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) July 11, 1969. MONEY MARKET AND RESERVE RELATIONSHIPS Recent Developments (1) Short-term market interest rates rose further on balance in the latter part of June and early July, as the squeeze on bank liquidity continued, as sizable Government and corporate demands on short-term credit markets loomed, and as final Congressional action on the surtax extension was delayed. Long-term corporate and municipal yields edged temporarily lower in the latter half of June as some investor interest in corporates developed and as the volume of tax-exempt issues slackened. But the yield declines in the corporate market were erased in large part in early July, reflecting the large corporate issue calendar in coming weeks. In general upward rate pressure was more pronounced in short-term than in long-term markets, possibly indicating some abatement in expectations of further sizable future interest rate increases. In this connection it might be noted that stock prices have dropped considerably further in recent days. And a vigorous rally developed in U.S. Government bond markets just before the week-end. (2) positions, With dealers reluctant to maintain more than minimal Treasury bill rates fluctuated widely in response to seasonal bill demands and to prospects for increased supplies of bills and Agency issues. The Treasury auctioned $3-1/2 billion of tax bills on July 9 and 11. And the Federal Home Loan Bank Board announced that on July 15 it would offer $900 million of new issues to raise $500 million of new cash. The 3-month Treasury bill rate fluctuated in a range of 6.07 -2to 7.04 per cent since the last Committee meeting, and was most recently bid at around 6.90 per cent, 40 basis points above its level at the time of the meeting. With respect to private short-term interest rates, yields on 4 - 6 month commercial paper rose by about 25 basis points over the period to 8-3/4 per cent, or a cost of 8-7/8 per cent to the issuer. (3) Although the wide range of variation in day-to-day money rates in recent weeks makes generalization difficult, it would appear that conditions were little changed from those prevailing in late May and the first three weeks of June. Federal funds traded mostly in an 8-1/2 -- 9-1/4 per cent range over the past three statement weeks, a range of fluctuation similar to that of the weeks just preceding. And for all member banks, average borrowings from the Federal Reserve were $1.3 billion, also little changed from the preceding few weeks. Net borrowed reserves fluctuated in a $1 --$1.2 billion range. (4) Total member bank deposits declined at about a 13 per cent annual rate on average in June. Private demand deposits, and the money supply, were weaker than expected earlier, in part reflecting the absence of any growth in business loans over the month. Total time and savings deposits are estimated to have declined on average at a 5-1/2 per cent annual rate, paced by a further $1-3/4 billion drop in CD's. But banks did increase their Euro-dollar borrowings sharply over the month, and the bank credit proxy adjusted to include such borrowings declined on average at a 3.2 per cent annual rate, in line with staff expectations. Weekly reports on other nondeposit sources of funds indicate a rise of about $925 million from the last Wednesday of May -3to the last Wednesday of June. weeks in May, it obviously is In the absence of such