Bluebook

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Content last modified 6/05/2009. Strictly Confidential (FR) Class I FOMC May 14, 1976 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Prepared for the Federal Open Market Committee By the staff Board of Governors of the Federal Reserve System STRICTLY CONFIDENTIAL (FR) May 14, 1976 CLASS I - FOMC MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent Developments (1) M1 increased at a 15,7 per cent annual rate during April, as both currency and demand deposits rose sharply. Even though M1 expansion appears to be moderating in May, growth for April and May combined is projected at around a 12¼ per cent annual rate, well above the 8½ per cent upper bound of the Committee's range. Growth in M2 over the April-May period is projected at about 12 per cent, at the upper end of the Committee's range. Inflows to savings accounts at commercial banks have remained strong, though continuing to decelerate from February's extraordinary pace; growth in time deposits other than CD's has strengthened somewhat. Growth in Monetary Aggregates over April-May period Reserve and monetary aggregates (Growth at SAAR, in per cent) Ranges Latest Estimates M1 4½ to 8½ 12.3 M2 8 to 12 12.1 Memo: Federal funds rate (per cent per annum) 4½ to 5½ Avg, for statement week ending 4.78 April 21 28 4.93 May 5 5.03 12 5.02 (2) Following the April 20 FOMC meeting, the Desk promptly became somewhat less accommodative in the provision of reserves and sought a funds rate around 4-7/8 per cent, a shade above the then prevailing rate of 4¾ per cent and equal to the mid-point of the range that had been adopted by the Committee. Subsequently, with incoming data suggesting rates of growth in M1 well above the Committee's desired range and M2 near the upper end of the range, the Desk adopted successively higher funds rate objectives, In moving to these higher rates the Desk took care in early May to avoid any undue disruption of the Treasury's refunding operation. Most recently, the Desk has been in process of establishing a 5¼ per cent Federal funds rate in the market, and as of this writing funds were trading around 5-3/16--5¼ per cent. (3) Growth in nonborrowed reserves in the April-May period, though quite modest, has been somewhat more rapid than contemplated at the time of the previous FOMC meeting. Such reserves increased at only a 1½per cent annual rate, on average, during April, as the sizable decline in CD's outstanding freed reserves to support the expansion of other deposits, but they show signs of increasing somewhat more rapidly in early May.1/ Member bank borrowings averaged about $40 million in the interval between Committee meetings, little changed from the previous intermeeting period. (4) Since the last Committee meeting, short-term market yields have risen 35 to 50 basis points in response to the rising funds rate, to 1/ A discussion of the expected and actual behavior of nonborrowed reserves relative to the Committee's short-run targets for monetary growth may be found in Appendix A. indications of a significant pickup in growth in the key monetary aggregates, and to further signs of vigorous economic recovery. Rates on most long-term securities have moved up by roughly 25 to 40 basis points. Rates in the secondary mortgage market have increased along with yields in other sectors of the credit markets; however, primary mortgage rates have only halted their downward trend as deposit growth continued strong at nonbank thrift institutions. (5) The Treasury announced that its May refunding would include an offering of three issues, with the following amounts available to the public: $2 billion of 1-year, 11½-month notes and $750 million of reopened 23¾-year bonds on an auction basis, as well as about $3½ billion of 10-year notes on a fixed-price subscription basis. The 10-year notes were sub- stantially oversubscribed, and $4.7 billion of them were allotted. As a result, new cash raised in the refunding amounted to about $3½ billion. The issues have been readily absorbed by the market despite the recent rise in interest rates, and dealers have distributed nearly all of the $1.4 billion of securities they received in the operation. Most recently, the two notes traded about ¼-½ of a point below their average issue price, while the bond has been near issue price. (6) Total short-term business credit remained unchanged during April as a $1 billion rise in outstanding commercial paper issued by nonfinancial firms offset a similar decline in bank loans to businesses. Total loans at all commercial banks are estimated to have contracted slightly during the month, but banks' net acquisitions of U.S. Government securities were substantial. Weekly reporting banks allowed another $3½ billion of CD's to run-off in April, as inflows from other deposits were strong. (7) The table on the following page shows (in percentage annual rates of change) related monetary and financial flows over various time periods. The data in this table and all subsequent tables except Table 2 in the back of the blue book incorporate benchmark revisions for the money supply based on nonmember call reports for December 31, 1975. These revisions were relatively small in magnitude, and a comparison of the unrevised and revised data may be found in Appendix table VI. --- Calendar Year 1975 Past Twelve Months Apr. '76 over -Apr. Past Six Months Apr. '76 over '75 Oct. '75 Past Three Months Apr. '76 over Past Month Apr. '76 over Jan. '75 Mar ,'7 Nonborrowed reserves 1.3 -1.1 -0.4 -2.1 1.3 Total reserves -.4 -1.3 -1.2 -2.5 0.9 Monetary Base 5.8 6.6 7.4 7.8 12.2 4.1 5.9 5.7 9.1 15.3 8.5 10.4 11.1 13.1 15.3 11.3 12.7 12.2 13.6 14.8 M4 (M2 plus CD's) 6.4 6.8 7.2 7.5 10.8 M5 9.7 10.1 9.7 10.0 12.1 Total member bank deposits (bank credit proxy adj.) 3.9 3.3 3.7 2.6 3.3 Loans and investments of commercial banks 2/ 4.3 4.8 5.0 7.1 4.9 -.6 -1.4 -1.6 -2.6 -1.8 Concepts of Money (Revised Series) Ml (currency plus demand deposits) 1/ M2 (M plus time deposits at commercial banks other than large CD's) M3 (12 plus deposits at thrift institutions) (M3 plus CD's) Bank Credit Short-term Market Paper (Monthly average change in billions) Large CDs Nnbank commercial paer -. 