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. August 9, 1968. CONFIDENTIAL (FR) MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments (1) Widespread expectations of significant further declines in interest rates have played a dominant role in determining money market relationships and the movement of related financial variables since the last meeting of the Committee. Reports suggesting that the slowing in expected/economic expansion had already begun late in the second quarter, and the reduction in the System's RP rate to 5-1/2 per cent, reinforced expectations of further easing in financial market conditions. Dealers and investors--particularly commercial banks--moved aggressively to enlarge their holdings of fixed income securities. In response, yield declines in bond markets ranged to nearly 25 basis points and bank credit expanded rapidly. (2) In the Treasury bill market, where the unexpected Treasury decision to offer no short-term anchor issue in the August financing reinforced downward rate pressures, yield declines ranged to about 50 basis points. The bid yield on the 3-month issue dropped from the 5.42 per cent level just prior to the last Committee meeting to a low of 4.89 per cent on August 5. (3) With day-to-day demands on banks for security financing very high, the Federal funds rate has consistently remained at or above FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE ('onthly averages and, where availablc, weekly averages of daily figures) Money Market Indicators Free teserves Period Borrowings (In millions of dollars) Corporate MuniciU.S. Funds Treas- Rate ury Bill Gov't. (20 yr) pal borrowed Reserves (I oi New 5.78** c/5.86** 5.85** 6.08** 6.50 6.51 3.86 3.78 3.81 3.88 3.99 4.15 +297 +307 +135 +299 +122 -294 6.22** 6 .25** 6.57** 6.50** 6.64 6.65 6.51 4.06 4.01 4.28 4.13 4.28 4.21 4.12 +345 +208 -266 -197 + 46 +137 +290 132 86 82 141 124 185 3.78 3.88 3.99 3.87 4.14 4.49 4.20 4.26 4.42 4.55 4.72 4.96 5.01 5.12 5.16 5.36 5.66 5.59 142 21 -312 -341 -374 -386 -193 275 368 649 689 728 727 523 4.60 4.68 5.02 5.74 6.10 6.09 6.03 5.00 4.98 5.17 5.38 5.66 5.52 5.31 5.39 5.38 5.59 5.46 5.55 5.40 5.29 -311 39 493 412 5.82 6.03 5.33 5.36 5.35 5.33 --- -194 -238 -262 -381 470 639 602 737 6.18 6.10 6.02 6.08 5.41 5.28 5.19 4.94 5.33 5.30 5.19 5.16 Year 1967 Second Half 1967 First Half 1968 195 238 -201 173 123 567 4.19 4.02 5 37 Recent variations in growth Mar. 29-Jun. 28 Jun. 28-Nov. 29 Nov. 29-Aug. 7 245 254 -166 110 112 523 4.00 3.96 5.33 3.66 4.41 5.24 1968--Jan. Feb. Mar. Apr. May June p July p 1968--July 3 10 p 17 24 31 Aug. 7 p p p p p - Preliminary. Re- Bank Money Time Credit Supply Deposits serves Proxy 2/ on (In billions of dollars) (Seasonally Adjusted) + 2.2 + 1.8 + 2.9 +237 + 2.4 + 1.1 + 3.7 +285 + 2.2 + 0.2 + 2.3 +159 + 1.2 + 1.1 + 2.4 +335 + 1.4 + 0.8 + 2.1 +154 + 1.5 + 0.3 + 0.2 -122 + + + + + + + + + + + + + 1.5 2.3 1.0 1.0 0.4 1.5 2.2 + + + + + + + 4.18 4.18 - 1.4 0.9 + 1.9 - 1.1 + 0.6 + 0.6 6.56 6 54 6.41 -- 4.10 4.00 3.90 3.80 + + + + 2.7 1.8 1.2 0.8 + + + + + + + Averages 5.01 4.29 5.31 4.51 5.46 5 29 5.77 6.10 6.47 3.74 3.91 4.16 4.83 5.25 5.45 5.59 5.99 6.47 3.68 3.86 4.13 Includes issues carrying 5-year and 10-year call Time deposits adjusted at all c ommercial banks. Base is change Total Non- Issues (Aaa) (Aaa)l/ 311 270 252 212 225 143 1967--July Aug. Sept. Oct. Nov. Dec. Flow of Reserves. Bank Credit and Money Bond Yields Federal 3-month c/ protection, ** +347 +265 + 47 -189 + 88 +105 + 93 1.0 0.4 0.7 0.9 1.8 1.2 2.0 1.3 1.2 0.9 0.8 Annual rates of increase 3/ + 6 4 +11.9 + 9.9 +11.5 + 6.0 +10 6 + 8.7 + 7.2 + 6.6 + 4.0 + 5.3 + 2.2 +20.4 +12.7 + 6.0 + 6.7 + 6.6 + 7.3 - issues carry a 10-year call protection. for month preceding specified period or in case of weekly periods, the first week shown. c - Correction Ai,,is,, 9. 1968. 