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) January 8, 1971. MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Prepared for the Federal Open Market Committee By the Staff BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM CONFIDENTIAL (FR) MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) Weekly deposit data now available on a preliminary basis through December 30 and on a partial basis through January 6 indicate that growth in the narrowly-defined money supply was at an annual rate of about 6.7 per cent on average in December, and only about 3.6 per cent for the fourth quarter. While the rate of growth in money supply during December exceeded that of any previous month since August, it still fell appreciably short of the projected 9.5 per cent rebound that was indicated at the last meeting of the Committee. Moreover, the November money supply growth rate was revised downward to 2.8 per cent from the 4.5 per cent rate estimated in mid-December. The combination of these developments resulted in a fourth quarter money supply growth rate that was about 1-1/2 percentage points below the roughly 5 per cent rate of growth that had been expected in consequence of the FOMC's decision at the last meeting. In the case of the adjusted bank credit proxy, it too grew somewhat less in December than had been indicated at the mid-December meeting, but the rate of growth was still substantial as extremely strong time deposit growth more than offset further declines in non-deposit funds. The latest estimates and the original target paths for the various monetary aggregates are compared in the following table: Recent Paths of Key Monetary Aggregates (Seasonally adjusted, billions of dollars) Money Supply (M1 ) Indicated at Last Meeting 1/ Actual Results Adjusted Credit Proxy Indicated at Last Meeting 1/ Actual Results 1970 Month October 213.0 213.0 324.8 324.8 November 213.8 213.5 326.9 326.7 December 215.5 214.7 331.6 331.0 214.5 214.5 214.2 328.3 331.0 330.2 332.7 333.2 328.3 330.7 330.1 331.4 331.7 334.0 331.6 Week ending Dec. 2 9 16 23 30 216.4 215.3 213.6 214.8 Jan. 6 215.6 214.1 214.9 215.5 215.4 % Annual Rates of Change % Annual Rates of Change Fourth Quarter 5.0 2/ 3.6 9.0 8.1 November over October 4.5 2.8 7.8 7.0 December over November 9.5 6.7 17.5 1/ 2/ 16.2 Alternative B path of previous Blue Book. 3.8 per cent annual rate for fourth quarter average over third quarter average. (2) That there might be a significant shortfall in money supply did not become evident until December 28, although there were some tentative indications of the direction of movement just before the long Christmas weekend. During the final days of December, it was still not known whether the preliminary estimate of a shortfall for the week of the -3- 23rd would be revised upward--as_had happened at times in the past--or how much of a year-end bulge in deposits might develop from the widely predicted heavy seasonal repatriation of Euro-dollars by corporations seeking to comply with balance of payments regulations. By January 4, however, more complete data indicated that the drop in the week of the 23rd was even larger than suggested earlier; the drop apparently reflected the accompanying very large pay-off of business loans and a marked increase in the Treasury balance. (3) The day-to-day behavior of the Federal funds rate since the last meeting of the Committee has been particularly volatile, as is often the case during the period around year-end. During the last two statement weeks of December the funds rate averaged 4.83 per cent, and then in the week ending January 6 it dropped to 3.82 per cent, largely because bank reluctance to borrow on the year-end statement date produced a low Federal funds rate which carried through the turn-of-the year holiday weekend. In the past two days, Federal funds have been trading mostly in a range of 4-3/8--4-3/4 per cent, with the Desk aiming most recently at about 4-1/2 per cent rate in the aggregates. in