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) December 13, 1968. MONEY MARKET AND RESERVE RELATIONSHIPS Recent Developments (1) Long-term interest rates, as well as yields on short-term instruments, continued to climb higher in the latter half of November and in the first part of December. In early December, upward pressure on rates was provided by normal seasonal factors, by the increase in the prime loan rate at major banks to 6-1/2 per cent, by some reversal of earlier foreign bill purchases, and by an unexpectedly sharp drop in the Treasury balance at the Federal Reserve (with $92 million borrowing by the Treasury for one day on December 10) which led to offsetting open market sales by the System. Expectations of a tightening of monetary policy, including a possible discount rate increase, also tended to exert upward pressure on interest rates. (2) The 3-month Treasury bill rate--which had been around 5.45 per cent at the time of the last meeting--quickly moved through the 5.60 per cent upper end of the range specified in the last Blue Book and was most recently quoted around 5.90 per cent. Longer ratec, on both Government and corporate securities, have risen around 20 basis points. (3) In contrast to developments in the credit markets generally, the market for day-to-day money was relatively comfortable throughout most of the period with the effective Federal funds rate averaging around 5-3/4 per cent. Net borrowed reserves have ranged widely between $75 and $450 million during the past three statement weeks. Borrowings have FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE (1onthlv M-nov Market Free Zeserves Period Nov. Dec. 1968--Jan. Feb. Mar. Apr. May June July August Sept. Oct. Nov. p 1968--Nov. Dec. ings 20 27 4 11 p p p p wee, L aviilait, 44 Federal 3-month Funds TreasRate ury Bill ' aver, L --- r _____ Corporate Municipal New U.S. Gov't. Issues (Aaa) (20 yr.) (Aaa)1/ 3.88 4.12 4.51 4.55 4.72 4.96 5.36 5.66 5.59 6.98* 6.50 6.51 3.88 3.99 4.15 142 21 -312 -341 -374 -386 -192 -240 -146 -191 -294 275 368 649 689 728 727 523 577 492 458 540 4.60 4.72 5.05 5.76 6.12 6.07 6.02 6.03 5.78 5.00 4.98 5.17 5.38 5.66 5.52 5.31 5.23 5.19 5.35 5.45 5.39 6.22** 6.25** 6.57** 6.50** 6.64 6.65 6.50** 6.16 6.27 6.47 6.57 4.06 4.01 4.28 4.13 4.28 4.26 4.12 4.00 4.23 4.21 4.33 -200 -192 -329 -455 - 75 -443 392 675 511 582 532 435 6.07 6.00 5.45 5.73 5.71 5.82 6.43 6.54 6.64 6.68 6.81 4.25 4.35 4.35 4.35 4.40 4.45 5.81 195 238 -201 4.22 4.03 5.39 Recent variations in growth Nov. 29-Feb. 28 Feb. 28-Jun. 12 Jun. 12-Dec. 11 106 -360 -222 4.64 5.45 5.92 F1 ,Monev P1 ',.ff ReservesRaserves. Bank Bank Credit Credic a-d a-d Money Bank Bank Total NonMoney Time __________ 141 124 185 5.92 ,f d-ilv f_ ure?) T.nd Yielde 212 225 143 Year 1967 Second Half 1967 First Half 1968 L wner, Tndicators Borrow- (In millions of dollars) 1967--Oct. averages and, 5.38 5.59 5.46 5.55 5.40 5.29 5.22 5.28 5.44 5.56 5.46 5.49 5.50 5.44 5.43 5.56 5.44 5.62 5.74 5.62 5.75 ~' 5.76 Avei ges 5.01 4.29 4.51 5.29 5.31 5.46 4.90 5.46 5.43 5.51 5.32 5.38 6.92 5.77 6.10 6.47 3.74 3.91 4.16 6.30 6.58 6.48 4.08 4.23 4.19 - - - borrowed ReReserves serves (In millions o dollars ' of dell ars +299 +335 +122 +154 -294 -122 +345 +208 -266 -197 - ______ upply Credit Proxy I +137 +394 +493 + 29 +264 + 51 d2/ + 0.2 + 0.3 + + + + + + 1.0 0.4 0.7 0.9 1.8 1.3 + + + 2.0 0.9 0.8 0.7 + 1.8 + + + - '' Annual + + 7.2 + + 2.2 + +11.5 __ _ __ _ __ _ rates 9.9 8.7 5.3 __ Deoosits (In billions of dollars) + 2.4 + 1.1 + 2.1 + 0.8 +347 +265 + 47 -189 + 88 +105 +107 +508 - 36 +215 +118 + 46 ] - _ __ 2.0 1.3 1.6 1.1 0.3 0.3 or increase 37 +11.9 +10.6 + 4.0 + 6.4 + 6.0 + 6.6 +16.1 +12.6 + 5.0 + 9.1 - 1.1 + 4.0 + 6.6 + 6.1 +12.9 +13.9 _ __ _ __ Includes issues carrying 5-year and 10-year cal 1 protection, ** - issues carry a 10-year call protection. 