0.6 1.1 1.5 0.4 0.5 0.5 2.4 1.0 0.9 0.7 0.3 +16.1 +12.6 + 5.0 +17.7 +13.4 + 7.3 -26 per cent, and the effective rate has most frequently been 6-1/8 per cent. Rates on new loans to dealers at New York banks have continued generally between 6-1/4 to 6-5/8 per cent, and measures of marginal reserve availability have become firmer. Net borrowed reserves have averaged$295 million since mid-July, and were $380 million in the latest week. Member bank borrowings have averaged $660 million, somewhat above the high end of the range specified in the last blue book, largely because of the $737 million figure in the latest week. (4) Most recently, as the initial impact of the Treasury's financing decision has faded, persistent firmness in money market conditions has created increasing sensitivity among dealers to the high cost of position financing and concern about the timing of any further easing in monetary policy. In consequence, yields on Treasury bills have erased a small part of their earlier declines. (5) Spurred by the earlier general decline of market rates and by expectations of even lower rates over the longer run, CD inflows to banks in July topped $2 billion, about twice as much as projected. Banks began to shave CD offering rates, and at the largest banks all maturities from 90-days outward now carry rates in a 5-5/8 to 5-3/4 per cent range. (6) Government deposits at banks declined on average about as projected in July. But private demand deposits rose even faster than anticipated, possibly reflecting the surge in security market transactions engendered by changed interest rate expectations. As a result -3the money supply for July is now estimated to have grown at about a 13 per cent annual rate, rather than in the 8--10 per cent range previously projected. (7) Outside of the dramatic growth in large CD's already noted, time and savings deposits at banks continued to increase about as projected, close to the moderate pace of recent months but with a noticeable shift from passbook accounts to higher yielding time deposits. At other depositary-type intermediaries, savings flows were not so severely affected by the June-July reinvestment period as was generally feared before the tax increase. Nonetheless, the seasonally adjusted rate of growth in these flows during July was well below that of the second quarter. (8) Largely because the shift in market expectations produced a larger than anticipated decline in interest rates and, in consequence, a larger than projected growth in CD's, the credit proxy for July expanded much more rapidly than indicated in the last blue book. It is now estimated at an annual rate of about 9 per cent for the month. Allowing for the rapid rise in Euro-dollar borrowing from foreign branches in June and early July, the rate of growth in the adjusted credit proxy amounts to 11 per cent, much above the rate projected at the time of the last meeting. (9) The expansion of bank credit took the form chiefly of bank investment in U.S. and State and local government securities and of security loans--the latter apparently largely to finance expanded -4professional inventories in these same markets. The bulk of the increase in bank holdings of U.S. Government securities occurred in connection with the tax financing early in the month. While business loans also rose more than seasonally in July, their growth was less than expected in view of the recent increases in corporate tax liabilities. (10) The following table provides comparative annual rates of growth for major financial flows over several recent periods. May'67Nov. '67 Dec. '67 Mar. '68 Apr. '68 June '68 July 0.1 4.3 Total reserves 9.5 6.4 Nonborrowed reserves 9.9 -0.1 -0.2 13.9 Bank credit, as measured by: Proxy 11.5 5.6 1.1 9.0 Proxy plus Euro-dollars 12.3 5.6 3.5 10.9 8.4 4.0 8.5 12.8 14.2 7.7 3.0 15.3 9.1 6.1 6. lp Money supply Time and savings deposits Savings accounts at thrift institutions 4.9 . 