not be sufficient to enable banks to rebuild very much liquidity or to adopt easier lending terms. Banks may be expected to become somewhat more active in longer-term markets. However, in view of the Treasury financing in prospect, significant declines in long-term -8- CONFIDENTIAL (FR) July 12, 1968 rates might not develop until current large corporate bond market demands moderate, or if signs of weaker business activity become more evident to the market. Policy alternative. Open market operations oriented toward attaining somewhat easier money market conditions would probably encourage some further reductions in bill rates, a downward movement in the more sluggish short-term rates, and declines in long-term interest rates. Such easier conditions could entail a Federal Funds rate around 5-3/4 per cent, a net reserve position of banks in a 0 to minus $200 million range, and member bank borrowings in a $350 - $500 million range. The 3-month bill rate would likely be in a 5-1/8 -- 5-3/8 per cent range under these circumstances. And expectations of a discount rate decrease might be generated in the market as the spread of the discount rate above the bill rate widens. Such expectations might dis- courage some borrowing over the short-run in capital markets, and encourage some investors to move funds into the market, thus exerting downward pressures on longer-term interest rates. With a lower over-all interest rate level, it is possible that bank credit expansion will be somewhat more rapid than under currently prevailing money market conditions. Interest rates are unlikely to fall enough to stimulate business loan demand, which would be held down by the expected cut-back in inventory building. But banks may become more eager to rebuild their portfolio positions in order to capture the available relatively high yields. Over-all, under the easing policy alternative specified, one might expect a bank credit growth in a 7-9 per cent annual rate range for July and August together. Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) 7 Excess reserves Period = ----- .. As revi I Member banks borrowings ........ -i- sed 9 Free r e serves I to date Y Monthly (reserves weeks ending in): As first published each week As expected at conclusion of each week's open market operations 1967--June July August September October November December 345 449 356 334 353 349 333 132 86 82 141 124 185 257 317 270 252 212 225 148 1968--January February March April May p June p 417 389 337 348 350 342 275 368 649 689 728 727 142 21 -312 -341 -378 -385 6 13 20 27 316 458 414 161 500 779 733 582 -184 -321 -319 -421 -151 -309 -332 -410 -155 -320 -289 -407 3 10 17 24 331 406 126 696 646 763 651 -365 -240 -236 -525 -328 -173 -230 -536 -340 -198 -220 -557 May 1 8 15 22 29 276 381 400 322 370 674 823 712 669 764 -398 -442 -312 -347 -394 -390 -428 -308 -390 -445 -408 -377 -307 -378 -438 June 5 12 19 26 217 323 261 566 759 678 664 807 -542 -355 -403 -241 -590 -403 -445 -289 -592 -392 -375 -337 July 3 10 185 493 412 -308 - 93 -406 -419 - 93 - 96 Weekly: 1968--Mar. Apr. p - Preliminary 527 319 88 ______________________________________________ I 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 Reserves Aggr egates Required reserves Nonborrowed rred Reserves Monetary Variables Total Member Time Money Supply Against Total Demand Deposits Deposits Bank Deposits (credit) (comm. (credit) 1/banks) banks) Total __Deposits Private D a Demand Deposs Annually: 1966 1967 2/ + 1.3 + 0.8 +11.5 + 1.5 +10.2 -0.2 + 7.0 + 3.8 +11.9 + 8.7 +16.1 +26.1 +17.8 +29.1 + 5.4 + 5.0 + 5.4 +14.9 +15.2 + 6.6 +14.5 + 5.9 -14.0 +14.6 +13.6 +12.9 + 7.5 + 0.1 + 6.6 +15.2 +15.0 + 9.5 +17.6 + 6.6 +10.1 +15.7 + 9.8 1.6 -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 +17.6 +15.9 +14.3 +17.6 +15.3 +16.5 +14.9 + 8.0 + 9.3 + 9.9 +16.7 + 9.9 -12.6 +11.4 +11.4 + 0.6 + 6.6 +10.0 + 4.3 - 8.8 - + 4.1 + 2.2 + 6.0 - +15.3 +19.2 + 0.2 -11.1 + 1.7 +11.1 + + + + + + + 9.9 Monthly: 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1968--Jan. Feb. Mar. Apr. May p June p +16.9 +13.1 +20.3 + 2.1 + 2.1 + 7.7 +11.8 +14.0 + 7.7 +16.2 + 7.4 - 5.8 +16.6 +12.5 + 2.2 + 4.3 9.4 - 6.0 1.8 + 9.2 - 0.3 0.9 + 1.2 +10.2 +18.7 + 5.7 +13.5 + 8.3 1/ Includes all deposits subject to reserve requirements. - 4.7 + 1.7 + 6.1 3.9 7.2 9.7 2.6 3.2 3.2 + 2.2 + 6.4 - 0.7 +10.6 + 9.8 - 4.9 + 1.2 + 6.7 - 2.7 +10.9 +11.7 - 7.1 +13.2 +11.0 +12.3 + 7.4 + 1.3 + 7.4 + 5.3 + 2.0 +16.2 +12.4 +14.9 + 8.7 + 6.6 + 2.6 + 4.6 + 6.5 +11.7 + 7.1 + 6.8 + 6.9 + 6.8 - 0.9 + 1.7 + 2.5 + 6.8 +12.6 + 6.6 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. Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES -7 T OF I BILLIONS OF DOLLARS, DAILY I I FIGURES SEASONALLY 1T I F I _ I I ADJUSTED I I I _1-_r I ----T 26.0 -- 25.5 - ~ -_ 25.0 S NONBORROWED RESERVES 24.5 ' 24.0 23.5 -REQUIREDRESERVES REQUIRED RESERVES I - - i 23.0 ~i_ __~_ 22.5 22.0 _ I BILLIONS OF DOLLARS, NOT SEASONALLY ADJUSTED MEMBER BANK BORROWINGS 1.0 EXCESS .S .5 ------------ RESERVES _------------------- /-------------------------iillllllIIIIIIIIIJI .. ^^-^-^. "^00 __________ oJ_____TT 1967 ______ 1968 _ _ Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS 286 DOLLARS OF i l I l I I 1 1 1 1 1 1 TOTAL MEMBER BANK DEPOSITS ICREDIT PROXY) SEAS ADJ WEEKLY AVERAGE OF DAILY FIGURES 282 278 274 270 266 262 258 254 250 246 242 242 6 ------- ___----------------------------------------------------_____ -LIABILITIES TO OVERSEAS BRANCHES (WEEKLY REPORTING BANKS) NOT SEAS ADJ, WEDNESDAYS 4 2 0L.L I 1966 1967 I I I 1968 Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED I I I WEEKLY I I I AVERAGES I BILLIONS OF DOLLARS I OF DAILY FIGURES I I I I I I I I I I I I BILLIONS OF DOLLAR 190 190 -186 186 192 182 SUPPLY MONEY 178 174 188 --- - 184 180 170 176 172 168 164 160 156 24 NEGOTIABLE NOT SEAS ADJ, CD'S WEDNESDAYS 20 16 12 D 1966 M J 1967 S D J M 1968 S Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY I I BILLIONS OF ADJUSTED WEEKLY I I I DOLLARS I AVERAGES OF DAILY FIGURES I I I I i I 4 8 44 40 36 146 142 138 134 130 12 U.S. GOVT. DEMAND DEPOSITS (Member Banks) 8 f ------------- - 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 supply of reserves Gold Currency Technical Gold b ne 2 s k outside factors banks net 2/ Period Period Year: 1966 (12/29/65 1967 (12/28/66 - = Federal Reserve f 1 credit (excl. float) I/ +3,149 +4,718 - 7/12/67) 7/10/68) 5/ +2,708 +3,363 49 -2,067 5 12 19 26 + 23 + 222 + 58 +1,222 12/28/66) 12/27/67) 627 725 -2,243 -2,305 + - Change r in total reserves +1,085 +1,522 805 165 1 = Bank use of reserves Required Excess _ Excess reserves 3/ +1,111 +1,517 + 26 5 - 305 + 160 + - 206 123 + 187 - 41 + + 243 312 + + 153 106 62 305 + 381 134 Year-to-date: (12/28/66 (12/27/67 - Weekly 1968--June July p p p p - 3 p 10 a -2,232 - 2 - 15 122 52 - 216 - 472 352 + + 486 209 + + 140 258 - 17 864 34 65 181 617 - 285 741 + + 38 685 370 108 + - 11 242 225 85 530 + 190 - 40 40 + - 190 40 40 120 165 + 20 - 145 + - 20 145 PROJECTED 1968--July Aug. 99 37 II 17 24 31 + + 7 14 A 455 310 325 + + + 420 185 165 + + - 610 260 - 470 - 50 + 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. 11, effective January 18, 1968. p - Preliminary. 1968, 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 $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, 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 August 14; $4.0 billion, July 11. 