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. Average of total number of days in period. Preliminary. n.a. - Not available. December 13. 1968. _ __ _ + 4.5 +17.0 __ _ __ _ __ _ -2fluctuated much more narrowly, averaging $515 million, little changed from recent experience. (4) The relative ease in the Federal funds market reflected in part the improved basic reserve position of the major New York banks. Their basic reserve deficiency averaged only around $570 million during the last three statement weeks, as compared with an average of about $1.2 billion since August. This sharp drop in the basic deficit of the major money market banks was partly seasonal, as banks prepared for midDecember pressures. But it more importantly reflected an apparent shift in bank reserve management policies. With expectations of higher interest rates becoming more prevalent, major banks reduced their dependence on very short-term borrowings, and in some cases sought longer-term CD funds; at the same time they became more willing lenders in the day-to-day money market, with dealer financing costs for new money reduced to around 6 per cent, or a bit above. (5) Primarily because of the banks' success in attracting CD funds at the end of November, time deposit growth in that month is estimated to have been at a 14-1/2 per cent annual rate on average, 2-1/2 percentage points above the estimate given in the last Blue Book. And, consequently, expansion of the bank credit proxy in November was also adjusted upward to 11-1/2 per cent per annum on average. The late- November strength in time deposit growth and in the bank credit proxy in part carried over into early December and contributed to an upward revision in the proxy projection for December to a level just above the top of the 5-8 per cent range presented in the previous Blue Book.1/ 1/ This range included an assumption that Euro-dollar borrowing would add 1/2 percentage point. -3(6) The unanticipated strength of the bank credit proxy led to activation of the proviso clause in the directive. However, the sharp rise in Treasury bill rates, under the influence of the factors noted in paragraph (1), limited the flexibility of the Desk in exerting further pressure on Federal funds and dealer loan rates, and on member bank reserve positions. The Desk did undertake sizable operations to offset day-to-day tendencies toward money market ease, generated by banks' increased desire to maintain a liquid position. This was mostly accomplished through matched sale-purchase transactions, the volume of which totalled almost $3 billion over the past two statement weeks, with a daily average amount outstanding of $280 million. (7) The money supply is now estimated to have increased at an 11-1/2 per cent annual rate on average in November. Business loan demand was exceptionally strong, and in the latter half of the month a sharp drop in U.S. Government deposits contributed importantly to growth in private demand deposits. (8) The following table summarizes the growth in a number of reserve and deposit aggregates for the most recent period and selected past periods: -4May Nov. 67'67 Dec. '67June '68 July *68- Nov. '68 Total reserves 9.8 3.7 8.3 Nonborrowed reserves 9.9 -0.1 9.7 Bank credit, as measured by: Proxy 11.5 3.7 12.8 Proxy plus Euro-dollars 12.3 4.7 13.3 Money supply 8.4 Time and savings deposits Savings accounts at thrift institutions NOTE: / 6.1 14.2 5.8 910 6.1 5.9 17.5 6.41/ Dates are inclusive. July '68 - Oct. '68. Prospective Developments (9) With mid-December seasonal pressures about to ebb and with an abatement in the corporate new issue volume over the holiday period, there should be a tendency for interest rates to stabilize and, indeed, for bill rates to back off from recent highs, assuming no change in monetary policy. Treasury bill rates often tend to drift down in the latter part of December and early January, with