2 -1 0.3 0,4 1.0 I/ 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 averages 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. Prospective developments (8) Summarized below for the Committee's consideration are three alternative sets of short-run specifications for the monetary aggregates and the Federal funds rate. (More detailed data, as well as longer-run growth rates, are shown in the tables on pp. 6a and 6b, while reserve aggregates consistent with the specifications are presented in appendix table V. Alt, A Alt. B Alt. C Ranges for May-June M1 6-10 5¼-9¼ 4½-8½ M2 7½ -11½ 7-11 5½-9½ 4¾-5¾ 5¼-6¼ Federal funds rate (intermeeting range) (9) 4¼ -5¼ Alternative B assumes a Federal funds rate range centered on 5-1/4 per cent, the most recent Desk objective, while alternative A assumes some easing of the money market and alternative C some further tightening. Under all three alternatives, the rate of growth in M1 over the May-June period is expected to be considerably reduced from its April pace, though remaining stronger than in the latter part of 1975 and early 1976. For instance, under alternative B growth may be in a 5-1/4 to 9-1/4 per cent annual rate range. (10) The very rapid rate of expansion of M1 in April may have been caused in part by a large decline in U.S. Treasury deposits. However, the underlying demand for money also appears strong, and a relatively -6aAlternative Levels and Growth Rates for Key Monetary Aggregates M1 M2 M3 Alt. Alt. C 1141.2 1141,2 1141.2 1152.3 1151.6 1150.6 700.8 1163.0 1161.2 1158.6 677.4 697.4 711.6 723.0 677.4 696.6 708.8 719.4 1116.1 1152.2 1178.5 1194.7 1116.1 1151.3 1177.7 1198.0 1116.1 1150.1 1172.7 1191.9 725.5 731.4 731.7 1200.5 1212.7 1213.8 7.2 5.9 10.1 9.1 9.5 8.3 8.3 6.7 11.7 11.1 10.9 10.0 9.9 8.3 9.7 6.3 3.5 3.0 9.4 5.0 3.3 4.8 12.0 8.4 5.3 2.1 11,8 8.1 6.4 4.6 11.3 7.0 6.0 6.8 12.9 9.1 5.5 1.9 12.6 9.2 6.9 4.9 12.2 7.9 6.5 7.3 8.4 2.9 8.1 3.2 7.3 4.0 10.3 3.7 10.1 5.6 9,3 6.5 11.2 3.7 11.0 5.9 10.1 7.0 5.7 5.7 5.7 7.1 8.0 8.0 7.6 8.7 8.8 Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C April 301.8 301.8 301.8 692.1 692.1 692.1 May 304.0 303.8 303.6 697,9 697.6 696.9 June 305.9 305.5 305.1 703.2 702.4 1976 QI QII QIII QIV 296,5 303.9 309,0 311.9 296,5 303.7 308,5 311.2 296.5 303,5 307.3 309.8 677,4 697.7 712.3 721.8 1977 QI 313.5 313.5 313.5 8.7 7.5 8.0 6.7 QII QIII QIV QI 10.0 6.7 3.8 2.1 Seami-annual QI '76-QIII '76 QIII '76-QI '77 Annual QI '76-QI '77 1976 Alt A growth Rates Nonthly: 1976 May June Quarterly Average: 1976 1977 FOMC longer-run range QI '76-QI '77 44-7 74-10 9-12 -6bAlternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) Alt. A Alt. B Credit Proxy M5 M4 Alt C Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C 1976 April May June 763.4 765.8 770.5 763.4 765.5 769.9 763.4 765.1 769.1 1212.5 1220.2 1230.3 1212.5 1219.5 1228.7 1212.5 1218.9 1226.9 517.4 516.6 519.1 517.4 516.4 518.7 517.4 516.3 518.5 1976 QI QII QIII QIV 753.3 766.6 780.8 794.0 753.3 766,3 780.1 793.7 753.3 765.9 777.8 790.9 1192,0 1221.0 1247.0 1266.9 1192.0 1220.2 1246.3 1268.7 1192,0 1219.4 1241.8 1263.4 515.2 517.7 524.8 532.5 515.2 517.5 524.3 531.9 515.2 517.4 522.9 530.2 1977 QI 804.8 806.4 805,7 1279.7 1287.7 1287.9 538.9 538.5 537.7 3.8 7.4 3.3 6.9 2.7 6.3 7.6 9.9 6.9 9.1 6.3 7.9 -1.9 5.8 -2.3 5.3 -2.6 5.1 QII QIII QIV QI 7.1 7.4 6.8 5.4 6.9 7.2 7.0 6.4 6.7 6.2 6.7 7.5 9.7 8.5 6.4 4,0 9.5 8.6 7.2 6.0 9.2 7.3 7.0 7.8 1.9 5.5 5.9 4.8 1.8 5.3 5.8 5.0 1.7 4.3 5.6 5.7 Semi-annual QI '76-QIII '76 QIII '76-QI '77 7.3 6.1 7.1 6.7 6.5 7.2 9.2 5.2 9.1 6.6 8.4 7.4 3.7 5.4 3.5 5.4 3.0 5.7 Annual QI '76-QI '77 6.8 7.0 7.0 7.4 8.0 8.0 4.6 4.5 4.4 Grath Rates Monthly: 1976 May June Quarterly Averages: 1936 1977 rapid growth in M1 is likely to continue. Perhaps indicative of the strength of underlying money demand, there was no significant reversal in late April and early May of the large build-up in private demand deposits in the first half of April. (11) Growth in M2 over the May-June period is expected to remain relatively rapid under alternatives A and B. Nevertheless, growth under alternative B--as measured by the mid-point of a 7-11 per cent, annual rate, range--is expected to be slower than during the first four months of the year. This reflects the higher level of market interest rates that has developed as well as some shift of funds out of savings and time deposits in payment for the $4.7 billion of new 10-year notes recently offered by the Treasury. (12) Under alternative C, growth in M2 is expected to slow more markedly over the May-June period. The further rise in the Federal funds rate that is envisaged would lead to a continued rise in other short-term rates, with the 3-month Treasury bill rate likely to move up to the 5-3/4-6 per cent area. This would probably lead to a considerable outflow from savings deposits