data for the earlier impossible to calculate the rise in terms equivalent to the proxy series. However, it probably would not be unreasonable to guess that the average June level exceeded an average May level by an amount equivalent to about 3 - 4 percentage points in the proxy series. (5) The following table summarizes the changes in major deposit and reserve aggregates for the last half of 1968 and the first two quarters of 1969. July '68Dec. '68 Jan. Mar. '69'69 Apr. June '69 Total reserves 9.8 -1.3 -0.6 Nonborrowed reserves 9.9 -5.0 -6.7 Bank credit, as indicated by: Proxy 12.8 -5.4 -3.4 Proxy plus Euro-dollars 13.0 -2.4 -0.3 Total loans and investments (as of last Wednesday of month) 15.0 2,3 3.7 1.9 2.9 Money supply Time and savings deposits Savings accounts at thrift institutions NOTE: Dates are inclusive. 6.1 17.1 -6.5 6.4 6.1 -3.6 3.6 Prospective Developments (6) Maintenance of prevailing money market conditions would appear to encompass a Federal funds rate averaging around 8-3/4 -- 9 per cent, member bank borrowings in a $1 -- $1-1/2 billion range, and net borrowed reserves of around $1 billion or a little more. The 3-month bill rate is likely to continue to gyrate--but in a higher 6-3/4 -- 7-1/2 per cent range. The cost of carrying bills may tend to maintain the rate generally above 7 per cent, given slack seasonal demands and a rising supply of bills and competing instruments. Expectations, as they in- fluence dealer willingness to take positions, will be an important factor affecting bill rate movements, with current very low positions providing scope for dealers to accumulate bills. Long-term rates, too, will be strongly influenced by expectations; while near-term demands on the capital market appear relatively strong, their upward impact on interest rates could be moderated, and perhaps reversed, by a bearish stock market and economic outlook or by hopeful peace developments. (7) On balance, the System will probably absorb reserves during the last half of July and provide reserves in the first half of August. The reserve projections do not include allowance for any reserves that may be required if the regulation eliminating from cash items amounts generated by Euro-dollar transactions is implemented. Presumably, these reserves would be supplied through additional open market operations unless the intention in issuing the regulation were to tighten domestic monetary conditions further. But individual bank adjustments might still result in some temporary money market churning. -5(8) With the 3-month bill rate so high, there is little prospect for any let-up in CD attrition over the next few eeks. It is now expected that outstanding CD's in July will decline by about $1-1/2 -- $1-3/4 billion, which, after allowing for seasonals, would be a larger run-off than in June. With respect to other time and savings deposits, banks (as well as thrift institutions) apparently experienced substantial net outflows around the interest-crediting period. And while these outflows should abate after the first several days of July, at current market yield levels no sizable inflow of other time and savings deposits is expected through mid-August. Thus, total time and savings deposits in July are expected to decline more rapidly then in June--in a 12 - 15 per cent, annual rate, range. (9) The money supply in July may rise in a 3 - 6 per cent, annual rate, range. U.S. Government deposits are