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) December 13, 1974 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) M1 grew at about a 7 per cent annual rate in November, and data for early December suggest that the growth rate in prospect for November and December combined is about 6½ per cent. This would be at the low end of the Committee's two-month range of tolerance. In the case of M 2 , the estimate for November and December combined shows a growth rate of about 8½ per cent, somewhat above the low end of the range of tolerance, as growth in consumer-type time and savings deposits at banks has been strong. has been modest. Bank credit expansion, as measured by the proxy, The outstanding volume of large CD's dropped in November, but growth picked up in early December, partly in anticipation of forthcoming maturities around the tax date. Growth of Monetary Aggregates and RPD's in November-December Period Reserve and Monetary Aggregates (Growth at SAAR in per cent) M1 M2 RPD Range of Tolerance Lat est Estimates 6.4 6½-9½ 8-10½ 8.7 2½-5½ 4.1 Memo: Federal funds rate (per cent per annum) 8½-10 Avg Avg. for statement week ending NovNov.20 9.34 27 9.46 9.02 DecDec.4 11 8.86 -2(2) Evidence that the monetary aggregates were expanding at annual rates near the low ends of the Committee's ranges of tolerance became available shortly after the November FOMC meeting. The Desk moved to a less restrictive reserve management posture, expecting the Federal funds rate to move down to around 9¼ per cent from the 9-3/8-9-1/2 per cent area. During the statement week ending November 27, however, the funds rate averaged 9.46 per cent as banks elected to hold a very large amount of excess reserves over the Thanksgiving holiday. In early December, the funds rate finally eased, averaging about 9 per cent in the week ending December 4. With growth in the monetary aggregates continuing near the low ends of the Committee's ranges of tolerance, and with the discount rate reduced from 8 to 7¾ per cent on December 6, the Desk has most recently been aiming at a Federal funds rate around 8¾ per cent or a little below. (3) Shifts in bank demands for excess reserves and borrowings have complicated the task of monetary management in recent weeks. Member bank borrowing at Reserve Banks rose to an average of about $1.4 billion in the two statement weeks ending December 4, which bracketed the Thanksgiving holiday. Excess reserves were large in both weeks, averaging about $500 million. In the statement week just ended, member bank borrowings declined to an average of only $647 million and excess reserves were negative, in part because banks had sizable carry-over reserve surpluses from the previous week. -3(4) Because market participants had widely anticipated a further easing of money market conditions following the November Committee meeting, the initial tendency for the Federal funds rate to level off at around 9½ per cent was reflected in a snap-back of short- and long-term market rates. When the Federal funds rate resumed its decline, most other market rates also began to move down again; the December 6 cut in the discount rate, to 7¾ per cent, accelerated this process. Recently, rates on Treasury and Federal agency securities have dropped below the levels prevailing at the time of the last Committee meeting. but yields on private market instruments remain somewhat higher, and those on municipal issues have continued to rise. Weakness in the municipal sector has reflected the continuing lack of demand from key investor groups. (5) Savings flows to non-bank thrift institutions--like those to banks--strengthened further in November and early December. At the S and L's, November growth was around an 8½ per cent seasonally adjusted annual rate and at the savings banks it was around 6½ per cent. At both types of institutions the November performance was nearly as favorable as in the same month a year ago, and roughly the same pattern of flows appears to be continuing in early December. The combination of improved savings flows and a limited supply of mortgages available for immediate delivery has resulted in declining mortgage rates throughout the intermeeting period. (6) The table on the following page shows (in percentage annual rates of change) selected monetary and financial flows over various recent time periods. Appendix table IV compares money supply growth rates Average of Past