of those interest-sensitive funds that were shifted into such accounts when short-term market rates first moved down to around 5 per cent, the Regulation Q ceiling rate on commercial banks' savings deposits. (13) The firming of money market conditions associated with alternative C would also exert upward pressure on longer-term interest rates over the next few weeks. Loan demands are still focused more on -8- securities markets than on banks. The corporate bond calendar has built up further in recent weeks, partly in anticipation of higher interest rates later, and the municipal calendar remains sizable. Moreover, the Treasury is likely to continue raising much of its new cash in the coupon area. Even if the Federal funds rate stabilizes around 5-1/4 per cent between now and the next Committee meeting--as is contemplated under alternative B-some further upward adjustment in longer-term, as well as short-term interest rates may still occur, since markets probably have not yet fully adjusted to a 5-1/4 per cent funds rate. (14) Over the coming year, the staff expects interest rates generally to be under considerable upward pressure, assuming M1 growth from QI '76 to QI '77 is at a rate around the mid-point of the 4-1/2-7 per cent range adopted by the Committee. Interest rates are projected to reach higher levels than anticipated at the time of the last meeting for three main reasons: (a) the FOMC lowered its longer-run growth rates for M1 and M2 slightly; (b) the staff has revised upward somewhat its projection for the rate of growth in nominal GNP; and (c) the much faster than expected increase in the money stock apparently in store for the second quarter probably reflects, at least in part, an increase in money demand relative to GNP. Because the annual rate of M1 growth in the second quarter now seems likely to be in the area of 9½-10 per cent, annual rate, over the next three quarters the growth rate would have to be held to about 4-1/4 per cent (annual rate) if the 5-3/4 per cent growth of the QI '76-QI '77 range is to be achieved. (15) The staff's longer-run projections of the Federal funds rate under each of the three alternatives are shown in appendix table IV. As may be seen, the staff expects that under alternative B the funds rate would peak out at around 8-1/2 per cent early next year. However, under alternative C, which contemplates a prompt further move toward restraint, the funds rate may peak out at a lower 7-3/4 per cent level by the winter of this year. A considerably higher ultimate level for the funds rate is envisaged under alternative A, since it would be necessary to offset later the effects of near-term easing in reserve conditions contemplated by that alternative. In view of these interest rate expectations, we have assumed for all alternatives an increase in Regulation Q ceiling rates in the fall of this year of 50 basis points for certificates maturing in 4 years or more and 25 basis points for shorter-term certificates. Even so, as indicated in the last two lines of the table on p. 6a, over the QI '76-QI '77 period, growth in M1 at a rate equal to the mid-point of the FOMC's range is expected to be associated with growth in M2 and M3 at rates near the bottom of their respective ranges. -10- Proposed directive (16) Given below is a proposed operational paragraph if the Committee wishes to formulate its instructions in terms of desired growth in monetary aggregates over the months ahead. No alternatives are pre- sented for this formulation, in the expectation that the reference to desired growth will be taken to apply to the longer-term targets and that at this meeting the Committee will not reconsider those targets. 'Monetary Aggregates" Proposal 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 period ahead. (17) Should the Committee desire to place main emphasis on bank reserve and money market conditions, the language needed would depend on the specific conditions sought. Three alternative "money market" direc- tives intended to correspond to the similarly lettered policy alternatives are given below. Alternative "Money Market" Proposals Alternative A To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve SOMEWHAT EASIER bank reserve and money market conditions moderate with consistent monetary in growth aggregates over the -11- period IMMEDIATELY ahead, PROVIDED THAT MONETARY AGGREGATES APPEAR TO BE GROWING AT ABOUT THE RATES CURRENTLY EXPECTED. Alternative B To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve MAINTAIN PREVAILING bank reserve and money market conditions with consistent in monetary growth moderate aggregates over the period IMMEDIATELY ahead, PROVIDED THAT MONETARY AGGREGATES APPEAR TO BE GROWING AT ABOUT THE RATES CURRENTLY EXPECTED, Alternative C To implement this policy, while taking account of developments in domestic and international financial markets, the Committee seeks to achieve SOMEWHAT FIRMER bank reserve and money market condimoderate with tions consistent in growth monetary aggregates over the period IMMEDIATELY ahead, PROVIDED THAT MONETARY AGGREGATES APPEAR TO BE GROWING AT ABOUT THE RATES CURRENTLY EXPECTED. CHART 1 CONFIDENTIAL (FR) CLASS II-FOMC 5/14/76 MONETARY AGGREGATES NARROW MONEY SUPPLY M1 BILLIONS OF DOLLARS S-320 305 300 295 BROADER MONEY SUPPLY M2 290 1974 1975 1976 CHART 2 5/14/76 MONETARY AGGREGATES ADJUSTED CREDIT PROXY BILLIONS RESERVES BILLIONS OF DOLLARS 39 37 TOTAL 35 NONBORROWED 33 31 1974 1975 1976 Total and nonborrowed reserve series have been adjusted to remove discontinuities associated with changes in reserve requirement ratios. 