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. December 12, 1969. CONFIDENTIAL (FR) MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments (1) With few exceptions, interest rates throughout short- and long-term credit markets have risen further since the last meeting of the Committee. Reflecting a rise in dealer bill positions, a sustained high cost of dealer financing, and expectations that tax-date and yearend pressures may be larger-than-usual this year, the 3-month Treasury bill rate moved well above the 7-1/2 per cent top of the range projected in the last Blue Book. It reached a peak of 7.91 per cent on December 10, about 40 basis points above its level two meetings ago. (2) In the previous inter-meeting period, the upsurge in the 3-month bill rate had been accompanied by even sharper increases in yields on other bill maturities and by sizable advances in other shortterm credit market rates as well. Since the last meeting, however, the 3-month bill has risen more in yield than other short-term instruments, bringing it more in line with other short-term rates. For example, the 6-month bill rate rose by only about 15 basis points to a high of 8.02 per cent from its already advanced level at the time of the last meeting. Most recently there was some improvement in the bill market, and the 3-month and 6-month bills were quoted 7.81 and 7.84 per cent, respectively on December 12. Long-term interest rates have moved higher on balance, FINANCIAL MARKETRELATIONSHIPS IN PERSPECTIVE c />*-*-1- 1-- -.- _.Monthly averages and, where available, weekly averages r daily figures) T of lil oly Perod avraers Money Market Indicators Free Borrowings Federal Reserve Funds (In millions of Rate dollars for weeks an, w ere avai a ue, 3-month U.S. Treasury Government TrasryIssues (20 yr.) Bill ending in) weer averages o Bond Yields Corporate New M (Aaa) ipaa (Aaa) 2/ a y u Flow of Reserves Nonborrowed Total Reserves Reserves (In millions of dollars Bank Credit and Money, S.A. Bank Money Time Credit Supply Deposits p, 3 Proxy (In billions of dollars ) ) 1968--September October November December - 146 192 255 327 492 458 541 743 5.78 5.92 5.81 6.02 5.19 5.35 5.45 5.96 5.28 5.44 5.56 5.88 6.27 6.47 6.61 6.79 4.23 4.21 4.33 4.50 +185 +206 + 29 +120 + 98 +193 +181 +279 + + + + 2.1 3.2 2.8 3.2 + + + + 1969--January February March April May June July August September October November p - 491 580 - 635 844 -1,116 -1,078 -1.045 997 744 -1,006 - 985 715 836 837 1,031 1,359 1,355 1,311 1,211 1,026 1,189 1,213 6.30 6.64 6.79 7.41 8.67 8.90 8.61 9.19 9.15 8 71 8.85 6.14 6.12 6.02 6.11 6.04 6.44 7.00 6.98 7.09 7.00 7.24 5.99 6.11 6.22 6.03 6.11 6.28 6.27 6.22 6.55 6.50 6.74 6.92 6.91* 7.37 7.17 7.22 7.58 7.63 7.65 7.98 7.89 8.32 4.58 4.74 4.97 5.00 5.19 5.58 5.60 5.74 5.83 5.80 5.88 +103 -112 -182 -270 +134 -183 -430 - 61 +169 -173 +314 +175 - 79 - 88 -197 +460 -179 -526 -129 + 1 - 48 +416 + + + 1.2** 0.3 2.5 1.2 0.3 2.5 4.6 2.7 0.4 2.2 2.6 + + + + + + + - 1.0 0.5 0.5 1.3 0.2 0.7 0.3 0.3 -+ 0.1 + 0.6 - 1.7 - 0.8 - 0.1 -- 0.6 - 0.9 - 3.1 - 3.2 - 0.4 - 0.6 - 0.1 b 13 20 27 839 996 -1,162 992 1,090 1,329 1,221 1,204 9.57 9.18 8.79 8.82 6.99 7.04 6.86 7.04 6.21 6.19 6.20 6.24 7.57* 7.53 7.61 7.82 5.70 5.73 5.73 5.80 +484 -102 -394 +344 +340 + 47 -387 +282 + 0.9 0.3 1.5 0.7 --+ 0.4 - 0.6 - 1.1 0.7 0.5 0.5 3 1n 17 24 - 839 349 886 901 1,240 740 1,018 1,105 9.57 8.57 9.07 9.61 7.01 7.09 7.11 7.13 6.35 6.45 6.49 6.60 7.90* 8.02* 8.04 8.13 5.80 5.85 5.85 5.82 - 65 +493 -323 -165 - 24 - 84 + 45 -134 + + - 0.7 2.1 3.4 2.1 + + - 0.6 0.2 0.3 1.3 + + - 0.1 0.1 0.3 0.2 1969--Aug Sept. 0.4 0.4 1.8 1.2 + + + + 2.6 3.0 2.7 2.8 Oct 1 8 15 22 29 -1 116 828 -1,129 857 -1,099 1,436 964 1,347 1,015 1,1/9 9.11 9.43 9.68 8 68 8 39 7.07 7.00 7.02 6.94 7.00 6.76 6.65 6.46 6.29 6 50 8.22 8.10 7.95 7.82 7 87 5.83 5.80 5.75 5.80 5.84 +163 - 71 -316 +54' -531 +481 -484 + 27 +287 -309 + - 0.8 0.5 1.8 2.2 0.7 -+ 1.3 - 0.9 + 1.2 - 1.4 + + 0.3 0.4 0.3 0.3 0.1 Nov 5 12 19 p 26 p -1,031 873 929 -1,105 1,328 1,244 1,072 1,207 9.07 9.32 8 79 8.32 7 01 7 14 7.16 7.44 6 59 6.66 6.78 6.83 8.13 8 27* 8.44 8.67 5 75 5 78 5.95 6.05 +370 - 20 +483 -308 +417 - 90 +180 - 84 + + 2.6 0.1 0.1 0.5 + + + - + + 0.1 0.2 0.2 0.3 Dec. 3 p 10 p -1.027 983 1,193 1,199 8.91 8.75 7.55 7.75 6.84 6.80 8.85 8.70 6.34 6.48 + 39 + 87 - 55 +232 + 0.9 - 1.4 - 210 - 218 779 548 529 1,034 5.58 5.77 7.45 5.36 5.42 6.17 5.45 5.44 6.12 6.47 6.50 7.20 4.20 4.22 4.99 + 6.0 +10.2 - 3.7 Annual rates of increase + 7.9 + 9.0 + +10.7 +13.4 + + 0.7 - 3.5 + - 203 839 516 1,106 5.90 8.10 5.34 6.58 5.40 6.28 6.47 7.58 4.21 5.36 +11.0 - 3.7 +12.9 - 1.2 Averages Year 1968 Second Half 1968 First Half 1969 Recent variation in growth 7/3/68 - 12/18/68 12/18/68 - 12/10/69 p - Preliminary 1/ Average of total number of days in period. - issues carry a 10-year call protection. 