declines somewhat more marked in the absence of net cash financings by the Treasury. (No Treasury cash financing has been assumed for next month, although an additional small cash borrowing in the market, probably through bills, might be required, as an alternative to borrowing from the System around midJanuary.) -5(10) The constellation of short-term and money market rates is likely to be brought into greater harmony in the next few weeks since upward pressure should develop on the Federal funds rate, which has recently been low relative to bill rates. The upward pressure would result from the usual seasonal enlargement of major banks' basic reserve deficiency, and from banks' increased willingness to borrow Federal funds, rather than sell relatively high-yielding Treasury bills, in adjusting to expected CD run-offs. Under these circumstances, main- taining the prevailing complex of money and short-term credit market conditions would appear to be consistent with a Federal funds rate back at around 6 per cent, and a Treasury bill rate edging down in a 5.605.90 per cent range. Market concerns over the possibilities of a rise in the Federal Reserve discount rate would tend to limit downward interest rate movements, as dealers become more unwilling to hold securities. Member bank borrowings averaging in a range of $450-650 million and net borrowed reserves of about $150-450 million would be consistent with these credit market conditions. (11) With bill rates in the range specified above, we would expect December CD run-off to total $1 to $1-1/4 billion, as compared with a normal seasonal decline of around $800 million. Such a greater than seasonal CD attrition in December, and continued contra-seasonal losses in January, would put the bank credit proxy in December in an 8-11 per cent, annual rate, range and a 4-7 per cent range in January. Thus, for the two months together, we would expect a growth rate in the proxy averaging 6-9 per cent, at an annual rate. (Euro-dollar borrowings might add slightly to this range on average if unchanged from current levels; but such borrowings have typically declined seasonally in the latter half of December and risen in January.) -6(12) Given the projected CD attrition, time deposit growth is projected to be in a 15-18 per cent, annual rate, range in December, dropping back to 8-11 per cent in January. The latter month will be particularly affected by the carry-over effect of the CD attrition expected in the latter half of December as well as by some likely further CD run-off during the month itself. Moreover, the relatively high level of market yields is also likely to lead to some slowing in net inflows of consumer-type time and savings deposits. (13) Growth in the money supply is likely to be considerably slower in December--in a 3-6 per cent annual rate range--and may taper further in January. Demand deposit growth is expected to be moderate, with interest rates remaining on the high side and assuming a step-down in demands for business loans. (14) Policy alternative. If the Committee decides to seek firmer credit conditions, it might wish to consider a complex including a Federal funds rate around 6-1/8--6-1/4 per cent, member bank borrowings in a $550-$750 million range, and net borrowed reserves $250-550 million. Under such conditions, the 3-month bill rate might move in a 5.75-6.10 per cent band. A rise in bill rates from current levels would tend to be limited by seasonal demands for bills as well as by efforts of investors to stay short in a period of developing credit market tightness. Announcement effects from the use of other monetary policy instruments at this time might tend to intensify upward interest rate pressures, although it would appear that the market may have already more than discounted an increase of 1/4 percentage point in the discount rate taken by itself. -7(15) A