Bluebook

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Content last modified 6/05/2009. (CONFIDENTIAL FR) April 2, 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 April 2, CONFIDENTIAL (FR) 1971 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) The money supply, both narrowly (M1) and broadly (M2 ) defined, grew more rapidly in March than targeted in the last bluebook, Growth in the adjusted bank credit proxy, however, as the table shows. fell somewhat short of its target rate. If these March figures are not significantly revised, M1 will have grown at about an 8 per cent annual rate over the first quarter and at around a 5-3/4 per cent annual rate since September. Recent Rates of Growth in Key Monetary Aggregates (Per Cent Annual Rates of Change) I March Bluebook Path M 5.5 1 Actual 1/ 9.4 First Quarter Bluebook Path Actual 1/ 7.0 8.2 M2 13.5 17.8 15.5 17.4 Adjusted Proxy 12.0 8.5 12.0 10.7 1/ Week ending March 31 is partly estimated. (2) Shortly after the last Committee meeting, deposit data coming available for the first two weeks ending in March suggested that levels of M1 and M 2 were running well above their bluebook target paths. As a result, annual growth rates for both money supply measures appeared their bluebook targets by more than the 3 to 4 percentage to be exceeding point deviation allowable under the directive proviso. In light of this development, the Desk adjusted the sights of its open market operations slightly, aiming at a Federal funds rate in a 3-1/2 to 3-3/4 per cent range. Later in sustained in the month, the money supply remained above target levels, part by a much sharper drop in U.S. Government deposits at banks than had been projected at the time of the last meeting. The short- fall in Government deposits occurred chiefly because the Treasury had to delay planned new financing until Congress raised the Federal debt ceiling. The greater than anticipated drop in Government deposits also explains most of the shortfall in the bank credit proxy below target, although the further run-off of Euro-dollar borrowings by major banks was appreciably larger than assumed. Recent Paths of the Key Monetary Aggregates (Seasonally adjusted, billions of dollars) M2 M1 Bluebook Path Actuals Bluebook Path Actuals Adjusted Credit Proxy Bluebook Path Actuals Month February March 217.3 218.3 217.3 219.0e 430.7 435.4 430.8 437.2e 337.7 341.1 337.7 340.1e Week ending Mar. 3 10 17 24 31 217.3 217.8 218.5 218.8 218.7 218.5 218.3 218.5 219.3 220.5e 432.8 433.9 435.5 436.5 437.2 434.6 435.2 436.2 438.5 440.4e 338.9 340.4 341.5 341.6 341.1 339.6 340.4 340.5 338.9 340.2e e--Estimated. (3) Even though the Desk has been aiming over most of the inter- meeting period at a Federal funds rate in the 3-1/2 to 3-3/4 per cent range, unforeseen technical factors have continued to push the funds rate to or above the high end of this range, despite very large System repurchase agreements with dealers. In the tax date week, ending March 17, the effective funds rate averaged over 3.90 per cent, and in the week ending March 31, the average slightly exceeded 4.00 per cent. A succession of large daily shortfalls in Desk estimates of reserve availability from float and the Treasury balance intensified the money market tightness in the tax date week. In the latest week, which included the publication date for bank statements, normal pressures arising from bank desires to avoid borrowing on the final day of the quarter were strongly accentuated by heavy dealer demands for financing, including the need to pay for the new tax bill noted below. In the week ending March 31, net free reserves amounted to $163 million, as a number of major banks--uncertain about their statement date positions--ran cumulative reserve surpluses in excess of what could be carried over. In the tax date week, net borrowed reserves averaged about $55 million, while in the statement week ending March 24 they averaged $270 million. Member bank borrowings averaged about $290 million over the three week period. (4) Treasury bill yields, while fluctuating rather widely since the last meeting of the Committee, show net advances for the period of as much as 35 basis points. quoted around 3.65 per cent. Most recently, the 3-month issue