Bluebook

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CONFIDENTIAL (FR) MONEY MARKET AND RESERVE RELATIONSHIPS Recent developments (1) The monetary and banking aggregates moved divergently in January, with current estimates showing the bank credit proxy (adjusted to include nondeposit sources of funds) to have declined on average at a 3.5 per cent annual rate, andthe money supply to have grown at a 9 per cent annual rate. The estimate of the proxy is within the range pro- jected in the last blue book, but that for the money supply is well above the blue book projection of little change. (2) The effective rate on Federal funds ranged generally between 9 and 9-3/8 per cent over the past three statement weeks; member bank borrowings averaged slightly over $1 billion; and net borrowed reserves around $900 million. All of these conditions were somewhat tauter than in the preceding three week period, which had been influenced by year-end churning. The Federal funds rate during the past three weeks tended toward the upper end of the range specified in the blue book, while net borrowed reserves and member bank borrowings were maintained near the low ends of their respective blue book ranges. (3) The rate on 3-month Treasury bills rose in late January toward the upper end of its specified 7-1/2-8 per cent range, reversing about half of the 25 basis point decline that had developed just prior FINANCIALMARKETS RELATIONSHIllPS AND IN PERSPECTIVE (Monthly averages weekly available, where and averages of daily I figures) Monty Marki Indt l rs HBond Yl lds Flo.wi 1,1 isi LI. Frt Borrowl n l id 1-month II 5 Corpiornt No.lllrr.odi h t,I 1 IkI II l loniIty -nCtne . iimll.ons "id ' .. .. Inl ary I rnnn '". (a " ... s .r... vI L period period I dollars for wks endin n), 1968--September Ot tober sovember De< emher - 1969- - n 715 H36 11)7 1 1il I1159 1 1 6 6 6 7 8 I '7 II I P) r 78 92 81 02 5 99 6 11 6.22 6.113 6 11 6 8II 6 1 I I 1 Il 71 117 ' 8 I' 9H721 1. 7 I\ 21 28 - 1.21* 0, 1 - 2,5 + 1.2 -0.3 - 2.5 - 4,6 - 2.7 + 0,-22 - 0.1 S1 0. - 1.7 - 0.8 - 0.1 - 0.9 - .3 - 1.3 + 0.7 144 6 11II I + +493 p p p p - -1 Itu 1 lO I I 2I i} -7 ,70 I 9I 26 I 2111 It 4 p 2.6 3.0 2.7 2.8 - 0.9 ii A II i - 1.2 - 0.1 +07 + 0 7 -2 + II -316 +161 o 50 6 .6 -51 I t 170 - 211 9 I) 6 h 6 6 9 21 6 92 ) 10 1 + 2 +12 - 1.4 2.6 - 0.1 + -. 0 2. S02 + 1 0 - 1.1 -07 - 0.5 - 0.5 + + - 0,1 0.1 0.3 0.2 + 0.3 - 0.4 -03 -03 + 0 - 0.1 0.2 - - .6 + .2 I + . I I 51 91 89 91 94 + + 0.2 - 11,9 - U.2 -1 77 +19 .'1 21 A 4' 8 III + 1J + S104 6 94 7 04 + 0.6 - 0.2 - 0.8 -05 - 1.8 +22 --070 7 6 59 t bb 6 78 A 71 + 0.4 - 0.6 + 0.7 - 2.1 + *.4 - 2.1 HI 10 . -1 Il t 0.5 + 1.1 - 0.8 t 91 « / I )4 0 17 24 1 p (In billions ol dollars) +101 -112 -182 -270 +134 -I18 -4 1(1 - 61 6 45 6 49 6 60 6 76 1 2, lI I I ll71 li I + + + + - 71 -Jlb t ltt + 0 4 + 0.4 + 1 8 SI 2 7 I I 1 1' I linme ep 2.1 + 3.2 + 2.8 + 1.2 AA 81i 5 12 1' 26 S A + )io i4 H 117 II Ii) 2 ily - 7 I 1021 12 I Ii 24 nd Mont, HoIt y 918, +206 + 29 +120 S51 26 928 I I ) S213 - I . I j I Crdt .ns +14 '7 Feb 5.56 5 88 11 6. 79 -. 