9 PZ1 NOTE: Dates are inclusive. p--preliminary f/Figures included for S&L's and mutual savings banks in July are confidential until August 15. Prospective developments (11) The unusually large spread that has opened up recently between day-to-day money market rates and the 3-month bill rate reflects currently prevailing expectations that money market conditions will soon be eased. If, on the other hand, day-to-day rates and marginal reserve measures in the weeks ahead should be maintained at levels close to those recently prevailing, market expectations could shift and Treasury bill rates would very likely tend to rise. As has been indicated, a little of this tendency has already been evident, with the 3-month bill rising nearly 10 basis points from its early August low. (12) Even with day-to-day rates at levels somewhat below those recently prevailing, some back-up in bill rates cannot be ruled out, particularly if market expectations shift. While bill dealers have recently been quite successful in rolling over their positions profitably, any tendency for market demands to slacken would quickly encourage them to try to reduce inventories unless financing costs began to decline. If upward pressures on bill rates became too great, yield increases could spread in some degree to other securities markets--particularly those for longer-term U.S. and State and local government notes and bonds where positions presently held by market professionals are also large. (13) Events that have already transpired assure a rapid increase in the bank credit proxy on average during August. The increase is now projected at an annual rate of 16-18 per cent. Nearly -6- three-fourths of the estimated growth is accounted for by the rise in the average of Government deposits from July to August resulting from heavy Treasury cash borrowings. Much of the remainder reflects time deposit growth that occurred over the course of July--principally in large CD's, although some further net growth in time deposits and CD's is also projected during August. (14) The effect on the credit proxy of Euro-dollar borrowings by U.S. banks in August is uncertain. Such borrowings have fluctuated widely in recent weeks, and most recently have been back close to their July peaks. If reserve pressures continue strong on money market banks, the decline in August expected earlier by the staff may not occur. (15) Since present relationships between bill rates, on the one hand, and other money market and marginal reserve variables, on the other, are not likely to be sustainable in the period ahead, maintenance of the "present stance of policy" would appear to require permitting some flexibility in operating targets. In particular, to avoid an overly- rapid snapback in bill rates that would trigger a more general reversal of recent interest rate declines, it may be necessary at some juncture to permit some easing of other money market conditions, particularly in the funds rate and member bank borrowings. (16) If bill rates were to remain relatively close to recent levels--say, fluctuating between 4.90 and 5.10 per cent--the Federal funds rate could be maintained in the 6- 6-1/8 per cent range of recent weeks. These conditions would likely be associated with average borrowings of $500 to $650 million, and average net borrowed reserves of $200 to $400 million. If, However, bill rates were to approach -7or exceed the top of this range, and particularly if they were rising rapidly, the Federal funds rate could be permitted to drift down, perhaps into the 5-3/4 to 6 per cent range. Such easing in the cost of reserve funds would likely be associated with marginal reserve measures about $100 million lower. This general approach to operations would, of course, be conditioned by bank credit developments if a bank credit proviso were included in the directive. (17) Looking beyond the immediate credit bulge, and assuming that the operating approach outlined above is implemented, growth in the bank