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 Supporting required U. S. Gov't. demand reserves reses deposits +1,111 +1,517 + private deposits _Supporting Total demand Other than seasonal chanes Seasonal changes Total Demand seasonal changes Time Demand Time Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) 87 261 +1,198 +1,256 + 14 59 + 4 6 5 +1,023 +1,221 1/ + 168 1/ Year-to-date: (12/28/66 - - 305 - 74 - 231 - 909 + 81 + 800 - 203 + 160 - 443 + 603 - 508 + 208 + 895 + 8 p p p p + + + 187 41 243 312 + + 182 85 81 480 + + + - 369 44 162 168 + + + - 319 244 157 288 - 6 7 12 7 + + + 49 203 23 138 + + - 10 6 11 3 p 10 p + - 11 242 - 481 109 + - 492 133 + - 146 11 + - 13 6 + - 312 137 + + 21 21 17 24 31 + - 190 40 40 + + - 145 245 40 + - 45 285 -- + + 45 175 30 + 5 - 10 120 45 + + + 10 10 10 7 14 + - 20 145 - 105 125 + - 125 20 + - 20 15 + + 5 15 + - 90 30 + + 1( 10 7/12/67) (12/27/67 - 7/10/68) 2/ Weekly: 1968--June July 5 12 19 26 PROJECTED 1968--July Aug. -- Reflects reserve requirement changes in July, September 1966, and March 1967. Includes increase in reserve requirements of $360 million effective January 11, 1968, and $190 million effective January 18, 1968. p - Preliminary. 1/ 2/ Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Technical factors (net) Period ACTUAL + 805 + 673 1967 (12/28/66 - 12/27/67) - 165 - 85 Year-to-date: (12/28/66 - 7/12/67) (12/27/67 - 7/10/68) -2,232 - 696 216 + 162 p p p p 486 209 17 864 + 305 - 36 206 16 3 p 10 D 38 685 July 5 12 19 26 loans Other nonmember deposits and F. R. accounts (Sign indicates effect on reserves) Year: 1966 (12/29/65 - 12/28/66) Weekly: 1968--June Float reasury operations Foreign deposts and gold - - 140 + 259 + 120 30 -1,073 - 423 + - 30 7 14 18 98 316 - 477 + 63 144 152 11 15 286 57 58 758 24 4 108 288 PROJECTED 1968--July Aug. 17 24 31 + + - 225 85 530 7 14 + 120 165 p - Preliminary. -- + - 20 40 530 --- + 120 75 + 30 -- + + 335 15 -- -- + 90 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 Repurchase agreements holdings 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 - 7/12/67) (12/27/67 - 7/10/68) +2,708 +3,363 +3,232 +3,348 +3,062 +2,509 845 Weekly: 1968--May June July + - 776 26 19 -21 - 3 606 6 130 272 42 300 144 Bankers' Bankers' Federal Agency Securities +t Member Member banks banks 52 - 69 - S 24 49 + + 13 40 + + 23 149 - 31 - 8 - 14 - 111 43 + 95 479 67 1 8 15 22 29 + + + 347 568 238 23 121 306 369 89 33 43 + + 176 97 - 131 + + 333 117 5 12 19 26 + 23 + 222 + 58 +1,222 30 251 88 985 + 30 - 10 + 261 + + + 241 916 - 153 - 2 31 + 38 + 43 + 3 10 - 274 61 + - 263 27 157 13 - 146 75 16 36 - + 122 52 70 + 2 203 + - + - - 2 23 - 5 - 81 - 14 143 - 314 81 Chart Reference Table C-l TOTAL, NONBORROWED AND REQUIRED RESERVES Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures) Period dTotal reserves Nonborrowed reserves Total Required reserves Aainst private deposits Total Demand 1966--Jan. Feb. Mar. Apr. May June 1/ July Aug. Sept. Oct. Nov. Dec. 22,785 22,857 22,888 23,118 23,192 23,149 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,.80 22,864 22,710 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 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 23,217 23,471 23.869 23 910 23,952 24,105 24,342 24,627 24.786 25.121 25.275 25.153 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 1968--Jan. Feb. Mar. Apr. May 2/ June 2/ 25,500 25,765 25,812 25,623 25,710 25,803 25,193 25,401 25,135 24,938 24,983 25,108 25,151 25,389 25,402 25,276 25,238 25,432 24,270 24,333 24,429 24,491 24,752 24,911 17,974 18,025 18,080 18,136 18,389 18,538 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 Period billions based on monthly averages of daily figures) Total member bank deposits (credit) I/ Time deposits Private demand deposits 2/ U.S. Gov't. demand deposits 1966--Jan. Feb. Mar. Apr. May June3/ July Aug. Sept. Oct. Nov. Dec. 