view of the weakness that has developed Net free reserves averaging about $120 million were published for the last two statement weeks, with year-end maneuvering and bad weather conditions leading to sizable excess reserves. (4) After a period of hesitation and even back-up in the last half of December, interest rates have declined in the last two days, with the largest drop in corporate bond yields. In early January the bank prime loan rate was reduced to 6-1/2 per cent, following the reduction to 6-3/4 per cent just before Christmas. The Federal Reserve discount rate was cut another 1/4 point to 5-1/4 per cent -4effective January 8; this reduction had already been well discounted by the market. Most recently the 3-month bill was quoted around 4.75 per cent. (5) The following table summarizes seasonally adjusted annual rates of change in major financial aggregates for selected periods. Third Quarter (Sept. over June) Fourth Quarter (Dec. over Sept.) Past Year (Dec. over Dec.) First Half of 1970 (June over Dec.) Total Reserves 7.2 -0.2 19.2 6.1 Nonborrowed Reserves 9.0 1.9 24.4 7.2 M 1 (Currency plus demand deposits 1/) 5.5 5.9 6.1 3.6 M2 (M1 plus time deposits at commercial banks other than large CD's) 8.3 6.0 11.0 9.2 M 3 (M2 plus deposits at thrift institutions) 8.0 5.4 10.7 9.8 10.4 6.0 15.9 12.1 Total member bank deposits (Bank credit proxy adj.) 8.3 3.5 17.2 8.0 Loans and investments of commercial banks 2/ 7.2 4.5 13.9 5.2 $14.8 $ 2.0 $ 8.5 $ 4.3 - Concepts of Money M4 (M3 plus large CD's) Bank Credit Short-term market paper (actual $ change) Large CD's Bank-related commercial paper Nonbank commercial paper 1/ 2/ - 1.9 3.3 - 3.2 2.1 - 1.4 3.0 2.2 2.5 Other than interbank and U.S. Government. Based on month-end figures. Includes loans sold to affiliate and branches. NOTE: All items are based on averages of daily figures, except for data on total loans and investments of commercial banks, commercial paper and thrift institutions--which are either end-of-month or last Wednesday of month figures. Prospective developments (6) Taking the December figures as a starting point, the table on the next page shows three patterns of growth for the monetary aggregates over the first quarter which the Committee may wish to consider. The three growth paths shown for the narrowly-defined money supply present alternatives that take account in differing ways of the recent shortfalls relative to expectations, as follows: (A) Alternative A shows a pattern consistent with a 6 per cent annual rate of growth for M 1 over the first quarter of 1971. This would be equal to the rate of growth for the quarter that the Committee indicated as the minimum acceptable at its last meeting, at a time when it was expected that fourth quarter growth would be 5 per cent. Thus alternative A does not make up for the fourth quarter shortfall. The growth rate for the fourth and first quarters taken together would be only about 4-3/4 per cent, as compared with the 5-1/2 per cent previously desired. As a result, under alternative A the March level of the money supply would be about $1 billion below previous expectations. (B) Alternative B shows a growth path for the first quarter which makes up for the shortfall in December and in the fourth quarter. The first quarter growth rate in this alternative is 7-1/2 per cent, which would lead to a March level for the money stock equal to that resulting from the earlier 5-1/2 per cent path for the fourth and first quarters taken together. (C) Alternative C, which has an 8-1/2 per cent annual rate of growth in the first quarter for M1,makes up for the shortfall and raises the growth rate in money supply for the September-to-March period back up to the 6 per cent rate of expansion experienced over the first three quarters of 1970. -7Alternative Paths of Key Monetary Aggregates--Monthly and Quarterly Money Supply Alt. A Alt. B Alt. C Adj. Credit Proxy Alt. A Alt. B Alt. C rotal Reserves Alt. A Alt. B Alt. C 1970 214.7 214.7 