has been Other short-term interest rates have shown less variability than Treasury bill rates, but have also tended to back up somewhat in response to the changes in bill rates. A key factor in the recent rise of short-term rates has been the heavy volume of Treasury cash financing in the bill market. These operations involve a $2 billion addition to the April tax bill (auctioned March 24 for payment March 30 without tax and loan credit); a $2.2 billion bill strip (auctioned March 31 for payment April 6); and $800 million of new 6-month bills (being offered $200 million at a time in the four weekly auctions starting March 22). Moreover, with the Federal funds rate tending to rise over the period, and with no further Federal Reserve cut in the discount rate, market participants began to ask whether the System might be moving toward a somewhat tighter money market stance in view of large short-term capital outflows from the U.S. and resultant uneasiness in foreign exchange markets and in light of the recently more rapid growth of the monetary aggregates. This tended to encourage the modest rise in short-term rates and was also a factor in the recent hesitation in capital markets and the partial reversal of long-term rate declines. (5) The table on the next page summarizes seasonally adjusted annual rates of change in major financial aggregates for selected periods. Third Quarter (Sept. over June) Fourth Quarter (Dec. over Sept.) First Quarter (Mar. over Dec.) Last 6 months (Mar. over 8.9 Total Reserves 19.1 11.0 Nonborrowed Reserves 24.4 11.0 Sept.) 10.3 Concepts of Money M1 (Currency plus demand deposits 1/) 5.8 6.1 3.4 8.2 M 2 (M1 plus time deposits at commercial banks other than large CD's) 11.0 9.2 17.4 13.5 M 3 (M2 plus deposits at thrift institutions) 10.3 9.7 18.2 3/ 13.2 4/ Bank Credit Total member bank deposits (Bank credit proxy adj.) Loans and investments of commercial banks 2/ 17.2 10.7 9.6 13.9 13.3 9.8 Short-term market paper (actual $ change in billions) Large CD's $ 8.5 $ 4.3 Bank-related commercial paper N.S.A. -3.0 - 2.3 Nonbank commercial paper - 1.2 1.5 $ 1.9 0.7 3/ $ 6.2 - 1.5 4/ - 0.5 Other than interbank and U.S. Government. Based on month-end figures. Includes loans sold to affiliates and branches. February 1971 over December 1970. February 1971 over September 1970. N.S.A. Not seasonally adjusted. 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) The table on the next page shows three alternative monthly paths for key monetary aggregates through the second quarter. Money market conditions now estimated to be consistent with these paths are noted below, using the annual rates of growth in M 1 as an index of the collection of aggregates. Federal funds rate Alternative A 3-3/4 Member Bank Borrowings Net Reserves M1 250-350 +50 to -150 9% Alternative B 4 -- 4-3/4 400-500 -150 to -300 7% Alternative C 4-3/4--5-1/2 500-600 -250 to -400 6% (7) The money market specifications for alternative A include a Federal funds rate around 3-3/4 per cent, the most recent Desk operating target. The Federal funds rates assumed to be consistent with the various monetary aggregate paths are all somewhat higher than specified at the time of the last FOMC meeting for given second quarter growth rates in M1 . This is partly because demand for M 1 in March was stronger than anticipated under prevailing money market conditions. The funds rates have been moved up more for alternatives B and C, since these alternatives involve a slowing in the M 1 growth rate over the second quarter from the recent pace and since there is one month less than there was at the time of the last meeting to affect public demand for cash balances in the second quarter. -7Alternative Monthly and Quarterly Paths of Key Monetary Aggregates (Seasonally adjusted, billions of dollars) M2 Alt. 1971 February March April May June A 217.3 219.0 220.8 223.1 224.0 B Alt. C Alt. A Alt. B Alt. C 217.3 219.0 220.6 222.3 222.8 217.3 219.0 220.5 221.9 222.4 430.8 437.2 442.2 447.1 450.1 430.8 437.2 442.0 446.1 448.5 430.8 437.2 441.8 445.5 448.0 Alt. Per Cent Annual Rates of Growth March April May June 9.4 10.0 12.5 5.0 1st Q. 1971 2nd Q. 1971 9.4 9.0 9.0 2.5 9.4 8.0 7.5 2.5 17.8 13.5 13.5 8.0 17.8 13.0 11.0 6.5 17.8 12.5 10.0 6.5 8.2 7.0 8.2 6.0 17.4 12.0 17.4 17.4 10.0 Total Reserves Adjusted Credit Proxy Alt. A 1971 February March April May June 337.7 340. 