Three Past Twelve Past Six Past Three Past Calendar Years Months Months Months Month 1971 -1973 Nov. '74 over Nov. '73 Nov. '74 over May '74 Nov. '74 over Aug. '74 Nov.'74 over Oct.'74 Total reserves 8.6 8.6 5.4 - 3.0 1.5 Nonborrowed reserves 7.7 9.3 13.6 21.3 20.7 Reserves available to support private nonbank deposits 8.8 9.4 7.3 - 3,2 0.8 7.0 5.2 4.1 4.0 6.8 10.4 8.0 7.2 7.1 9.7 M 3 (M2 plus deposits at thrift institutions) 11.7 7,1 6.1 6.2 8.8 10.0 6.6 3.3 6.1 12.8 9.8 4.6 - 1.5 4.2 Large CD's 1.1 1.9 1.2 .6 - 0.7 Nonbank commercial paper -- .4 .7 .7 .9 Concepts of Money M 1 (currency plus demand deposits) 1/ 2 (M1 plus time deposits at commercial banks other than large CD's) Bank Credit Total member bank deposits (bank credit proxy adj.) 10.4 Loans and investments of commercial banks 2/ Short-term Market Paper (Monthly average change in billions) 1/ Other than interbank and U.S. Government. 2/ Based on month-end figures. Includes loans sold to affiliates and branches. NOTE: All items are based on average of daily figures, except for data on total loans and investments of commercial banks, commercial paper, and thrift institutions--which are derived from either end-of-month or last Wednesday-of-month figures. Growth rates for reserve measures in this and subsequent tables are adjusted to remove the effect of discontinuities from breaks in the series when reserve requirements are changed. -5computed on a quarterly-average basis with those computed on a last-monthof-quarter basis. table V for the Projected figures on the two bases are shown in appendix four alternatives presented in the next section. -6Prospective developments (7) Summarized below for Committee consideration are four alternative sets of specifications detailed data shown in for key monetary variables (with more the table on page 6a. The length of to which the longer-run growth rates of the aggregates the period apply (November '74-June '75) has been kept the same as in recent blue books, but the period has been shifted forward to encompass the two quarters ahead. Since money supply data for December are still based mainly on projections, November has been taken as the base month and thus the period is actually seven months. (In recent blue books August had been used as the base for longer-run growth rates, which had encompassed the fourth quarter of 1974 and the first quarter of 1975). Alt. A Alt. B Alt. C Alt. D M1 7¼ 6½ 6 5½ M2 11 9¾ 8½ 7½ Credit proxy 9 7½ 6 4½ 4¼-6¼ Longer-run growth rates (Nov. '74-June '75) Associated ranges of tolerance for Dec.-Jan. M1 5¼-7¼ 4¾-6¾ 4½-6½ M2 7¾-9¾ 7¾-9¼ 7-9 6¾-8¾ RPD 9½-11½ 8½-10½ 8-10 7½-9½ 7½-9¼ 8-9½ Federal funds rate (inter-meeting range) (8) 6¼-8½ 7-9 The longer-run targets adopted by the Committee at its last meeting involved an M 1 growth of 5¾ per cent from August to March. Expansion since August has fallen below this path. The following chart -6aAlternative Longer-Run Growth Rates for Key Monetary Aggregates 1974 Nov. Dec. 1975 Jan. Mar. June Alt. A Alt. B Alt. C Alt. D Alt. A Alt. B Alt. C Alt. D 283.3 284.8 283.3 284.7 286.0 283.3 284.7 285.9 283.3 284.6 285.8 612.7 616.9 621.7 612.7 621.2 612.7 616.6 620.9 612.7 616.5 620.7 289.1 294.1 288.8 293.3 288.4 292.4 Growth Rates 633.5 651.8 631.2 647.2 629.8 643.6 628.4 640.0 286.2 289.9 295.3 616.7 Nov.'74--June'75 7.3 6.5 6.0 5,5 10.9 9.7 8.6 1974 4th Q. 1975 1st Q. 2nd Q. 5.7 7.2 7.5 5.6 6.2 6.9 5.6 5.8 6.2 5.4 5.3 5.5 8.8 10.8 11.6 8.7 9.4 10.1 8.6 8.6 8.8 8.5 7.7 7.4 1974 Dec. 1975 Jan. 6.4 5.9 5.9 5.5 5.9 5.1 7.8 7.6 8.8 8.4 Credit Proxy 7.4 8.2 Alt. A Alt. B Alt. C 1974 Nov. Dec. 1975 Jan. 951.2 957.7 965.3 951.2 957.4 964.4 951.2 957.3 963.9 Nov. June 983.8 1012.6 979.9 1004.4 977.9 999.2 9.6 8.7 7.9 9.4 10.0 7.8 8.6 8.7 7.8 8.8 7.7 8.3 Nov.'74--June'75 1974 4th Q. 1st Q. 2nd Q. 1974 Dec. 1975 Jan. 11.1 8.0 10.9 11.7 8.2 9.5 8.2 9.3 Alt. D 951.2 957.2 963.5 975.7 994.2 Growth Rates 7.7 7.6 7.9 Alt. A Alt. B Alt. C Alt. D 491.5 491.5 494.2 495.7 491.5 494.1 495.2 491.5 494.0 494.8 500.7 513.4 498.8 509.0 497.0 504.6 7.6 4.6 4.0 2.4 6.1 6.1 1.9 494.4 496.2 502.6 517.3 9.0 4.3 6.6 11.7 4.2 5.3 10.1 6.1 4.1 3.8 8.2 7.1 4.4 6.6 3.6 6.3 2.7 LONGER RUN GROWTH RATES OF MONEY SUPPLY RATIO SCALE, BILLIONS OF DOLLARS A-1295 - - -^ 53%% Growth Path 285 Growth Rates-Nov. '74 to June '75 To Point A 714% To Point B 61/2% To Point C 6% To Point D 51/2% 275 A M J J A S O 1974 N D J F M A M 1975 J -7shows the