projected to decline sharply, but private demand deposits are not expected to show a commensurate rise, as corporations and others quickly economize on cash balances, given the tight position of banks and of corporations themselves. (10) With banks stiffening loan terms and lending standards, and also unable to provide any significant support to securities markets, outstanding bank credit is expected to drop, on average, in July. Total reserves and member bank deposits are likely to decline sharply--in a 12 - 15 per cent, annual rate, range for the latter--but in order to accommodate some domestic customers banks will probably rely on the Euro-dollar market, even given the marginal reserve requirement proposal, -6and other nondeposit sources. Assuming some further growth in Euro- dollars from current advanced levels, the bank credit proxy adjusted to include Euro-dollars is expected to decline in a 5 - 8 per cent, annual rate, range. There is little reason to believe that nondeposit sources of funds will rise less rapidly than in June, given the continuing pressure on bank deposits; on the other hand, the incoming data are not suggestive of an accelerating trend. (11) In August, total member bank deposits may decline only slightly further. Pressure may be eased by a little pick-up in consumer- type time deposits and by a noticeably smaller amount of maturing CD's. Credit demands on banks in August may also be affected by dealer and bank support of the Treasury mid-August refunding. This refunding will be announced in late July, and will involve at least $3.2 billion of publicly-held issues. In addition, the Treasury is expected to raise $1-1/2 billion of new cash in late August. 1 MEMBER BANK RESERVES Chart mONTHLY AVERAGES Of DAILY FIGUPES T 17 i T -T 1F T-T BILLIONS Of DOLLARS, SEASONALLY ADJUTE 28 5 - _ 28 0- 27 0 26 5 _ 25 5 NONSORROWED IREQUIRED RESERVES 24 5 24 0 23 5 - _ _ _ _ _ _-_ -- 4 - -- _ RESERVES -- _ _ __- - -T BILLIONS OF DOLLARS NOT SEASONALLY ADJUSTED 10 00.f_____ ___ MEMBER SANK BORROWINGS S 1967 D M J 1968 S 00 - D MJ 1969 Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS TOTAL MEMBER BANK DEPOSITS (CREDIT PROXY) 302 SEAS ---- ADJ WEEKLY AVERAGES OF DAILY FIGURES - 298 - 294 290 286 282 - 278- 274 270 14 LIABILITIES TO OVERSEAS BRANCHES (WEEKLY REPORTING BANKSI 12 NOT SEAS ADJ - 10 - 8 -- --- I- 6 4 M J 1968 S D M 1969 - -- Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES I I I BILLIONS OF DOLLARS 198 I I I I - TIME DEPOSITS ADJUSTED (All Commercial Banks) NEGOTIABLE CD'S NOT SEAS ,I ADJ WEDNESDAYS J 1968 1969 Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES I I I I I I I I I I I I I I I I I I BILLIONS OF DOLLARS MONEY SUPPLY COMPONENTS: 48 CURRENCY OUTSIDE BANKS 44 40 36 DEMAND DEPOSITS 142 146 - ---------------------------------- -^ 142 138 134 12 U.S. GOVT. DEMAND DEPOSITS (Member Banks) 0 1 I M J 1968 S D M J 1969 S D MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Member Period Free Excess reserves reserves Banks Re s e r v e Total Borrowings C i ty Major banks 8 N.Y. th Country Outside N.Y. Monthly (reserves weeks ending in): 1968--April May June July August September October November December - 341 374 386 192 240 146 192 255 270 348 354 341 331 337 346 267 286 330 689 728 727 523 577 492 458 541 600 56 65 72 13 195 125 81 65 134 262 155 168 140 65 158 88 171 223 148 186 141 102 101 73 117 93 66 223 322 346 268 215 136 172 212 177 1969--January