1 343.5 345.0 346.7 Alt. B 337.7 340.1 343.4 344.2 345.8 10.5 Alt. C 337.7 340.1 343.3 343.8 345.2 Alt. A 30.5 30.7 30.8 31.3 31.3 Alt. B 30.5 30.7 30.8 31.2 31.1 Alt. C 30.5 30.7 30.8 31.2 31.0 Per Cent Annual Rates of Growth March April May June 8.5 12.0 5.0 6.0 8.5 11.5 3.0 5.5 8.5 11.5 3.0 5.0 8.5 4.0 18.0 -1.5 15.0 - 5.0 1st Q. 1971 2nd Q. 1971 10.7 8.0 10.7 6.5 10. 7 11.0 7.0 11.0 4.0 6.0 8.5 3.0 8.5 2.5 14.0 - 6.5 11.0 3.5 -8(8) Under all three alternatives, growth rates in M 2 are expected to slow from the exceptionally rapid first quarter pace. Growth in time and savings deposits other than large CD's has slowed somewhat in recent weeks. It is expected to slow further as a result of spreading downward adjustment by banks in rates offered on time deposits and as the public's shift from market to deposit assets tends to lose force. Growth in the bank credit proxy in the second quarter may also be slower than in the first. With banks already quite liquid and loan demand expected to be modest, large CD's are expected to grow relatively little over the quarter, although banks may seek longer-term CD's more actively if expectations of rising interest rates become prevalent. Liabilities to foreign branches are assumed to decline more slowly--apart from an abrupt adjustment related to financing of the recently announced offshore Treasury issue--as the cost of holding the relatively small amount of such liabilities remaining becomes less burdensome. After the new Treasury certificate goes on the books, about half of the banks' remaining Euro-dollar base would be in the form of high-yielding Ex-Im Bank and Treasury securities. (9) Assuming a Federal funds rate trading around 3-3/4 per cent growth in M 1 in April--at around 10 per cent--is expected to be little changed from the March pace. In large part this growth rate reflects the high level of demand deposits already reached by the end of March; if there were no change from that level during April, M 1 would average 8 per cent higher than in March. Even at the higher funds rates specified under alternatives B and C, the slowing in the growth rate -9in April is likely to be modest, with more of an effect later in the quarter. Weekly paths for the various monetary aggregates are shown in the table on the next page. With money market conditions as specified for alterna- (10) tive A, the 3-month bill rate is likely to be in a 3-1/4--3-3/4 per cent range between now and the next meeting of the Committee. demand from the $4-1/4 billion maturing April tax bill, Reinvestment temporary purchases from the proceeds of a large though diminishing volume of capital market financing, temporary investment of State and local tax receipts,and potentially large demands from foreign monetary authorities may exert downward pressure on bill rates. However, higher Federal funds rates--such as contemplated under alternatives B and C--would likely raise bill rates significantly--with the 3-month bill perhaps up to ranges of 3-3/4--4-1/2 per cent and 4-1/2--5-1/4 per cent, respectively--as dealers attempt to get out from under sizable bill positions. The Treasury is expected to announce its mid-May refund- (11) ing on April 28. Nearly $6 billion of publicly held securities mature. It is too early to tell whether an advance refunding will be undertaken and/or whether some new cash will be raised in conjunction with the refunding. The possibilities of an advance refunding will depend in part on whether or not money market conditions tighten significantly between now and then. The Treasury may, however, offer a coupon issue maturing in more than seven years as a part of the mid-May financing. -10Alternative Weekly Paths of Key Monetary Aggregates (Seasonally adjusted, in billions of dollars) M2 Alt. 1971 March April May A Alt. B Alt. C Alt. A Alt. B Alt. C 24p 219.3 219.3 219.3 438.5 438.5 438.5 31e 220.5 220.5 220.5 440.4 440.4 440.4 7 220.6 220.6 220.6 441.0 441.0 441.0 14 221.6 221.5 221.5 442.6 442.5 442.5 21 219.7 219.5 219.4 441.4 441.2 441.1 28 221.3 221.0 220.8 443.6 443.3 443.0 5 221.3 220.8 220.6 444.6 443.9 443.6 Adjusted1 Credit Proxy