relationship to this path (extended to June) of the longer-run growth rates for M1 contained in the four alternatives shown above. (9) The 5½ per cent growth rate in M 1 from November forward, under alternative D, appears to be consistent with prevailing money market conditions, as typified by a Federal funds rate around 8¾ per cent. Under this alternative M1 may be expected to grow in a 4¼-6¼ per cent annual rate range in the two month December-January period. This alternative does not contemplate making up for recent shortfalls in M1 growth. (10) Alternatives C and B involve growth rates of M 1 of 6 and 6½ per cent, respectively, through the first half of next year. Under alternative B the level of M1 by June is the same as that obtained by extending the 5¾ per cent August-March growth path to June. This alternative is consistent with the basic chart show projection, which assumes the same catch-up in M1 growth and also assumes continuation of the 5 per cent basic M1 growth path throughout the chart show projection period (to mid-1976). Under alternative C, the catch-up period would extend into the fall. (11) Because of the further weakening in GNP growth, pro- jected by the staff, some further decline in interest rates over the next few months now appears to be required to achieve the monetary aggregate objectives of either alternatives C or B. Between now and the next Committee meeting, alternative C would appear to entail a Federal funds rate of around 8-3/8 per cent, and alternative B around 8 per cent-the mid-points of the ranges shown in paragraph (7). M1 growth in the December-January period under both alternatives may be on the low side -8of longer-run growth rates, but growth would be expected to increase somewhat later on as a result of the lagged impact on money demand of the further interest rate declines. (12) Alternative A encompasses a higher 7¼ per cent annual rate of growth in M 1 between now and mid-year. The Federal funds rate under this alternative would be likely to drop to the 7¼-7½ per cent area by mid-January. The implications for economic activity and prices of moving on to such a growth path for M1 will be analyzed in the chart show. (13) Although demands in credit markets are in process of moderation, they remain fairly strong in particular market sectors. Corporate demands for long-term funds still appear to be quite substantial, and business short-term borrowing may be sustained temporarily by involuntary inventory accumulation. In the municipal market, demands also remain sizable, while institutional investor interest appears to be very limited. Moreover, larger than seasonal borrowing by the Treasury can be expected during the winter. Against this background, it would appear that further declines in interest rates over the next few weeks may be limited in the absence of a noticeable further decline in the Federal funds rate, and interest rates could back up some. (14) A drop in the funds rate to aroung 8-3/8 per cent would probably forestall tendencies for interest rates to back up, and would likely lead to a modest renewal of rate declines. A drop in the funds rate to around 8 per cent would have an appreciable downward effect on short-term market rates, would trigger further declines in bank prime loan rates, and would more noticeably ease long-term market conditions. -9Market expectations of a further decline in the discount rate might begin to develop, but they would become much more pronounced if the funds rate were to drop as much as is implied under alternative A. (14) Net inflows of time and savings deposits (other than money market CD's) at banks are likely to continue to be relatively strong under each of the alternatives presented, with growth highest, of course, under the easiest alternative. The position of thrift institutions probably also will continue to improve, even under alternative D. However, it would probably require a further decline in market interest rates, and an accompanying more rapid inflow of savings funds,to ensure a significant liberalization in mortgage loan commitment policies by thrift institutions. (15) Banks are likely to moderate offerings of large CD's in the period ahead, given the expected availability of funds from other sources, reduced loan demands, and continued conservative bank investment and lending policies. Offerings could remain on the strong side, however, until year-end if banks