February March April May Junep 1969--May 7 14 21 28 - 477 - 580 - 635 - 844 -1,116 -1,095 -1,120 - 910 -1,242 -1,190 359 256 202 187 243 261 483 261 116 113 836 836 837 1,031 1,359 1,356 1,603 1,171 1,358 1,303 131 62 58 85 123 57 146 121 165 59 302 255 233 411 346 459 462 260 378 284 149 215 254 260 397 288 489 385 360 353 253 304 293 275 493 552 506 405 455 607 4 11 -1,152 - 812 369 448 1,522 1,260 43 86 552 375 289 300 638 500 18 -1,241 75 1,315 -- 465 283 569 25 p -1,174 151 1,325 97 449 276 503 2 p -1,166 468 1,634 125 416 395 698 9 p -1,000 19 1,019 -- 162 333 523 June July Table 2 AGGREGATE RESERVES AND MONETARY VARIABLES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages of daily figures) I Reserve Total Reserve PerLod Ag grega I Nonborrowed Reserves Ic Annually 1967 1968 Quarterly, 1st Quarter 2nd Quarter 3rd Quarter 4th Ouarter 1968 1968 1968 1968 1st Quarter 1969 96 9 2nd Quarter 1 p Monthly: 1968--April May June July August September October November December 1969--January February March April May June p p - Preliminary. - t e s Required Reserves - M o n e +10 2 +71 +11 7 + 8.6 + 6.4 + 7.5 + 1.0 +10.4 + 8.6 + 0.7 + 1.7 +13.9 + 4.3 +71 + 1.4 +10 4 + 8.8 + 7.0 - -40 -67 + 0.6 - 1.5 - 5.4 - 3.4 - 7.3 + 0.6 - -7.3 + 2.2 + 8.3 5.6 +11.8 +12.6 +21.9 + 6.8 + 8.3 + 0.3 + 4.2 + 6.1 + 3.1 +11 3 - - - 4,7 4.3 -66 +16 5 -11 6 6.4 -8.7 -10.1 + 2.4 -12 4 + 8 3 +21 4 + 1 4 + 9.6 + +757 5 + 9.2 4.6 -47 - 3.1 +10.8 -12 + 1.2 +13.1 +12.2 - 4.7 -06 +10.4 + 6.4 +21.9 + 2.8 + 7.0 +69 +11.1 - 1 v Private Demand Depoits 1 +17 + 6.5 + 9.0 +21.4 + 8.4 +12 5 +11 1 +12 7 -49 - 12 -10 2 + 5.3 - 2 5 -13 1 Commercial bank time deposits Credit Proxy (Incl. Eurodollar borrowngs adjusted S___ 411.5 + 5.2 -06 Currency - +10.0 + 7.1 1.0 S u p y I Total ables Var Monetary Total Member Banl, Depoits + 5 5 + 7 4 +55 + 6.7 +62 +16 1 +11 3 +11.6 + 9.5 + 4.6 + 8.7 + 4.5 + 7.6 + 6.9 +88 +6.7 + +373 7 + 6 6 + 9.0 + 3.6 + 7.9 +7 0 + 3.2 +17.9 +15.7 +74 + 3.5 +14 0 +11.7 + 1.9 + 2.9 + 7 4 +66 +74 +63 + 0.5 + -65 -36 +04 + 5.9 +11.7 + 8.4 +12.8 + 5.7 + 8.8 + 5.8 +11 5 + 5.7 +11 4 + 2.8 + 2.8 +11 2 + 5.6 + 6.8 +12.6 + 7.5 +14.9 + 2.6 - + +323 2 +57 +10 6 + 7.3 +38 +14 +21 +17 +17 +14 +14 + 5.1 + 9.3 +10.1 +22.1 + 3.7 + 06 + 1.2 +10.5 +55 +83 + 8.2 + 4.0 -10 6 - +10 9 + 8.1 + 6.5 - 5.0 + 4.4 +10.7 + 7 5 3.1 +12 +74 19 + 3.3 - 7.3 - 1.6 -08 +13.6 - 6.3 - 1 6 - - 0 4 3 7 4 3 8.9 - 1.2 -4.2 -54 + 2.4 3.8 94 +11 8 +11 3 +11 6 -20 +20 -71 + 6.0 -16 -32 ) Table 3 AGGREGATE RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based on monthly averages of daily figures) Member Bank Deposits orted by Required Reserves Private U.S. Gov't Time demand demand ositst deosits pdosits 1/ . I de deDostts E Reserve Aggregates Period In lin Monthly' 1968--Jan. Feb. Mar. Apr. May June July Aug Sept. Oct. Nov. Dec. 26,064 26,273 26 361 26,202 26,250 26,432 26,574 27,058 27,121 27,293 27,451 27,705 25, 718 25,884 25,(67 25 510 25, 521 25,774 26,045 26 520 26,670 26,855 26.861 26,956 25,704 25,910 25,990 25,868 25,856 26,080 26,261 1969--Jan. Feb. Mar. Apr. May June p 27,845 27,737 27,637 27,486 27,864 27,595 27,025 26,882 26,688 26,464 26,517 26,244 S b i i on s Credit Commercial Proxy bank time Private (Incl. Euro deposits dollar demand adjusted borrowings 4/3I I deposits V i I I Money Supply Total Currency I of dol 2/ ars 26,761 26,974 27,142 27,350 277.0 278.0 276.9 277.3 278.8 280.9 285.9 287.9 290.9 293.6 296.7 149.9 150.2 