67 8 40 8 6h 9 S170--lan 28 5 1 - i Iov - P IL- la I irv , I ll (I ol dollr Ill II iiii r p lt I 'II S0 i - 44 -I lb 1178 - I 01 ti 5 S 5 6 - hie A.. 492 458 541 74 1 (Ats) 2/ 4 1 146 192 25S 127 - lanuar\ Febrularv Mar II April Mav " nk (rdit Hank - 0.8 - U.4 - 25 -06 - I1 -02 - 0.5 - 1.0 t 0.1 -0 - 0.1 - 1.4 -0 - 60 + 1 -did -17" +n ? - 0.4 9 14Annual rates of increase 4/ Averagb 'Iar 1969 Fir' t lalf 1969 Selnnd Halt 1969 - 862 779 941 1 110 1 031 I 183 8 22 7 4h 8 96 6 67 6 15 7 19 6 32 6 12 6 53 7.62 7.20 8.04 5.45 5.01 5 89 - 3 0 - 3.7 - 2 0 - 1.6 + 0.7 - 3 9 - 4.1 - 3,5 - 47 + 2.5 + 4.3 + 0.6 Recent variation In erel-th 12/18/69-5/21/69 5/21/69-2/4/70 - b90 956 955 1 184 6 97 8 96 6 10 7 10 6 07 6 51 7 09 8.00 4 83 '.90 - + 0.6 - 2.8 - 2.3 - 5 8 + 57 - 0 Sr ntolhu Average of 'rtal II I.i Includes " Ti0w deposlts ad td at hange for month Base is :1 2' 1 4/ - Ill .0i J fleLts, rthip from Svst. n,'i - trlld f days il p r "id 0-t *year all inVrtr I prec d 0t, I I1 ploleit, II hnt ptil. cfld 1 i t, 6 or in Ls, ol wee t ll. Jlep Ilt. r r hi i ' I Percentage a.nnal riLts art dul su9re tio cllii nrv I p Ilods, e 5.2 2 6 Revised. ill p - r the first week shos l. 1 lw. in sent n break att tll February 6 1970 "ll tr . Is PIrtIlrinary S A + 3.9 - 7.7 - Seasonally adjusteo -2to the last meeting of the Committee. Since early February, however, the 3-month bill rate has dropped sharply again, and most recently was bid at 7.42 per cent (with an equivalent offering yield on an investment basis of 7.60 per cent). Rates on the 6-month and 1 year bills have declined to 7.53 and 7.30 per cent, respectively, on a discount basis (equivalent to investment yields on the offering side of 7.85 and 7.73 per cent). All of these bill rates are well above the new Regulation Q rate ceilings for large denomination CD's of corresponding maturities. Rates on private short-term debt instruments have declined 1/8 to 3/8 of a percentage point since the last Committee meeting, carrying the quote on 6-month commercial paper down to 8.50 per cent. (4) The general downturn of short-term rates was triggered by strengthened market expectations of a near-term lessening of monetary res- traint that followed various Administration statements and publication of the new Federal budget. This changed market attitude occurred at a time when demands for bills were being generated by swaps out of "rights" to the Treasury's Feburary refinancing, and dealers' positions in short-term bills were being depleted. The shift in expectations also contributed to a highly successful Treasury refinancing. Of the $5.9 billion of public holdings of maturing debt involved in the operation, only about 15 per cent were redeemed for cash. This relatively modest attrition reduced the size of the Treasury's estimated remaining need for cash somewhat. -3markets have also been buoyed to some extent that the same expectational factors / have been affecting the (5) from Other bond U. S. Government securities market. Earlier, however, yields in these other markets had been under substantial upward pressure from the heavy volume of recent offerings, and had reversed a sizable part of the declines that had developed early in January during the period of largest savings withdrawals from depositary institutions. Even in the most recent period, the continuing weight of new issue volume has tended to brake the size of the yield decline. (6) The larger-than-anticipated average growth in the money supply during January chiefly reflected failure of the sharp year-end money supply bulge to be eroded as rapidly as projected. To some extent was this slower-than-anticipated contraction / probably due to the unusual volume of security transactions that of depositary institutions. continued as funds flowed out Despite the unexpectedly large average growth in the money supply, however, the adjusted bank credit proxy remained within its projected range because