214.7 331.1 331.1 331.1 29.9 29.9 29.9 January 215.7 215.7 215.8 334.2 334.5 334.6 30.3 30.3 30.3 February 217.1 217.5 217.7 336.7 337.9 338.4 30.6 30.7 30.7 March 217.8 218.8 219.2 337.7 339.9 340.5 30.4 30.7 30.8 18 18 18 December 1971 Per cent Annual Rates of Growth December 6.7 6.7 5-1/2 5-1/2 6 February 8 10 10-1/2 March 4 7 8-1/2 3-1/2 4th Q 1970 3.6 3.6 3.6 8.1 8.1 1st Q 1971 6 7-1/2 8-1/2 8 10-1/2 January 6.7 16.2 16.2 16.2 11 12-1/2 12-1/2 14.0 15-1/2 17-1/2 12 13-1/2 11-1/2 14-1/2 16 7 7-1/2 -5-1/2 -1/2 1 8.1 6.6 6.6 6.6 6-1/2 10 11-1/2 9 11-1/2 -8(7) The range of money market conditions, as typified by the Federal funds rate, expected to be consistent over the next few weeks with the various paths for the aggregates are noted below. The large increases in the money stock, given the Federal funds rate, depend mainly on the resurgence in economic activity expected to result from the catch-up in GM auto output during the first quarter. How strong a resurgence will develop and how such a temporary bulge will affect money demand are additional uncertainties that compound the usual difficulties of specifying relationships between money market conditions and monetary aggregates. First qtr. annual rate of increase Federal funds rate Alternative Money Stock Bank Credit 8 A 5 --5-3/4 6 B 4 --4-3/4 7-1/2 10-1/2 C 3-1/4-- 8-1/2 11-1/2 (8) 4 The weekly paths between now and the next meeting for the various alternatives are shown in the table on the next page. (9) Realization of alternative A aggregates would require, in the staff's judgment, pushing the Federal funds rate up from its recent trading range of around 4-1/2 per cent. With nominal GNP projected to rise at an 11.7 per cent rate in the first quarter, strong transaction demands for money and a pick-up in short-term private credit demands are expected. Should the GNP projection and these money and credit demands be realized, short-term rates would rise in the process of keeping money growth down to 6 per cent. Although a tightening of the money market following a reduction in the discount rate would be rather puzzling -9Alternative Weekly Paths of Key Monetary Aggregates Money Supply Adj. Credit Proxy Total Reserves Alt. A Alt. B Alt C Alt. A Alt. B Alt. C 214.8 214.8 214.8 331.7 331.7 331.7 30.0 214.1 214.1 214.1 331.5 331.5 331.5 30.5 30.5 30.5 13 215.4 215.4 215.4 332.4 332.6 332.6 30.0 30.0 30.1 20 216.1 216.1 216.1 334.1 334.4 334.5 30.3 30.3 30,4 27 216.3 216.4 216.4 336.5 337.0 337.2 30.2 33.3 30.4 3 217.1 217.3 217.4 337.2 337.9 338.1 30.4 3).4 30.5 10 217.5 217.8 218.0 337.5 338.4 338.7 30.6 3).6 30.7 A It. A Alt. B Alt. 30.0 30.0 1970 December 30p 1971 January February 6e p -- Preliminary. e -- Estimated from partial data. C -10to the market, it would probably be interpreted as an effort to keep short rates up, and, with some lag, the 3-month bill rate would likely move back up toward the new 5-1/4 per cent discount rate. Marginal reserve measures would be tighter than recently prevailing. (10) Under alternative B, the money market may have to be eased from currently prevailing conditions; the funds rate was around 4-1/2 per cent on Friday and might have to be moved down into the lower half of the 4--4-3/4 per cent range specified. The 3-month bill rate would likely go into a 4--4-5/8 per cent range, but may not drop to the lower end of the range unless the Federal funds rate falls to 4 per cent or below for a sustained period of time. Under alternative C, which would probably require a funds rate below 4 per cent, the bill rate might also decline below 4 per cent, although expectations that rates were bottoming out might tend to inhibit such a decline in the 3-month rate. In either case, movements in the bill rate would be influenced by expectations as to future discount rate actions as well as by the nature of forthcoming Treasury financings. (11) The Treasury is expected to announce its mid-February refunding on January 20. Books will be open until