attempt to show a lengthening in their liability structure in their December 31 statement by reducing reliance on Federal funds. Should market interest rates begin to drop sharply, banks might well step up CD offerings in order to acquire securities in anticipation of capital gains. -10Proposed directive (16) Presented below are four alternative formulations for the operational paragraph of the directive, which are intended to correspond to the similarly lettered policy alternatives discussed in the preceding section. Alternative A To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve bank reserve and money market conditions consistent with MORE RAPID[DEL: moderate] growth in monetary aggregates over the months ahead. Alternative B To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve bank reserve and money market conditions consistent with SOMEWHAT MORE RAPIDmoderate] [DEL: growth in monetary aggregates over the months ahead. Alternative C To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve bank reserve and money market conditions consistent with moderate growth in monetary aggregates over the months ahead. -11Alternative D To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve bank reserve and money market moderate] growth in conditions consistent with RELATIVELY SLOW [DEL: monetary aggregates over the months ahead. CHART 1 STRICTLY CON FIDENTIAL(FR) 12/16/74 RESERVES AVAILABLE TO SUPPORT PRIVATE NONBANK DEPOSITS BILLIONS OF DOLLARS 7 40 22% growth A S 1973 D M J 1974 S D M 1975 Break in Series, Actual Level of RPD After Changes in Reserve Requirements I I I1 S 0 1974 I .- I N D STRICTLY CONFIDENTIAL(FR) CHART 2 12/16/74 MONETARY AGGREGATES NARROW MONEY SUPPLY M1 BILLIONS OF DOLLARS -300 295 -280 290 9%2% growth for Nov -260 285 ER MONEY SUPPLY M2 280 1974 1975 1974 CHART 3 STRICTLY CONFIDENTIAL(FR) 12/16/74 MONETARY AGGREGATES ADJUSTED CREDIT PROXY BILLIONS OF DOLLARS 520 -500 -480 - 460 TOTAL RESERVES 1873 1974 *Break in series, Actual Level of Total Reserves After Changes in Reserve Requirements 1975 CHART 4 MONEY MARKET CONDITIONS AND INTEREST RATES INTEREST RATES PERCENT Short-term PERCENT WEEKLY AVERAGES WEEKLY - INTEREST RATES 9\ I D Aaa L MUNICI I I i I I e_. GOVERNMENT 8B 10-YEAR AVERAGES BILLIONS OF DOLLARS \ TREASURY BILLS S3 MUNICIPAL BOND BI 3-MONTH THURSDAYS PRIME COMMERCIAL PAPER 4-6 MONTH SOWED lk i L I 3 1 1 1 1 1 1 1 1973 1 1 1 1 I I I I I I l 1974 l I s i l l l l l 1973 l l l 1974 TABLE STRICTLY CONFIDENTIAL 1 DECEMBER 13, BANK RESERVES (ACTUAL AND CURRENT PROJECTIONS) 1974 - - - -- - - - - -- - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - -- - - - - - - - - - - - - - - _- -__ - _- _ __- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - II RFSERVES AVAILABLE FOR PRIVATF NONBANK DEPOSITS AGGREGATE RESERVES REQUIRED RESERVES I I SEASONALLY I SA I TOTAL NONBORROWED I-----------------------------I S SEAS ADJ RESERVES RESERVFS I NON SEAS ADJ ii -----------------------------------------'-------- ------- I PRIVATE DEMAND PERIOD ----"-- (1) I (?) OTHER TIMF DEP CD'S AND NON DEP GOV'T AND INTERBANK ' (5) r4) (3) ADJUSTED (6) (7) (8) MONTHLY LEVELS-$MILLIONSI --- I -------------- 3 5,296 3.4,905 (3 4,994) (3 4,680) 1974--SEP. OCT. NOV. DEC. ANNUAL RATES 3 5,133 34,838 13 5,001) (3 4,898) QUARTERLY: OTR. OTR. OTR. QTR. MONTHLY: 1974--SEP. OCT. NOV. DEC. WEEKLY ----- r.7 19.1 9.1 2.5) 7.8 -0.7 0.8) 7.4) NOV.-DFC. II Ft II I II II II II II i! II II i II I' II OF CHANGE 1974--1ST 2ND 3RD 4TH 1 II II 4.1) 37,282 36,874 (36,986) (36,895) 1.3 20.1 8.2 ( 5.2) 34 ,000 35 ,061 1355,733) (38 (35 ;,998) 1.2 0.8 5.6 33.6) ( 20,367 20,409 (20,5191 (20,611 I I ( 5,643 5,224 ( 4,966) ( 4,734) 1,986 1,969 ( 1,992) ( 2,215) 0.4 2.2 0.1 8.2 15.5) 9.7 50.2 20.7) 28.0) -1.4 4.8 4.1) 15.6) 8.5) 24.6) 9.9) 7.1 -1.2 1.5) 9,092 9,130 ( 9,201) ( 9,1021 LEVELS-SMILLIONS --------- NOV. DEC. 6 13 20 27 3 5,044 3 4,824 3 4,733 3 5,353 35,038 3 4,743 4 11 3 5,060 34,390 I 11 ,899 ,506 ,462 34,812 3c,348 37,026 36,604 36,829 37,371 35 35 35 35 35,162 34,265 37,269 36,537 36 ,197 35 ,890 ,890 I 20,459 20,458 20,536 20,578 9,170 9,168 9,203 9,241 5,113 4,999 4,927 4,892 1,982 1,779 2,097 20,609 20.499 9,241 9.275 4,855 4,810 2,209 2.147 NOTE: DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. AT THE FOMC MEETING OF NOV. 19, 1974 THE COMMITTEE AGREED ON A RPD RANGE OF 2.5 TO 5.5 PERCENT FOR THE NOVEMBER-DECEMBER PERIOD. 