time and savings deposit outflows at banks were much larger than projected. The blue book forecast for such deposits in January had been for a decline at an annual rate of 3--6 per cent; the actual decline is now estimated at a 12-1/2 per cent annual rate, with the larger attrition entirely accounted for by more rapid run-off of consumer-type accounts. Among the nondeposit sources of funds, sales of commercial paper through affiliates rose sharply in January as several key banks which had not resorted to this source of funds until late 1969 pressed their sales actively. Altogether, growth in these sales amounted to the equivalent of about 3-1/2 percentage points in the adjusted credit proxy. But the effect of this change on the proxy was almost entirely offset by a decline on average in Euro-dollar borrowings from foreign branches. (7) The following table summarizes the annual rates of growth in major deposit, reserve, and credit aggregates for 1968 and 1969, and, on a preliminary basis, for January 1970: Year 1968 Year 1969 July Sept. '69 Total reserves 7.8 -1.6 - 9.3 Nonborrowed reserves 6.0 -3.0 - 4.8 Money supply 7.2 2.5 Time and savings deposits Savings accounts at non-bank thrift institutions 11.5 6.3 -5.3 Oct. Dec. '69 1.4 2.6 -0.1 6.5 1.4 9.0 -12.4 -13.3 3.3 2.1 January 1970 6.1/ 1.2 - 6.9- Member bank deposits and related sources of funds Total member bank deposits (bank credit proxy) 9.0 -4.1 - 9.4 Proxy plus Euro-dollars 9.8 -1.7 - 6.2 -0.3 - 6.4 Proxy plus Euro-dollars and other nondeposit sources n.a. n. a. - 4.0 2.1 - 3.1 Total loans and investments 11.0 of all commercial banks 2.4 - 0.8 2.1 - 9.3 L&I plus loans sold outright to affiliates and foreign branches 3.4 0.8 2.3 - 3.6 - - 3.4 Commercial bank credit (month end) NOTE: l/ n.a. Dates are inclusive. All items are average 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. For savings and loan associations only; preliminary. Prospective developments (8) If the Committee wishes to maintain an unchanged stance with respect to its views as to monetary aggregates and money market conditions, it may wish to consider the following second paragraph for the directive (alternative A): To implement this policy, while taking account of the CURRENT forthcoming Treasury refunding, possible bank regulatory change, and the Committee's desire to see a modest growth in money and bank credit, System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining firm conditions in the money market; provided, however, that operations shall be modified if money and bank credit appear to be deviating significantly from current projections. (9) Over the next four weeks, firm money market conditions could encompass a Federal funds rate most frequently in an 8-1/2-9-1/2 per cent range, net borrowed reserves generally in a $750 million to a little over $1 billion range, and member bank borrowings around $1 billion, and sometimes a little less. Under these conditions, the 3-month Treasury bill rate is likely to be in a 7-1/4--7-3/4 per cent range. The Treasury may announce a small cash offering, presumably in bills, toward the end of February to cover the seasonal drain on its cash balance during the first half of March, and another similar operation may be needed at the end of March. -6- (10) Assuming day-to-day money market conditions averaging in the middle of the range noted above--which would be a shade lower than the last three weeks for the Federal funds rate--growth in the money stock is likely to be