move toward restraint initiated promptly after the December 17 Committee meeting would likely lead to greater CD attrition in December and in January than assumed in paragraph (11). As long as the 3-month bill rate remains somewhat above the bottom of the projected range given in paragraph (14), it is likely that the investment yield on Treasury bills along the whole maturity spectrum would be at least at Regulation Q ceiling levels, and in many cases would be above such levels. In an effort to replace CD's, banks would turn more and more to the Euro-dollars market. Individual banks would also increase demands in the Federal funds market and at the discount window (16) While Euro-dollars and the discount window may enable banks as a group to postpone, or make less drastic, portfolio adjustments, at some point they will have to cut back on expansion in earning assets. Initially, security markets, particularly the municipal market, will probably take the main burden of such adjustments, followed by reduced lending in mortgage and other sectors. credit proxy is likely to show slower growth. In this process, the bank Only a little slowing may become evident in December, with the principal effects likely to be in January and thereafter. Growth in the bank credit proxy could be in a 2 to 5 per cent range, on average, in January, or possibly lower as banks make sales of securities that had been postponed to the new year for tax purposes. Euro-dollar borrowings would provide some leeway, but the likely amount is difficult to gaugesince it will depend in part on reactions of foreign monetary authorities. (17) Longer-term interest rates are likely to rise even further under these conditions, at least over the short-run. The constraint on bank credit growth may lead to some acceleration of -8corporate borrowing in capital markets, as businesses attempt to hold on to, or build up, liquidity for financing future expenditures in a period of credit tightness. The strength and duration of any rise in long-term rates, however, will depend in part on how market participants evaluate the likely success of monetary moves in stemming inflation and inflationary psychology, and on the rapidity with which State and local governments and home builders reduce their demands in view of the lessened availability of funds from both banks and other financial intermediaries. Table A-1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Excess reserves Period Member banks borrowings Free reserves II As to revised I I date 4. Monthly (reserves weeks ending in): As first published each week As expected at conclusion of each week's open 1967--November De'ember 349 333 124 185 225 148 1968--January February March April May June July August September October p November p e 417 389 337 348 354 341 331 337 346 267 246 275 368 649 689 728 727 523 577 492 458 540 142 21 -312 -341 -374 -386 -192 -240 -146 -191 -294 4 11 18 25 255 556 374 197 454 634 404 474 -199 -277 -323 -196 -141 -148 -347 Oct. 2 9 16 23 30 385 225 373 - 1 352 541 403 516 337 495 -156 -178 -143 -336 -143 -191 -245 -177 -368 -196 -230 -214 -141 -337 -230 Nov. 6 192 483 182 127 392 675 511 582 -200 -192 -329 -455 -240 -259 -368 -471 -170 -202 -347 -469 457 - 8 532 435 - 75 -114 -443 -203 -446 Weekly: 1968--Sept. 13 p 20 p 27 p Dec. 4 p 11 D p - Preliminary - 78 - 30 -443 market operations ____________________________________ -239 -108 - 93 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 Against Nonborrowed Nonborrowed Monet l Member T ar Bank Bank Deposits Deposit Variables Time Money Supply Deposits Private ? ^ (comm. Total Demand Reserves Total : + 1.3 + 9.9 + 0.8 +11.5 + 1.5 +10.2 - 0.2 + 7.0 + 3.8 (+ 4.5) +11.7 (+11.5) + 8.7 +16.1 + 2.2 + 6.4 + 1.2 + 6.7 +11.8 +14.0 + 7.7 +16.2 + 7.4 +14.9 +15.2 + 6.6 +14.5 + 5.9 +15.2 +13.7 +12.0 +16.4 + 6.6 +10.2 +18.7 + 5.7 +13.5 + 8.3 +13.4 +16.9 +10.4 +10.7 + 9.3 +15.3 +16.5 +14.9 + 8.0 + 9.3 +12.3 + 7.4 + 1.3 + 7.4 + 5.3 +14.9 + 8.7 -+ 6.9 + 6.8 - 5.8 -14.0 - 1.6 -10.5 + 1.3 ( -- + 9.9 + 2.0 - 0.9 +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 (+ 6.5) +10.0 (+10.8) + 4.3 (+ 4.7) + 3.9 + 7.2 + 9.7 + 6.6 + 2.6 + 4.6 + 6.8 + 1.7 + 2.5 - - - -11.1 - 3.8) + 2.6 + 5.9 + 6.8 +11.7 + 8.4 +12.8 + 5.7 +12.6 + 7.5 +14.9 + 3.3 Reee Demand Deposits (credit) I/ (c ) banks) ___Deposits Annually: 1966 1967 2/ Monthly: 1967--July Aug. Sept. Oct. Nov. Dec. 1968--Jan. Feb. Mar. Apr. 8.8 9.4 6.0 4.7 (- ) + 1.5 +12.2 + 0.1 +21.8 + 1.7 + 6.5 + 9.0 +21.4 (+ 5.1) (+ 9.3) (+10.1 (+22.1) + 3.2 + 3.8 +14.0 +21.4 + 4.8 - 3.5 + 8.4 (+ 9.4) +17.3 - + 8.5 + 8.2 + 4.1 + 7.5 +12.5 (+11.8) +11.6 (+11.7) +17.7 +14.4 + 4.4 +11.4 + 4.1 + 4.9 + 5.0 +23.5 + 2.2 + 6.6 +14.5 +23.3 - 1.9 + 9.6 + 7.7 +21.2 Sept. p - 1.6 + 1.3 Oct. p Nov. p + 9.8 + 5.3 +12.2 - 2.3 May June July Aug. p (+14.6) (+19.0) (+10.2) (+12.3) (+10.5) 5.0 - 7. + 5., +11.4 Includes all deposits subject to reserve requirements. Movements in this aggregate correspond closely with Figures in parenthesis includeEuro-dollar movements in total member bank credit on a daily average basis. borrowings. 2/ Changes in reserves, total deposits and time deposits have been adjusted for redefinition of time deposits effective June 9, 1966. 1/ p - Preliminary. Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES BILLIONS OF OF FIGURES DAILY DOLLARS, NOT SEASONALLY ADJUSTED MEMBER BANK BORROWINGS 1.0 .s ---- EXCESS . . . M RESERVES . . .. . J 1967 S ------------------ D %io g M J 1968 - ^ a ^ ^o --- S D Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS TOTAL MEMBER BANK DEPOSITS (CREDIT PROXY] SEAS ADJ WEEKLY AVERAGE OF DAILY FIGURES 294 290 286 282 278 274 270 266 262 258 254 8 LIABILITIES TO OVERSEAS BRANCHES [WEEKLY REPORTING BANKS) NOT SEAS ADJ, WEDNESDAYS 6 4 J S D 2968 -1968-----------------------69-----1967 M J 1968 S D M 1969 Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES I BILLIONS OF DOLLARS BILLION S OF DOLLARS 190 MONEY SUPPLY 186 182 204 178 200 174 196 170 192 __ 188 __ TIME DEPOSITS ADJUSTED (All Commercial Banks) 184 180 176 172 168 NEGOTIABLE 24 NOT SEAS 20 CD'S ADJ, WEDNESDAYS I0000__ 16 1967 1968 1969 Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES U.S. GOVT. DEMAND DEPOSITS (Member A S J 1967 D Banks) M J 1968 5 M D 1969 Table B-l 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 Federal Reserve Gold credit (excl. k outside factors stock float) 1/ banks net 2/ Period Period = Change in total reserves = Bank use of reserves Required Exces Excess reserves reserves reserves 3/ Zear: 1966 (12/29/65 1967 (12/28/66 - 12/28/66) 12/27/67) +3,149 +4,718 - 627 725 -2,243 -2,305 + - 805 165 +1,085 +1,522 +1,111 +1,517 + 26 5 Year-to-date: (12/28/66 - 12/13/67) +4,439 - 727 -1,876 -1,291 + 544 + 646 - 102 (12/27/67 - 12/11/68) 5/ +3,552 -2,067 -2,754 +1,991 + 722 +1,172 - 450 Weekly: 1968--Nov. Dec. p p p p + - 119 665 426 487 ----- - 199 356 584 79 + + + 48 388 883 167 + - 366 697 127 399 + + - 206 406 174 336 + - 160 291 301 55 4 p 11 p + - 284 923 --- + 215 199 + + 238 293 + - 307 431 + 23 34 + - 330 465 6 13 20 27 PROJECTED 1968--Dec. 18 25 + 870 835 --- - 240 140 +1,415 625 + + 305 70 + + 305 70 Jan. 1 8 15 + + - 360 50 100 ---- + + + 290 310 730 - + + + 430 270 360 + + + 430 270 360 220 90 270 For retrospective details, see 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 Jan. 18, 1968. p - Preliminary. 1968 and $190 million Explanation of Projections in Table B-l 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 maintenance of Treasury balances with Federal Reserve at $0.5 billion, thereafter. 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, banks' investment preferences and willingness to supply loans, banks' 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 loans 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: $-0.8 billion, December 18. 