credit proxy in September is expected to drop to, perhaps, a 5-7 per cent range. slower growth: Several factors account for the expectation of The Federal Government will not be a cash borrower again until the latter part of October; business borrowing at banks is expected to slacken; security loans should recede somewhat from their unusually high recent levels, as borrowings in securities markets by the Federal government and business corporations drop-off; and growth of large bank CD's is likely to recede from the accelerated July pace. In the early stages of past periods of interest rate declines, growth of large bank CD's has typically mushroomed, but the change has been of a one-shot character reflecting bank efforts to restore liquidity and add to security investments while yields were still attractive. With the sharp reductions in outstanding CD's that occurred earlier this year now fully restored, and with bank needs for liquidity less pressing than in some earlier periods of interest rate reversal, -8it seems reasonable to expect a slower growth of CD's in the weeks ahead. In fact, many large city banks already appear to have dropped their aggressive approach to bidding for CD's. (18) Growth in total time and savings deposits is projected at a rate of about 14 per cent in August and around September. 10 per cent in Net shrinkage of savings deposits at banks is projected to persist in August and September, with savers continuing to switch to higher yielding consumer-type time account alternatives. Growth in the latter should continue to exceed net withdrawals from savings accounts despite the new Federal surtax. With private demand deposits at member banks expected to decline in August, the money supply for that month is likely to show little or no growth. In September, on the other hand, as Government deposits decline again, on average, the money supply is projected to expand, but at a much slower rate than in recent months. (19) Policy alternative. It may be that, in light of the emerging economic situation, the Committee would wish to guard against the possibility of any further rise in short-term interest rates, and to accommodate any renewal of downward pressures on these rates that might develop. These objectives might be accomplished by acting, as soon as even keel considerations permit, to reduce the present degree of tautness in money market conditions. The complex of relationships appropriate to this end would seem to be a Federal funds rate ranging from 5-1/2 to 5-3/4 per cent, net borrowed reserves averaging from -9$0 to $200 million, and member bank borrowings of $250 to $450 million. These conditions would likely be associated with a 3-month bill rate at or below 5 per cent. (20) Since this approach would maintain rates on competitive market instruments well below CD ceilings, it probably would provide some stimulus to bank credit growth. But since banks have already begun to back away from the CD market, that stimulus is not likely to be great. On balance, there would probably be little effect on the proxy for August, but the proxy in September could be in the 7 to 9 per cent range, about two percentage points higher than under the course of operations described in paragraph 16. Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Excess reserves Period As Member banks borrowines revised 1* reserves Free to 1 date 1 As expected at conclusion of each week's oppn mar ket operations I Monthly (reserves weeks ending in): As first published each week 1967--July August September October November December 449 356 334 353 349 333 132 86 82 141 124 185 317 270 252 212 225 148 1968--January February March April May June July p 417 389 337 348 354 341 330 275 368 649 689 728 727 523 142 21 -312 -341 -374 -386 -193 1 8 15 22 29 276 381 400 322 391 674 823 712 669 764 -398 -442 -312 -347 -373 -390 -428 -308 -390 -445 -408 -377 -307 -378 -438 June 5 12 