5/14/76 CHART 3 MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET COINDITIONS PERCENT 8 - F.R. DISCOUNT RATE INTEREST RATES Short-term - PERCENT INTEREST RATES 10 - WEEKLY WEEKLY AVERAGES - - 7 9 FHA MORTGAGES FNMA MONDAY AUCTIO! EURO-DOLLARS 3-MONTH - FEDERAL FUNDS RATE 8 8 PRIME COMMERCIAL PAPER / 4-6 MONTH 5 S- _I I Aaa UTILIT NEW ISSUE 4 BILLIONS OF DOLLARS 1 2 1975 1976 1975 1976 1975 1976 I CONFIDENTIAL (F.R.) CLASS II-FOMC TABLE 1 MAY 14, BANK RESERVES 1976 ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED BANK RESERVES Period Total Reserves Nonborrowed Reserves REQUIRED RESERVES Monetary Base Total Required Private Demand 111,537 112,191 113,335 (114,1141 33,833 33,780 33,862 (33,962) 19,715 19,659 19,783 420,0131 Total Time Deposits Gov't. and Interbank MONTHLY LEVELS-SMILLIONS 34,052 34,003 34,029 (34,162) 1976--FEB. MAR. APR. MAY 33,971 33,949 33,985 (34,081) 11,915 11,869 11,931 (11,758) 4 2,203 2,252 2,148 2,193) PERCENT ANNUAL GROWTH QUARTERLY 1975--30 QTR. 4TH OTR. 1976--IST QTR. -0.8 1.4 -6.2 -2.8 4.5 -5.3 4.1 7.3 4.5 -0.7 0.5 -5.7 3.4 -3.4 -2.0 -9.0 4.1 -11.1 0.1 0.6 -3.8 -1.9 2.7 -3.2 6.3 5.6 5.3 -0.1 -0.1 -3.6 6.2 -2.1 -1.0 -12.2 -0.6 -6.5 -6.1 -1.9 2.9 3.5) -1.0 QUARTERLY-AV 1975--3R0 QTR. 4TH OTR. 1976--1ST QTR. MONTHLY -6.8 -1.7 0.9 S 4.7) 1976--FEB. MAR. APR. MAY APR.-MAY WEEKLY APR. S 2.3) ( 10.3) ( 1 S 3.2) -3.4 7.6 14.0) ( -21.1 -4.6 6.3 -17.4) 10.8) f -5.6) 31 34,315 34,279 112,748 33,917 19,781 11,892 2,244 7 14 28 336,65 33,805 34,095 34,126 33,841 33,744 34,055 34,073 112,438 112,937 113,905 113,775 33,742 33,632 33,965 33,977 19,576 19,692 19,739 20,024 11,914 11,955 11,983 .11.910 2,253 1,985 2,243 2,042 5 12 34.815 33,662 34,785 33,606 114,334 113,258 34,329 33,725 20,140 19t922 11,792 11,779 2,397 2,024 21 MAY I 2.8) 4.0 7.0 12.2 S 8.2) LEVELS-$MILLIONS 1976--MAR. NOTE: ( ( -6.9 -0.8 1.3 3.4) RESERVE SERIES HAVE BEEN ADJUSTED 10 REMOVE DISCONTINUITIES DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. ASSOCIATED WITH CHANGES I IN RESERVE REQUIREMENT RATIO. Table 2 CONFIDENTIAL (FR) CLASS II-FOMC MONETARY AGGREGATES ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED Total Broad Credit U.S. Govt. (Ml) (M2) Proxy Deposits1 Totall Savings Other 1 2 3 4 5 6 7 8 455.5 456.4 459.1 (458.61 380.1 383.2 387.8 (391.0) 170.2 173.5 176.6 1179.1) 210.0 209.8 211.1 (211.9) Other Tan Mmber Nondeposit Time and Savings Deposits Adjusted Narrow Money Supply Period CD'S C d o Funds U.S. Govt. Deposits 10 9 11 MONTHLY LEVELS-SBIL 1976--FEB. MAR. APR. MAY 296.9 298.4 302.3 (304.5) 677.0 681.7 690.1 (695.5) 515.6 516.0 517.4 (516.2) 1 10.9 11.0 7.2 7.1) 1 75.4 73.1 71.3 67.6) I 8.0 8.2 7.5 7.5) ( 2.6 2.5 2.5 2.5) X ANNUAL GROWTH QUARTERLY 1975-3R0 QTR. 4TH OTR. 1976-1ST OTR. 3.6 1.9 4.6 6.5 6.4 11.1 -0.8 7.0 1.2 2.6 11.8 4.6 8.9 10.1 16.2 14.5 17.1 32.1 4.9 4.7 4.0 -23.8 19.2 -47.3 7.1 2.5 3.0 10.1 6.1 9.5 1.4 6.0 2.3 4.7 9.1 6.8 12.7 9.1 14.8 18.4 14.7 28.6 8.6 4.9 4.4 -27.5 9.5 -29.3 ( 6.5 6.1 15.7 8.7) ( 14.3 8.3 14.8 9.4) 3.5 0.9 3,3 -2,8) 6.9 2.4 7.1 -1.3) ( 20.6 9.8 14.4 9.9) ( 43.8 23.3 21.4 17.0) ( 2.9 -1.1 7.4 4.5) ( -57.6 -36.6 -29.5 -62.3) I 12.3) ( 12.1) 2.9) ( 12.2) ( 19.4) ( 6.01 ( -45.1) QUARTERLY-AV 1975-3RD QTR. 4TH QTR. 1976-1ST QTR. MONTHLY 1976--FEB. MAR. APR. MAY. APR.-MAY ( I 0.21 ( WEEKLY LEVELS-SBIL 1976-NAR. 31 298.6 683.2 515.3 9.0 457.8 384.5 73.3 8.2 1.9 APR. 7 14 21 28 300.0 30.3 303.7 302.3 686.6 691.1 691.0 691.2 517.3 517.9 519.6 515.2 7.3 5.6 9.6 6.2 459.9 459.8 458.0 458,5 386.6 387.8 387.2 388.8 73.2 72.0 70.8 69.7 7.2 7.2 8.0 7.6 2.4 2.5 3.6 1.9 303.1 692.4 515.8 6.8 458.4 389.3 69.1 7.3 1.7 MAY NOTEt I/ 3 P DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. CONFIDENTIAL (FR) CLASS II - FOMC MAY 14, 1976 TABLE 3 RESERVE EFFECTS OF OPEN MARKET OPERATIONS AND OTHER RESERVE FACTORS (Millions of dollars, not seasonally adjusted) BilU & Accept. Period ) Open Market Operations / Agency RPT'a Coupon aIssu Issues Net 3/ (2) (3) (4) Total (5) Daily Average Reserve Effects 2~ Other 4/ Open Market A Member 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) (9) (10) 1975--Oct. Nov. Dec. 147 -608 1,799 709 297 284 -1 -- 15 -2,637 1,219 445 -2,537 3,315 1,276 521 1,165 -205 -130 66 -1,150 -387 -813 15 1 79 -94 3 339 1976--Jan. Feb. Mar, -1,590 1,205 -180 321 528 203 240 295 -- 3,597 -3,129 788 2,567 -1,101 812 942 1,631 128 -48 -3 -18 -308 -3,250 -96 137 -76 -22 449 -1,546 36 Apr. 464 294 -- 1,261 2,019 -1,769 -14 1,888p -116p 221 3 10 17 110 -711 401 -107 310 297 --- -3,314 -8,835 4,115 -2,907 -9,653 4,826 -93 -4,051 429 -63 -38 -7 588 3,380 -91 144 -50 -112 288 -659 443 24 31 376 -147 -- -- 3,143 1,142 3,519 995 3,541 -1,002 38 -42 -3,727 1,718 -159 184 -70 -- -7,764 -4,396 -12 3,759 -64 -- -- 5,064 4,543 -1,273 37 1,492 -225 364 -- 5,206 6,372 4,845 -21 -4,139 310 -- -1,002 -13 138 13 1976-Mar. Apr. 7 -1,608 14 -521 21 801 28 May 5 12 - 988 242 -634 -- -- -2,077 522 -9,442 -1,835 -12 2,600 -4,089 -23 26 -195p -1,677p 2,454p 11 490 -585 482 375 2 -297 444 -349 19 26 1/ Represents change in System's portfolio from end-of-period to end-of-period; includes redemptions in regular bill auctions. 2/ Represents change in daily average level for preceding period. i/Includes 53p 456p -1,26Op matched sale-purchase transactions as well as RP's. 4/ Sum of changes in vault cash, currency in circulation, Treasury operations, F.R. float, gold and foreign accounts, and other F.R. accounts. 