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) S U S. Gov't required reserves Period Supporting private deposits Supporting T o t Total al deposits reserves Other than seasonal changes Time Demand Time Seasonal changes T l Totale U.demand depositsmand Demand Time Demand Year: 1966 (12/29/65 1967 (12/28/66 - 12/28/66) 12/27/67) - 4 6 5 +1,023 +1,221 1/ + + 168 1/ + + 6 126 + 983 +1,108 + + 186 676 188 74 239 7 162 50 157 + + + + + 27 27 29 32 23 +1,111 - 87 +1,517 + 261 +1,198 +1,256 + 649 +1,172 - 292 450 + 941 +1,622 - 234 288 + + 228 487 + 116 + - 219 - - 35 150 307 + + + 367 25 199 + + + 176 35 15 + + 38 213 - 242 - 48 - 159 - 101 + + 190 333 + + 27 148 - 235 + 2 - + 204 - 52 - 64 115 - Year-to-date: (12/28/66 (12/27/67 Weekly: 1968--Oct. - 12/13/67) 12/11/68) 2/ 2 9 16 23 30 + + + 344 268 332 - 125 108 6 13 20 p 27 p - 204 + + 403 174 - 336 + + - 8 4 4 - 7 7 230 + + + 43 27 6 136 176 13 249 + 25 18 13 257 23 + + 29 53 -- Nov. Dec. 4 p 11 D - 23 + 34 1969--Jan. 1 II PROJECTED 1968--Dec. -227 + 86 305 70 + + - 6 1 85 5 390 75 + 290 - 115 60 285 120 370 + 330 + 480 - 430 270 360 1 1 - 1 5 5 15 480 _________________________ .1. J _________________________ 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. I/ 2/ 15 ________________________ Table B-3 TECHNICAL FACTORS AFFECTING RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) Technical Technical factors Period d fcto ACTUAL Year: 1966 (12/28/65 1967 (12/28/66 - 12/28/ '66) 12/27/ '67) + - 805 165 Other Foreign Treasury Treasury Float operations deposits and gold loans (Sign indicates effect on reserves) + 573 - 85 - 213 + - - 30 64 389 7 nonmember deposits and F. R. accounts + + 98 316 year-to-date: (12/28/66 (12/27/67 Weekly: 1968--Nov. - -1,291 +1,991 12/13/67) 12/11/68) 6 Dec . ,125 197 + - 3 83 + 44 +1,194 + 683 + - 12 17 23 64 + - 47 2 153 + 673 6 8 - 151 48 + 275 - 70 + 210 - 40 + + + 396 886 167 30 63 426 32 35 348 596 410 + + 243 674 68 415 30 315 640 955 500 400 PROJECTED 1968--Dec. +1,415 1969--Jan. P - Preliminary. - 625 - 220 90 270 + - 220 300 270 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 Year: 1966 (12/29/65 - 12/28/66) 1967 (12/28/66 - 12/27/67) U.S. Government securities Total Bills Other Repurchase agreements holdings +5,009 +2,158 +4,433 + 474 +1,153 +4,439 +3,552 +4,932 +3,522 +4,437 +2,430 +1,153 +1,176 +1,121 + + + 899 82 334 - 165 113 51 261 53 557 +3,149 +4,718 +3,069 Federal Agency Securities Bankers' acceptances acceptan + - 2 203 56 + 427 90 + 5 + 67 - 1 - 138 + 53 + 113 - 47 - 3 - 179 + 160 - 106 30 + 284 24 - 1 + 164 71 2 - 50 97 26 + 52 - 19 - 69 S 26 7 - 40 - - + Member banks borrowng Year-to-date: (12/28/66 (12/27/67 - Weekly: 1968--Oct. Nov. Dec. 11 /22/67) 12 /11/68) 2 9 16 23 30 6 13 20 27 4 11 + 31 + 599 +1,048 + 171 + 430 - 433 - 211 + 270 + 120 - 119 - 20 + 665 + 345 - 426 487 - 225 557 + - + 284 -923 + 335 + 307 - 825 - 797 - 96 152 63 63 96 46 7 31 84 172 + - L * - Includes effect of change in special certificates of the week of December 21, 1966. 658 S 81 _____________ + - 28 28 - . S of +$72 million of the week of December 14, 1966, and -$72 million Chart Reference Table C-1 TOTAL, NONBORROWED AND REQUIRED RESERVES Seasonally Adjusted (Dollar amounts in millions, based on monthly averages of daily figures) Period Total reserves Nonborrowed reserves reserves Total Required reerves Aainst private deposits TotalTotalDemand 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 22,780 22,864 22,687 22,712 22,629 22,593 22,600 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 24,234 24,476 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 June July Aug. Sept. Oct. p Nov. p 25,500 25,193 25,401 25,135 24,938 24,984 25,121 25,425 25,918 25,947 26,211 26,160 25,151 25,389 25,402 25,276 25,236 25,438 25,601 26,053 26,158 26,344 26,525 24,270 24,333 