Alt. A 1971 March April May Alt. B Alt. Total Reserves C Alt. A Alt. B Alt. C 24p 338.9 338.9 338.9 30.5 30.5 30.5 31e 340.2 340.2 340.2 31.0 31.0 31.0 7 342.4 342.4 342.4 30.6 30.6 30.6 14 343.4 343.4 343.3 30.6 30.6 30.6 21 343.9 343.8 343.7 31.1 31.0 31.0 28 344.0 343.7 343.6 31.0 31.0 30.9 5 345.0 344.5 343.3 31.3 31.2 31.2 p--Preliminary. e--Estimated from partial data. -11(12) Long-term markets are likely to remain sensitive to money market conditions as indicators of Federal Reserve policy. Thus, attain- ment of the conditions specified in alternative A would be likely to reinforce other trends in capital markets now expected to contribute to some further decline in long-term rates, as noted in the Greenbook. On the other hand, if money market conditions are made firmer, as specified under alternatives B and C, shifts in market expectations about the course of short-term rates and monetary policy might tend to offset the underlying trends. A rise in long-term rates would seem likely if the Federal funds rate were to trend convincingly above 4 per cent, with the rise in long rates largest if money market conditions were to tighten as much as specified under alternative C. -12- Possible directive language (13) use if Alternative A. This language is proposed for possible the Committee decides to retain the form of the present directive, involving a primary instruction concerned with money market conditions and long-term interest rates and a proviso clause relating to the aggregates. "To implement this policy, System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining prevailing money market conditions while accommodating any downward movements in long-term rates; provided that money market conditions shall be modified if it appears that the monetary and credit aggregates are deviating significantly from the growth paths expected, TAKING ACCOUNT OF THE FORTH- COMING TREASURY FINANCING." With respect to the proposed reference to the forthcoming Treasury financing (in this and the other alternatives) the Treasury's announcement is expected on April 28, as indicated in paragraph (11) above. Committee adopts this alternative, it If the may wish to consider the money market conditions noted for alternative A in paragraph (6) as a description of "prevailing" conditions, and for purposes of the proviso clause, the aggregate growth paths discussed earlier in tive A as the "expected" paths. to adopt connection with alterna- The Committee could also specify a slow- er growth path for purposes of the proviso, the effect of which would be to -13activate the proviso sooner if the staff projections prove to be correct. Or, if the Committee so desires, it could use a directive with a structure similar to alternative A but with the specifications for money market conditions and aggregates given above in connection with alternative B or C. In such a case, the language preceding the proviso clause might be modified to call for "attaining firmer money market conditions;". (14) Alternative B. This language is proposed for possible use if the Committee decides (a) to formulate its primary instruction in terms of desired growth rates for the aggregates, and (b) to adopt as targets the growth rates (including a 7 per cent second-quarter rise in M 1 ) discussed earlier in connection with alternative B, which would be somewhat more moderate than the rates experienced recently, "To implement this policy, THE COMMITTEE SEEKS TO PROMOTE SOMEWHAT MORE MODERATE GROWTH IN MONETARY AND CREDIT AGGREGATES OVER THE MONTHS AHEAD, WHILE CONTINUING TO MEET SOME PART OF RESERVE NEEDS THROUGH PURCHASES OF COUPON ISSUES IN THE INTEREST OF PROMOTING ACCOMMODATIVE CONDITIONS IN LONG-TERM CREDIT MARKETS. System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining [DEL: prevailing BANK RESERVES AND money market conditions CONSISTENT WITH THOSE OBJECTIVES, TAKING ACCOUNT OF THE FORTHCOMING TREASURY FINANCING [DEL: movedownward any accommodating while ments market] money that provided rates, term long in -14- the that appears it if modified be shall conditions [DEL: monetary signifideviating are aggregates credit and expected]." paths growth the from cantly Accommodation of declines in long rates is not listed as a specific