2/ Includes issues carrying 5-year and 10-year call protection, 3/ Time deposits adjusted at all commercial banks. 4/ Base is change for month preceding specified period or in case of weekly periods, the first week shown ** - Reflects $400 million reduction in member bank deposits resulting from withdrawal of a large countrv bank from System membership. Percentage annual rates are adjusted to eliminate this break in series. December 12, 1969. +14.8 - 4.1 0.2 1.0 0.5 0.2 - 0.8 - 0.8 4/ 7.2 7.0 4.3 + 5.9 + 1.9 + 0.3 - 0.1 +11.5 +17.3 - 4.0 +18.6 - 5.6 S.A. - Seasonally adjusted. -2although in the corporate bond sector a recent rally has pushed rates down from the record levels reached in the first week of December. (3) During the past two statement weeks, the weekly average effective rate on Federal funds was between 8-3/4 and 9 per cent, or about the same as in November. Net borrowed reserves averaged $1 billion and member bank borrowings $1.2 billion, also little changed from November. Dealer loan rates increased somewhat in early December, however, as dealer bill positions and financing demands rose and the basic reserve deficit of major reporting banks in New York began to deepen by somewhat more than seasonal proportions. (4) Along with the general rise in interest rates since the last meeting of the Committee, the money supply has been weaker than previously projected, as indicated by figures for private demand deposits in the last statement week of November and in the first two weeks of December. Money supply growth in November is now estimated at about a 3-1/2 per cent annual rate, slightly below the bottom of the range of the previous Blue Book. And the December projection, as will be noted in the section on prospective developments, has also been revised in a weaker direction. (5) Total time and savings deposits in November showed a slight decline, on average, about as projected, and total member bank deposits rose at around an 11 per cent annual rate--also about as expected--due to the very large increase in U.S. Government deposits. Supporting deposit growth, total reserves rose at about a 9 per cent annual rate and nonborrowed reserves at a 5 per cent rate, as member bank borrowings rose seasonally adjusted from October to November. Nondeposit sources of funds in November added about 2-1/2 percentage points to total member bank deposits. (6) The following table summarizes annual rates of change in major deposit, reserve, and credit aggregates for 1968 and to date in 1969: Year 1968 Jan. '69June '69 July '69Sept. '69 Oct.-Nov. '69 Total reserves 7.8 0.7 -9.3 -1.3 Nonborrowed reserves 6.0 -3.7 -4.8 -6.4 Money supply 7.2 4.3 0.0 2.1 11.5 -4.0 -13.3 -2.2 6.3 5.0 2.1 1.5 Total member bank deposits (bank credit proxy) 9.0 -3.5 -9.4 0.8 Proxy plus Euro-dollars 9.8 -0.2 -6.2 u.6 Proxy plus Euro-dollars and other nondeposit sources n.a. n.a. -4.3 3.L 4.1 -0.8 4.8 n.a. 0.8 6.3 Time and savings deposits Savings accounts at non-bank thrift institutions Member bank deposits and related sources of funds Commercial bank credit (month end) Total loans and investments of all commercial banks L&I plus loans sold outright to affiliates and foreign branches Note: 11.0 n.a. Dates are inclusive. All items are averages of daily figures(with "other nondeposit sources" based on an average for the month of Wednesday data), except the commercial bank credit series which are based on total outstanding on last Wednesday of month. All additions to the total member bank deposit series and the last Wednesday total loans and investments series are seasonally unadjusted numbers, since data have not been available for a long enough time to make seasonal adjustments. Prospective developments (7) For the second paragraph of the current economic policy directive, the Committee may wish to consider