5/ Reserves to support private nonbank deposits. P - Preliminary. CONFIDENTIAL (FR) CLASS II - FOMC MAY 14, 1976 TABLE 4 NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES 1/ ($ millions, not seasonally adjusted) Treasury Bills Net Change 2/ Period -490 7,232 1,280 -468 1972 1973 1974 1975 Within 1-year Treasury Coupons Net Purchases 3/ Over 10 5 - 10 1 - 5 Total Within 1-year 1,582 1,415 1,747 6,202 46 120 439 191 592 400 1,665 824 87 207 320 337 789 579 797 3,284 539 500 434 1,510 167 129 196 1,070 Federal Agencies Net Purchases 4/ Over 10 Total 253 244 659 460 168 101 318 138 1,059 864 3,082 1,613 285 5 - 10 1 - 5 Net Change Outright Holdings Total 5/ Net RP's 6/ -1,358 -46 -154 1,272 1,631 9,273 6,303 7,267 -2,093 33 1,054 625 312 2,024 69 169 61 584 508 53 Qtr. II 1,086 218 1,135 454 273 2,079 - -- -2 -- -2 3,076 230 Qtr. III Qtr. IV -757 1,294 13 74 712 385 201 234 171 315 1,096 1,006 64 58 514 141 106 71 63 14 747 284 1,060 2,626 2,392 -1,403 -363 115 554 226 156 1,052 102 288 108 38 535 1,022 1,256 1975--Nov. Dec. -588 1,784 43 31 267 118 156 78 244 71 709 297 - -- -- -- -- 99 2,096 -2,637 1,219 1976--Jan. Feb. -1,596 1,275 37 40 110 366 100 63 73 59 321 528 26 76 139 149 47 61 27 11 -1,030 2,029 3,597 -3,129 Mar, -42 38 78 63 24 203 - -- -- - 23 788 Apr. 513 27 179 51 38 294 - - - - --63 -- 24 --- --107 310 -- 76 -- 149 --- 61 --- 11 -- -- -70 -- - -- - -- -- - - 1975--Qtr. I 1976--Qtr. I 1976-Mar. 3 10 17 24 31 150 -688 438 431 -156 -38 - -107 185 -- Apr. 7 14 -1,593 -501 - -70 - -- 21 800 27 249 51 38 364 - -- 28 1,008 - -- -- -- - - - 5 12 240 -- -- -- -- - -626 - - - - May 19 26 1/ / / 4/ 5/ 6/ - - - 240 297 -- 1,261 -758 297 ---- 407 -88 711 376 -147 -3,314 -8,835 4,115 3.143 1,142 - -1,678 -521 - - 1,166 5,206 - - 988 -1,002 -- 242 -2,077 - -634 522 - - - -7,764 5,064 Change from end-of-period to end-of-period. Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions. Excludes redemptions, Outright transactions in market and with foreign accounts and short-term notes acquired in exchange for maturing bills. maturity shifts, rollovers of maturing coupon issues, and direct Treasury borrowings from the System. Excludes redemptions and maturity shifts. Outright transactions in market and with foreign accounts only. In addition to net purchases of securities, also reflects changes in System holdings of bankers' acceptances, direct Treasury borrowings from the System, and redeptions (-) of Agency and Treasury coupon issues. Includes changes in both RP's (+) and matched sale-purchase transactions (-). CONFIDENTIAL (FR) CLASS II - FOMC May 14, 1976 TABLE 5 SECURITY DEALER POSITIONS AND BANK POSITIONS (millions of dollars) I SU.S. Govt. Security Dealer Positions _ Underwriting Syndicate Positions Corporate Municipal Bonds Bonds (3) (4) Period _ Bills (1) Coupon Issues (2) 1975--High Low 7,029 1,586 2,845 253 464 0 389 48 1976--High Low *6,821 *4,100 1,684 349 167 0 239 34 1975--Apr. May June 2,737 4,744 5,201 1,617 1,752 1,351 35 91 89 115 170 118 July Aug. Sept. 4,231 4,020 5,008 1,246 1,204 588 60 44 31 Oct. Nov. Dec. 5,766 4,751 4,822 1,480 2,073 1,075 4,959 5,214 5,910 May NOTE: Total 8 New York (8) 804 -42 74 5 -7,387 -1,757 -11,632 570 -106 11 8 -6,736 -2,367 -12,603 110 66 227 6 9 11 -4,079 -3,965 -5,821 -10,426 - 9,567 9,344 135 181 122 259 211 397 17 37 58 -5,546 -3,964 -3,551 - 9,896 9,966 9,015 14 156 95 123 173 103 189 60 130 65 29 14 -2,644 -3,812 -2,811 - 9,202 1,220 1,051 778 34 66 43 97 181 151 79 81 54 9 10 8 -3,581 -4,138 -4,726 - *5,750 *605 69 133 43p 10p -5,248p -10,675p 3 10 17 24 31 4,530 5,984 6,107 6,106 .6,032 581 911 349 809 1,184 155 187 169 93 134 84 48 40 78 36 -4,415 -6,510 -4,980 -3,681 -4,226 - 7 14 21 28 6,725 6,821 *6,190 *4,100 669 773 *611 *405 158 97 139 136 24 61 39 53p -5,819 -6,686 -5,016 -10,533 -12,660 -11,856 -3,533 - 9,215 5 12 1.9 26 *4,309 *4,620 *548 *949 137 2 00p 30p -4,270p - 7,145p -6,198p -9,23 p Apr. Apr. Excess** Reserves (5) Member Bank Reserve Positions Borrowin& at FRB** Basic Reserve Deficit Seasonal (7) 1976--Jan. Feb. Mar. 1976--Mar. _ 6 5 p 38 Others (9) - - 7,207 7,997 -10,159 -10,418 9,746 -10,015 - 9,640 9,390 -10,252 - 9,914 -10,095 - 8,824 2 Government security dealer trading positions are on a commitment basis. Trading positions, which exclude Treasury bills financed by repurchase agreements maturing in 16 days or more, are indicators of dealer holdings for sale over the near-term. Other security dealer positions issues still in syndicate, excluding trading positions. The basic reserve deficit is excess reserves less borrowing at Federal Reserve less net Federal 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) CLASS II -- FOMC MAY 14, 1976 TABLE 6 SELECTED INTEREST RATES (Per Cent) Long-Term Short-Term Treasury Bills 1-year (3) 1975--High Low 90-Day (2) 6.68 5.02 90-119 Day Commercial Paper (4) 7.31 5.46 8.43 5.38 1976--High Low 5.17 4.73 5.92 5.35 5.44 1975--Apr. May June 5.61 6.40 5.91 6.11 5.70 5.67 5.34 July Aug. 6.13 6.64 7.16 6.32 6.05 6.59 7.20 6.79 6.31 6.44 5.96 5.48 5.44 6.48 6.35 5.78 5.88 6.08 6.07 6.16 5.44 5.53 5.82 5.15 5.13 5.25 4.91 Mar. 4.87 4.88 5.00 Apr. 4.86 5.54 5.08 Federal Funds Period 5.23 5.34 6.44 6.42 Sept. I)Ct. Nov. Dec. 1976--Jan. Feb. 1976--Mar. Apr. May Daily--May 5.86 5.00 CD's New Issue-NYC 60-89 Day (5) 90-119 Day (6) U.S. Govt. (20yr. Constant Maturity) (10) FNMA Auction Yield (11) GNMA Guaranteed Securities 7.75 5.38 9.71 9.06 7.67 6.27 8.63 7.63 9.95 8.78 5.13 4.75 5.38 4.88 8.94 8.44 7.13 6.54 8.15p 7.80 9.13 5.85 5.44 6.03 5.63 5.51 9.66 9.33 6.94 6.97 6.94 8.36 8.22 8.04 9.06 9.27 9.09 6.25 6.63 