151.2 151.3 151.5 151.8 153.8 156.5 158.9 161.5 163.5 165.8 119.4 119.7 120.1 120.4 122.1 123.2 124.3 124.6 123.6 124.5 125.4 126.7 5.4 7.1 6.7 5.2 3.7 3.9 2.7 4.8 5.3 5.0 4.7 4.2 182.3 182.7 183.4 184.3 186.1 187.4 189.4 190.3 189.5 190.2 191.9 193.1 141.7 141.9 142.2 143.0 144.5 145.4 147.2 147.6 146.7 147.4 148.7 149.6 184.1 185.2 186.7 187.1 187.6 188.2 190.4 193.8 196.6 199.5 201.9 204.3 279.0 281.5 282.6 281.7 282.9 285.1 287.5 292.8 295.1 298.0 300.8 303.7 27,608 27,502 27,394 27,324 27,571 27,294 295.1 294.8 292.3 293.6 293.0 289.8 163.2 161.0 160.5 160.1 159.3 158 1 126.6 127.2 126.9 127.6 127.8 127.7 5.3 6.7 4.8 5.8 5.9 4.0 193.7 193.8 194.0 195.7 195.2 195 4 150.1 149.9 149.8 151.5 202.5 201.0 201.0 200.8 200.1 199.2 303.0 303.5 301.7 303.2 302.8 302.0 26,729 i ______________________________________ 150.7 150 5 Private demand deposits include demand deposits of individuals, partnerships, and corporations and net interbank 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, process of collection and Federal Reserve float, and (2) foreign demand balances at Federal Reserve Banks. 4/ Excludes interbank and U S Government time deposits p - Preliminary 1/ 2/ 3/ L ________________ J _________________ less cash items in Table 4 RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based on weekly averages of daily figures) AGGREGATE ocseive Total Perod reserves Weekly: 1969--Jan. AgAte aLes Nonborrwed Nreserves Required I Reserve Member Total Time member hanki depos deposits (In millions of dollars) Bank Deposits o Private U.S. Gov't dmand demand deposits 1/ deposLts b I o n (I n Total I of d Currency 2/ 1 a Commercial| Credit Private demand deposits 3 deposits adjusted 4/ (Incl. Euro dollar borrowings r 1 8 15 22 29 28,096 27,778 28,027 27,010 27,682 27,176 27,070 27,289 27,103 26,671 27,620 27,536 27,802 27,697 27,454 297.4 297.2 294 9 294.4 293.8 165 5 164 4 163.9 162.8 162.1 127 9 128.2 126.7 126.0 124.9 4.0 4 5 4.3 5.6 6.8 193.7 195.4 193.8 193.6 191 6 43 4 43.5 43.5 43.6 43 5 150 3 151 9 150.2 150 0 148 1 204 1 203.3 202.8 202.1 201 5 304 1 303.9 302.8 302.7 302 4 5 12 19 26 27,666 27,593 27,707 27,913 S 26,837 26,844 26,638 27,137 27,407 27,412 27,439 27,684 294 1 295 5 295.3 294 4 161.4 161.1 160.8 160.6 126 126 127 128 2 3 7 0 6 5 8 0 6.8 5 8 192 8 192 9 194.8 194.3 43 7 43.9 44.0 43 8 149 1 149 0 150 9 150.5 201 0 201 0 201.0 200 9 302.5 304.2 303.8 303.2 Mar 5 12 19 26 27,910 27,710 27,461 27,611 27,03 26,78' 26 680 26,600 27,637 27,410 27,366 27,353 293 6 293 8 292 1 291.2 160 4 160 6 160.5 160 7 127.6 126 7 126.6 126.9 5.6 6 5 5.1 3.6 193 8 193 6 194.0 194.6 43.8 44 1 44.2 44 3 149.9 149 5 149.9 150.3 200.7 200 9 200.7 200.9 302.6 303 1 301 6 300 8 Apr 2 9 16 23 30 27,535 27,271 27,710 27,683 26,345 26,287 26,519 26,595 26,490 27,226 27,084 27,196 27,560 27,483 291.8 294.1 293.6 293.7 292.4 160 7 160.6 160 2 160.1 159 8 128.1 128.7 128 1 126.9 126.0 3.0 4.9 5 3 67 6.6 195.2 197 9 196 4 194.6 193 4 44.3 44.4 44 2 44.3 44 2 150 8 153 5 152 1 150.3 149 2 201.1 201.2 200 9 200.6 200.3 301 2 303.4 303 2 303 5 302.4 May 7 14 21 28 28,119 27,758 27,657 27.878 26,666 26,576 26,266 26,579 27,611 27,484 27,481 27,750 292.7 294 6 293 2 292.5 159.6 159 4 159 3 '19.1 126 6 127.8 128.8 128.1 6.5 7.3 5 1 5.3 194 0 195.1 196 8 195.8 44.3 44.5 44.5 44.6 149.7 150.6 152.3 151.2 200 2 200.2 200.1 200.0 302.4 304 3 302. 9 302.7 June 4 11 18 25 27,964 27,890 27,383 27,257 26,473 26,610 26,093 26,082 27,470 27 382 27,148 27,731 291.1 291.2 290. 