at about a 3--4 per cent annual rate over the first quarter (measured from the December daily average level to the March daily average level). On the same assumption, the adjusted bank credit proxy appears likely to decline over the quarter in about a 2--4 per cent annual rate range. Thus, our projections would appear to suggest that money market conditions may have to be toward the lower ends of the ranges specified above if modest growth in the aggregates, taken together, is to be achieved, In terms of monthly average levels, the money stock on average --following the unexpectedly large rise/in January--is projected to (11) decline in February and then to rise in March, changing little on balance in the two months. During the course of February, the money stock is likely to begin rising as Government deposits decline. The average level now projected for March is above that projected four weeks ago, in part because of large transactions needs for cash in connection with sizable bond and money market transactions, and a smaller-than-expected Treasury cash financing paid in early March. (12) The projected decline in the bank credit proxy is based largely on continuation of the recent greater weakness in time and savings deposits, particularly consumer-type deposits. In February, we expect total time and savings deposits to drop in an -78-11 per cent annual rate, range, on average. However, the quarter's decline may come to a halt in late February and March, as holders of claims on depositary institutions tend to defer further withdrawals until after March interest-crediting. The new higher Regulation Q interest rate ceilings have not yet had a discernible effect on time deposit flows, but by March large CD's, particularly for longer maturities, may begin to become marginally competitive. (13) In view of the recent and expected behavior of time deposits, it would appear to be difficult to bring about even a modest growth in the adjusted bank credit proxy over the first quarter without an immediate drop in the 3-month Treasury bill rate to below 7 per cent. But keeping money market conditions near the low end of the ranges specified in paragraph (9) would be a step in the direction of halting bank credit contraction. The expectational effects on markets could move the bill rate down from current levels toward or possibly even below the 7-1/4 per cent bottom of the range projected above. Assuming commensurate declines throughout the bill yield curve, this would permit banks to sell more longerterm CD's and draw more successfully on customer relationships to hold down the rate of attrition on shorter maturities. Under the circumstances, the decline in the adjusted bank credit proxy might be stemmed, accompanied by only a minor additional increase in the rate of growth in the money stock. Additionally, market expectation of further interest rate declines could, at some stage, stimulate speculative purchases of securities that would further enhance bank credit totals and bank demands for reserves. (14) Our projections have assumed that banks will continue to issue commercial paper over the next two months, but at a slower pace than in January, when several large banks entered the market for the first time. In addition, if a 10 per cent reserve requirement on such paper is made effective at the end of February, the additional costs would reduce the relative attractiveness of this source of funds. Euro-dollar borrowings through branches are assumed to change