Wednesday, January 27 on the exchange portion, and if there is a cash portion, an auction would be likely and would be held in early February. About $5 billion of publicly-held securities mature in February, but the Treasury is also likely to include in the exchange $1 billion of maturing March coupon issues, and may pre-refund other later maturing issues. A large refunding that accomplishes a noticeable amount of debt extension would tend to -11lower short-term interest rates,-partly as a result of demand for bills from holders of maturing issues not wishing to lengthen. Recent upward adjustments in interest rates on intermediate-term Government securities were partly in anticipation of such an enlarged refunding. (12) With the forthcoming Treasury refunding probably largely discounted by the market, with recent corporate issues well received, and in light of the still large spread of long- over short-term rates, it seems likely that longer-term interest rates will drop further, except under conditions specified for alternative A. Interest rate declines would tend to accelerate should the Federal funds rate move down significantly from prevailing levels. (13) Banks over the period ahead are likely to continue to be aggressive buyers of municipal and U.S. Government securities in order to lock in existing yields, Even though business loan demand may rise, net inflows of total deposits to banks are likely to be sufficiently strong to leave them with a substantial surplus of investment funds. Growth in time and savings deposits other than CD's, as well as large CD's, may slow somewhat from the advanced rate of the last half of 1970, in light of the projected acceleration in consumer durable goods spending, but is still likely to remain vigorous. Relatively more expansion in time deposits would be expected under alternatives B and C, in view of the anticipated further declines in market interest rates. With respect to nondeposit sources, banks will become even less willing holders of Eurodollars to the extent that domestic short-term interest rates decline further relative to Euro-dollar rates. The actual movement of bank Euro- dollar holdings will depend in large part on any further official action -12that may be taken to affect them. For the present projection, we have assumed a further drop in Euro-dollar holdings of about $300 to $400 million per month under Alternatives B and C. Possible directive language (14) This section presents possible language for the second paragraph of the directive for the three alternative policy courses discussed above. As will be noted, all three alternatives have the same second sentence, calling for bank reserves and money market conditions consistent with the objectives described in the first sentence. Also, the second sentence includes a reference to the forthcoming Treasury financing; as mentioned in paragraph (11), above, an announcement of the terms of this financing is expected on January 20. Finally, it will be noted that the structure of all three alternatives is similar to that in the directives the Committee was issuing before the December 15 meeting; it has been assumed that the Committee adopted a different structure in the second paragraph of the December 15 directive primarily because of special circumstances it expected to prevail during the period, encompassing the year-end, to which that directive applied. (15) Alternative A. This alternative is proposed for possible use if the Committee decides upon a 6 per cent target growth rate for the money supply in the first quarter, despite the shortfall in the fourth quarter from the 5 per cent rate that had been expected at the time of the last meeting. -13- To implement this policy, THE COMMITTEE SEEKS TO PROMOTE MODERATE GROWTH IN MONEY AND ATTENDANT BANK CREDIT EXPANSION OVER THE MONTHS AHEAD. System open market operations UNTIL THE NEXT MEETING OF THE COMMITTEE shall be conducted with a view to maintaining BANK RESERVES AND [DEL: attained] recently the money market conditions CONSISTENT WITH THOSE OBJECTIVES, TAKING ACCOUNT OF THE FORTHCOMING TREASURY FINANCING [DEL: until expected that provided Committee, of meeting next the be least at will credit bank and money in growth of rates achieved]. Unlike alternatives B and C below, the first sentence of this alternative does not indicate that the Committee desires to promote easier conditions in credit markets. Such a statement has been omitted since this directive might entail tighter money market conditions with potential consequences for credit markets generally. (19) use if Alternative B. This alternative is proposed for possible the Committee decides that the fourth-quarter shortfall in money should be made up in the first quarter. As indicated in paragraph (6B) above, attainment of the average March level of money contemplated by the Committee at the December 15 meeting would involve a growth rate for money over the first quarter of about 7-1/2 per cent. To implement this policy, THE COMMITTEE SEEKS TO PROMOTE SOME EASING OF CONDITIONS IN CREDIT MARKETS AND MODERATE GROWTH IN MONEY AND ATTENDANT BANK CREDIT EXPANSION. System open -14- market operations UNTIL THE NEXT MEETING OF THE COMMITTEE shall be conducted with a view to maintaining BANK RESERVES AND [DEL: attainged] recently the WITH THOSE OBJECTIVES, money market conditions CONSISTENT TAKING ACCOUNT OF THE FORTHCOMING TREASURY FINANCING until Committee, of meeting next the [DEL: provided and money in growth of rates expected the that bank achieved]. be least at will credit The phrase "some easing of conditions in credit markets" has been reintroduced here in line with the expectation noted in paragraphs (10) and (12). That interest rates--encompassing intermediate- and longer- term as well as short-term rates--would decline under this alternative. (20) Alternative C. This alternative is proposed for possible use if the Committee decides to seek growth in money over the first quarter at a faster rate than would be required simply to make up the fourth quarter shortfall. One possible growth rate under this alternative--8-1/2 per cent--was noted in paragraph (6C) above. To implement this policy, THE COMMITTEE SEEKS TO PROMOTE EASING OF CONDITIONS IN CREDIT MARKETS AND MORE RAPID GROWTH IN MONEY, WITH ATTENDANT BANK CREDIT EXPANSION, OVER THE MONTHS AHEAD. System open market operations UNTIL THE NEXT MEETING OF THE COMMITTEE shall be conducted with a view to maintaining BANK RESERVES AND [DEL: attained] recently the money market conditions CONSISTENT WITH THOSE OBJECTIVES, TAKING ACCOUNT OF THE -15- the of meeting next the until FORTHCOMING TREASURY FINANCING [DEL: Committee, in growth of rates expected the that provided achieved]. be least at will credit bank and money Whereas alternative B includes a statement to the effect that "the Committee seeks to promote some easing of conditions in credit markets," the word "some" is omitted in the corresponding statement in this alternative. This difference reflects the expectation that interest rates would decline somewhat more under this alternative--which calls for "more rapid growth in money"--than under alternative B. Table 1 STRICTLYCONFIDENTIAL (FR) PATHS OF KEY MONETARY AGGREGATES January 11, 1971 SEASONALLY ADJUSTED Monthly Pattern in Billions of Dollars 1970: 1971: Sept. 324.5 324.5 212 8 212.8 218.5 218.5 Oct. Nov. Dec 324.8 326.9 331.6 324.8 326.7 131.) 213.0 213.8 215. 213.0 213.5 21/.7 222.2 225.0 229.7 222.2 225.0 210.3 29.1 29.2 29.7 29.4 29.5 29.9 334.6 337.3 334. 5 337 . 3 341.5 138. 