the following wording (Alternative A): "To implement this policy, System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining the prevailing firm conditions in THE money [DEL: and-short term-credit markets; provided, however, that operations shall be modified if bank credit appears to be deviating significantly from current projections or if UNUSUAL LIQUIDITY pressures SHOULD DEVELOP." arise in-connection-with-possible-bank-regulatory-changes. (8) The specification of prevailing firm conditions in the money market as they pertain to the Federal funds rate and marginal reserve measures could be the same as in the previous Blue Book--a Federal funds rate in an 8-1/2 - 9-1/2 per cent range, member bank borrowings $1 $1-1/2 billion, and net borrowed reserves $900 million - $1.2 billion. Some allowance may have to be made within the period, however, to accommodate a seasonal tendency for banks to hold higher excess reserves in connection with year-end churning. (9) The prevailing 3-month Treasury bill rate, as noted earlier, has moved well above previous specifications. Over the next four weeks, given the money market conditions noted, the bill rate may -5fluctuate in a 7-1/2 - 8 per cent range. A number of factors might exert upward pressure on the 3-month bill rate. Corporate tax payments are of record proportions for mid-December and both corporate and bank liquidity are strained; dealer bill positions are on the high side going into the tax period; and if prevailing net borrowed reserves were to be maintained, the System might have to absorb about $800 million of reserves in the statement week ending December 24 largely in consequence of a seasonal bulge in float. In addition, the market is likely to be anticipating large outflows of savings from banks and thrift institutions over yearend (with some of the funds going into intermediate- and longer-term bonds); as a result Federal agencies and thrift institutions may have to sell sizable amounts of Treasury bills and other short-term assets into the market. Thus, there is a possibility that unusual liquidity pressures could develop in the next few weeks. (10) It is possible, on the other hand, that the bill market has already been discounting some of these pressures. For this and other reasons the bill rate could move back to or even below the lower end of the range specified above during the latter part of the interval before the January 13 meeting, although such a change cannot be predicted with certainty. In the first half of January seasonal pressures abate, and in late December and early January, the System is likely to be a net supplier of reserves. In addition, Board staff projections suggest that the Treasury may not need to raise new cash in January, as it typically -6has done in past years. Because of the possibility of a bill rate decline, the reference to "other short-term credit markets" in the proposed directive language has been deleted on the assumption the Committee would wish to avoid any implication that the Manager should resist a tendency for the bill rate to recede from its current high prevailing level. (11) Total time and savings deposits are projected to rise in a 3 - 6 per cent, annual rate, range in December. In part, this rise reflects continued net inflows of foreign official time deposits, which are assumed to continue rising at about $100 million a week. In addition, time deposits other than large CD's appeared to become less weak in the last week of November and thus far in December--with outstandings showing moderate net increases after rough seasonal adjustment. Finally, the steady attrition of large CD's of domestic holders has reduced their relative weight in total time and saving deposits and brought amounts maturing in December to the point where the actual decline in December is unlikely to reach usual seasonal proportions. A crude adjustment for the inappropriateness of established seasonal factors on total time and saving deposits, given current low levels of outstanding CD's, suggests that growth in time and savings deposits in December might be overstated by one to two percentage points, implying compensating adjustments throughout other months of the year. In January, total time and savings deposits are projected to decline rate at a 2 - 5 per cent/partly because the seasonal