2,018 - -_ STRICTLY CONFIDENTIAL TABLE DECEMBER 13, MONETARY AGGREGATES (ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED) ------------------------------------------------------ -_ PERIOD PERIOD | MONEY SUPPLY NARROW I BROAD (M1) I (M2 I ADJUSTED CREDIT PROXY II II II U.S. GOVT. DEPOSITS I - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - (1) MONTHLY ------------------ LEVELS-tBILLTONSI --I 1974--SEP. OCT. NOV. DEC. I (2) 13) 603.6 607.8 (612.7) (616.61 489.1 488.2 (491.5) (494.11 (4) TIME AND SAVINGS DEPOSITS I OTHER I CD S I THAN CD S I TOTAL I NONDEPOSIT I SOURCES OF FUNDS I - - -- - - - - - - - - - - - - - - - - - - - - - - - (7) (5) I (6) (8) II 280.8 281.7 (283.3) (284.71 6.3 3.7 (4.7) ( 2.6) 407.6 412.3 (414.9) (419.7) 322.8 326.1 (329.4) (331.9) 15.1 21.3 9.2 (11.9) 12.8 8.6 7.3 (11.3) 6.8 13.8 t 7.61 (13.91 4.9 12.3 (12.1) ( 9.1) (10.8) (10.7) 84.8 86.2 (85.5) (87.8) 8.6 7.9 ( 7.6) ( 7.7) It PERCENT ANNUAL GROWTH --- - - - QUARTERLY --------1974--IST 2ND 3RD 4TH I II I I II II - 5.5 6.5 1.6 ( 5.6) QTR. QTR. OTR. OTR. 9.3 7.7 4.6 (8.6) 8.2 20.4 6.6 ( 4.1) It I It MONTHLY 1974--SEP. OCT. NOV. DEC. NOV.-DEC. 1.3 3.8 (6.8) ( 5.9) I 3.2 8.3 ( 9.7) ( 7.61 ( 6.4) I 8.7) 3.9 -0.2 I 6.1) ( 6.3) (6.3) II II II II WEEKLY LEVELS-SBILLIONS --- ----- -----------NOV. DEC. 6 13 20 27 282.0 282.8 283.3 283.3 4 P 11 PFI I 285.8 284.5 1 610.0 612.1 612.6 613.4 488.9 491.3 492.1 492.1 3.2 5.5 5.7 4.7 413.8 414.7 414.4 415.4 328.1 329.2 329.3 330.1 85.7 85.5 85.1 85.3 7.3 7.1 7.8 8.2 615.2 615.6 493.6 494.6 3.6 3.5 416.0 418.8 329.5 331.1 86.5 87.7 7.6 7.7 ------ -- - ---- --- - - ---- -- -- ----NOTES DATA SHOWN IN ---- 11---11-_- ------ ------ II PARENTHESES ARE CURRENT PROJECTIONS. ------ 1 -------------- ------- --------------------- I ----------- --^--- ----- -I P - PRELIMINARY PE - PARTIALLY ESTIMATED -----------------^----^--- ----------------^-- --------- II----- -------- 1974 STRICTLY CONFIDENTIAL (FR) DECEMBER 13, 1974 TABLE 3 RESERVE EFFECTS OF OPEN MARKET OPERATIONS AND OTHER RESERVE FACTORS (Millions of dollars, not seasonally adjusted) Open Market Operations 1/ Bills Coupon Agency & Accept. Issues Issues (1) (2) (3) RP's Net 3/ Total (4) (5) Daily Average Reserve Effect 2/ Open Market A Member Other 4/ Operations Bank Borrowing Factors (6) (7) (8) A in reserve categories req. res. against available res. 5/ U.S.G. and interb. (6)+(7)+(8)-(9) (10) (9) 6 Target available reserves 5/ (1) Monthly 1974 -- May June 653 -544 207 176 185 237 1,111 -984 2,155 -1,115 1,970 -673 866 420 -2,239 74 207 -400 390 221 -130 275 July Aug. Sept. 898 862 -594 125 -176 726 235 191 -3,760 2,225 549 -2,011 3,322 322 1,601 141 -32 309 39 -60 -901 -464 99 465 -450 -67 544 166 74 375 180 375 -1,727 1,217 -212 -331 -243 981 -1,970 2,739 -633 327 -1,494 -507 1,990 201 178 -209 -315 230 315 395 450 Oct. Nov. Dec. 1975 -- Jan. Weekly 2 9 16 23 -100 -338 -391 -665 --- --- 823 -5,869 7,090 -2,027 724 -6,207 6,698 -2,692 563 -1,357 -768 -122 -313 -973 -501 -422 337 1,398 2,123 -455 170 -21 83 -290 417 -911 771 -709 30 -324 -- - 336 12 161 316 -35 -222 664 'To. 6 13 20 27 -7 -374 835 251 134** -1,341** 1,675 1,388 -511 -29 269 114 469 912 -1,629 -1,231 Dec. 4 11 18 25 554 56 532 -243 -409 -425 -190 -112 1974--Oct. 1/ 131* -131* -212 - --331 -- 953 -3,101 1,485 3,088 1,077** -3,607*2,652 3,550 --- -5,269 3,987 -4,715 4,043 88 96 1 p 63 .1 p 246p 6 -2 5p - p -295p 6 9p 536p 119p lllp -187p -891p 2/ 3/ 4/ 5/ Represents change in System's portfolio from end-of-period to end-of-period; includes redemptions in regular bill auctions. Represents change in daily average level for preceding period. Includes matched sale-purchase transactions as well as RP's. Sum of changes in vault cash, currency in circulation, Treasury operations, F.R. float, gold and foreign accounts, and other F.R. accounts. Reserves to support private nonbank deposits. Target change for Nov. and Dec. reflects the target adopted at the Nov. 19, 1974 FOMC meeting. Target change for previous months reflects the bluebook patterns that are consistent with target ranges that were adopted during the month. * Special certificate. (Direct Treasury borrowing from F.R.) ** Reflects special certificate purchase. STRICTLY CONFIDENTIAL (FR) DECEMBER 13,1974 TABLE 4 SECURITY DEALER POSITIONS AND BANK POSITIONS Millions of dollars U.S. Govt. Security Dealer Positions Period Bills () Coupon Issues (2) Dealer Positions Municipal Corporate Bonds Bonds () (4) Excess** Reserves (5) Member Bank Reserve Positions Basic Reserve Deficit Borrowing at FRB** Total Seasonal 8 New York 38 Others (6) (7) (8) (9) 3,796 1,299 384 631 2,561 163 -5,243 -10,661 897 -301 0 36 -240 688 3 -1,831 - 4,048 High Low 3,553 -289 2,203 -309 253 0 384 27 628 -189 3,906 647 176 13 -7,870 -2,447 -12,826 - 6,046 1973--- Nov. Dec. 2,804 3,441 793 973 90 105 148 276 239 307 1,393 1,298 84 41 -4,469 -4,682 - 8,186 - 9,793 1974 -- Jan. Feb. Mar. 3,102 2,436 1,986 540 1,619 583 114 120 68 254 263 239 162 184 134 1,051 1,162 1,314 18 17 32 -4,753 -5,262 -5,030 -10,893 -10,769 -11,058 Apr. May June 1,435 408 580 99 -85 9 39 142 66 78 83 124 182 178 204 1,736 2,590 3,020 40 102 134 -3,952 -3,171 -4,445 -11,603 - 9,091 - 9,920 July Aug. Sept. 457 1,758 2,309 -214 398 552 14 33 23 79 108 85 162 197 180 3,075 3,337 3,282 149 164 139 -3,522 -4,231 -4,235 - 9,555 - 9,224 -. 8,250 Oct. Nov. 2,174 *2,900 654 *1,608 25 83 166 268 153p 308p 1,813p 1,253p 117p 6 7p -4,602 36 3 -6, p - 8,689 - 9,674p 2 9 16 23 30 1,131 1,269 2,522 2,638 2,677 772 621 566 616 776 171 12 23 6 4 80 117 207 259 202 456 -55 349 -159 319p 3,218 2,245 1,744 1,322 1,638p 142 134 122 107 4 10 p -3,844 -5,388 -5,295 -4,101 -3,772 - 6,046 - 8,399 -10,020 - 8,696 - 8,383 Nov. 6 13 20 27 2,518 2,962 *2,327 *3,553 534 1,919 *1,903 *1,709 93 60 164 92 202 222 384 329 302p 199p 66p 643p 1,12 p 1,098p 1,367p 1 48 1 , p 79p 70p 6 3p 6 5p -5,015 -7,688 -6,802 -5,795 - 8,976 -10,046 -10,040 - 9,871 Dec. 4 11 18 25 *2,975 *2,965 *1,630 *1,678 171 159p 167 1,072p 647p 51p 34p -5,485p -7,445p -10,095p 10 7 63 - , p 1973 -- High Low 1974 -- 1974--oct. NOTE: 197 16 7 4 p 35 p -189p 7 Trading positions, which exclude Treasury bills financed by repurchase agreeGovernment security dealer trading positions are on a commitment basis. Other security dealer positions are debt ments maturing in 16 days or more, are indicators of dealer holdings available for sale over the near-term. The basic reserve deficit is excess reserves less borrowing at Federal Reserve less net Federal in syndicate, excluding trading positions. issues still funds purchases. Weekly data are daily averages for statement weeks, except for corporate and municipal issues in syndicate which are Friday figures. * STRICTLY CONFIDENTIAL ** Monthly averages for excess reserves and borrowings are weighted averages of statement week figures. STRICTLY CONFIDENTIAL (FR) DECEMBER 13, 1974 TABLE 5 SELECTED INTEREST RATES Per cent 1 _ Short-Term Treasury Bills 90-119 Day Commercial Period ----4 - Q0-nar L Fedra (2) -sr e - r Fuands I P D, . e An-8O20" (5) 10.50 5.38 (6) 10.75 5.50 (7) 8.52 7.29 (8) 8.30 7.26 (9) 5.59 4.99 10.50 5.63 n-.11i o-Ian nTl . TI 511 e Off eA 9.63 6.53 9.54 12.25 6.39 7.88 12.25 8.00 12.00 7.88 10.61 8.05 10.52 8.14 10.03 9.95 7.83 7.45 7.40 7.01 9.11 9.28 9.06 9.44 8.91 9.13 7.90 8.00 Feb. Mar. 9.65 8.97 9.35 7.77 7.12 7.97 7.01 6.51 7.34 8.86 8.00 8.64 9.05 8.09 8.69 8.83 7.97 8.56 Apr. May June 10.51 11.31 11.93 8.33 8.23 7.90 8.08 8.21 8.16 9.92 10.82 11.18 9.81 10.83 11.06 July Aug. Sept. 12.92 12.01 11.34 7.55 8.96 8.06 8.04 8.88 8.52 11.93 11.79 11.36 Oct. Nov. 10.06 7.46 7.47 7.59 7.29 11.04 10.43 10.11 9.81 9.72 6.53 8.03 7.63 7.65 7.41 27 9.63 9.37 9.34 9.46 4 11 -- Nov. Dec. 1974 -- Jan. -- Oct. 9 16 23 30 Nov. 6 13 20 Dec. U.S. Government (10-yr. Constant MB u i c1T' Y (10) FNMA Auction V4i 1 (11) 7.54 6.42 9.37 7.69 7.15 5.16 8.14 6.93 10.59 8.43 7.94 8.04 5.18 5.12 6.73 6.74 8.84 8.21 8.12 8.46 8.21 8.23 8.44 5.22 5.20 5.41 6.99 6.96 7.21 8.71 8.48 8.53 9.78 10.90 10.88 8.99 9.24 9.38 8.95 9.13 9.40 5.73 6.02 6.13 7.51 7.58 7.54 9.07 9.41 9.54 11.83 11.69 11.19 11.83 11.91 11.38 10.20 10.07 10.38 10.04 10.19 10.30 6.68 6.69 6.76 7.81 8.04 8.04 10.25 10.58 9.55 8.95 9.35 8.78 9.33 8.72 10.16 9.21 10.23 9.34 6.57 6.61 7.90 7.68 10.22 9.87 10.00 10.13 10.61 9.50 9.50 7.50 10.50 10.13 9.56 9.38 8.93 9.50 8.88 8.88 9.25 8.88 8.88 10.44 10.03 9.42 10.52 10.36 10.36 10.02 9.82 6.68 6.52 6.48 6.51 6.65 7.99 7.94 7.87 7.84 7.82 7.76 7.43 7.38 7.45 7.46 7.37 7.20 7.23 9.00 9.00 8.88 8.93 8.88 8.75 8.50 9.00 8.87 9.17 9.68 9.28 9.17 9.29 9.38 6.66 6.55 6.53 6.71 7.76 7.72 7.61 7.63 9.93 9.00 8.88 8.63 8.50 8.88 9.02 8.86 7.45 7.28 7.20 6.95 9.22 9.00 9.25 8.88 9.13 8.75 9.50 9.60p 9.39 9.47p 6.89 7.15 7.61 9.61 8.88 7.48 7.38 7.12 6.75 9.25 9.00 9.45 2 Municipal V0 A U.