little, on balance, in February and March. (15) Should the Committee wish to move toward somewhat easier conditions in the money market, concomitant with somewhat stronger growth in the banking and deposit aggregates, it might consider the following second paragraph for the directive (alternative B): To implement this policy, while taking account of the CURRENT forthcoming Treasury refunding, possible bank regulatory changes and the Committee's desire to see MODERATE a-modest growth in money and bank credit, System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining firm MOVING TOWARD SOMEWHAT EASIER conditions in the money market; provided, however, that operations shall be modified if money and bank credit appear to be deviating significantly from current projections. (16) Somewhat easier conditions in the money market, con- sistent with moderate growth in money and bank credit, could encompass -9a Federal funds rate in a 7-1/2--8-1/2 per cent range, net borrowed reserves in a $550 - $750 million range, and member bank borrowings of around $750 million. Such an easing in money market conditions would likely be accompanied by a sharp drop in short-term interest rates, partly on expectational grounds, with the 3-month Treasury bill rate, for example, moving to and probably somewhat below 7 per cent. (17) Under such conditions, banks might be in a position to regain a substantial amount of CD's, Instead of an attrition running at about the $100-$300 million per month rate likely under alternative A (depending on the degree of firmness achieved under the specifications of that alternative), we would expect banks at least to maintain outstanding CD's at around the current $10 billion level. And if the bill rate fell to 6-3/4 per cent or below, banks would probably have considerable opportunity to add to CD's. Indeed, they might well add substantial amounts if loan demand remains strong or if they wish to replenish their liquidity and to start rebuilding investment portfolios at attractive yields. Another alternative for banks would be to move into CD's at the expense of nondeposit sources. On balance, a reasonable guess would be that CD's could rise at a rate of $500 million per month, or even more. (18) The effects of easing money market conditions would first become pronounced in the March aggregates, since February is in large part already determined and since it would take some time to effect the degree of easing specified. $500 million Assuming that large CD's rise at around per month, that consumer-type time and savings show less -10weakness, and that banks are somewhat less active in the Euro-dollar and commercial paper markets, the adjusted bank credit proxy in March could rise in a 3 - 6 per cent annual rate range. For the first quarter as a whole, the adjusted credit proxy might show little net change, or a slight growth, with the main thrust of the greater rate of bank credit expansion being seen in the second quarter figures. (19) The money stock, too, would be likely to show more ex- pansion in March under easier money market conditions, as the public rebuilds its liquidity. For the first quarter the money stock could grow in a 4 - 5 per cent annual rate range, assuming the economy does not weaken more than projected. (20) Long-term interest rates would decline under this policy alternative, as banks began to re-enter the bond markets and as dealers took larger positions in longer-term U.S. Government and corporate securities in