24,431 24,487 24,751 24,925 25,188 25,340 25,294 25,528 25,764 17,974 18,025 18,082 18,133 18,387 18,550 18,727 18,765 18,621 18,746 18,898 25,765 25,812 25,623 25,711 25,816 25,923 26,431 26,395 26,610 26,728 21,936 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) / Time deposit 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 June July 274.7 277.0 278.0 276.9 277.3 278.8 280.9 119.4 119.7 120.1 120.4 122.1 123.2 124.3 124.6 5.4 7.1 6.7 5.2 3.7 3.9 2.7 4.8 123.6 124.5 125.5 5.3 5.0 4.8 D 285.9 149.9 150.2 151.2 151.3 151.5 151.8 153.8 156.5 Sept. p Oct. p Nov. p 287.9 990.9 293.7 158.9 161.5 163.5 Aug p - Preliminary. 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 in millions, based on weekly averages of daily figures) Week ending: Total member bank deposits Time deposits Private demand U. S. Gov't. demand (credit 1/ ____ deposits 2/ deposits 1968--June 5 12 19 26 278.2 278.4 277.9 280.2 151.6 151.8 151.8 151.7 123.4 122.2 122.2 123.0 3.2 4.4 3.9 5.5 July 3 10 17 24 31 278.8 278.0 280.6 282.4 283.6 152.2 152.7 153.6 154.4 155.1 125.2 123.8 124.4 123.9 124.5 1.4 1.5 2.7 4.1 4.0 Aug. 7 14 21 28 284.7 285.0 286.4 287.0 155.5 156.0 156.8 157.4 125.0 123.9 124.9 124.7 4.2 5.2 4.7 4.9 Sept. 4 11 18 25 286.7 287.0 287.8 288.8 157.9 4.1 4.6 158.9 159.4 124.7 124.1 123.5 123.4 2 9 16 23 290.3 290.4 289.9 289.5 30 292.7 160.1 160.8 161.1 161.9 162.2 124.0 123.9 125.1 123.7 124.3 6.2 5.7 3.7 3.9 6.2 Nov. 6 13 20 27 293.9 293.6 292.9 294.1 162. 6 163.0 163.6 164.6 125.5 124.2 125.9 126.1 5.8 6.3 3.4 3.4 Dec. 4 p 11 p 294.8 296.3 165.3 166.0 126.3 126.0 3.2 4.3 Oct. 158.3 5.4 6.0 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/ Private demand deposits include demand deposits on individuals, partnerships and corporations and net interbank balances. TABLE C-3 MONEY SUPPLY AND TIME DEPOSITS AT ALL COMMERCIAL BANKS Seasonally adjusted (Dollar amounts in billions, based on monthly averages of daily figures) Monthly Money Supply Currency 1/ Private Demand Time Deposits 2/ __ _Deposits Adjusted 1966--July Aug. Sept. Oct. Nov. Dec. 169.9 170.0 170.5 170.2 170.2 170.4 37.6 37.8 37.9 38.0 38.2 38.3 132.3 132.2 132.6 132.1 132.0 132.1 155.9 156.9 157.7 157.3 156.9 158.1 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 July Aug.p Sept. p Oct. p Nov. p 182.3 182.7 183.4 184.3 186.1 187.4 189.4 190.3 189.5 190.2 192.0 40.6 40.7 41.1 41.4 41.6 42.0 42.2 141.7 141.9 142.2 143.0 144.5 145.4 147.2 147.6 146.7 147.4 148.8 184.1 185.2 186.7 187.1 187.6 188.2 190.4 193.8 196.6 199.5 201.9 42.6 42.7 42.8 43.2 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 at Federal Reserve Banks. 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 ]/ Private Demand Deposits 2/ Time Deposits adjused 1968--June 5 12 19 26 187.7 186.4 186.8 187.6 41.8 42.0 42.0 42.0 145.9 144.3 144.8 145.6 188.0 188.1 188.1 188.0 July 3 10 17 24 31 189.7 188.8 190.0 188.6 189.5 42.1 42.2 42.2 42.2 42.2 147.6 146.6 147.8 146.4 147.3 188.6 189.2 190.2 191.1 191.8 Aug. 7 14 21 28 190.4 189.7 190.4 190.2 42.2 42.5 42.6 42.7 148.1 147.1 147.8 147.5 192.5 193.3 194.0 194.6 Sept. 4 11 18 25 190.3 190.2 188.7 188.5 42.7 42.6 42.7 472.6 147.5 147.5 146.0 145.9 195.2 195.8 196.6 197.2 2 16 23 30 190.0 189.9 191.0 189.4 189.9 42.7 42.9 42.8 42.8 42.9 147.3 147.0 148.1 146.5 147.0 198.1 198.7 199.1 200.0 200.4 Nov. 6 13 20 27 191.9 190.6 192.2 193.3 42.9 43.2 43.2 43.4 149.0 147.3 149.0 150.0 200.8 201.4 201.7 202.9 Dec. 4 11 193.0 192.7 43.5 43.4 149.5 149.3 203.7 204.1 Oct. 9 1/ 2/ Includes currency outside the Tresury, 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, December 16). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19681217

@misc{wtfs_bluebook_19681217,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1968},
  month = {Dec},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19681217},
  note = {Retrieved via When the Fed Speaks corpus}
}