rebuilding of domestic CD's -7achieved in past Januaries cannot occur in the current environment of very high market interest rates. The staff has assumed that net out- flows of domestic time deposits other than large CD's following the endof-year interest-crediting will be larger than after September but not quite as large as following the mid-year interest-crediting period, given the outflow of interest-sensitive money that has already occurred. (12) The money supply in December is projected to decline in a 3 - 6 per cent, annual rate, range and little net growth is expected in January. At current high interest rates, demand for cash balances appears to be reduced, and the slower growth currently estimated and in near-term prospect for GNP is consistent with a moderation in transactions demand for money. On the other hand, year-end window dressing by domestic non-financial corporations seeking to conform to Commerce regulations on direct foreign investment might lead to a temporary inflow of funds and a bulge in year-end demand deposits similar to the one that occurred last year. Such a development would tend temporarily to strengthen money supply performance at year-end and in early January, as also might shifts of savingsfrom institutions to the market. U.S. Government demand deposits seem likely to decline moderately on average in December and to recover to about the same degree in January, assuming that savings outflows from S&L's in January are not so severe as to force the FHLB to make use of its direct borrowing line at the Treasury. (13) Total member bank deposits in December are projected to show little net change, on average, but then to decline in a 1-4 per cent range in January. Commercial paper issued by bank-related affiliates is expected to continue growing at about the recent $100 million per week rate, assuming no change in the current pending status of the Board's proposed regulation. Euro-dollar takings are likely to decline somewhat between now and year-end, if past seasonal patterns are followed. However, business loan demands are likely to be relatively strong this month--in view of the tax payments and continued inventory accumulation--and banks may bid somewhat more aggressively for Euro-dollar funds, perhaps reducing the extent of the seasonal decline in the last half of December. All in all, in December nondeposit sources may add about a percentage point to the change in total member bank deposits, followed by a somewhat larger addition in January, although the increase could be mainly the result of a seasonal recovery in Euro-dollars. (14) Given the continued constraints on banks, changes in long-term interest rates are most likely to reflect expectational factors and changes in credit market demands. A temporary seasonal abatement in demands will develop between now and year-end, and heavy buying of bonds by retail customers could well push interest rates down, but the January calendar of corporate and municipal issues appears unusually large. The magnitude and persistence of any declines in long-term interest rates would appear to depend on the volume of -9fund transfers out of equities, short-term market instruments, and thrift institutions, as well as on the willingness of institutional investors with regular inflows of funds to bid actively to lock-up high yields. Such buying will depend in part on expectational forceswhich would be strongly affected by economic news. (15) If current projections for December are realized, the annual rates of increase for key aggregates in the fourth quarter would be as follows (using the midpoint of the December projections): Annual Rates (in percentage points) Total reserves Nonborrowed reserves Money supply Time and savings deposits Total member bank deposits Total member bank deposits plus nondeposit sources 2.0 -2.0 0.0 0.0 0.5 2.0 Policy alternative (16) If the Committee should decide to move toward slightly less firm money market conditions, it might wish to consider the following second paragraph for the directive (Alternative B): 'To implement this policy, System open market operations until the next meeting of the Committee maintaining-the shall be conducted with a view to [DEL: prevailing-ACHIEVING SLIGHTLY LESS firm conditions in THE money and-short-term-credit markets;]provided, however, that