8 216.9 217.9 218.8 /15 7 717 t 218.1 233.4 237.6 241.4 234.5 238.9 241 .4 30.1 30.0 30.2 30.3 30.6 30.5 1.4 14.1 32.2 21.6 -2.9 2.6 19.2 6.0 -2.9 2.6 19.2 p Jan. Feb. Mar. (proj.) (proj.) (proj.) 6.2 6.2 16.5 16.5 29.2 Annual Percentage Rates of Change--Quarterly and Monthly 1970: 1st 2nd 3rd 4th Qtr. Qtr. Qtr. Qtr. p 0.5 6.5 17.2 0.5 6.5 17.2 5.9 5.8 6.1 5.9 5.8 6.1 9.0 8.1 5.0 3.6 1.4 14.1 32.2 20.5 12.0 9.5 6.0 6.5 20.5 19.5 6.6 7.5 1971: 1st Qtr. (proj.) 1970: Sept. 29.8 29.8 27.5 Oct. Nov. Dec. p 20.3 15.1 25.0 20.3 15.1 28.3 -3.6 3.5 18.5 Jan. Feb. Mar. (proj.) (proj.) (proj.) 19.5 21.5 19.0 22.0 22.5 12.5 16.5 -3.0 8.5 Nov. 4 11 18 25 325 5 326.0 326.7 327.8 325.5 326.0 326.7 327.7 212.7 213.7 213.9 713.8 212.7 213.1 213.9 213.6 223.4 223.8 224.9 226.1 223.4 223.8 224.9 226.0 11.2 13.0 13.0 12.4 29.4 29.4 29.5 29.4 29.6 2 9 16 23 30 p 328.3 131 0 330.2 332.7 3 13. 328.3 330.7 330.1 331.4 331. 1 214.5 214.2 715.3 213.6 214.8 227. 1 228.4 229.1 230.3 230.6 227.2 228.8 229.7 231.6 232. 1 11.7 12.0 12.0 11.9 11.8 29.7 29.7 29.7 29.8 29.7 29.7 29.7 331.h 214.5 214.9 215 5 71 .4 216.4 215.6 332.6 216.'5 214.1 215.4 232.7 232.3 232.8 233.6 11.7 11.6 30.2 30.1 30. 30 0 1971: 7. 5 27.5 - 1.9 3.6 18.0 14.0 12.5 - 4.0 Weekly Pattern In Billions of Dollars 1970: Dec. 1971: NOTES: Jan. 6 (proj.) 13 (proj.) 334 0 331 3 29.4 29. 5 ?9.8 10.1 jo. I 10 Annual rates of h nne ,iher than thoe for the past are rounded to the nearest half per cent. 1/ Path show annual rates of increase of monfv e iyppiv and the ad )usled credi t proxy for the fourth and first quarters that represent "expected rate ofI t growth" referred to In thl FOMWdirective adopted Dncembor II; these were rates of growth for November ani December together as projected at tie t impeof the last rOMr meet inR . 0 FR 712 - D CONFIDENTIAL (FR) Table 2 AGGREGATE RESERVES AND MONETARY VARIABLES 1 RETROSPECTIVE CHANGES, SEASONALLY ADJUSTED (In per cent, annual rates based on monthly averages of daily figures) Reserve Aggregates Monetary Variables 2 3 Total 4 Money Supply Total Period Total Reserves Annually 1968 1969 1970 p Nonborrowed Nonborrowed Reserves Member Member Bank Deposits Currency Time Deposits Adjusted + 7.4 + 6.0 + 6.5 + 7.9 +11.1 + 2.4 + 5.1 - n.a. - 1.2 + 5.1 + 6.5 + 5.4 + 4.7 + 0.1 - + 3.5 +12.9 + 5.9 + 7.8 4 5.0 + 5.3 + 4.9 - 4.3 + 2.0 + 0.8 + 1.6 + 4.5 + 6.2 + 0.3 + 0.5 + 5.9 + 6.5 +17.2 + 8.1 + 5.8 + 6.1 + 3.6 + + + 4 + + + + + 1.4 +14.1 +32.2 +21.6 + / 7 + 1.6 + 1.2 + 2.7 -17 De< . -11.7 + 9.7 + 6.3 - Jan. Feb. + 3.1 -12.0 4 7.2 -15 .6 4 7.5 - +14 0 +10.7 June +21.3 -13.9 4 0.5 175.4 4I' 1 .0 .0 + '6.7 116.8 July Aug. Sept. + 6.0 +23.3 +27.5 -16 I V. H. 8 1, 11. Get. Nov - 1.6 + 7.2 411. 1st Half 1970 2nd lHalf 1970 p -0.2 +16.0 + 1.9 4 3.1 +1 '.9 t19.9 Quarterly 3rd Qtr. 1969 4th Qtr. 1969 - 9.3 + 1.4 - 4.8 - 0.1 + 0.1 Qtr. Qtr. Qtr. Qtr. - 3.9 - 2.9 + 2.6 +19.2 + 6.6 1970 1970 1970 1970 p Monthly 1969" Sept. Oct. Nov. Mar. Apr Mly Dec p - 1.7 2.4 - 0.4 4 4 1 441 +24.4 + 7 .2 - 3.5 - 4.6 - 9.4 + 06 4 6.0 +24.1 +14.8 7.9 4 4.4 +18.0 +16.1 + 1.5 +14 -12.7 + 2.3 - + 1.4 0.4 - + 3.7 +40 7 3.7 - 0.7 + 3.0 + 1.9 +20 0 -11 7 -14 7 +10.3 +15.3 + 2.5 +10.5 + 3.0 + 2.2 +19.7 +10.9 +11.4 + 5.7 + 7.5 4 2.5 + 4.4 + 8.9 419.0 +18.1 +23.2 + 9.7 +35.6 +28.8 +29.8 110.1 413.1 t20.6 I 1.1 + 7.0 +16.7 I + 6.8 + 1.1 + 2.8 + 6 .7 - - 1.2 + 6.6 + 5.7 + 7.5 + 4.9 + 7.4 - 0.7 + 2.2 1 6.6 + 3.7 8.0 +20.3 +15.1 428.3 - 4.2 + 2.8 nher 1, Iq/10 1 6 4 66 7 +15 4 0 4 + 8.1 471 + 5 1 +10 7 - 17 +61 +1(1. + 6 1 +10.5 + 10.1 + R.8 n.a. 3 -88 4 -14 1 453.1 4- 1 A -37.5 107.0 - A iprepate reserve s.erles have hIen idJusted Io el minnte chanRes in percentage reserve requirements against deposits, but reserve requirements on Euro-dollai horriowiigs arrc in Imhd hIvI:1iitnii * it t'o1 r 16. 1969, and reqii rements on bank-rolated commpr Ial paper are in luded h pinniny Ot 1 +31.0 S422 4 3.7 + 9.9 + 5.2 + 2.3 + 1.7 + 6.9 +10.0 0 + 7.0 n.e. +13.7 - 1.2 + 7.0 4, ' n.a. 413.2 414 3 -17 7 + 11.2 - - 1031 + 4.3 + 1.2 +11.2 3.5 5.5 na n A + 7.8 +27 8 - 6.8 +12.9 - +463 6 3 + 3.4 na n a. + 9.9 4.2 8.0 Commercial Paper +77 6 + 0.8 Nonbank Instit Deposits + 1.9 + 5.2 + 5.2 + 7.8 + 0.8 + 3.6 5.3 5.3 6.7 2.7 Thrift + +.84 8 3.5 6.6 + 9.4 - 4.1 +12.3 +12.1 -I 6.1 9.4 3.3 6.6 + 4.7 +18.3 + 7.9 + 7.9 + 2.6 +13.1 - + 1.2 5.0 + 2.4 + 1.8 + 0.6 9 + 5.5 1.9 S1 NOTE. Total 7 Private Demand Deposits + 7.8 + 3.1 + 5.5 - + 0.7 