anticipation of more favorable market conditions ahead. Moreover, the volume of corporate bond offerings could abate somewhat, at least in the short-run, as some businesses deferred financing temporarily to await even more favorable market conditions. Table (Dollar 1 MARGINAL RESERVE MEASURES in millions, based on period averages amounts I Fret reserves Period Monthly (reserves weeks ending in): 1969--September October November Derember - Member Excess reserves I Total Banks Borrowing R e s e r v e C i t Major banks O r 8 N.Y. Outside N.Y ther 125 81 65 134 136 172 212 177 477 - 580 131 62 58 85 123 57 89 81 83 106 120 268 148 253 304 293 275 493 550 608 621 485 464 456 329 261 - 844 -1,116 -1,078 -1,045 997 744 995 975 8 1 -768 836 836 837 1,031 1,359 1,355 1,311 1,211 1,026 1,190 1.213 1,127 928 1969--July 2 9 16 23 30 -1,138 -891 -1,103 972 -1,123 1,634 1,020 1,279 1,354 1,269 125 6 13 20 27 -839 1.090 1,329 1,221 OLt. Noc Dec. 1970--Jan. Feb p - Country 492 458 S41 600 - Sept s 146 192 255 - 270 - 1969--January February 'arch April May June July August September October November December p 1970--January p Aug. of daily figures) 86 146 416 165 302 214 152 697 521 499 661 663 183 S365 267 196 638 589 624 633 88 1,204 18 118 136 53 3 10 17 2- - 838 349 - 886 -901 1,240 740 1.018 1, 15 57 6 128 83 286 39 331 306 664 465 1 8 15 22 29 -1.116 828 -1 120 857 -1,099 1,436 967 1,347 1,01.1 1,179 9 53 531 112 396 275 322 553 418 439 396 511 5 12 19 26 -1.032 873 92 S-1,072 1, 32A 1,244 1 ,071 1,210 121 350 422 296 400 988 -99 -1.162 992 17 24 31 p - 916 -820 596 1,191 1.200 1,044 1,094 1,104 7 14 21 28 -597 846 -760 -870 -1 092 854 864 966 1,028 1 258 3 10 4 -901 p p p p p Preliminary. - 170 210 S 42 388 -21 -- -38 504 266 293 164 296 319 307 264 296 356 334 379 196 234 75 86 75 327 281 340 218 389 8 379 295 292 298 244 161 254 385 484 Table 2 AGGREGATE RESERVES AND MONETARY VARIABLES Retrospective Changes, Seasonally Adjusted (In per cent, annual rates based on monthly averages ofSii daily figures ly figuur .) I1 .R ese r e r A z S- a e t M o i ep I----- t t r Total Reserves Period Nonborrowed Reserves 4 I Annua lly I 9bs 1969') p + 7.8 + 1.6 + 6.0 Semi-annually 1st talf 1969 2nd IHalt 1969 + 0.7 - Quarterly 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1968 1968 1968 1968 + 7.9 + 1.5 +11.5 + 9.6 1st Quarter 1969 2nd Quarter 1969 3rd Quarter 1969 4tl Quarter 1969p Monthly 1968-rApril i May June lulv August September October November December + 0.1 + 1.2 1969--January February March April May June July August September October November December p 1970--January p + 7.5 p - Preliminary. + 7.4 - 6,0 + 1.0 - 3.5 - - 4.7 + 4. ) + 0.7 +6.5 + 5.4 1.7 - 2.4 1.3 - 3.4 - 3.8 - 8.5 +19.9 - 7.6 - - 4.0 - 6.7 - 2.8 + 1.7 + 0.2 - 4.8 - 2.2 - 9.4 + 4.1 + 4.5 + 1.4 + + + + 6.5 6.3 3.6 7.1 + 5.9 +11,0 4 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 + 5.0 + 2.8 + 8.3 + 8.2 + 2.7 + 8.1 + 8.1 + 5.4 + 8.0 - 2.6 -10.6 t 7.9 + 2.6 + 7.1 + 1.6 + 1.6 +10.2 -10.0 - 4.7 - 0.6 - - - 4.7 0. 