6.81 9.43 9.49 9.57 7.06 7.17 7.44 8.17 8.50 8.57 9.14 9.41 9.78 6.45 6.03 5.83 9.43 9.23 7.39 7.43 7.31 8.35 8.28 8.23 9.80 9.80 9.31 4.84 5.03 5.06 5.05 5.20 8.79 8.63 8.61 7.07 6.94 6.92 8.01 8.03 7.97 9,10 9.06 9.05 8.37 8.29 8.30 4.81 4.94 8.52 6.60 7.86 8.89 8.22 5.13 5.38 8.72 8.64 8.60 8.50 8.54 7.04 5.25 5.25 6.98 6.92 6.72 6.69 8.07 7.99 7.97 7.89 7.90 9.06 8.31 8.31 8.50 6.65 6.54 6.55 6.55 6.71 7.88 5.69 5.65 4.95 4.86 4.77 5.87 5.92 5.86 5.13 5.13 4.79 4.84 5.71 5.71 5.00 4.88 5.13 5.00 7 14 21 28 4.73 4.77 4.78 4.93 5.69 5.42 5.40 5.57 4.88 4.75 5.00 5 12 19 26 5.03 5.02 5.65 5.79 5.00 6 13 4.94 5.12p 5.69 5.91 Municipal Bond Buyer (9) 5.25 3 10 17 24 31 4.92 5.10 Aaa Utility New Recently Offered Issue (8) 4.75 4.88 5.13 9.65 9.26 8.72 8.63 8.61 8.53 8.60 - 4.88 4.88 5.00 8.42 8.38 8.58 8.44 8.54 8.57 5.13 5.25 8.68 8.82p 8.62 8.78p 6.83 8.83 8.31 9.03 8.31 8.28 7.84 7.80 7.84r 7.94 8.94 8.27 8.12 8.27 8.23 8.03 8.15p 8.94 8.83 8.31 8.31 8.02 8.17(5/12) NOTE: Weekly data for columns 1 to 4 are statement week averages of daily data. Columns 5 and 6 are S1-day Wednesday quotes. For columns 7 and 10, the weekly date is the mid-point of the calendar week over which data are averaged. Columns 8 and 9 are 1-day quotes for Friday and Thursday, respectively, following the end of the statement week. Column 11 gives FNMA auction data for the Monday preceding the end of the statement week. Column 12 is a 1-day quote for the Monday preceding the end of the statement week. The FNMA auction yield is the average yield in bi-weekly auction for short-term forward commitments for Government underwritten mortgages. GNMA yields are average net yields to investors on mortgage-backed securities for immediate delivery, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying the prevailing ceiling rate. Appendix A Comparison of "Targeted" and Actual Reserves The table below compares the actual average level of reserves for the 4 week period ending May 19 with the "targeted" level that had been thought to be consistent with the mid-points of the short-run ranges for the monetary aggregates adopted at the last FOMC meeting. Actual 1/ Nonborrowed reserves Total reserves Monetary base 34,136 34,190 113,870 "Targeted" Difference 33,886 33,964 113,234 Memorandum: Member bank borrowing Excess reserves 1/ 250 226 636 -24 27 Includes week of May 19, which is partly projected. As can be seen, nonborrowed reserves during the intermeeting period turned out to be $250 million higher than "targeted." In evaluat- ing the relationship between "targeted" and actual reserves during the period just past, it needs to be recognized that the FOMC adopted a Federal funds rate range--4-1/2 to 5-1/4 per cent--that was somewhat lower than the range the staff had believed consistent with the chosen monetary and reserve aggregates--which was 4-3/4 to 5-3/4 per cent. Thus, the chances of hitting the nonborrowed "target" were reduced by the particular Federal funds rate constraint adopted. Given the actual Federal funds rate, about $50 million more in nonborrowed reserves had to be supplied to accomodate larger bank demands for free reserves (excess reserves minus borrowings) than the A - 2 have had to rise sufficiently in the short run to limit expansion in deposits and required reserves. Upward rate pressures would have been most pronounced in pursuing a monetary base target, given the need to reduce total reserves in order to offset the very rapid expansion in currency that took place. Astaff had assumed. 3 In addition, reserve demands were considerably strengthened as required reserves turned out to be $200 million higher than originally expected at the time of the last FOMC meeting. reflected stronger deposits than earlier anticipated. This However, the multiplier relationship between lagged deposits and current required reserves turned out to be higher than anticipated, and therefore held down the increase in required reserves that would otherwise have been associated with deposit growth. If the Desk had restrained nonborrowed reserves further, banks would have been forced to borrow their required reserves and/or to reduce deposit expansion. However, given the sgrength in deposit demand, and assuming an orderly upward adjustment in the funds rate, the nonborrowed reserve "target" (within a $50 million range) probably would not have been achieved even if the upper limit of the funds rate constraint had been as high as 5-3/4 per cent. Actual total reserves differed from "target" by about the same magnitude as nonborrowed reserves. The monetary base showed a much larger overshoot, reflecting the considerably greater than anticipated rise in currency. In sum, if the Desk had adhered to a nonborrowed target, upward interest rate pressures would have been stronger over the intermeeting period. Such pressures would have been even stronger if attempts had been made to achieve the total reserve target, since interest rates would APPENDIX TABLE 1-A MONEY AND CREDIT AGGREGATE MEASURES Period Tol Nonborrowed Monetary Base 1 2 3 Total Loans and Invest- Adj. Credit proxy 14, 1976 MONEY STOCK MEASURES BANK CREDIT MEASURES BANK RESERVES V MAY M1 M2 M3 M4 M5 M6 M7 8 9 10 11 12 ments 5 6 7 4 (Per cent annual rates of growth) ANNUALLY: I II REVISED SERIES 8.8 7.2 8.5 6.7 7.1 -0.4 6.0 9.2 1.3 7.7 9.2 5.8 10.5 10.2 3.9 1974 4.2 19.3 8.0 6.1 3.1 3.9 1ST HALF 1975 2ND HALF 1975 -1.2 0.3 1.7 0.9 5.6 5.7 4.5 3.1 5.1 3.4 5.6 2ND QTR. 1975 3RD QTR. 1975 4TH OTR. 1975 1.3 -0.8 1.4 -0.1 -2.8 4.5 7.2 4.1 7.3 5.3 -0.8 7.0 4.6 