Committee objective under this (and the following) alternative because of the likelihood that such rates would rise if the money market is firmed to the degree that would appear to be necessary to achieve the However, a reference is suggested to aggregate growth rates specified. purchases of coupon issues "in the interest of promoting accommodative conditions in long-term credit markets" on the assumption that even if the Committee adopts this alternative it will want to index a concern with conditions in capital markets. (15) Alternative . This language is proposed for possible use if the Committee decides to adopt as targets the growth rates for the aggregates (including a 6 per cent second quarter rise in M1) discussed earlier in connection with alternative C. "To implement this policy, THE COMMITTEE SEEKS TO PROMOTE MODERATE GROWTH IN MONETARY AND CREDIT AGGREGATES OVER THE MONTHS AHEAD, WHILE CONTINUING TO MEET SOME PART OF RESERVE NEEDS THROUGH PURCHASES OF COUPON ISSUES IN THE INTEREST OF PROMOTING ACCOMMODATIVE CONDITIONS IN LONG-TERM CREDIT MARKETS. System open market operations until the next meeting of the Committee shall be conducted with a view to maintaining [DEL: prevailing] BANK RESERVES AND money market conditions CONSISTENT WITH -15- THOSE OBJECTIVES, TAKING ACCOUNT OF THE FORTHCOMING downward any accommodating while TREASURY FINANCING {DEL: movements in long term rates, provided that money appears it if modified be shall conditions market deviating are aggregates credit and monetary the that significantly expected]." paths growth the from This language differs from alternative B only in the use of the term "moderate" to describe the lower target growth rates for the aggregates. That term is suggested because the second-quarter growth rates specified are within the range the Committee recently has considered moderate in an absolute sense. CHART 1 STRICTLY CONFIDENTIAL (FR) 4/2/71 MONETARY AGGREGATES NARROW MONEY SUPPLY M1 BILLIONS OF DOLLARS 220 218 7% PATH 216 214 J, I I I I __ _ BROADER MONEY SUPPLY M2 1969 - Actual - Currently Projected 1971 1970 --- Wkly Path, Indicated at FOMC Meeting43/9/71) 0 '70 J F M A '71 ..- Longer Run Path ,CHART IA STRICTLY CONFIDENTIAL (FR) 4/2/71 MONETARY AGGREGATES ADJUSTED CREDIT PROXY BILLIONS OF DOLLARS 1348 13% -320 -328 I I I I I I I I I I ! TOTAL RESERVES 14% PATH 1969 1971 3970 D J F -- Actual --- Currently Projected --- Wkly Path, indicated at FOMC Meeting3/9/71) M A 71 '70 .Z- Longer Run Path 4/2/71 CHART 2 INTEREST BEARING SOURCES OF BANK FUNDS BILLIONS OF DOLLARS -230 TOTAL TIME AND SAVINGS DEPOSIT -90 TIME AND SAVINGS DEPOSITS OTHER THAN CD'S NONDEPOSIT SOURCES 1969 1970 1971 CHART 3 MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDITIONS 1969 1970 INTEREST RATES Short-term 1971 INTEREST RATES Long-term 1969 1970 1971 STRICTLY CON FIDENTIAL (FR) Table 1 PATHS OF KEY MONETARY AGGREGATES April 2, 1971 Monthly Pattern in Billions of Dollars 1970- Dec. 214.6 1971, Jan. Feb. Mar. 218.3 214.8 217.3 (219.0) Apr. 219:5 (220.8) 4 19.0 331.2 29.9 435.4 4 23.0 4 30.8 (4 37.2) 341.1 334.1 337.7 (340.1) 30.2 30.5 (30.7) 439.8 (4 42.3) 345.5 (343.4) (30.8) Annual Percentage Rates of Change--Quarterly and Monthly 1970: 1st 2nd 3rd 4th 5.9 5.8 Qtr. Qtr. Qtr. Qtr. 1971: 1st Qtr. 1970: Dee. 1971: Jan. Feb. Mar. 3.4 8.4 11.0 9.2 6.1 3.4 7.0 (8.0) 15.5 Apr. 8.3 -2.9 2.6 19.1 6.6 (10.5) (11.0) 13.0 16.5 18.4 12.2 11.4 12.0 10.5 12.9 (8.5) (9.0) 15.5 (11.5) (3.5) 17.5) 5.5 ( 9.5) 13.5 11.5 22.1 (18.0) 6.5 (10.0) 12.0 (14.0) 1.1 14.0 0.5 6.5 17.2 12.0 Weekly Pattern in Billions of Dollars Feb. 1971: Mar. Apr. NOTES. 3 10 17 24 31 7 pe 335.6 425.3 428.6 431.7 432.6 214.7 216.2 218.2 217.9 3 10 17 24 337.4 337.2 338.5 339.6 340.4 30.3 30.3 30.7 30.6 219.3 220.5 432.8 433.9 435.5 436.5 437.2 434.6 435.2 436.2 438.5 440.4 338.9 340.4 341.5 341.6 341.1 340.5 338.9 340.2 30.7 30.5 31.0 30.6 31.0 (220.6) 437.8 (441.0) 340.0 (342.4) (30.6) 217.3 217.8 218.5 218.3 218.5 218.5 218.8 218.7 219.0 Annual rates of change ether than those for the past are rounded Data shown in parenthesis are current projections. Currency plus private demand deposits. i/ plus time deposits other than large CD's. 2/ M pe - artially estimated. to the nearest half per cent. FR712-D