1 288 3 158.8 158. 7 158. 2 157.6 128.0 127.9 127. 6 127 2 4. 3 4. 6 4. 3 3 5 195 195 195 194 44.9 44. 8 44 9 44 9 150.1 150.9 150 3 150 0 199.6 199. 7 199.2 198 7 301 1 302. 3 302.6 301 5 July 2 9 27,659 26,931 25,985 25,887 27,181 26,931 287 6 286 6 157 1 156 4 127 4 126 8 45 0 44 9 150 9 150 1 198 1 197 2 300 9 299 8 Feb 27,264 0 8 1 9 195.8 195 0 1/ Private demand deposits include demand deposits of in ndividuals, partnerships, and corporations and net interbank deposits. 2/ Includes currency outside the Treas ry, the Fedcr 1 Reserve, and the vaults of all commercial banks. Includes (1) demand de p o s its at all commercial ban k s , other than those due to domestic commercial banks and the U S Government, less cash items in 4 / process of collection ard Federal Reserve fLoat, and d (2) foreign demand balances at Federal Reserve Banks. 4/ Excludes interbank and U S Government time deposits p - Preliminary. Table 5 SOURCE OF FEDERAL RESERVF CREDIT Retrospective Changes (Dollar amounts in million of dollars, based on weekly averages of daily figures) " Period I Year 1967 (12/28/66 - 12/27/67) 1968 (12/27/67 - 12/26/68) - Total Federal Reserve credit (Ercl. float) Total holdings • +4 718 43,757 i, # L.S. Goverrment securities I I RIIs I/ I Other *1 I +5,009 +3,298 +4,433 ( +2,143 ( -- ) -- ) + + -- ) I + + - 57 559 +1,153 +1,176 Repurcha=e agreements - - Federal Agency Securitie 577 21 I Bankers' accentances -. Member banks borrowines __ ___ - 19 3 + + 203 514 Weekly 1969--Apr May June July I 2 9 16 23 30 + 357 - 113 380 + 773 347 + + + + 819 ( 280 ( 7 14 21 28 + - 794 + + + 41 ( 293 + + 149 259 + 4 11 18 25 p + 439 + 35 18 + 2 p 9 p + 677 - 248 + - -166 + I+ 51 ( ( ( -- --- + + 223 4 + + 10 9 15 20 56 + 304 52 256 32 + + + 25 18 9 21 + + - 116 28 151 - 50 20 29 + + 117 2 + - 53 29 + + - ) 156) 156) S27 ) + 96 ) + 73 71) 309) 191) 189) 121) + - 52 7 211 + 7) 533) 460) 80) + 67 - + + + + Figures in parenthesis reflect reserve effect of match sale-purchase agreement. Includes effect of changes in special certificates of $+96 million of the week of April 9, $+627 million of the week of April 16, and $-723 million of the week of April 23. Preliminary. __ (Mnthl Monty c Market Period __ _ Free Borrowings Reserves dIn millions of (In millions of dollars for weeks ending In) av r FINANCIAL MARKET RELATIONSHIPS IN PERSPECTIVE f s and whe r l 1 .Il1r ilr^ l -,i ro , c f H ,1 , Indicators Federal Funds 3-month Treasury Rate B20 U S. Govcrnment Corporte I New I Mes Issues (Aaa) 2/ I r s) Flow of Reserves Bond Yields MunicipalMoney Mu pal ((ia) honborrowcd Reserves Bank Credit and Money, S A Totl Reserves Bank Monty Time lme Credit Supply Deposits P ro (In billions of dollars) I (In millions of dollars) 1968--June July August September October November December - 386 192 240 146 192 255 327 727 523 577 492 458 541 743 6 07 6.02 6.03 5.78 5.92 5 81 6 02 5.52 5.31 5.23 3 19 5.35 5 45 5 96 5 40 5 29 5 22 5.28 5 44 5.56 5 88 6 65 6.51* 6 15 6.27 6.47 6.61 6.79 4 21 4.12 4.00 4.23 4.21 4.33 4.50 + + + + + + + 251 271 475 150 185 6 95 + + + + + + + 182 142 484 63 172 158 254 + + + + + + + 1.5 2.1 5.0 2.0 3.0 2.7 3.1 + + + + + + 1 3 2.0 0.9 0.8 0.7 1.7 1.2 + + + + + + + 0.6 2.2 3.4 2 8 2.9 2 4 2 4 1969--January February March April Iav June 491 580 635 844 -1,116 -1 087 715 836 837 1,031 1,359 1,355 6.30 6.64 6 79 7 41 8 67 8.90 6 14 6 12 6 02 6.11 