3.6 3.1 9.7 1ST QTR. 1976 QUARTERLY-AV: -6.2 -5.3 4.6 1.2 2ND OTR. 3RD QTR. 4TH QTR. 1975 1975 1975 -1.4 0.1 0.6 -0.4 -1.9 2.7 5.2 6.3 5.6 1ST QTR. 1976 -3.8 -3.2 1975--APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 3.5 -11.6 12.2 -3.2 -3.1 3.9 -6.3 9.7 0.8 1976--JAN. FEB. MAR. APR. P -10.2 -6.8 -1.7 1.2 1973 1974 1975 8.8 6.8 11.3 11.6 10.6 6.4 10.6 9.0 11.9 9.7 9.e 6.1 6.2 7.8 7.4 7.0 9.8 6.8 11.9 10.1 6.9 5.7 9.9 9.2 9.4 9.4 1.6 12.5 6.5 7.0 14.5 10.7 9.3 7.7 3.0 8.4 11.3 8.1 10.0 10.1 7.5 11.2 7.3 4.3 11.5 12.6 5.0 8.4 8.0 3.6 1.4 6.0 5.1 4.1 4.7 7.4 7.1 2.3 10.2 10.1 6.4 12.6 13.3 9.4 5.6 5.7 6.7 9.4 10.1 9.4 8.7 9.5 9.7 5.3 2.3 4.0 2.6 10.1 11.4 5.8 8.6 8.6 3.4 -10.1 6.5 -5.8 0.0 -2.6 0.8 14.3 -1.6 4.5 3.6 13.3 4.7 4.9 2.8 3.6 11.1 7.0 2.2 1.0 12.7 -3.3 -4.3 5.2 5.9 14.4 0.7 3.4 5.1 5.1 2.0 6.6 2.0 6.0 10.5 -7.3 7.1 3.9 6.2 12.9 5.1 -0.5 4.3 7.9 11.7 5.3 8.3 10.1 15.0 10.0 5.9 8.2 9.9 12.1 7.7 7.8 8.6 13.5 10.6 6.0 5.7 10.5 14.7 8.0 -8.4 -6.9 -0.8 1.6 2.6 4.0 7.0 12.3 -0.7 3.5 0.9 3.3 '5.3 8.1 8.2 4.9 3.5 7.0 4.5 10.8 7.2 9.8 7.8 12.1 6.7 9.2 7.8 11.4 13.5 9.2 4.3 8.9 SEMI-ANNUALLY: 2ND HALF 2.6 QUARTERLY: 3.6 MONTHLY: NOTESt 1/ * ~- a- 11.4 14.2 3.7 5.3 1.6 -0.8 9.0 -3.2 13.4 16.5 9.5 5.7 4.2 5.3 11.5 4.0 10.8 14.9 17.4 13.2 10.3 8.5 8.7 11.9 7.1 1.2 10.7 14.9 8.7 15.3 11.9 14.7 10.8 14.8 3.4 5.7 6.1 15.3 u ADJUSTED CREDIT PROXY INCLUDES MAINLY TOTAL MEMBER BANK DEPOSITS RELATED INSTITUTIONS, AND EURODOLLAR BORROWINGS OF U.S.BANKS. BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS. -s & a i- & L SUBJECT 70 RESERVE REQUIREMENTS, LOANS SOLD TO BANK- APPENDIX TABLE 1-B MONEY AND CREDIT AGGREGATE MEASURES MAY 14, SEASONALLY ADJUSTED, BILLIONS OF DOLLARS MONEY STOCK MEASURES BANK CREDIT MEASURES BANK RESERVES 1 1976 STotal Period Adj. TNonborrowed 1 2 Loans Monetary Base Credit proxy and Invest- MI1 M M3 3 4 5 6 7 8 Sments M4 M5 M6 M 9 10 11 12 REVISED SERIES ANNUALLY9 1973 1974 1975 32,390 34,693 34,539 31,092 33,966 34,409 96,051 1048,92 110,930 449.4 495.3 514.4 634.6 691.9 721.6 270.5 283.1 294.8 571.4 612.4 664.3 919.5 981.6 1092.9 634.9 702.2 747.2 982.9 1073.4 1175.8 1093.7 1191.0 1311.1 1132.0 132.7 1351. 1975--APR. MAY JUNE 34,477 34,143 34,490 34,367 34,077 349263 106,331 106,647 107,833 500.8 501.2 506.5 703.7 706.7 709.7 284.9 267.6 291.0 626.7 633.7 642.4 1012.7 1025.3 1040.2 715.1 718.8 726.5 1101.1 1110.4 1124.3 1222.8 1232.4 1247.7 1267.k 1276.3 1290.7 JULY AUG. SEPT. 34,399 34,310 34,421 34,098 34,099 34,024 108,254 108,694 108,949 505.1 503.3 505.5 710.9 714.9 716.1 291.9 293.2 293.6 647.5 650.6 652.9 1051.6 1060.6 1068.1 729.6 729.3 731.9 1133.7 1139.3 1147.1 1260.1 1267.5 1274.4 1302.1 1368.6 1314.6 OCT. NOV. DEC. 34,239 34,515 34,539 34,046 34,455 34,409 109,279 110,287 110,930 508.0 514.1 514.4 719.7 726.0 721.6 293.4 295.6 294.8 655.8 662.1 664.3 1075.8 1086.5 1092.9 736.7 743.9 747.2 1156.6 1168.3 1175.8 1286.2 1302.2 1311.1 1326.3 1342.6 1351.5 1976--JAN. FEB. MAR. 34,245 34,052 34,003 34,167 33,971 33,949 111,171 111,538 112,192 514.1 515.6 516.0 724.8 729.7 734.7 295.1 296.5 298.0 670.2 678.5 663.4 1103.7 1117.2 1127.3 749.4 753.8 756.6 1182.9 1192.6 1200.4 1318.7 1329.3 1336.2 1359.1 1369.5 1378.4 34,037 33,993 113,344 517.4 737.7 301.8 692.1 1141.2 763.4 1212.5 1351.4 1391.6 33,834 33,843 33,876 34,315 33,786 33,803 33,798 34,279 111,863 112,025 112,212 112,749 515.7 516.7 515.9 515.3 298.9 298.3 296.9 298.2 683.7 683.5 682.8 685.1 756.7 756.5 755.8 758.4 7 14 21 28P 33,865 33,805 34,130 34,126 338,41 33,744 34,091 34,073 312,438 112,937 113,940 113,777 517.3 517.9 519.6 515.2 299.6 302.8 303.3 301.9 688.6 693.1 693.0 693.4 761.8 765.1 763.8 763.1 5P 34,813 34,773 114,333 515.8 302.6 694.6 763.7 MONTHLY: APR. P WEEKLYt 1976-MAR. 10 17 24 31 APR. MAY ADJUSTED CREDIT PROXY INCLUDES MAINLY TOTAL MEMBER BANK DEPOSITS SUBJECT TO RESERVE REQUIREMENTS, LOANS SOLD TO BANKRELATED INSTITUTIONS, AND EURODOLLAR BORROWINGS OF U.S.BANKS. MEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS. MONTHLY DATA ARE DAILY AVERAGES. WEEKLY DATA ARE NOT AVAILABLE FOR M3, M5S M6, NM, TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS. 1/ BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS. P - PRELIMINARY NOTESt APPENDIX TABLE 2-A MAY 14, COMPONENTS OF MONEY STOCK AND RELATED MEASURES Currency Period 1 Demand D posit 2 Total Time Deposits 3 REVISED SERIES ANNUALLY: 1973 1974 1975 8.1 10.2 8.7 5.3 3.0 2.6 16.2 15.0 7.9 1974 9.9 2.1 10.6 1ST HALF 1975 2ND HALF 1975 9.4 7.6 4.4 0.9 7.8 7.8 Time Mutual Other h Savings Bank Tha CD's and S L Sharesj Shares!i 4 5 I Credit Union Short CD's ShareBonds Savings _ "1 6 7 (Per cent annual rates of growth) 11.4 9.4 32.2 8.5 5.6 15.8 13.8 12.1 20.2 8.0 6.1 13.4 10.4 15.2 15.2 8 Term U.S. Gov't Commercial er Per Securitie_ , 1 9 10 45.6 41.4 -7.7 4.9 4.8 6.3 31.3 11.9 21.0 39.3 9.1 -3.3 11.5 20.9 5.2 4.4 4.4 20.9 17.6 -12.7 -2.9 5.7 6.8 6.7 34.0 5.7 -12.1 -9.1 -24.2 0.0 SEMI-ANNUALLY: 2ND HALF QUARTERLYt 2ND OTR. 3RD OTR. 4TH QTR. 1975 1975 1975 9.2 5.6 9.4 9.9 2.9 -1.1 6.3 2.6 12.9 14.6 8.9 11.6 17.7 17.4 12.5 20.6 17.0 17.6 -25.4 -23.8 19.2 5.6 6.8 6.6 7.0 19.2 46.6 1ST QTI. 1976 10.9 2.4 5.4 17.1 14.3 14.4 -47.3 5.9 8.2 -2.0 QUARTERLY-AV: 2ND QTR. 3RDO TR. 4TH QTR. 1975 1975 1975 8.1 8.5 8.4 6.9 6.6 0.2 4.5 4.7 9.7 12.5 12.7 9.8 16.2 18.2 14.0 21.0 18.6 16.5 -24.5 -27.5 9.5 5.6 6.8 6.7 -2.8 26.4 30.7 9.3 -23.7 -8.7 1ST OTR. 1976 9.8 0.4 7.8 15.9 13.4 15.9 -29.3 5.4 17.0 0.0 1975--APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1.7 12.1 13.7 5.1 10.1 1.7 10.0 13.2 4.9 3.9 11.1 14.4 3.3 