19 26 208 310 266 578 759 678 664 807 -551 -368 -398 -229 -590 -403 -445 -289 -592 -392 -375 -337 July 3 10 17 24 31 182 451 276 401 340 493 512 470 639 602 -311 39 -194 -238 -262 -406 -419 - - -284 -307 -288 -312 -315 -319 7 356 737 -381 -381 -353 Weekly: 1968--May Aug. p - Preliminary 4 93 96 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 Aggregates Required reserves Against Total Demand Reserves SDeposits Monetarvy Variables Total Member Time Money Supply Total Member Deposits Private it (comm. Total Demand (credit) 1/ Deposits banks) Annually: 1966 1967 2/ + 1.3 + 9.9 + 0.8 +11.5 + 1.5 +10.2 - 0.2 + 7.0 + 3.8 +11.9 + 8.7 +16.1 + 2.2 + 6.4 1967--Jan. +16.9 +26.1 +14.6 +10.1 +15.2 +22.0 - Feb. Mar. +13.1 +20.3 +17.8 +29.1 +13.6 +12.9 +15.7 + 9.8 +16.0 +14.3 +18.6 +17.6 +10.6 + 9.8 + 1.2 + 6.7 Monthly: 0.7 - 2.7 +10.9 +11.7 Apr. + 2.1 + 5.4 + 7.5 - 0.3 + 8.5 +15.9 - 4.9 - May June July Aug. Sept. Oct. Nov. + 2.1 + 7.7 +11.8 +14.0 + 7.7 +16.2 + 7.4 + 5.0 + 5.4 +14.9 +15.2 + 6.6 +14.5 + 5.9 + 0.1 + 6.6 +15.2 +15.0 + 9.5 +17.6 + 6.6 - 0.9 + 1.2 +10.2 +18.7 + 5.7 +13.5 + 8.3 + 6.6 +10.7 +13.4 +16.9 +10.4 +10.7 + 9.3 +14.3 +17.6 +15.3 +16.5 +14.9 + 8.0 + 9.3 +13.2 +11.0 +12.3 + 7.4 + 1.3 + 7.4 + 5.3 +16.2 +12.4 +14.9 + 8.7 -+ 6.9 + 6.8 Dec. - 5.8 -14.0 - 1.6 -10.5 + 1.3 + 9.9 + 2.0 - +16.6 +12.5 + 2.2 +16.7 + 9.9 -12.6 +11.4 +11.4 + 0.6 +15.3 +19.2 + 0.1 + 6.6 +10.0 + 4.3 + 3.9 + 7.2 + 9.7 + 6.6 + 2.6 + 4.6 + 6.8 + 1.7 + 2.5 1968--Jan. Feb. Mar. 8,8 Apr. - May June p July p + 4.1 + 4.9 + 4.3 - 9.4 + 2.2 + 6.6 +13.9 7.1 0.9 6.0 -11.1 - 4.7 + 2.6 + 5.9 + 6.8 - 1.9 + 9.6 + 7.4 + 1.5 +11.7 + 0.8 + 1.7 + 6.5 + 9.0 + 3.2 + 3.2 +15.3 +11.7 + 7.7 +12.8 +12.6 + 6.6 +15.7 - 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 I AVERAGES I I DAILY I BILLIONS OF DOLLARS, 26.0 OF I FIGURES I I SEASONALLY I I S-- I -- - TOTAL 25.5 25.0 ' I ADJUSTED RESERVES --------------- VIA ~ ~-- -- NONBORROWED RESERVES 24.5 REQUIRED RESERVES---- REQUIRED RESERVES 24.0 23.5 23.0 22.5 22.0 __ BILLIONS OF DOLLARS, _ ADJUSTED NOT SEASONALLY MEMBER 1.0 - BANK BORROWINGS EXCESS .5 5*1-1i -- RESERVES ----- - /" - " J 1967 ~____~ 1968 -- Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF 286 I DOLLARS I I I I I I I I I I TOTAL MEMBER BANK DEPOSITS (CREDIT PROXY) SEAS AVERAGE OF DAILY FIGURES ADJ WEEKLY I I I 282 278 274 270 266 + 262 258 254 250 246 -- 242 6 -LIABILITIES TO OVERSEAS BRANCHES (WEEKLY REPORTING BANKSJ NOT SEAS ADJ, WEDNESDAYS 4 I~~~~~ 1966 1967 I 1968 i . Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES 190 186 196 182 192 178 188 174 184 170 180 176 172 TIME DEPOSITS ADJUSTED (All Commercial Banks) 168 164 160 156 NEGOTIABLE NOT SEAS ADJ, CD'S WEDNESDAYS J 1966 1967 1968 Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY I I I I AVERAGES OF DAILY FIGURES I I I I BILLIONS OF DOLLARS I I 48 44 CURRENCY OUTSIDE BANKS 40 36 146 142 DEMAND DEPOSITS 138 134 130 12 U.S. GOVT. DEMAND DEPOSITS (Member Banks) 8 0 D 1966 M J 1967 S D M J 1968 S MAJOR SOURCES AND USES OF RESERVES Retrost L.tive and Prospective (Dollar amounts in millions, ba ' >-n weL ly averages of daily figures) I Period Factors affecting supply of reserves of reserves suplly Federal Reserve Factors affectin Currency Technical Gold credit (excl. outside factors stock float) 1/ hanks nrt 9/ l float) ____ Year: 1966 (12/29/65 1967 (12/28/66 - 12/28/66) - 12/27/67) Year-to-date: (12/28/66 - 8/9/67) (12/27/67 - 8/7/68) Weekly: 1968--July Aug. 3 10 17 24 31 5/ p p p p 7 p Change in total rasrva Bank use of reserves Required Excess reserves reserves 3/ +1,085 +1,522 +1,111 +1,517 + 26 5 - 66 86 +3,149 +4,718 - 627 725 -2,243 -2,305 +2,472 +3,919 - 102 - 478 701 -2,095 - 205 - 139 - 606 + 544 + 630 - 293 694 38 746 10 + 378 7 + 18 - 396 - 259 + 266 375 207 213 + + + + + 340 133 175 10 525 165 258 - - + + + 125 - 87 - 26 - 61 507 + 74 + 56 + 40 + 16 -2,067 + 122 52 220 60 + 226 + + + + 490 - PROJECTED ,/ - 1968--Aug. 