operations shall be modified if bank credit appears to be deviating significantly from current projections or if UNUSUAL LIQUIDITY pressures SHOULD DEVELOP bank [DEL: in aruse changes.] regulatory connection with-possible -10(17) The slightly less firm money market conditions might involve Federal funds most frequently around 8-1/2 per cent, member bank borrowings around $1 billion or a little less, and net borrowed reserves fluctuating around $800 million. With some change in market expectations developing under these conditions, the 3-month bill rate might move rather rapidly down into a 7 - 7-1/2 per cent range, and some downward adjustment in long-term interest might be expected as well. (18) Monetary aggregates probably would be affected only in a minor way over the near-term by the change in market conditions specified above, unless there is a sharp shift in market expectations. Any significant upward impact on the aggregates probably would require a more extended easing of money market conditions than the one specified, especially when ceiling rates on deposits are so far below the market and bank investment policies have become so cautious. Chart 1 MEMBER BANK RESERVES MONTHLY AVERAGES OF DAILY FIGURES I I I I I I I I BILLIONS OF DOLLARS, SEASONALLY ADJUSTED I 28.5 28.0 27.5 27.0 26.5 25.5 25.0 24.5 24.0 M J 1968 S D M J 1969 S 0 Chart 2 MEMBER BANK DEPOSITS AND LIABILITIES TO OVERSEAS BRANCHES BILLIONS OF DOLLARS TOTAL MEMBER BANK DEPOSITS (CREDIT PRI SEAS 12 ADJ WEEKLY AVERAGES OF DAILY FIGURES LIABILITIES TO OVERSEAS BRANCHES (WEEKLY REPORTING BANKS) -NOT SEAS ADJ, 1968 1969 Chart 3 MONEY SUPPLY AND BANK DEPOSITS SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS TIME DEPOSITS ADJUSTED (All Commercial Banks) - NEGOTIABLE CD'S NOT SEAS ADJ, WEDNESDAY A M J 1968 S D M J 1969 S D Chart 4 DEMAND DEPOSITS AND CURRENCY SEASONALLY ADJUSTED WEEKLY AVERAGES OF DAILY FIGURES I i I I I I I I BILLIONS OF DOLLARSI MONEY SUPPLY CON 48 U.S. GOVT. DEMAND DEPOSITS (Member Banks) IS I. I ^II-A 1968 1968 1969 Table 1 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Member Period P d Free reserves Excess reserves Banks Re s e r v e Major banks Total 8 N.Y. Borrowings C ty Other Countr Outside N.Y. Monthly (reserves weeks ending in): 1968--September October November December - 146 192 255 270 346 267 286 330 492 458 541 600 125 81 65 134 158 88 171 223 73 117 93 66 136 172 212 177 1969--January February March April May June July August September October - 477 580 635 844 -1,116 -1,078 -1,045 997 - 744 995 359 256 202 187 243 277 266 214 282 195 836 836 837 1,031 1,359 1,355 1,311 1,211 1,026 1,190 131 62 58 85 123 57 89 81 83 106 302 255 233 411 346 459 250 253 236 327 149 215 254 260 397 288 364 256 222 293 253 304 293 275 493 550 608 621 485 464 1969--July 2 -1,138 496 1,634 125 416 396 697 9 - 891 129 1,020 -- 165 334 521 16 23 30 -1,103 972 -1,123 176 382 146 1,279 1,354 1,269 88 86 146 302 214 152 390 393 308 499 661 663 Aug. 6 13 20 27 839 996 -1,162 992 251 333 59 212 1,090 1,329 1,221 1,204 18 118 136 53 183 365 267 196 251 256 194 322 638 589 624 633 Sept. 3 10 17 24 - 838 349 886 901 402 391 132 204 1,240 740 1,018 1,105 57 64 128 83 286 39 331 306 233 172 136 328 664 465 423 388 Oct. 1 8 15 -1,116 828 -1.129 320 139 218 1,436 967 1,347 95 170 210 531 112 396 257 267 302 553 418 439 22 - 857 158 1,015 -- 275 344 396 29 -1,099 80 1,179 53 322 293 511 422 296 295 190 490 408 Nov. Dec. 5 12 -1,032 - 873 296 371 1,328 1,244 121 350 -- 19 p - 929 143 1,072 390 262 420 26 p -1,105 102 1,207 8 438 258 503 3 p 10 p -1,027 - 983 166 216 1,193 1,199 266 293 307 264 239 263 381 379 p - Preliminary. Table 2 AGGREGATE RESERVES AND MONETARY VARIABLES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages of daily figures) I Period Reserve Total Reserves A ee r e ea t e s A 2 2 r e g a te s Nonborrowed Reserves *1* Required Reserves _ _ +11.8 + 9.0 + 6.6 + 7.2 + 5.5 + 7.4 +15.0 + 5.3 + 7.5 + 1.8 +11.5 + 9.8 + 7.3 + 1.4 +13.6 +12.7 + 5.5 + 8.7 + 6.8 + + + + -2.8 -4.7 - 4.8 + 1.7 + 0.2 -8.6 - 4.8 - 2.2 - 9.4 + 4.1 + 4.5 -6.9 -6.9 + 2.5 + 8.8 + 7.6 + 0.9 +12.3 +13.8 +22.4 +22.4 + 8.3 + 9.2 + 1.3 -5.2 -0.6 +11.3 + 9.4 +22.3 + 2.6 +10.4 + 8.4 +10.2 - 5.2 + 2.2 + 7.3 + 9.4 +22.2 + 8.8 +13.3 +11.5 +13.0 + 5.9 +11.0 + 9.0 + 8.9 + 8.9 + 2.5 + 2.5 +11.3 + 7.4 + 5.8 + 8.7 + 8.7 + 