3.8 1.6 -4.3 7.1 -5.9 3.9 3.1 12.0 5.8 -3.8 5.8 13.7 13.5 11.0 9.9 15.1 18.4 14.0 6.4 6.0 10.7 13.6 10.1 16.4 17.2 18.9 18.9 17.7 14.9 13.5 12.4 11.3 20.6 20.3 19.9 15.7 19.4 15.2 18.8 14.8 18.3 -18.7 -44.8 -14.1 -28.5 -48.2 4.6 27.3 13.4 16.1 5.6 5.6 5.6 9.2 5.5 5.5 7.3 7.2 5.4 0.0 -2.1 23.1 53.6 27.6 -23.2 37.4 78.2 19.7 10.9 -13.5 -24.6 -25.1 -28.5 -20.4 -5.9 6.0 0.0 1976-JAN. FEB. MAR. APR. 8.1 14.6 9.6 17.4 -1.1 3.8 4.3 15.1 5.3 7.7 3.1 8.1 18.2 21.4 11.0 15.3 13.4 14.7 14.2 14.1 18.0 10.7 14.1 10.4 -53.6 -57.6 -36.6 -29.5 5.3 5.3 7.1 5.3 1.8 10.6 12.2 13.8 0.0 -3.0 -3.0 -3.0 MONTHLY 1/ P - P GROWTH RATES ARE BASED ON ESTIMATED PREVIOUS MONTH REPORTED DATA. PRELIMINARY. MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF 1976 APPENDIX TABLE 2-B MAY 14, 1976 COMPONENTS OF MONEY STOCK AND RELATED MEASURES Period Currency Demand Ped Time Mutual Total Other Savings Credit Time Deposits r TCDn Bank and S & L Union Shares CD's _ Di 1 2 3 Short Savings Shares 4 5 6 7 Commercial Non- U.S. ommerca Paper y deposit Funds Gov't Demand Scurities 9 10 11 12 Term dsais Ter yB U.S. Gvt 8 REVISED SERIES ANNUALLY: 61.5 67.8 73.7 209.0 215.3 221.0 364.4 419.1 452.4 300.9 329.3 369.6 323.5 341.6 395.5 24.7 27.7 33.3 63.5 89.8 82.9 50.3 56.3 68.1 38.3 41.8 40.4 6.6 8.4 8.4 5.0 3.4 3.0 69.5 70.2 71.0 215.4 217,4 220.0 430.1 431.2 435.5 341.8 346.1 351.4 356.7 361.8 367.5 29.6 30.1 30.6 81.4 85.1 84.1 57.2 57.1 58.2 44.4 43.9 43.0 6.7 7.4 7.0 2.7 2.5 3.2 JULY AUG, SEPT. 71.3 71.9 72.0 220.6 221.3 221.6 437.6 436.2 438.3 355.5 357.4 359.2 373.3 378.8 383.5 31.0 31.5 31.9 82.1 78.8 79.1 60.8 62.2 61.0 42.1 41.1 40.4 6.8 7.0 7.0 2.6 2.8 3.0 OCT. NOV. DEC. 72.6 73.4 73.7 220.8 222.1 221.0 443.3 448.3 452.4 362.4 366.5 369.6 387.8 391.8 395.5 32.4 32.8 33.3 80.9 81.8 82.9 62.9 67.0 68.1 40.2 40.4 40.4 7.9 8.2 8.4 3.0 3.9 3.0 74.2 75.1 75.7 220.8 221.5 222.3 454.4 457.3 458.5 375.2 381.9 385.4 399.9 404.8 409.6 33.8 34.1 34.5 79.2 75.4 73.1 68.2 69.5 40.4 40.3 40.2 7.9 8.0 8.2 2.6 2.6 2.5 P 76.8 225.1 461.6 390.3 414.4 34.8 71.3 70.3 40.1 7.5 2.5 10 17 24 31 75.8 75.9 223.1 222.6 221.0 222.4 457.8 458.2 458.9 460.1 384.8 385.2 386.0 386.9 73.0 73.0 73.0 73.3 8.3 8.5 8.2 2.9 2.8 2.8 1.9 APR. 7 14 21 28P 76.3 76.6 77.2 76.9 223.3 226.1 226.0 224.9 462.3 462.3 460.6 461.2 389.0 390.3 389.8 391.5 73.2 72.0 70.8 69.7 7.2 7.2 8.0 7.6 2.4 2.5 3.6 1.9 MAY SP 77.0 225.5 461.2 392.1 69.1 7.3 1.7 1973 1974 1975 MONTHLY 3975--APR. MAY JUNE 1976--JAN. FEB. MAR. APR. 68.8 WEEKLY: 1976--MAR. - I/ P - ~~ ~ I 75.8 75.9 1 ~ _ .--... -~_._ .-_;- N -.-^ ESTIMATED MONTHLY AVERAGE LEVELS DEKVtED BY AVERAbNlb DATA. PRELIMINARY =.-END OU __CURRENT .-. UPNTH AND -~__. END UP -; PREVIOUS -i_ *-.-_. 'h MOUNH REPORTED DAIA. I -~. Appendix Table III Growth Rate in Money Supply (Per cent change in an annual rate) (Revised Series) 14, 13 M2 M Q M Q M Q I 3.6 7.4 7.3 9.2 8.4 10.3 II 10.1 6.4 9.9 8.2 9.8 8.5 III 1.8 5.5 6.3 7.9 6.1 7.8 IV 7.8 5.1 9.0 9.9 8.4 QIV '72-QIV '73 6.0 6.2 8.8 8.8 8.8 9.0 1974 I 5.3 6.0 9.0 9.6 8.4 8.9 II 5.3 5.6 6.9 7.4 5.7 6.5 III 3.0 4.2 5.5 6.4 5.2 5.6 IV 4.7 4.0 6.6 6.4 7.2 6.5 QIV '73-QIV '74 4.7 5.0 7.2 7.7 6.8 7.1 1975 I 1.4 0.6 6.9 5.6 9.0 7.5 II 9.7 7.4 III 3.6 7.1 IV 1.6 QIV '74-QIV '75 1976 1973 I 10.5 12.5 10.2 14.5 12.6 6.5 10.1 10.7 13.3 2.3 7,0 6.4 4.1 4.4 8.5 8.3 4.3 2.6 11.5 10.1 9.3 9.4 11.3 11.1 12.6 11.4 M = Annual rates of growth calculated from average levels in the final months of the quarters. Q = Annual rate calculated from average levels in all three months of the quarters. Appendix Table IV Projected Federal Funds Rates 1976 1977 QII Alt. A Alt. B Alt. C 4-7/8 5-1/8 5-3/8 QIII 6 6k 7 QIV 8k 71 7% QI 9 8k 7% Appendix Table V Reserve Measures Consistent With Short-run Alternatives (seasonally adjusted) Nonborrowed reserves Member-bank borrowing Excess reserves previous 4-week period ($ million) Alt. C Alt. A 2 -218 4.1 4.1 3 40 219 -36 -49 -62 34,219 143 43 1 6.1 5.1 4.2 Alt. A Alt. A Alt. B Alt. C 34,246 34,164 33,944 84 96 275 175 162 59 188 2-month Annual Percentage Growth Rate for May-June Change from average of Average of 5 weeks May 26 to June 23 ($ million) Alt. B Alt. B Alt. C -0.7 Other reserve aggregates: Total reserves 34,305 34,261 Monetary base 114,765 114,721 114,679 866 822 780 9.0 8.7 8.4 Nonborrowed monetary base 114,706 114,625 114,404 863 782 561 8.9 8.4 6.9 l i 1/ Total reserves plus currency held outside the Treasury, the Federal Reserve, and member banks. Appendix Table VI Comparison of Old and Revised Money Stock Growth Rates (Per cent annual rate) M1 1975 1976 M2 M3 Old Revised Old Revised Old Revised Oct. -0.8 -0.8 5.1 5.3 8.4 8.7 Nov. 9.4 9.0 10.8 11.5 11.6 Dec. -2.8 -3.2 3.1 4.0 6.5 Jan. 1.2 1.2 10.3 10.7 11.6 11.9 Feb. 6.5 5.7 14.3 14.9 14.4 14.7 Mar. 6.1 6,1 8.3 8.7 10.5 10.8 April 15.7 15.3 14.6 15.3 14.5 14.8 11.9 7.1 Quarterly:1975 IV 1.9 1.6 6.4 7.0 8.9 1976 I 4.6 4.3 11.1 11.5 12.3 9.3 12.6 Quarterly average: 1975 IV 2.5 2.3 6.1 6.4 9.2 1976 I 3.0 2.6 9.5 10.0 11.1 II I 1/ End-month-of-quarter to end-month-of-quarter. 9.4 11.4 May 17, 1976 CORRECTION Monetary Aggregates and Money Market Conditions (Blue book) In appendix A (which follows charts 1-3 and tables 1-6), the numbering of pages A-2 and A-3 should be reversed. 

Federal Reserve (1976, May 17). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19760518

@misc{wtfs_bluebook_19760518,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1976},
  month = {May},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19760518},
  note = {Retrieved via When the Fed Speaks corpus}
}