14 21 28 + Sept. 4 11 + + 105 ---- + + 105 225 - 140 165 300 + 290 60 30 + 290 60 30 385 380 --- - 295 370 + 120 160 + 30 170 + 30 170 150 -- -- 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 Jan. 18, 1968. Table B-2 CHANGES 1N rEQUIL7E) FFE-RVE COMPOENTS Retrospective and Prospective Seasonal and Nonseasonal Changes (Dollar amounts in millions, based on weekly averages of daily figures) I 1 Total required reserves Period I Supporting U. S. Gov't. demand SuDDortine Drivate deDosits dPnnnit de Demandr __ __ Other than seasonal changes Seasonal changes Total Time Tm _ Time nfmand Tm Year: 1966 (12/29/65 1967 (12/28/66 - 12 /28/66) 12 /27/67) Year-to-date: (12/28/66 - 8/9/67) (12/27/67 - 8/7/68) Weekly: 1968--July + 87 261 +1,198 -1,256 + + 139 630 + - 24 196 + -1,012 18 - + 501 40 163 826 - 14 59 + 4 6 751 + - 5 +1,023 +1,221 + lt8 + 838 +1,180 + 90 375 13 6 + 151 26 + - 295 180 519 229 189 162 154 + 40 - 76 116 14 21 28 + 290 60 30 + + 75 150 135 - 215 210 105 - 15 190 65 + - 15 15 5 - 225 15 45 + + + 10 10 10 Sept. 4 11 + 30 170 - 315 165 + + 285 335 + + 160 295 - 5 15 + + 120 45 + + 10 10 Aug. 3 10 17 24 31 2/ +1,111 +1,517 p p p p - 269 + + 340 133 - 7 p - 339 250 86 31 74 89 PROJECTED 1968--Aug. 4/ 2/ Reflects reserve requirement changes in July, September 1966, and March 1967. Includes increase in reserve requirements of $360 million effective January 11, effective January 18, 1968. p - Preliminary. 1968 and $190 million 1/ I/ 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 Treasury operations ACTUAL Float (Sign indicates effect Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) + - Year-to-date: (12/28/66 - 8/9/67) (12/27/67 805 165 Foreign deposits and gold loans on reserves) + - 673 85 + - 64 389 - -2,095 - 512 -1,392 - 606 + 235 - 758 Weekly: 1968--July .3 10 p 17 p + + + 38 746 10 + - 140 259 194 + + - 24 p 31 p - 10 525 + - 88 19 7 p + 74 + 198 1968--Aug. 14 - 140 - 21 28 - 165 300 - 4 11 + 120 160 - Aug. 8/7/68) Other nonmember deposits and F. R. accounts 30 7 + + 98 316 + 15 - 206 - 43 - 40 94 195 113 + + 24 4 27 + + + 108 288 290 + - 110 396 + - 12 13 - 220 97 + 3 - 51 - 76 90 - 100 + 25 + 25 60 300 300 - 405 -- + - --- + 120 160 PROJECTED Sept. p - Preliminary. -- -- Table B-4 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) I Total Federal Reserve credit (Excl. float) 1~ Period +3,149 +4,718 +3,069 +5,009 +2,158 +4,433 + 474 +1,153 Year-to-date: (12/28/66 - 8/9/67) (12/27/67 - 8/7/68) +2,472 +3,906 +3,010 +3,540 +2,765 +2,466 776 1 8 15 22 29 + + + 347 568 238 23 121 + + 306 369 + + 176 97 5 12 June July Aug. Federal Agency Securities Iholdines .1 Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) Weekly: 1968--May I U.S. Government securities Total Repurchase Bills Other aereements t - 89 - 131 + 33 + 43 + + 333 117 + + + + 30 251 88 985 + 30 19 26 + 23 + 222 + 58 +1,222 3 10 17 24 31 + + 122 52 220 60 226 + + 274 61 - 284 + 90 214 + + 14 180 7 + 490 + 352 + 76 -- 845 + .437 + 26 - 577 - 19 - 531 - + + + 52 69 -55 - 19 7 5 10 - 70 + - 26 S 310 Bankers' acceptances -- + 2 - 203 - 457 + 392 13 40 + 23 + 149 -31 - 8 - 14 - 111 - 43 + 95 + + 7 5 3 Member banks borrowings - 10 + 261 + 29 + + 241 916 - 153 - 14 + - 2 23 2 31 + 38 + 51 + 43 + + 263 146 - 66 + 75 + 16 36 + - 29 104 4 4 - - 27 313 157 13 - - + 10 - 19 + + 58 169 + 34 + 49 - 37 + 276 10 - 135 - - + - - 13 - 5 - 81 - 14 143 - 314 81 Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES Seasonally Adjusted (Dollar amounts in millions, based on monthly a,verages of daily figures) er iPero od Total reserves Nonborrowed reserves Total Required reserves Against private deposits STotal 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 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 23,217 1968--Jan. Feb. Mar. Apr. May June July p/ I Demand 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 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 