1 + 0.9 +12.3 +13.8 +22.4 + 8.3 + 9.2 + 1.3 + 5.3 + 4.5 - 4.9 - 8.0 -12.0 + 6.0 - 8.2 - 8.6 5.2 0.6 +11.3 + 9.4 +22.3 + 2,6 +10.4 + 8.4 +10.2 +12.7 - 3.0 - 4.4 - 5.0 +14.3 - 8.6 -19.3 -17.6 - - 2.8 + 7.7 -17.9 + 5.5 +11.9 + 6.5 - 7.6 0.8 -10.4 + 9.3 + 6.9 + 4.7 5.2 + 2.2 + 7.3 + 9.4 +22.2 + 8.8 +13.3 +11.5 +13.0 - 3.2 1.2 -10.1 + 4.9 - 1.2 -10.2 -18.9 -11.3 + 1.7 - 9.2 + 9.7 -0.4 - 3.4 + + + + + + + - 6.2 3.1 3.1 7.9 1.2 4.2 1.8 1.8 + 0. + 1.2 + 2.4 + 9.0 + + + + 5.4 8.7 6.8 7.0 + 3.2 - - -13.3 +12.5 + 8.3 + 9.8 + 8.9 + 1.6 + 2.4 +11.3 + 7.2 1.6 + 3.1 + 1.6 - 4.7 0.8 0.8 - 1.6 + 2.3 +10.9 sources - 3.0 + 7.6 + 3.0 +16.5 +17.3 + 4.2 1.3 realt Pro > Euro-dols. and nondeposit 5.3 6,9 7.8 7.6 6.6 - -11.7 + 9.7 + 6.0 + 2.6 4 3.7 - 0.6 I Icl. +11.5 + + + + -22.5 5.6 + 7.1 + 1.5 5.5 8.7 6.8 7.1 -6.9 +22.4 + 4.3 + 8.5 + 7.9 +12.1 adjusted + + + + - 7.6 i LC umn retI me bn deposits + 7.3 + 1.4 +13.6 +12.7 - + Prvate Demand post + 7.5 + 1.8 +11.5 + 9.8 + 2.0 6.9 + I + 1.1 + 2.1 +15.0 + 5.3 - + 2.5 + 8.8 i a b I Currency 2. - V a r S______________________ + 1.2 1.2 + 1 4 9.3 Total + 9.0 - 4.1 - -48 - embr Bank Deposits + 7.9 !.0 - 3.9 I Required Reserves y Supply iToi o I c y 5.1 3.0 + 3.2 + 3.2 + 2.6 +15.9 +17.0 +16.1 +18.3 +16.2 +16.6 3.6 5.4 - 7.0 - 7.5 -18.5 -19.4 + 1.6 - 2.5 - 3.7 +12.7 + 1.6 -0.6 + 4.3 -12.4 - 7.9 - 3.1 - 7.1 - 0.8 of funds 4 Table 3 AGGREGATE RESERVES AND MONETARY VARIABLES Seasonally Adjusted (Based on monthly averages of daily figures) - I Reserve Aggregates uporteu SI Period Total reserves I hlyr Member Bank Deposits 5/ (In Nonborrowed reserves mi I llions Required reserves I of do liars) 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 liars) --January February March April May June ly gust September 0 tober November December p )--January p 28,139 28,060 27,972 27,775 28,235 28,056 27,530 27,401 27,402 27,318 27,206 27,024 26,754 26,888 26,705 26,275 26,214 26,383 26,210 26,538 26,802 26,948 )7, 154 27,783 27,923 27,983 U y Total member bank deposits deos e'o2its I deposits d A u Requi I Private demand deposits I/ I Co mercial bank time deposits adjusted Money Supply erv R ( In I --January February March April May June July August September October November December A b i U.S. Gov't demand Total / deposits l o n Currency o f I~~----' do Private demand ' Ven- 4-tL l 1 21 ars 3 25,989 26,078 25,964 25,952 26,196 26,402 26,893 26,951 27,185 27,376 27,609 149.9 150.2 151.2 151.3 151.5 151.8 153.8 156.5 158.9 161.5 163.5 165.8 119.7 120.1 120.6 120.8 122.7 123.8 125.2 125.6 124.8 125.7 126.8 128.2 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 27,902 27,832 27,729 27,614 27,942 27,742 27,334 27,161 27,144 27,129 27,548 27,707 27,816 297.0 296.7 294.2 295.4 295.1 292.6 288.0 285.3 28. .7 283. 5 285.8 285.7 284.9 163.2 161.0 160.5 160,1 159.3 158.1 155.1 152.5 152.1 151.5 128.4 129.1 128.9 129.4 130.0 130.5 130.5 129.9 129.2 128.9 129.1 129.3 130.2 5.4 6.7 4,8 5,9 5,9 4.0 2.4 2.9 4.4 3.1 5.6 4.9 5.3 195.8 196.3 196.8 198.1 198.3 199.0 199.3 199.0 199.0 199.1 I 9. 3 199.7 201.2 43.5 43.8 44.1 44.2 44.5 44.8 45.0 45.3 152.3 152.5 152.6 154.0 153.8 154.2 154.4 153.8 153.7 15%.6 1 3.4 153.7 155.1 203.2 202.4 202.3 202.3 201.7 200.8 197.7 194.5 194,1 193. 1 ,92.4 194.1 192.1 151.1 151.5 149.4 45.6 46.0 46.0 funds 4/ 3 275.1 277.4 278.5 277.3 277.8 279.5 281.7 286.9 289.0 292.2 295.0 298.2 '4 ~i.2 Credit Proxy Incl. Euro-dols. and nondeposit sources of 307.5 305.7 303.8 304.2 302.2 305.4 305.7 304.9 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, less cash items in process of collection and Federal 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 $425 million since October 16, 1969. Table 4 i l PL 1. bLAI __________________ lI Nonhirod aid i I ppi rttd lu i d l I is, min lions ol dol Ii Ib ) t vi ,11 > d kt n.. i PI inidell h i,tib Illlk 11 .I p. , ' I I,s) laposits ( I n d I '1 Privat d iiid iil poI.. dIIi I 27,826 27,800 27 698 27 701 293.7 293.9 293 1 291.3 158.8 158.7 158.2 157.6 130,6 110.6 110.6 130.3 4.1 4.6 4. 