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 4.0 4.0 4.1 3.5 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 247.7 251.0 254.0 255.8 257.2 259.5 262.4 266.1 268.4 270.8 272.9 273.2 131.5 133.3 135.3 137.2 138.7 140.8 142.8 144.6 146.3 147.4 148.6 149.9 111.4 112.6 113.6 113.0 114.5 116.0 116.7 117.5 117.6 118.2 118.7 118.6 4.8 5.1 5.1 5.6 4.0 2.6 2.9 4.0 4.5 5.2 5.6 4.6 1968--Jan. Feb. Mar. Apr. May p June p 274.7 277.0 278.0 276.9 277.3 278.7 149.9 150.2 151.2 151.3 151.5 151.7 119.4 119.7 120.1 120.4 122.1 123.1 5.4 7.1 6.7 5.2 3.7 3.9 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. Private demand deposits include demand deposits of individuals, partnerships and corporations and net interbank balances. 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, Week ending: based on weekly averages of daily figures Total member bank deposits (credit) 1/ 2/ Time deposits 2/ Private demand deposits 3/ U. S. Gov't. de mand deposits 1968--Jan. 3 10 17 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 27 279.1 278.4 277.3 277.5 150.7 151.1 151.0 151.3 119.8 120.0 119.9 120.3 7.3 6.5 6.0 3 277.4 276.6 120.3 120.1 121.7 120.0 5.5 5.0 5.5 5.7 8.6 24 278.6 276.7 151.6 151.5 151.4 151.0 May 1 8 15 22 29 276.3 277.2 276.7 277.3 277.7 151.5 151.5 151.6 151.6 151.3 120.0 120.9 121.3 122.7 123.3 4.8 4.8 3.7 3.1 3.1 June 5 12 19 26 278.2 278.3 277.9 280.2 151.5 151.8 151.8 151.7 123.4 122.1 122.2 123.0 3.3 4.4 3.9 5.4 July 3 10 278.7 277.9 152.1 152.6 125.1 124.2 1.5 1.1 Apr. 10 17 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, ships and corporations and net interbank balances. partner- 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/ Private Demand Deposits Time Deposits 2/ 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. Dec. 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 40.1 40.4 131.8 133.0 134.3 133.5 135.3 136.7 138.4 139.4 139.4 140.2 141.0 140.9 161.0 163.5 165.9 168.1 170.1 172.6 174.8 177.2 179.4 180.6 182.0 183.5 1968--Jan. Feb. Mar. Apr. May p June p 182.3 182.7 183.4 184.4 186.1 187.2 40.6 40.7 41.1 41.4 41.6 42.0 141.7 141.9 142.2 143.0 144.5 145.3 184.1 185.2 186.7 187.1 187.6 188.1 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 andFederal 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. 1/ 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) Money Supply Week Ending Currency 182.3 182.4 182.7 182.2 182.1 40.5 Private Demand D/ Deposits Time Deposits p 2/ adjusted 183.9 40.5 141.8 141.8 40.6 142.1 40.6 40.6 141.6 141.5 184.0 182.4 182.7 182.8 182.9 40.7 40.8 40.8 40.8 141.8 141.9 142.0 142.1 184.5 185.0 185.3 185.7 183.1 183.6 183.3 183.6 40.9 41.0 41.1 41.2 142.2 13 20 27 142.2 142.4 186.0 186.7 186.8 187.0 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 22 29 183.7 184.8 185.1 186.8 187.5 41.5 41.5 41.6 41.8 41.8 142.3 143.3 143,5 145.0 145.8 187.3 187.4 187.7 5 187.6 41.8 12 186.2 186.8 42.0 42.0 42.0 145.8 144.2 144.8 145.8 187.9 188.1 188.0 187.9 41.9 42.1 147.4 146.6 188.5 189.1 1968--Jan. 3 10 17 24 31 Feb. 7 14 21 28 Mar. June 6 19 26 July 3 10 187.8 189.3 188.8 142.5 3/ 183.9 184.0 184.3 187.7 187.6 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 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 reduced time deposits adjusted by $1,140 million. 3/ p - Preliminary. 

Federal Reserve (1968, July 15). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19680716

@misc{wtfs_bluebook_19680716,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1968},
  month = {Jul},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19680716},
  note = {Retrieved via When the Fed Speaks corpus}
}