- (4) Vp e (3) 8.43 5.42 13.55 8.81 -- High Low 1974 run 8.95 5.15 Low 1973 (1) Aas Utility New Recently 10.84 5.61 1973 -- High 1974 PFdPral1 Long-Term CD's New Issue-NYC 6.87 7.72 7.60 7.92 8.78 9.84 10.32 10.11 9.81 7.37p 18 25 Daily -- Dec. NOTES- 5 12 8.72 7.58 n.a. For columns 7, 8 and 10 the Columns 5 and 6 are one-day Wednesday quotes. Weekly data for columns 1 to 4 are statement week averages of daily data. weekly date is the mid-point of the calendar week over which data are averaged. Column 9 is a one-day quote for Thursday following the and of the The FNMA auction yield is the average yield Column 11 gives FNMA auction data for the Monday preceding the end of the statement week. statement week. in bi-weekly auction for short-term forward commitments for Government underwritten mortgages. Appendix Table 1 December RESERVES AND MONETARY VARIABLES Period Total Available to Support Nonborrowed Private Deposits 1 2 3 M1 M2 ___ _ments 4 1974 BANK CREDIT MEASURES MONEY STOCK MEASURES RESERVES 13, M3 Adjusted Credit Proxy 5 6 7 (Per cent annual rates of growth) Total Loans and Invest- Total Time Other Than CD's Institution Deposits 8 9 10 11 Te m e Tr ft CD's Nondeposit Funds U.S. Gov't. Demand 12 13 14 (Dollar change in billions) Annually: 1973 7.8 7.2 9.3 6.1 8.8 8.8 10.4 13.5 16.2 11.4 8.6 19 9 2.3 -1.7 Semi-annually: 1st Half 1973 2nd Half 1973 6.4 8.9 1.4 13.1 9.8 7.8 7.4 4.7 9.1 8.3 9.6 7.6 13.5 6.8 16.6 9.6 19.8 11.4 10.6 11.6 10.5 6.4 16.7 3 2 0.7 1 6 0.8 -2.5 1st Half 1974 10.6 1.0 12.4 6.0 8.6 7 6 14.5 15.0 18.6 10.8 5.9 17 5 1.8 1.4 Quarterly: IstQtr. 1974 2nd Qtr 1974 3rd Qtr. 1974 1.3 20.1 8.2 1.2 0.8 5.6 5.7 19.1 9.1 5.5 6.5 1.6 9.3 7.7 4.6 8.8 6.4 4.0 8.2 20.4 6.6 17.5 12.0 5.6 15.1 21.3 9.2 12.8 8.6 7.3 7.9 3.9 3.1 4 2 13.3 3.5 0.9 0.9 0.2 -0.7 2.1 1.0 Monthly: 1973--July Aug. Sept. Oct. Nov. Dec. 26.9 3.9 9.4 11.1 -3.5 12.1 24.6 -4.1 21.9 25.7 -0.7 16.1 15.0 11.5 14.1 1,6 -3.4 8.9 3.6 -0.5 -1.4 4.1 12.6 94 5.2 7.0 4.5 9.5 12.0 10.6 5.8 5.4 4.4 8.4 10.6 10.1 8.6 17.8 4.9 2.4 1.6 5.1 14.5 18.2 5.2 7.7 7.4 3.6 11.8 20.7 11.2 6.7 4.0 12.3 6.8 13.4 10.4 14.4 11.0 12.1 6.9 2.7 4.2 6.4 8.3 9.4 1.9 2.8 0.8 -1.4 -1.6 0.7 0.9 0.8 -0.1 -0.1 -0.1 0.1 -1.0 0.3 -0.3 -0.2 -0.1 -1.2 1974--Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. p Nov. p 32.6 -23.6 -4.7 31.1 21.2 7.1 21.7 -4.3 7.1 -1.2 1.5 42.6 -29.2 -9.2 17.2 -7.7 -7.1 13.1 -5.9 9.7 50.2 20.7 5.9 2.9 8.2 19.1 21.5 15.7 8.6 10.8 78 -0.7 0.8 -2.7 9.7 9.2 6.1 4.3 9.1 2.1 1.3 1.3 3.8 6.8 6.9 11.1 9.7 8.0 4.3 10.5 5.4 5.2 3.2 8.3 9.7 7.2 9.3 9.5 7.3 3.3 8.5 5.0 4.1 2.9 6.9 8.8 12.3 2.9 9.2 29.6 16.9 13.6 9.2 6.4 3.9 -0.2 6.1 16 5 17.0 18 4 17.9 12.1 5.7 16.0 9.4 -8.6 4.2 21.4 15.8 7.7 26.6 18.0 18.0 13.3 7.4 6.8 13.8 7.6 15.6 12.2 10 1 9.3 5.0 11.5 8.3 8 6 4.9 12.3 12.1 7.8 6.3 9 5 5.8 1.4 4.3 4.7 1.8 2.9 4.7 6.8 2.6 1.8 -0.2 5.9 4.6 2.8 2.3 0.2 1.0 1.4 -0.7 -0.1 0.4 0.6 0.6 0.7 -0.4 0.8 -0.2 -0.4 -0.7 -0.3 1.2 -2.9 1.0 1.4 1.0 -0.3 -1.1 2.0 0.1 -2.6 1.0 I I I- NOTES: Reserve requirements on Eurodollar borrowings are - -I - included beginning October I - - I- -- 1 __ 16, 1969, and requirements on bank-related commercial paper are included beginning October 1, 1970. I/ Growth rates are based on estimated monthly average levels derived by averaging end of current month and end of previous month reported data. p - Preliminary. FR 712-S December Appendix Table 2 13, 1974 RESERVES AND MONETARY VARIABLES SEASONALLY ADJUSTED, BILLIONS OF DOLLARS BANK CREDIT AN SURET MONEY STOCK MEASURES RESERVES Available Period Tota Non Total M1 to borrowed Support borrowed Pvt Deposits OTHER Total pCe Pvt Dep M2 M3 3 Adl Credit Proxy Loan and and Invest ments 9 Tme Total Time Other h Than CD's CD's Thrift Insti- s sFunds D tution Deposits CD's deposit i 13 2 3 4 5 7 8 Annuallybtec. 1972 31,456 30,406 29,092 255.8 198.9 525.7 823.2 406.4 559.0 313.8 269.9 297.5 43.9 4.3 Monthly: 1973--July Aug. Sept. 33,346 33,923 34,188 31,393 31,758 32,337 31,274 31,990 32,365 266.1 266.0 265.7 206.6 206.2 205.5 551.9 555.1 557.2 866.8 870.7 873.9 437.0 443.5 445.3 612.8 622.1 624.8 348.3 354.3 357.6 285.8 289.0 291.5 314.9 315.6 316.7 62.5 65.3 66.1 5.9 6.7 6.6 Oct. Nov. Dec. 34,930 34,870 35,164 33,454 33,476 33,867 32,832 32,780 32,965 266.6 269.4 271.5 206.1 208.4 209.9 561.6 567.2 572.2 880.0 887.8 895.3 446.2 446.8 448.7 628.8 632.8 634.6 359.6 360.8 364.5 295.0 297.7 300.7 318.4 320.6 323.1 64.7 63.1 63.8 6.5 6.4 6.6 197 -- Jan. Feb. Mar. 35,820 35,115 34,978 34,769 33,924 33,664 32,824 32,904 33,130 270.9 273.1 275.2 208.9 210.4 211.9 575.5 580. 