1 1,4 19h.8 198.8 198.2 1'9.1 lul\ 2 S 16 23 10 2 217 27 , 16 27, Ih8 .7 7(3 27 I I 26 >43 26 6d1 26,370 26,274 25,917 27 711 27,462 27,'.92 27, 107 26,980 290.6 289.4 286.7 288.0 287.1 157.0 156.1 5 . 1I.6 154.1 130.7 1 11.2 1 10. 110. 130.0) 2. 1.01 .1 1.01 ).0 6 13 26, .11 26, 109 2 ,91, 26 259 27,258 27,216 27 164 27,135 286.2 285.9 2h't.4 285.1 153.4 152.9 152.4 152. 1 129.9 129.9 110.1 129.1 9 2.9 1.1 1.7 20 1 ,4 26 687 26, 64 26,199 26,9'7 27 059 27 238 26,982 285.8 283.7 287.1 285.0 151.9 151.9 152.0 152.2 130.7 129.7 129.8 128.6 152.3 151.9 151.4 151.3 151.2 27 Sept 1 10 17 24 7 ,.0 7 j3 21, 70 27,210 (Oct. I 8 1 22 29 27,717 27.' ' 7 '9i '7 147 27, 721' 26,362 26,29)1 2 ,97,i 76 .20 ~",')19 ')7 -17 27 ,04. 7,11,9 27 )63 27,O'1 284.7 283.7 281.9 284.1 283.4 41 5 12 19 26 27, (05 27 1(' 17 ' "( 26, 359 26 119 26 2 27 160 27 154 2 l 2 I 296.0 285.9 ' . ?, '1 041 ?R n ' 27,790 27,878 '6 1 6,6 1 26,861 26 718 27,079 12 10 17 24 31 p 7 14 21 28 p p p p 28,088 27,930 28 078 27,877 4 p 27 890 1970--an. Feb. 1/ 2' l7 ' I , 151. 1 151.0 1 I0 I 1 I CurrLnc lu 1tl n , 26.829 27 028 26 543 26 588 27,491 27, i 18 2i 151 27 4 bank time ,,.v't b d I 1 I I r , (redit Pro'y (onmercial C Sulp M|ni l)p R(qui I \ i 28 120 28, 18 27 813 27 761 lDe,. 5/ bink Mil lr i it ll Ad iiljI, 4 11 18 2, 2? 4/ SA I VI S ,\ Su onilly 1969-lune Aug 2/ 3/ t, v. (I1. 11 l Incl. dCpositS demand ,depuosis 3 Euro-dols and nondeposit adjusted 4/ sources 201.6 201.5 200.9 200.1 306.1 307.6 308.4 307.5 199.3 198.8 197.9 197.2 196.7 307.1 306,0 304.4 306.3 305.6 funds ) 44.7 44.7 44.8 44.8 154.0 154.0 153.5 1 4.2 "i'.2 ' .' 1l . I 19. I 199.1 4 .9 44.1 4 .0 154.3 154., 154.3 154.2 154 . 1. 190.1 199.1 1'.5 198.9 45.1 45.2 45.2 45.3 153.9 1"..0 154.3 153.6 195.6 194.9 194.4 193.9 304.5 304,2 303.1 303.8 1.2 2.2 5.2 4.1 199.5 199.3 199.6 198.3 45.5 45.1 45.3 45.3 154.0 154.2 154.3 153.0 194.0 193.9 194.2 194.0 304.3 302.3 305.7 303.4 128.1 128.8 127.8 129.7 129.1 3.8 3.0 2.7 3.1 3.2 198.3 1996 198.7 199.9 198.5 41.2 4.4 45.6 45.7 45.7 153.1 154.3 153.0 154.3 152.8 194.3 193.9 193.6 193.3 193.4 302.4 301.9 300.7 303.2 3C2.1 129.3 129.0 12 .1 I .I 5.5 5.9 >. 198.7 190.7 I~ .I 45 7 45.8 ' . ' 153.0 153. ,2 . 193.3 193. 1 I .1 i' 304.7 305.2 305.3 305.8 1I I 5.0 3.7 . 198.7 197.8 202. ' 4(. 1 I 46.1 6.2 45.9 153.3 1 2. 152.7 151.6 157.0 1I .h 19i.8 194.1 194.3 193.9 1 0,,0 45.0 . i i 27,'46 21 '76 27,711 2'7 2 24> 1 28,.5 284 3 286.2 I I I I. 151.7 151.8 151.3 I . 12 L . 128.5 127.6 131.3 27,119 27,059 27,062 26 724 27 70L 27,919 27 924 27 679 286.1 284.9 284.9 284.1 150.6 149.7 149.2 148.6 111.7 130.5 130.3 128.8 4. 4.7 5.3 6.7 2?.5 202.1 201.7 199.2 45.7 46.0 46.1 46.3 156.8 156.1 1'.5 152.9 193.3 192.2 192.0 191.5 305.4 26,546 27,703 283.1 148.0 129.2 5.8 199.3 46.2 153.1 190.6 303.6 2 .. ( (I 1 52 1 I 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, less cash items process of collection and Federal 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 $425 million since October 16, 1969. 307.3 30 .9 305.4 304.5 306.1 305.2 305.4 304.5 in of 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: $-0.2 billion, February 16; and $2.5 billion. March 3. 

Federal Reserve (1970, February 9). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19700210

@misc{wtfs_bluebook_19700210,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1970},
  month = {Feb},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19700210},
  note = {Retrieved via When the Fed Speaks corpus}
}