5.7 + 8.6 + 8.5 + 2.8 +11.2 + 5.6 +12.7 - 3.0 - 4.4 - 5.0 +14.3 - 8.6 -17.6 -7.6 -0.8 -10.4 + 9.3 - 3.2 - 1.2 -10.1 + 4.9 - 1.2 -10.2 -18.9 -11.3 + 1.7 - 9.2 +11.0 6.2 3.1 3.1 7.9 1.2 + 2.8 + 8.3 + 8.2 + 2.7 + 8.1 + 8.1 + 5.4 + 8.0 - 2.6 +10.6 + 5.3 +11.7 1968 1968 1968 1968 + 7.9 + 1.5 + 1.1 + 2.1 +11.5 1st Quarter 1969 2nd Quarter 1969 3rd Quarter 1969 + 0.1 Quarterly 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Monthly: 1968--April May June July August September October November December 1969--January February March April May June July August September October November p p - Preliminary. Currency +10.5 + 7.9 +10.3 + 7.8 1968 + 9.6 + 1.2 - 9.3 + 4.3 + 8.5 + 7.9 +12.1 + - 7.5 3.4 3.8 8.5 + 6.0 + 5.3 + 4.5 - 4.9 - 8.0 +19.9 -12.0 + 6.0 - 7.6 - 8.2 -22.5 -19.3 - 5.6 - 2.8 -11.7 + 7.7 -17.9 + 4.9 - 9.1 + 7.1 + + + + + + 4.2 + 1.8 -1.8 + 0.6 + 3.6 Variables S u p p I Annually 1967 __Monetary M o n e y Total Member Bank DepositsTotal y Private Demand Deposits _______ I __ + 7.0 + 7.1 Commercial bank time deposits adjusted Credit Proxy (Incl Eurodollar borrowings) +15.9 +11.7 +11.5 + 9.8 6.9 7.8 7.6 6.6 + 7.6 + 3.0 +16.5 +17.3 + 7.6 + 6.5 + 6.3 + 3.6 - 5.1 - 3.0 - 1.8 + 1.4 -13.3 - 6.2 + 5.0 +12.5 + 8.3 + 9.8 + 8.9 + 1.6 + 2.4 +11.3 + 7.2 + 3.2 + 3.2 - 4.7 + 7.1 + 1.6 + 1.6 +10.2 - 1.6 + 3.1 + 1.6 - 4.7 - 0.8 - 0.8 + 2.3 + 2.6 +15.9 + 3.7 +14.7 +11.9 + 6.0 + 9.7 +10.5 +17.0 +16.1 +22.5 +18.3 +16.2 +16.6 +12.1 -10.0 - 4.7 - 0.6 - +10.6 +11.6 +11.5 0.8 + 2.0 - 6.7 + 5.5 - 3.6 - 5.4 -18.5 -19.4 - 2.5 - 3.7 - 0.6 - 1.2 -11.4 - 9.5 + 2.4 -10.0 +11.3 Table 3 AGGREGATE RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based on monthly averages of daily figures) S__Supported Period Total reserves Nonborr reserves reserves Required Total member bank reserves reservesdeposits M by Re uired Reserves me deposits Private demand ( I n (In millions of dollars) Commercial Money Supply Member Bank Deposits Reserve Aggregates 5/ U.S. Gov't. demand 1/ s b i 1 I i o n s y S y Currency Total deposits 2/ o f bank time d Private demand deposits adjusted 32/ 4/ Credit Proxy (Incl. Eur dollar borrowings d o 1 1 a r s ) thly 1968--January February March April May June July August September October November December 26,134 26,352 26,451 26,298 26,353 26,547 26.715 27,213 27,311 27,504 27,685 27,964 25,818 25,961 25,755 25,606 25,626 25,889 26,186 26,675 26,860 27,066 27,095 27,215 25,774 25,989 26,078 25,964 25,952 26,196 26,402 26,893 26,951 27,185 27,376 27,609 275.1 277.4 278.5 277.3 277.8 279.5 281.7 286.9 289.0 292.2 295.0 298.2 149.9 150.2 151.2 151.3 151.5 151.8 153.8 156.5 158.9 161.5 163.5 165.8 119.7 120.1 120.6 120.8 122.7 123.8 125.2 125.6 124.8 125.7 126.8 128.2 5.4 7.1 6.7 5.2 3.7 3.9 2.7 4.8 5.3 5.0 4.7 4.2 182.6 183.3 184.2 185.1 186.8 188.2 189.6 191.0 191.4 191.8 193.6 194.8 40.6 40.7 41.1 41.3 41.6 41.9 42.1 42.4 42.7 42.8 43.2 43.4 142.0 142.6 143.2 143.8 145.3 146.3 147.5 148.6 148.8 149.1 150.5 151.4 184.1 185.8 187.2 187.7 188.2 188.6 191.1 193.8 196.4 199.4 202.1 204.9 279.4 281.9 283.2 282.1 283.5 285.8 288.3 293.7 296.3 299.3 302.2 305.1 1969--January February March April May June July August September October November p 28,139 28,060 27,972 27,775 28,235 28,056 27,530 27,401 27,402 ?7, 154 27,770 27,318 27,206 27,024 26,754 26,888 26,705 26,275 26,214 26,383 26,210 26,524 27,902 27,832 27,729 27,614 27,942 27,742 27,334 27,161 27,1&4 27,129 27,549 297.0 296.7 294.2 295.4 295.1 292.6 288.0 285.3 28).7 283.5 286.1 163.2 161.0 160.5 160.1 159.3 158.1 155.1 152.5 152.1 151.5 151.1 128.4 129.1 128.9 129.4 130.0 130.5 130.5 129.9 129.2 128.9 129.5 5.4 6.7 4.8 5.9 5.9 4.0 2.4 2.9 4.4 3.1 5.5 195.8 196.3 196.8 198.1 198.3 199.0 199.3 199.0 199.0 199.1 199.7 43.5 43.8 44.1 44.2 44.5 44.8 45.0 45.3 45.2 45.6 45.8 152.3 152.5 152.7 154.0 153.8 154.2 154.4 153.8 153.7 1536 153.9 203.2 202.4 202.3 202.3 201.7 200.8 197.7 194.5 194.1 193 193.4 304.8 305.3 303.6 305.0 305.0 304.7 301.8 299.4 O0 975 30,.3 1/ Private demand deposits include demand deposits of individuals, partnerships, and corporations and net interbank deposits. 2/ Includes currency outside the Treasury, the Federal Reserve, and the vaults of all commercial banks. 3/ 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. 4/ Excludes interbank and U.S. Government time deposits. 