6.04 6 44 5.99 6 11 6.22 6.03 6.11 6 28 6 6 7 7 7 7 92 91* 37 17 22 58 4.58 4 74 4 97 5.00 5 19 5.58 + + - 69 143 194 224 53 285 + + - 140 108 100 151 378 280 + - 1.5-* O 3 2.5 1.3 0.6 3 1 + 0,6 + 0 1 + 0 2 + 1.7 - 0 5 + 0.2 - 1 8 1.5 -- - 0 2 0.7 0.9 1 969--June 4 11 18 25 p -1,152 812 -1 216 -1 168 1,521 1,260 1,315 1,325 9.20 9.13 8.54 8.34 6.16 6.50 6.65 6.48 6.40 6.32 6.22 6.27 7 52 7 75 7.66* 7.50* 5.55 5 60 5.60 5 55 + - 106 137 517 11 + - 86 74 507 126 - 1.4 + 0 1 - 1.2 - 1 7 + + - 0.8 0.8 0.7 0.2 + - 0.4 0.1 0.5 0.5 July 2 p 9 p -1 166 -1 000 1,634 1,019 9.00 9 07 6.38 6.93 6.27 6.34 7.63 7.68* 5.55 5 52 - 97 98 + - 402 728 - + 0.9 - 0.8 - 0.6 0.9 6.47 6.50 7.20 4 20 4.22 4.99 + 5.6 + 9 9 - 5.3 + 7 1 + 9.8 - 0 8 + 8.6 +12.8 - 4.4 + 6.5 + 6.1 + 2.4 +11.3 +17.1 -50 + 9.9 +11.8 - - +14.1 - 6.0 + 3 4 + 2,1 +18.1 - 6.4 Annual rates of increase 4/ Aver 5.36 5.42 6.17 548 529 1.034 Year 1968 Se-ond Half 1968 First Half 1969 0.8 1.0 Rerent variation in growth 7/3/68 - 12/18/68 12/18/68 - 7/9/69 - 203 516 5.90 789 1,048 7 43 5 34 6.18 5 40 6.13 6.47 7.22 7.1 p number of days in period Average of total Includes issues carrying 5-year and 10-year call protection, * - issues carry a 10-year call protection. commercial banks. Time deposits adjusted at all Base is change for month preceding specified per period or in case of weekly periods, the first week shown. ** - Reflects $400 million reduction in member bank deposits resulting from withdrawal break in series. rates are adjusted to eliminate this 4.9 Preliminary S A - of a large country bank from System membership. annual July 11, 1969. Seasonally adjusted. Percentage Table (Dollar amounts F a c t Federal Rp,erve I Period credit (cxcl. 1/ float) float) 1/ _______________ Year1967 (12/28/66-12/27/67) 1968 (12/27/67-12/25/68) Weekly 1969--Apr. May June July Aug. +4,718 +3.757 s MAJOR SOURCES AND USES OF RFSERVES Retrospective and Prospective Changes in millions, based on weekly averages of daily F f e c t a T Currency Gold stock ( S 725 -2,067 outside b banks baokss Rn i n g s u p p ly s Treasury Float operand operaconse S f f 1 -2,305 -3,221 85 928 - 272 + 231 + 44 4 25 -425 -330 + + 625 125 For retrospective details, see Table 5. I/ 1/ See reverse side for explanation. p - Preliminary + - 45 + 485 - 130 -225 - 30 90 - + 155 - 182 220 119 + 18 + 123 . 271 + 327 + + - S48 40 - 342 278 59 160 + 227 + 70 - 19 I 111 - 3 7 7 - 124 100 +1,517 +1,563 +1,508 -40 32 4 + + - +1,522 60 98 936 164 8 I + U_ 40 Excess reserves ) 316 869 + + + + 150 350 ves + + + 350 - 50 + + 80 - + - r reserves + 295 i c = Bank use of reserves in 25 15 29 5 2 - + + 16 23 30 6 13 660 + + - 2 1 n Change totald reserves deposts and F R accounts deposits gold loans I = Other nonmember Foreign t figures) e r v e s 67 18 -120 p 9 p e +1,309 -741 4 11 18 25 p r 7 + 7 14 21 28 of 389 - 2 9 16 23 30 PROJECTED 2, 1969--July i o r 6 + + 185 135 + 70 , , 1 , ... + - 5 55 Explanation of Projections in Table 6 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 $1.0 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: $+3.5 billion, July 18; $-0.7 billion, August 1. 

Federal Reserve (1969, July 14). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19690715

@misc{wtfs_bluebook_19690715,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1969},
  month = {Jul},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19690715},
  note = {Retrieved via When the Fed Speaks corpus}
}