1970: Adusted Credit Proxy 11, 1971 Addenda 10 9 n.a n.a. + 8.3 4 9.0 - 4 0 + 7.8 Semi-annually 1st Half 1969 2nd lialf 1969 1st 2nd 3rd 4th Adusted 8 January FR 712 - E Table 3 CONFIDENTIAL (FR) AGGREGATE RESERVES AND MONETARY VARIABLES January A, 1971 SEASONALLY ADJUSTED (Based on averages of daily figures) lember Bank Deposits Total S. Gov. Demand 6 7 Total Currency 1970: Privat Total 10 lo Demand Deposits (In billions of dollars) Jan. Feb. Mar. 28,139 28,060 27.972 27,318 27,206 27,024 27.902 27,832 27.729 297.0 296.7 294.2 198.1 199.3 200.1 43.6 43.8 44.1 154.5 155.5 156.0 203.7 203.2 202.5 21.8 20.2 18.9 181.9 182.9 183.6 Apr. May June 27.775 28,235 28,056 26,754 26.888 26.705 27,614 27,942 27,742 295.4 295.1 292.6 201.0 201.6 202.4 44.2 44.5 44.8 156.8 157.1 157.6 202.1 201.7 201.2 18.2 17.4 15.8 184.0 184.3 185.4 307.5 25.5 July Aug. Sept. 27,530 27,401 27.402 26,275 26,214 26.383 27,334 27,161 27,144 288.0 285.3 285.7 203.1 202.6 202.8 45.0 45.2 45.3 158.1 157.4 157.6 198.1 195.4 194.8 14.1 12.5 12.0 184.0 182.9 182.8 305.7 303.8 304.2 26.1 26.6 27.5 Oct. Dec. 27.354 27.783 27.928 26,210 26,538 26,806 27,129 27.548 27,707 283.5 285.8 285.8 203.2 203.5 203.6 45.6 45.9 46.0 157.6 157.6 157.7 194.2 194.0 194.6 11.5 11.1 11.2 182.6 182.9 183.4 302.2 305.5 305.7 27.9 28.2 29.0 Jan. Feb. Mar. 28,001 27,722 27,723 26.966 26.615 26,782 27,823 27,523 27,536 284.8 282.9 286.2 205.2 204.5 206.6 46.2 46.4 46.7 159.0 158.1 159.8 193.3 193.5 195.3 10.6 10.6 11.5 182.7 182.9 183.8 304.8 303.4 306.1 29.1 30.0 30.0 Apr. May June 28,216 27,890 27,902 27,350 26,916 27,056 28.046 27,692 27,713 290.2 289.1 290.5 208.3 209.2 209.6 47.1 47.7 47.8 161.2 161.6 161.9 198.5 200.3 202.2 12.9 13.2 13.2 185.6 187.1 189.0 309.6 309.3 311.1 31.8 32.0 31.0 July Aug. Sept. 28,041 28,585 29,240 26.694 27,780 28,708 27,896 28,408 29,024 296.0 303.2 308.0 210.6 211.8 212.8 48.1 48.2 48.2 162.5 163.7 164.6 208.2 213.2 218.5 16.9 19.0 21.7 191.3 194.2 196.8 315.8 321.9 324.5 28.8 28.4 29.7 Oct. Nov. Dec, 29,385 79,474 29,913 28.928 29.013 29,572 29,134 29,233 29,702 310.6 314.0 319.4 213.0 213. S 214.7 48.5 48.7 49.0 164.5 164.8 165.7 222.2 225.0 230.3 23.2 23.9 26.0 199.1 201. 1 204.3 324.8 326. 7 331.1 30.5 29.5 32 2 Nov. 1970: Time 0 9 8 (In millions of dollars) 1969: Commer Money Supply p n.a. n.a. Nov. 4 11 18 25 29,363 29,394 29,520 29,409 28,970 20,957 29,167 28,820 29.045 29,237 29,302 29,205 312.3 313.0 313.7 315.3 212. 7 213.1 213.9 213.6 48.6 48.6 48.7 48.6 164.2 164.4 165.2 165.0 223.4 223.8 224.9 226.0 23.4 23.5 23.7 24.3 200.0 200.3 201.2 201.7 325.5 326.0 326.7 327.7 30.4 31.0 31 .2 31 .2 Dec. 2 9 16 23 p 30 p 29,714 29,719 29,817 30,052 30,037 29,299 29,234 29,343 29,717 30.006 29,322 29,433 29,732 29,819 316.6 318.6 318.6 319.6 320.5 214.5 214.1 215.3 213.6 214.8 48.6 48.9 49.0 49.1 49.1 165.9 165.4 166.3 164.4 165.7 227.2 228.8 229.7 231.6 212.1 24.7 25.4 25.8 26.4 26 A 202.5 203.3 203.9 205.2 205.3 328.3 330.7 330.1 331.4 11 7 30.9 31 .0 29.8 29.7 29.5 29.899 NOTES: Aggregate reserve series have been adjusted to eliminate changes in percentage reserve requirements against deposits, but reserve requirements on Eurodollar borrowings are included heginning October 16, 1969, and requirements on bank-related commercial paper are included beginning October 1, 1970. Adlijsted credit proxy includes mainly total member bank deposits sublect to reserve requirements, hank-related commercial paper, and Euro-dollar borrowings of I.S. hanks. Weekly data are daily averages for statement weeks. Monthly data are daily averages except for nonbank commercial FR 712-F paper figures which are for last day of month. Table 4 (Dollar amounts MARGINAL RESERVE MEASURES in millions, based on period averages of daily Me Free reserves Period Monthly (reserves weeks ending in): 1969--January February March April May June July August September October November December 1970--January February March April May June July August September October November December p Excess