5/ Includes increases in required reserves due to changes in Regulations M and D of approximately $400 million since October 16, 1969. Table 4 AGGREGATE RESERVES AND MONETARYVARIABLES Seasonally Adjusted Aggregate Reserve Reserve Aggregate Period Total Total member bankli Tme s I idei . ddeposits o n Money U S. Gov't Private I demand drmand deposits 1/ deposits o n s b I (I n Total o f do Credit Commercial Supply Currency 2/ 1 ar s bank tme Private demand Ideposits 3 deposits adjusted 4/ I Proxy l(Incl Euro oy dollar borrowings 2 9 16 23 30 27,879 27,611 27,590 27,848 28 023 26,689 26,634 26,838 26,733 26,830 27,570 27,431 27,515 27,698 27,823 293.6 294.9 295.6 295.9 294.7 160.7 160.6 160.2 160.1 159.8 130.0 129.5 130.0 129.1 128.3 3.0 4.9 5.3 6.8 6.6 197.6 199.0 198.7 197.4 196.9 44.2 44.2 44.2 44.2 44.2 153.4 154.7 154.5 153.2 152.7 202.6 202.6 202.4 202.3 202.0 303.0 304.2 305.1 305.7 304.7 May 7 14 21 28 28,501 28 162 28,020 28,219 27,048 26,980 26,629 26,920 27,993 27,888 27,844 28,091 294.7 296.5 295.2 294.9 159.6 159.4 159.3 159.1 128.7 129.8 131.0 130.6 6.4 7.3 5.0 5.3 197.2 197.8 199.5 199.1 44.3 44.4 44.4 44.6 152.9 153.4 155.1 154.6 202.0 201.8 201.7 201.7 304.5 306.2 305.0 305.1 June 4 11 18 25 28,320 28,308 27 833 27 761 26,829 27,028 26,543 26,588 27,826 27,800 27,698 27,701 293.7 293.9 293.1 291.3 158.8 158.7 158.2 157.6 130.6 130.6 130.6 130.3 4.3 4.6 4.3 3.4 198.8 198.8 198.2 199.1 44.7 44.7 44.8 44.8 154.0 154.0 153.5 201.6 201.5 200.9 303.6 304.9 305.6 154.2 200.1 304.5 2 9 16 23 30 28.217 27,506 27,568 27,703 27,151 26,543 26,461 26,370 26,274 25,927 27.711 27,462 27,492 27,307 26,980 290.6 289.4 286.7 288.0 287.1 157.0 156.1 155.3 154.6 154.1 130.7 130.2 130.5 130.5 130.0 2.9 3.0 .9 3.0 3.0 199.2 199.4 199.3 199.1 199.1 44.9 44.9 45.0 45.0 45.0 154.3 154.5 154.3 154.2 154.1 199.3 198.8 197.9 197.2 196.7 303.8 302.5 300.7 302.2 301.3 6 13 20 27 27,491 27,538 27,151 27,433 26,411 26,309 25,915 26,259 27,258 27,216 27,164 27,135 286.2 285.9 284.4 285.1 153.4 152.9 152.4 152.1 129.9 129.9 130.3 129.9 2.9 3.1 1.7 3.1 199.1 199.1 199.5 198.9 45.1 45.2 45.2 45.3 153.9 154.0 154.3 153.6 195.6 194.9 194.4 193.9 300.2 299.8 298.6 299.4 Sept 3 10 17 24 27,409 27 325 27,370 27,236 76,194 26,687 26,364 26,199 26,957 27,059 27,238 26,982 285.8 283.7 287.1 285.0 151.9 151.9 152.0 152.2 130.7 129.7 129.8 128.6 3.2 2.2 5.2 4.1 199.5 199.3 199.6 198.3 45.5 45.1 45.3 45.3 154.0 154.2 154.3 153.0 194.0 193.9 194.2 194.0 300.0 298.1 301.6 299.2 Oct. 1 8 S1 22 29 27,717 27.233 7,260 7,'47 27,239 26,362 26,291 25,975 76 520 2',919 77.417 27,044 27,059 27,263 27,041 284.2 283.7 281.9 284.1 283.4 152.3 151.9 151.4 151.3 151.2 128.1 128.8 127.8 129.7 129.1 3.8 3.0 2.7 3.1 3.2 198.3 1996 198.7 199.9 198.5 45.2 43.4 45.6 45.7 45.7 153.1 154.3 153.0 154.3 152.8 194.3 193.9 193.6 193.3 193.4 298.2 297.5 296.1 298.5 297.1 N,. 5 12 19 p 26 p 27, 655 27. 565 27 94' 27,861 26, 359 26 339 26,822 26.514 27. 360 27. 354 27, 732 27,637 2 6.0 285.9 2S5 8 286.3 151. 1 151 0 151. 0 151.2 129.3 129.0 129. 2 129.9 55 5.9 5 5 5.2 198. 7 199.7 1200. 2 200.0 45 7 45.8 45.9 45.9 153.0 153.9 154. 3 154.0 193. 3 193. 1 193.3 193.6 299.5 299.9 299.9 301.0 3 p 10 p 27 806 28,038 26,553 26,640 27,650 27,698 287.2 285.8 151.3 151.6 129.8 128.6 6.1 5.6 199.2 198.4 45.9 43.8 153.4 152.7 193.9 193.8 301.5 300.2 Aug. Dec 4/ 5/ Supported by Required Reserves Apr. July 2/ 3/ RequSred qu r svreservees reserves (In millions of dollars) Weekly 1/ Nonborrowed Total Non e Money Member Bank Deposits 5/ / 1 1 1 Private demand deposits include demand deposits of individuals, partnerships, and corporations and net interbank deposit 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 Federa1 Reserve float, and (2) foreign demand balances at Federal Reserve Banks. Excludes interbank and U S Government time deposits Includes increases in required reserves due to changes in Regulations M and D of approximately $400 million since October 16, 1969. Table 5 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figur -) Pftrod Year* 1967 (12/28/66 - 12/27/67) 1968 (12/27/67 - 12/26/68) Total Federall' Reserve credit (Excl. float) U.S. Government securities T Bills I/ Other Total holdings Repurchase agreements +4,718 +3,757 +5,009 +3,298 +4,433 ( +2,143 ( 2 9 16 23 30 + + + 357 113 380 773 347 + + + + + + + + 51 57 559 819 280 ( -) 17) (533) (+ 460) (+ 80) + 