Rev2/16/71 STRICTLY CONFIDENTIAL (FR) Table 1-A PATHS OF KEY MONETARY AGGREGATES April 2, 1971 Monthly Pattern in Billions of Dollars 1970 dec. 6.2 230.4 204.4 26.0 11.6 1971- Jan. Feb. Mar. 244.7 235.3 240.9 (246.0) 217.1 208.2 213.5 (219.1) 27.1 27.4 (27.9) 10.1 8.6 5.7 6.7 6.2 (4.7) (7.0) Apr. 6.4 (5.0) 248.2 (249.4) 220.3 (221.4) (28.0) (6.1) 1970, Annual Percentage Rates of Change -Quarterly and Monthly 1.4 14.1 32.2 21.8 ( ( ( ( 1st 2nd 3rd 4th 0.9 11.3 16.5 15.4 25.0 (27.0) 1971: 1st ( 1970- Dec. 28.8 19.7 1971: Jan. Feb. Mar. 25 5 25.1 25.0 S 19.5 Apr. S17,0 (27.0) 28.6 (25.5) 20.0 22.3 30.5 (26.0) (16.5) 17.5 (18.0) Weekly Pattern in Billions of Dollars 7.1 6.3 5.0 10 17 24 Mar, I r NOTES: Apr. I 3 10 17 24 31 pe 7 6.6 i 5.0 5.9 6.3 3.5 2.6 4.9 6.2 6.7 5.8 4.0 I (4.3) 210.6 212.3 213.5 214.6 27.0 27.4 27.3 27.4 8.8 9.1 8.7 8.2 215.5 216.1 217.0 217.7 218.5 216.1 216.9 217.7 219.2 219.9 27.7 27.8 28.5 27.9 27.8 8.0 7.5 7.0 6.6 6.6 218.8 (220.3) 237.6 239.8 240.7 242.0 Veb, 1971- A 243.1 243.6 244.7 245.3 246.2 243.7 246.6 (248.1) I 244.7 246.2 247.1 247.6 S I Annual rates of change other than those for the past are rounded to the nearest half per cent. Data shown in parenthesis are current projections. pe - Partially estimated. & a (27.8) (6.6) a L FR 712-K Rev2/16/71 ninually 1968 1969 1970 CONFIDENTIAL(FR) AGGREGATE RESERVES AND MONETARY VARIABLES April 2, 1971 Reserve Aggregates 2 1 eod Table 2 Total Period7 Reserves + 6.0 - - 1.6 3 Nonborrowed Reserves 4 7.8 RETROSPECTIVE CHANGES, SEASONALLY ADJUSTED (Annual rates in percent) Monetary Variables Total 4 Money Supply Member Bank Deposits 3.0 Adjusted 5 Credit Proxy Total Currency Private Prvate Demand Deposits Addenda 10 9 8 T67e Deposits Adjusted Thrift Instit Deposits Nonbank Commercial Paper n a. 4 8.3 + 3.1 + 5.4 + 6.0 + 6.3 + 7.9 + 2.4 + 5.1 +11.1 n.a. +18.4 + 6.3 + 3.4 + 7.8 n.a. + 5.1 + 1.2 + 6.5 + 5.4 + 4.7 + 0.1 - 3.5 - 6.6 + 5.3 + 1.6 + 7.8 +27.9 + 4.7 +10.6 +12.8 -12.7 + 1.8 + 1.4 +31.6 +23.2 +14.1 +32.2 +21.8 + 2.5 + 7.0 + 9.3 +11.5 +17.8 +7.5 -16.2 +20.4 + 9.0 - 4.0 +11.8 + - - 1.2 7.8 + 7.4 - 5.0 + 6.4 + 9.5 + 0.7 -3.9 - 3.7 - 2.4 -0.2 +13.0 + 1.9 +17.1 + 3.3 +20.0 + 3.5 +12.9 + 5.9 + 4.8 + 7.8 + 4.6 + 5.3 + 4.7 3rd Qtr. 1969 4th Qtr. 1969 - 9.3 + 1.4 - 4.8 - 0.1 - 9.4 + 0.1 - 4.3 + 2.0 + 0.8 + 1.6 + 4.5 + 6.2 + 0.3 1st Qtr. 1970 26d Qtr. 1970 - 2.9 + 2.6 + 0.6 + 3rd Qtr. 1976 +19.1 + 6.6 0.5 + 6.5 +17.2 + 8.3 + 5.9 + 5.8 + 6.1 4th Qtr. 1970 - 0.4 + 4.1 +24.4 + 9.4 + 3.4 + + + + + + + + + 0.8 + 0.6 + 2.6 + 0.8 + 3.7 + 1.3 +27.4 - 3.5 - 5.5 + 5.2 + 5.2 + 7.8 + 9.9 - 6.8 +12.9 - 8.0 - 2.5 + 3.1 + 6.7 +12.6 +26.2 +13.8 + 8.1 + 5.3 + 7.3 +34.4 +18.9 -30.0 +11.9 + 5.9 +10.0 -87.5 -7.2 +49.6 +10.6 + 9.4 +14.2 +32.4 -28.7 +58.1 +24.9 +18.5 - 9.0 -10.9 Semi-annually 1st Half 1969 2nd Half 1969 1st Half 1970 2nd Half 1970 3.5 4.6 n.a. +28.3 +1.7 uarterly + 6.0 +24.1 +15.1 6.1 9.4 3.3 5.8 5.3 5.3 6.7 2.7 - 0.4 + 1.4 1969: Dec. + 6.3 +12.1 1970: Jan. + 3.1 + 7 2 feb. -12.6 -15.6 + 7.5 - 4.2 - 8.0 +14.0 +10.7 + 9.4 - 4.1 +12.3 +21.3 -13.9 + 0.5 +25.4 -19.0 + 6.2 +16.8 - 4.5 + 5.8 +13.7 - 1.2 + 7.0 + 9.9 + 5.2 + 2.3 +10.3 +15.3 + 2.5 +10.5 +19.7 + 3.0 + 2.2 +10.9 + 6.0 +23.3 +27.5 -16.1 +48.8 +22.7 +18.1 +23.2 + 9.7 + 5.7 + 7.5 + 4.4 +35.6 + 6.8 + 2.5 + 8.9 +28.8 +29.8 + 1.1 + 7.0 +16.5 + 1.1 + 2.8 + 6.2 + 7.5 + 4.9 + 4.9 - 0.7 + 2.2 + 6.6 +10.5 +12.9 + 1.1 +14.0 + 7.4 + 9.8 - 1.4 +16.0 March April May June July Aug. Sept. 1971: +29.2 +19.0 +40.1 +10.1 Oct. - Nov. Dec. + 3.6 +18.4 + 4.4 +22.8 +13.1 +21.4 Jan. +t2,2 +11.4 + 8.8 +16.1 Feb. 1.9 +15.1 +19.3 + 6.6 + 5.7 + 1.2 +11.2 +11.4 +20.3 +15.1 +28.8 +25.5 +28.6 - NOTE:" reserve series have been adjusted to eliminate changes in percentage reserve requirements against deposits, but reserve requirements IFR 712- E Aggregate on Eurodollar borrowings are included beginning October 16, 1969, and requirements on bank-related commercial paper are included beginning October 1, 1970. CONFIDENTIAL (FR) April 2, 1971 Table 3 AGGREGATE RESERVES AND MONETARY VARIABLES SEASONALLY ADJUSTED (In millions ofdollars) 1969- 1970: 1971: 2/,530 27,401 27 402 2b.275 26,214 26 383 27,334 27,161 27,144 288.0 285.3 285.7 Oct. Nov. ec. 27 354 27 783 27,928 26.210 26 538 26,806 27 129 27 548 27,707 Jan. Feb. March 28,001 27,722 27.723 26.966 26,615 26,782 April May June 28,216 27,890 27,902 July Aug. Sept. 202.6 202.8 158.1 157.4 157.6 198.1 195.4 194.8 14. 