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 25,500 25,765 25,812 25,623 25,711 25,816 25,909 25,193 25,401 25,135 24,938 24,984 25,121 25,411 25,151 25,389 25.402 25,276 25,236 25,438 25,595 24,270 24,333 24,431 24,487 24,751 24,918 25,194 17,974 18,025 18,082 18,133 18,387 18,543 18,732 22,954 22,915 22,895 23,471 23,869 23,910 23,952 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) 1/ Time depoits Private demand deposits 2/ U.S. Gov't. demand deposits 1966--Jan. Feb. Mar. Apr. May June 3/ 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 1967--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 247.7 251.0 254.0 255.8 257.2 259.5 262.4 266.1 268.4 111.4 112.6 113.6 113.0 114.5 116.0 116.7 117.5 117.6 118.2 118.7 118.6 4.8 5.1 5.1 5.6 4.0 2.6 2.9 273.2 131.5 133.3 135.3 137.2 138.7 140.8 142.8 144.6 146.3 147.4 148.6 149.9 1968--Jan. Feb. Mar. Apr. May June p July p 274.7 277.0 278.0 276.9 277.3 278.8 280.9 149.9 150.2 151.2 151.3 151.5 151.8 153.8 119.4 119.7 120.1 120.4 122.1 123.1 124.4 5.4 l/ 2/ 3/ 270.8 272.9 4.5 5.0 4.4 4.0 4.6 4.6 5.1 4.5 4.0 4.0 4.1 3.5 4.0 4.5 5.2 5.6 4.6 7.1 6.7 5.2 3.7 3.9 2.7 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 in billions, based on weekly averages of daily figures) Week ending: Total member bank deposits Time deposits (credit1I/ Private demand deposits U. S. Gov't. demand 2/ deposits 3 10 17 24 277.4 276.6 278.6 276.7 151.6 151.5 151.4 151.0 120.3 120.1 121.7 120.0 5.5 5.0 5.5 1 151.5 151.5 151.6 151.6 151.4 120.0 120.9 121.3 122.7 123.3 4.8 22 29 276.3 277.2 276.7 277.3 277.7 June 5 12 19 26 278.2 178.4 277.9 280.2 151.6 151.8 151.8 151.7 123.4 122.2 122.2 123.0 3.2 4.4 3.9 5.5 July 3 152.2 152.7 153.7 154.4 155.1 125.2 123.7 24 31 278.8 277.9 280.6 282.5 283.7 124.3 124.0 124.5 1.4 1.5 2.6 4.0 4.1 7 284.5 155.1 125.1 4.2 1968--Apr. May 8 15 10 17 Aug. 5.7 4.8 3.7 3.1 3.1 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 a;gregate correspond closely with movements in total member bank credit. 2/ Private demand deposits include demand deposits of individuals, partnerships, and corporations and net interbank balances. TABLE C-3 MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally adjusted (Dollar amounts in billions, based on monthly averages of daily figures) Money Supply Monthly Currency 1/ Private Dema Demand Deposits ________________ ___~______ Time Deposits 2/ / Adjusted Adus 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 June p July p 182.3 182.7 183.4 184.3 186.1 187.3 189.3 40.6 40.7 41.1 41.4 41.6 42.0 42.1 141.7 141.9 142.2 143.0 144.5 145.3 147.2 184.1 185.2 186.7 187.1 187.6 188.1 190.5 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) Week Ending Money Supply Currency 1/ Private Demand Deosits adjusted 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 1 15 22 29 183.7 184.8 185.1 186.8 187.4 41.5 41.5 41.6 41.8 41.7 142.3 143.3 143.5 145.0 145.7 187.3 187.4 187.7 187.7 187.7 June 5 12 19 26 187.7 186.4 186.8 187.7 41.8 42.0 42.0 42.0 145.9 144.3 144.8 145.8 188.0 188.1 188.1 188.0 July 3 10 17 24 31 189.6 188.5 189.8 188.6 189.5 42.0 42.1 42.1 42.0 42.1 147.6 146.4 147.7 146.6 147.4 188.6 189.2 190.2 191.1 191.8 Aug. 7 190.3 42.1 148.2 192.1 May 8 2/ 2/ 3 10 17 24 1968--Apr. 1/ Time Deposits Includes currency outside the Treasury, the Federal Reserve and the vaults of all commercial banks. Includes (1) demand deposits at all commercial banks, other than those due to domestic commercial banks and the U.S. Government, less cash items in process of collection and Federal Reserve float; and (2) foreign demand balances of Federal Reserve Banks. p - Preliminary. 

Federal Reserve (1968, August 12). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19680813

@misc{wtfs_bluebook_19680813,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1968},
  month = {Aug},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19680813},
  note = {Retrieved via When the Fed Speaks corpus}
}