7 14 21 28 + + + 794 293 149 259 + + 345 118 - 39 + 307 + + + + 41 66 190 243 ( -) (156) (+ 156) ) ( -- + + - 4 11 18 25 + 439 S 35 S 18 168 + + + + + - 351 284 118 174 ( -) (71) (309) (+ 191) 2 9 16 23 30 + + - 679 247 261 337 379 + + + - 297 401 30 408 287 + + + - 180 332 122 404 264 (+ ((+ ((- 189) 121) 121) 146) 95) 6 13 20 27 + + + 562 153 198 86 + 672 - 69 45 + 96 + + + 241 71 355 61 (+ ((+ (+ 241) 98) 10) 37) Sept. 3 10 17 24 + 273 -1,434 400 + 728 + + + 155 -1,276 890 +1,254 (+ 51) (632) (+ 531) (+ 101) Oct 1 8 15 22 29 + + - + + + 298 217 548 - 33 289 + + + + + 87 88 536 172 181 ( -) ) ( -) -( (430) (+ 137) 5 12 19 p 26 p +1, 224 + 297 + 563 + 304 +1,049 + 391 + 748 + 164 + + + + 788 585 788 128 (+ ( ( (- + + + + + + 402 ( -) 172 (+ 53) Weekly: 1969--Apr. May June July Aug. Nov Dec. 3 p 10 p 622 151 89S 381 184 563 203 103 146* 143* 319* 284 308 256 S 33 - 174 218 900* 686* 633* 561 175 __________ - - --- ____________ ) ) 293) - ) -- ) 53) - +1,153 +1,176 + + + 27 + 96 + 73 + + Federal Agency Securities - - 69 52 52 7 211 223 4 + + + 13 2 34 58 24 304 52 256 - 32 + - 19 3 577 - 21 - 116 - 28 151 + + - 27 + - - 2 + + + 431 2 400 35 + 21 + 18 3 + + + 63 131 50 40 + + 5 12 4 + 211 + - 12 205 108 + - 261 194 - 67 + + 159 3 - - + + + 36 -I-I + + + 9 10 + 37 10 11 - 2 117 2 92 4 23 129 Member banks borrowings 11 3 8 14 - - 67 + Bankers' acceptances 18 5 13 4 33 1 19 15 + 8 2 3 5 + + 7 12 ___________________ 1/ 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, S+627 million of the week of April 16, $-723 million of the week of April 23, $+507 million of the week of September 10, $_154 million of th week of September 17, and $-661 million of the week of September 24 p - Preliminarv. 203 514 Table 6 MAJORSOURCES AND USES OF RESERVES Retrospective and Prospective Changes (Dollar amounts in millions, based on weekly averages of daily figures) F a c t o r s affect n g upp y of r e serve s Federal Reserve God Currency r Foreign Other nonmember credit (excl. o outside easury Float deposits aeposits and a n F.R. sockfloat) banks opertionsand / float) 1/ banks __ and gold old loans loans F.R. accounts accounts ( S i g n i n at s ef f c t on serves) Period Year1967 (12/28/66-12/27/67) 1968 (12/27/67-12/25/68) Weekly 1969--April +4,718 +3,757 725 -2,067 -2,305 -3,221 85 928 389 +1,309 7 - 67 2 9 16 23 30 + + + 357 113 380 773 347 54 93 186 166 602 + + + 50 119 380 - 427 194 7 14 21 28 + + + 794 293 149 259 99 270 450 155 + 16 - 42 + + + 141 128 + June 4 11 18 25 + 439 35 18 -168 348 51 419 115 - 108 217 354 179 July 2 9 16 23 30 + + - 679 247 261 337 379 3 344 136 174 719 + + 221 23 - 65 87 6 6 13 20 27 + + + 562 153 198 86 201 180 417 289 + + - 318 147 259 153 3 10 17 24 + 273 -1,434 - 400 + 728 145 54 98 222 + + 39 860 - 18 1 8 15 22 29 + 4 - 622 151 895 383 -184 269 233 416 416 453 + + + + 64 222 198 174 8 5 12 19 p 26 p +1,224 + 297 + 563 + 304 52 337 553 191 - 174 - 34 + + 94 67 + + 563 203 92 134 + 515 795 295 ---- + 215 205 345 + - 460 185 --- + + 395 525 May Aug. Sept. Oct. Nov. 3 Dec. p 10 p 1969--Dec. 17 24 31 1970--Jan. 7 14 PROJECTED 2 - + + 316 869 Change in total - reserves =Bank use of reserves Re Reuired Excess reserves reserves +1,522 +1,508 +1,517 +1,563 + 80 60 98 936 164 + + + 155 182 111 40 + + 342 218 59 162 229 43 52 317 334 + + 343 164 473 403 + + 149 2 132 45 + -1,125 + 353 66 147 295 3/ 364 + 273 11 468 358 + 3 - 136 + - 200 20 + - 80 52 -- + + - 600 600 150 --- - 295 450 + 15 ----- + + 345 150 -- + 115 + + 430 270 490 + + 430 270 490 + + 560 5 + + 560 5 1/ For retrospective details, see Table 5. 2/ See reverse side for explanation. 3/ Includes increases in required reserves due to changes in Regulations M and D of approximately $400 million since October 15, p - Preliminary. 1969. -- 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 $1.9 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: $-0.7 billion, December 15; $-1.1 billion, December 22; and $100 million addition to weekly bill auctions over the remainder of the year. 

Federal Reserve (1969, December 15). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19691216

@misc{wtfs_bluebook_19691216,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1969},
  month = {Dec},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19691216},
  note = {Retrieved via When the Fed Speaks corpus}
}