8 585.5 900.7 907.7 914.9 453.3 454.4 457.9 643.3 652.4 662.4 371.0 375.9 378.3 304. 6 307.7 310.3 325.2 326.9 329.5 66.4 68.2 68.0 6.5 6.9 7.5 Apr. May June 35,884 36,519 36,736 34,147 33,929 33,729 33,658 34,260 34,708 276.6 277.6 279.7 212.8 213.2 215.0 589.4 591.5 596.7 920.5 923.0 929.5 469.2 475.8 481.2 672.3 679.1 682.9 386.7 392.5 398.4 312.7 314.0 317.0 331.1 331.5 332.7 73.9 78.5 81.3 8.1 8.8 8.4 July Aug. Sept. 37,399 37,266 37,282 34,098 33,930 34,000 34,958 35,272 35,296 280.2 280.5 280.8 215.4 215.1 215.0 599.4 602.0 603.6 933.4 936.6 938.9 484.9 487.5 489.1 692.0 697.3 692.3 402.8 405.3 407.6 319.2 321.5 322.8 334.0 334.5 335.3 83.6 83.8 84.8 9.2 9.0 8.6 Oct. p Nov. p 36,874 36,986 35,061 35,733 34,905 34,994 281.7 283.3 215.2 216.2 607.8 612.7 944.3 951.2 488.2 491.5 692. 3 693.2 412.3 414.9 326.1 329.4 336.6 338.5 86.2 85.5 7.9 7.6 37,578 36,682 37,301 36,375 36,916 34,360 34,437 35,557 35,053 35,278 35,174 34,762 35,232 34,510 35,021 280.7 280.8 282.4 282.0 281.2 214.8 214.6 215.8 215.6 214.5 604.2 605.4 608.2 608.8 608.3 488.5 487.4 488.2 489.2 487.2 409.5 411.0 411.9 413.0 413.1 323.5 324.6 325.8 326. 8 327.0 86.0 86.4 86.1 86.2 86.1 7.8 7.8 7.5 p 13p 20p 27p 37,026 36,604 36,829 37,371 35,899 35,506 35,462 35,890 35,044 34,824 34,733 35,353 282.0 282.8 283.3 283.3 215.0 216.0 216.2 215.9 610.0 612.1 612.6 613.4 488.9 491.3 492.1 492.1 413.8 414.7 414.4 415.4 328.1 329.2 329.3 330.1 85.7 85.5 85.1 85.3 7.3 7.1 7.8 8.2 4p 37,269 36,197 35,060 1285.8 218.0 615.2 416.0 329.5 86.5 7.6 1 4 Weekly: 1974--Oct. 2 9 16 23 30 6 Nov. Dec. 493.6 10 11 8.2 8.0 ETLaimated monthly average levels derived by averaging end of current month and end o prevous month reported data. Reserve requirements on Eurodollar borrowings are included beginning October 16, 1969, and requirements on bank-related commercial paper are included beginning October 1, 1970. Adjusted credit proxy includes mainly total member bank deposits subject to reserve requirements, bank-related commercial Weekly data are daily averages for statement weeks. Monthly data are daily averages except for nonpaper and Eurodollar borrowings of U. S. banks. bank commercial paper figures which are for last day of month. Weekly data are not available for 13, total loans and investment and thrift FR 712-T institution deposits. p - Preliminary. l NOTES: 6 Gov't e Demand Appendix Table III Money Supply Growth Rates ,M 1 less Foreign Official Deposits Ml less Foreign Official Deposits and Deposits due to Foreign Commercial Banks 5.2 5.7 5.7 February 4.7 4.7 5.2 March 0.5 0.5 0.9 April 6.5 6.5 6.1 1973 - January May 13.4 13.0 12.2 June 13.7 13.8 13.5 July 3.6 3.2 August - 0.5 September - 1.4 - 1.8 October 4.1 4.5 November 12.6 11.8 2.3 - 1.4 3.7 11.0 9.0 7.7 - 2.7 - 2.7 - 4.1 February 9.7 9.8 10.0 March 9.2 9.7 9.4 April 6.1 3.9 4.0 May 4.3 5.7 4.9 June 9.1 7.8 8.0 July 2.1 3.5 1.8 August 1.3 1.7 2.2 September 1.3 0.4 0,4 October 3.8 4.7 4.8 November - 6.8 6.9 7.0 December 1974 - January 9.4 Appendix Table IV Growth Rate in Money Supply (Per cent change at an annual rate) 1973 1974 8.6 10.3 10.3 8.9 7.7 5.2 7.5 8.9 9.8 7.9 9.3 9.6 8.8 9.1 7.2 7.7 8.2 6.4 7.3 3.6 4.6 6.2 4.0 5.2 I 3.4 6.8 7.3 II 11.3 7.3 10.6 III 0.6 5.5 5.6 IV 8.7 5.0 10.8 I 5.5 5.8 II 6.5 III 1.6 9.1 8.6 M = Annual rates of growth calculated from average levels in the final months of the quarters. Q = Annual rates calculated from average levels in all three months of the quarters. Appendix Table V Growth Rates in Money Supply for Alternatives M3 M2 M M Q M Q M Alt. A 6.3 1974 IV 5.7 4.0 8.8 7.2 8.0 1975 I II 7.2 7.5 6.6 7.8 10.8 11.6 9.8 11.7 10.2 9.8 11.7 11.7 Alt. B 1974 IV 5.6 3.9 1975 I II 6.2 6.9 6.1 7.1 8.7 7.1 7.9 9.4 9.0 9.4 10.1 10.1 10.0 8.9 10.0 Alt. C 1974 IV 5.6 3.9 8.6 7.8 1975 I II 5.8 6.2 5.8 6.2 8.6 8.8 8.6 8.7 Alt. D 1974 IV 3.8 8.5 7.1 7.8 1975 I II 5.6 5.4 7.7 7.4 7.9 7.6 7.7 7.6 M = Annual rates of growth calculated from average levels in last months of the quarters. Q = Annual rates calculated from average levels in all three months of the quarters. 7.8 7.6 

Federal Reserve (1974, December 16). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19741217

@misc{wtfs_bluebook_19741217,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1974},
  month = {Dec},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19741217},
  note = {Retrieved via When the Fed Speaks corpus}
}