12, 12, 184.0 182.9 182.8 305.7 303.8 304.2 26.0 26.5 27.5 283.5 285.8 285.8 203.2 203.5 203.6 157.6 157.6 157.7 194.2 194.0 194.6 11 11 11 182.6 182.9 183.4 302.2 305.5 305.7 28.0 28.4 29.1 27,823 27,523 27.536 284.8 282.9 286.2 205.2 204.5 206.6 159.0 158.1 159.8 193.3 193.5 195.3 182.7 182.9 183.8 304.8 303.4 306.1 29.4 30.0 30.4 27,350 26,916 27,056 28,046 27,692 27.713 290.2 289.1 290.5 208.3 209.2 209.6 161.2 161.6 161.9 198.5 200.3 202.2 185.6 187.1 189.0 309.6 309.3 311.1 31.2 31.7 30.9 28,041 28 585 29,240 26,694 27,780 28,708 27,896 28,408 29,024 296.0 303.2 308.0 210.6 211.8 212.8 162.5 163.7 164.6 208.2 213.2 218.5 191.3 194.2 196.8 315.8 321.9 324.5 28.7 28.5 29.7 Oct. Nov. Iec. 29,385 29,474 29.925 28,928 29,033 29.584 29,134 29,233 29.703 310.6 314.0 319.6 213.0 213.5 214.6 164.5 164.8 165.7 222.2 225.0 230.4 199.1 201.1 S204.4 324.8 326.7 331.2 30.5 29.7 31.2 Jan. 30,229 30,515 29,801 30,176 30,029 30,255 323.9 329.1 214.8 217.3 165.5 167.7 235.3 240.9 208.2 213.5 334.1 S 337.7 Feb. 1971: NOTES: (In billions of dollars) July Aug Sept. 203.1 Feb. 3 10 17 24 30,250 30,293 30,677 30,610 29,880 30,096 30,066 30,450 29,990 30,080 30,370 30,383 326.8 328.3 328.5 330.2 214.7 216.2 218.2 217.9 49.5 49.5 49.9 49.5 165.3 166.8 168.3 168.4 237.6 239.8 240.7 242.0 27.0 27.4 27.3 27.4 210.6 212.3 213.5 214.6 335.6 337.4 337.2 338.5 30.5 31.5 31.0 31.2 Mar. 3 10 17 p 24 p 30,655 30,539 30,955 30,552 30,252 30,068 30,625 30,232 30,335 30,427 30,676 30,564 331.6 332.9 333.5 332.4 218.5 218.3 218.5 219.3 49.8 49.8 50.0 50.0 168.7 168.5 168.5 169.3 243.7 244.7 246.2 247.1 27.7 27.8 28.5 27.9 216.1 216.9 217.7 219.2 339.6 340.4 340.5 338.9 30.9 31.2 31.1 31.1 Aggregate reserve series have been adjusted to eliminate changes in percentage reserve requirements against deposits, Euro-dollar borrowings are included beginning October 16, 1969, and requirements on bank-related commercial paper are 1970. Adjusted credit proxy includes mainly total member bank deposits subject to reserve requirements, bank-related Monthly data are daily averages Weekly data are daily averages for statement weeks. dollar borrowings of U.S. banks. commercial paper figures which are for last day of month. but reserve requirements on included beginning October 1, commercial paper, and Euroexcept for nonbank FR 712-F Table 4 MARGINAL RESERVE MEASURES (Dollar amounts in millions, based on period averages of daily figures) Member Period Free reserves Excess reserves Total Banks Borrowings ty C R e s e r v e Major banks Other 8 N.Y. Outside N.Y. Country Monthly (reserves weeks ending in): 1969--July August September October November December -1,045 - 997 744 995 975 - 849 266 214 282 195 238 278 1,311 1,211 1,026 1,190 1,213 1,127 89 81 83 106 120 268 250 253 236 327 387 310 364 256 222 293 250 220 608 621 485 464 456 329 1970--January February March April May June July August September October November December - 759 - 916 - 751 - 687 - 765 - 736 -1,134 - 706 - 374 - 274 199 84 169 210 129 178 159 171 183 175 235 193 210 264 928 1,126 880 865 924 907 1,317 881 609 467 409 348 148 106 90 227 165 140 218 143 101 12 42 36 287 317 225 331 241 289 460 278 115 40 17 16 232 289 287 119 228 217 348 273 274 313 294 265 261 414 278 188 290 261 291 187 119 102 57 30 1971--January February March p - 140 71 118 238 264 194 378 335 312 45 29 41 36 30 17 262 248 238 35 29 16 2 9 16 23 30 - 482 348 144 507 389 178 415 356 -47 272 660 763 500 460 661 79 160 89 75 1C3 181 143 93 77 79 221 343 224 258 325 179 117 94 50 154 1970--Sept. 7 - 46 352 398 -- 4 304 90 14 21 28 - 409 397 242 41 189 191 a5n 586 433 21 16 16 11 97 13 312 342 292 71 131 117 4 11 - 105 163 318 282 423 445 11 69 15 29 311 282 86 65 18 - 166 164 330 -- 1 295 34 25 - 360 76 436 86 22 287 41 Dec. 2 9 16 23 30 - 38 154 279 114 164 417 136 120 211 434 455 290 399 325 270 86 -55 39 -- 22 -46 11 -- 300 263 268 250 245 47 27 28 25 25 1971--Jan 6 13 20 27 138 245 380 72 545 32 92 282 407 277 472 354 71 -82 26 60 -63 20 250 249 284 266 26 28 43 42 Oct. Nov. p - - Feb. 3 10 17 24 - 46 42 264 67 237 205 297 317 283 247 561 250 --114 -- --121 -- 