reserves figures) Borrowin Banks ty C Reserve Other Major banks th (Outside N Y. 8 N.Y irber Total g Country - 477 - 580 - 635 - 844 -1,116 -1,078 -1,045 - 997 - 744 - 995 - 975 - 849 359 256 202 187 243 277 266 214 282 195 238 278 836 836 837 1,031 1,359 1,355 1,311 1,211 1,026 1,190 1,213 1,127 131 62 58 85 123 57 89 81 83 106 120 268 302 255 233 411 346 459 250 253 236 327 387 310 149 215 254 260 397 288 364 256 222 293 250 220 253 304 293 275 493 550 608 621 485 464 456 329 - 759 - 916 - 751 - 687 - 765 - 736 -1,134 - 706 - 374 - 271 169 210 129 178 159 171 183 175 235 196 218 250 928 1,126 880 865 924 907 1,317 881 609 467 408 348 148 106 90 227 165 140 218 143 101 12 42 37 287 317 225 331 241 289 460 278 115 40 17 16 232 289 287 119 228 217 348 273 274 312 293 265 261 414 278 188 290 261 291 187 119 103 56 30 - 190 - 98 1970--July 1 8 15 22 29 -718 -1,219 -1,451 -1,201 -1,078 273 75 230 185 153 991 1,294 1,681 1,386 1,231 93 360 467 139 29 260 412 569 531 528 304 283 371 395 388 333 240 274 321 286 Aug. 5 1? 19 26 - 822 854 - 589 - 522 188 280 92 138 1,010 1,174 681 660 114 382 21 56 362 362 243 144 303 300 229 262 231 130 188 198 2 - 482 348 144 -507 -389 17 41 356 -47 272 660 763 500 460 661 79 lo0 89 75 103 181 143 93 77 79 221 343 224 259 324 179 117 94 49 155 - 46 409 -388 242 3 2 41 200 196 398 450 586 433 21 16 11 4 46 97 13 305 310 342 292 89 73 133 117 - 105 163 - 166 - 327 318 282 164 108 423 445 3'0 435 69 0 86 15 29 1 22 311 282 295 287 86 65 34 40 - 60 -153 - 279 66 68 174 394 138 120 258 338 581 454 291 399 324 270 407 86 22 55 39 48 301 264 268 249 245 253 45 27 28 25 25 26 Sept. 9 16 23 30 Oct. Nov. 7 14 21 28 4 11 Il In 25 Dec. 2 Jan. 9 16 23 p 30 p 6 p p - Preliminary. - fl __________________ .& 11 72 L 56 A I Table 5 SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes (Dollar amounts in millions of dollars, based on weekly averages of daily figures) Total Federal Reserve credit (Excl. float) Period Year 1968 (12/27/67 - 12/25/68) 1969 (12/25/68 - 12/31/69) U.S. Government securities _Federal Total Bills 1/ holdings +2.143 ( +4,779 ( +3,757 +5,539 +3,298 +5,197 + 544 + 231 +1,181 + 445 - 73 + - + + - 632 194 230 + - Other &#45;&#45;&#45; ) ) +1,176 + 707 Repurchase Agency agreements Securities S 21 + 206 + Bankers' Member banks acceptances 3 67 borrowings + 514 + 74S + + 104 301 + - 117 - 221 Weekly 1970--July Aug. Sept. Oct. Nov. Dec. Jan. 1/ 1 8 15 22 29 - 5 12 19 26 185 - 460 + + + 362 591 231 + + + 540 462 653 - 343 - 243 + + + + 164 316 14 864 418 2 9 16 23 30 + + 189 473 - 248 982 + 689 7 14 21 28 - 482 5 224 479 + - - 67 - 268 692 + - + 671 4 - 141 - 2 9 16 23 p 30 p + 986 + 103 697 - 123 142 - 6 p + + Figures in 938 183 56 + S 48 + 4 11 18 25 - + + 610 75 711 445 (+ 145) ) 73 ( --- + + + + + 99 61 188 - 38 (+ 71) ( -) ( -) ( -) + + 247 196 + - 33 28 + - 9 452 + 45 S 50 &#45;&#45;&#45; + + + 133 123 250 + + ( 638 (42 (- 293 266 644 209 -- ) 29) 42) + 632 - 444 - ) ) + + 31 ( 193 ( - 236 (358 (- 90) 256) + 222 (+ 346) -165 -16 63 + - ( ( ( ( 241 (94 ( -- ) ---- ) ) ) 1 + 42 ( 772 4 537 (- parenthesis reflect reserve effect of ,.itch sqnle-purchase ) ) -- ) 189) agreement. + 185 + 261 57 + 136 - 151 S - 22 11" + - 10 165 + 100 + 321 S 45 &#45;&#45;&#45; 201 51 258 - 328 ( ( + 41 37 22 6 - 21 + 100) -1CH + + + (- + 12 17 13 S 40 + 21 73 S 30 24 + 7 64 - 337 177 853 145 586 - 35 - + + + 107 500 144) S 29 491 201 63 6 6? + - 516 (- 164 - + + 202 + 155 + 29 11 13 - 47 - 25 4 16 295 10 7 26 + + + + + - + 1 63 23 37 44 - + -- 5 + + 11 5 + 5 - 14 + + ) (- 286 S 18 56 83 205 150) 509 + + + - 369 19 407 ( 32 196 + + 4 4 506 ?14) -) + 913 - + 13 37 S 12 S 38 + 49 - - 28 40 In - + 75 54 117 

Federal Reserve (1971, January 11). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19710112

@misc{wtfs_bluebook_19710112,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1971},
  month = {Jan},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19710112},
  note = {Retrieved via When the Fed Speaks corpus}
}