253 229 280 228 30 18 46 22 Mar. 3 10 17 p 24 p 31 p - 88 339 56 270 163 170 82 234 63 420 258 421 290 333 257 -108 46 52 -- 1 51 -15 16 241 249 231 252 219 16 13 13 14 22 rreliminary. Table 5 (Dollar amounts Period Period Year: 1969 (12/25/68 - 12/31/69) 1970 (12/31/69 - 12/30/70) Total Federal Reserve credit (Excl. float) s floar~it SOURCE OF FEDERAL RESERVE CREDIT Retrospective Changes in millions of dollars, based on weekly averages of daily figures) U.S. Government securities Total holdings Tna Other Bills 1/ Federal Agency Securities Agenwinyie Repurchase agreements purhas +5,539 +3,351 +5,192 +4,276 2 9 16 23 30 + + 189 473 - 248 982 + 689 + + + + 164 316 14 864 418 7 14 21 28 - - 183 (-- + - 482 5 224 479 56 67 268 (-( -- Nov. 4 11 18 25 + + - 692 48 671 141 + - 93 ( -) (- 214) (+ 214) (- 150) Iec. 2 9 16 23 30 + 986 + 853 (+ 150) - 303 - 145 + - 697 122 143 + (- 244) (+ 244) 6 13 20 27 + 938 + 722 + - 534 64 204 - 308 - 153 - 81 (F 97) (+ 46) (- 159) (+ 85) 3 10 17 24 + 8 - 236 - 928 + 61 171 +1,082 - 518 (+ 74) (- 412) (+ 412) (- 367) 3 10 17 p 24 p 31 p + + - 279 275 761 516 + 286 - 414 + 736 - 432 + 502 + 530 (+ ((+ ((+ +4,279 ( -- +3,220 (- ) + 707 + 143) +1,180 - 206 124 + - 67 63 Member banks borrowings Bankers' acceptances + - 35 28 Weekly: 1970--Sept. Oct. 1971--Jan. Feb. Mar. Figures in + - ((- - .JI ______I 90) 256) ) 0) ) ) (-- 586 - ) (+ 346) 610 S 75 + 711 +1,523 -____ 1/ - ( -- ( -- ) ( -- 35 3 (- L parenthesis reflect reserve effect of match sale-purchase + 134 + 41 + 114 ) + 152 + 137 143) + 109 + 106 + 209 367) 204) 204) 107) 107) + 207 + 98 + 67 - 81 + 136 I agreement. 4 . _ L-- -_ - + 245 - 834 Table 6 MAJOR SOURCES 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 a f f e c t ng supp 1 y of r e s e r v e s Foreign Other nonmember Currency Federal Reserve o Period credit (excl. floatanks outside Float operations ( S i g n ind i c a t es e f deposits and gold loans e c t on deposits and F.R. accounts r e e Change in total reserves Bank use of reserves reserves reses reserves r v e s) Year. 1969 (12/25/68 - 12/31/69 1970 (12/31/69 - 12/30/7Q +5,539 43,351 -+1,150 2/ -2,676 -3,122 - 813 + 773 + 241 + 667 + + 54 1 - 898 -1,655 +1,448 +1,340 + 108 +1,163 +1,257 - 14 - 45 + 100 + 169 + 95 + + + 193 561 10 527 640 + + + + 153 324 49 124 321 + 40 + 237 - 59 - 403 + 319 94 Weekly: 1970--Sept. 2 9 16 23 30 + + + 189 473 248 982 689 ---36 -214 + + 196 170 205 124 861 + 15 78 + 154 - 124 + 35 + + + - 217 379 183 552 833 + + + + + 20 4 6 21 4 + 7 - 482 -- - 260 + 20 - 10 + 271 - 248 - 328 + 14 21 28 + - 5 224 479 ---- + 329 549 432 - 163 63 71 + 174 + 576 - 311 + - 4 9 15 + 1 + 230 + 1 + - 322 426 443 + - 11 278 445 - 311 + 148 + 2 Nov. 4 11 18 25 + 4 - 692 48 671 141 ----- + - 46 353 545 298 + 146 + 81 + 88 + 153 + + 382 482 210 275 + + 24 1 17 18 - 271 86 + 16 - 397 + + + - 205 73 38 390 + + + - 78 109 156 302 + 127 36 - 118 - 88 Dec. 2 9 16 23 30 + + - 986 303 697 122 143 ------ + + 13 85 263 688 264 + 34 + 103 - 107 + 1 - 376 + + + 349 174 85 873 843 + + - 5 8 3 8 19 - 187 39 + 75 + 206 24 + + + + 502 157 320 260 545 + + + + + 161 124 336 169 322 + 341 - 281 16 + 91 + 223 1971--Jan. 6 13 20 27 + + - 938 534 64 204 - 385 ---- + + + + 319 601 450 544 + 188 63 + 108 - 275 + - 250 673 191 889 + - 8 4 - 1 50 + 305 26 34 + + - 768 369 787 857 + 657 + 144 + 727 -1,047 + 111 - 513 + 60 + 190 3 10 17 + 8 - 236 +1,523 ---- + 3 -237 587 + 289 - 256 50 - 402 + 542 - 533 + - 16 4 10 - 130 7 + 97 + 213 199 442 + 168 167 350 45 -32 + 92 24 - 928 -- -102 +418 + 844 + 2 - 515 - 286 - 306 + 3 + 279 - + 220 - - 752 + 17 40 - 374 - 227 - 147 10 17 p 24 p 31 p + + 275 761 516 506 ----- + + 92 628 177 421 - 105 + 508 - 186 60 + + - + 2 5 + 20 -41 37 + 280 + 85 9 - + + 138 523 426 478 + + 50 371 255 121 88 + 152 - 171 + 357 Oct. Feb. Mar. 1/ For retrospective details, see Table 5. Includes $400 million in special drawing account. _2 p - Preliminary. 214 99 185 392 348 337 -- - 80 20 

Federal Reserve (1971, April 5). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19710406

@misc{wtfs_bluebook_19710406,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1971},
  month = {Apr},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19710406},
  note = {Retrieved via When the Fed Speaks corpus}
}