Bluebook

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Content last modified 6/05/2009. July 15, Strictly Confidential (FR) 1977 Class I FOMC 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) CLASS I - FOMC July 15, 1977 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) M-1 growth was at a 4.9 per cent annual rate in June and, reflecting the expected effect of the early disbursement of social security checks, appears to have accelerated in July. For the June-July period, M-1 growth is now projected at about a 6.2 per cent annual rate, just below the upper end of the Committee's desired range. M-2 appears to be increasing at about a 9¼ per cent annual rate over June and July, somewhat above the midpoint of the Committee's range. Growth in the time and savings deposit component of M-2 in recent weeks has accelerated from its April-May pace, as sharp increases in large denomination non-negotiable CD's have more than offset weakness in savings accounts. Nonborrowed reserves increased at a 3.3 per cent annual rate in June but are expected to grow much more rapidly in July, primarily in lagged response to the pickup in deposit growth in late June and early July. Growth in Monetary Aggregates over June-July period (SAAR in per cent) Ranges Latest Estimates M-1 2½ to 6½ 6.2 M-2 6 to 10 9.2 Memorandum: Federal funds rate (per cent per annum) Avg. for statement week ending June 22 5.43 29 5.43 5.35 July 6 5.33 13 -2(2) Throughout the period since the last Committee meeting, growth of both M-1 and M-2 remained within the Committee's desired ranges, and the Account Management accordingly sought to maintain the funds rate at about 5-3/8 per cent. With the funds rate remaining slightly above the discount rate, member bank borrowings from the discount window averaged $257 million, little different from the preceding four weeks, but above the average level of $80 million during the first four months of the year. (3) Demands on credit markets strengthened in June. Both financial and nonfinancial corporations substantially increased their issuance of commercial paper over the month. Nonfinancial corporations also stepped up their short-term borrowing at commercial banks, and the volume of publicly offered bonds of domestic financial corporations, public utilities, and foreign issuers expanded significantly. At the same time, State and local governments marketed a record volume of long-term securities. The Treasury auctioned $1.5 billion of 15-year bonds near the end of the month but paid down a roughly equal amount of short-term bills over the month. (4) Despite the strengthening in short-term credit demands, rates on private short-term debt instruments have shown essentially no change since the June FOMC meeting. Treasury bill rates, however, have moved up about 10 to 20 basis points as the market has begun to adjust to the ending of the period of large cash redemptions of Treasury bills. In addition, this up- ward rate adjustment may reflect a slight shift in the market's interest rate outlook in response to recent strengthening in published monetary aggregates data. (5) Since the June FOMC meeting yields on corporate and municipal securities and also on intermediate-term Treasury coupon issues, have advanced 5 to 15 basis points. Dealers in Treasury securities have made substantial net sales of coupon issues in recent weeks. As a result, they now have large net short positions in issues in the one- to ten-year maturity category and only a modest long position in issues with maturities over 10 years--the latter reflecting mainly the remainder of dealer awards in the recent 15-year bond auction. (6) Inflows into deposit accounts at nonbank thrift institutions in June were maintained at about the moderate pace of other recent months, but there appears to have been a pick-up in growth at savings and loan associations in early July. With demands for mortgages remaining strong, primary mortgage rates edged higher on balance in recent weeks. (7) The table on the following page shows (in terms of percentage annual rates of change) related monetary and financial flows over various time periods. 1975 & 1976 Past Twelve Months June '77 over Past Six Months June '77 over Past Three Months June '77 over Past Month June '77 over Average June '76 Dec. '76 Mar. '77 May '77 Nonborrowed reserves 1.4 2.8 1.1 4.7 3.1 Total reserves 0.4 3.2 2.3 6.5 5.0 Monetary Base 6.6 7.0 6.7 8.2 6.5 5.2 6.2 6.1 8.4 4.9 10.4 10.7 8.8 8.8 8.1 13.0 12.3 10.0 9.8 9.4 Concepts of Money M M M (currency plus demand deposits) 1/ (M plus time deposits a commercial banks other than large CD's) (M plus deposits at Sthrift institutions) M (M2 plus CD's) 7.3 8.9 8.3 9.1 10.0 M (M3 plus CD's) 10.7 11.1 9.7 9.9 10.5 Total member bank deposits (bank credit proxy adj.) 4.5 6.0 5.2 7.2 16.1 Loans and investments of all commercial banks 2/ Month-end basis 6.7 10.1 10.5 11.2 8.9 6.2 10.0 10.3 9.3 8.6 -1.1 -0.5 0.1 0.6 1.6 0.0 0.2 0.4 0.7 0.6 Bank Credit Average of Wednesdays Short-term Market Paper (Monthly average change in billions) Large CD's Nonbank commercial paper 1/ Other than interbank and U.S. Government. 2/ 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-ofmonth 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. -5Prospective developments (8) Shown below for the Committee's consideration are four alternative sets of longer-run ranges for the monetary aggregates-alternatives A through D--that pertain to the one year period, QII '77QII '78. In the last column are shown the ranges adopted at the April The growth rates for bank Committee meeting for the QI '77-QI '78 period. credit shown under A through D relate to total loans and investments of all 1/ commercial banks.rather than to the bank credit proxy.Alt. A Alt. B Alt. C Alt. D Current M1 4½-7 4½-6½ 4-6½ 3½-6 4½-6½ M2 7-10 7-9½ 6½-9½ 6-9 7-9½ M3 8-11 8-10½ 7½-10½ 7-10 8½-11 Bank credit 7½-10½ 7½-10½ 7-10 6½-9½ 7-10 (9) Under alternative B, the one year growth ranges for M-1 and M-2 are the same as those adopted by the Committee in April. The growth range for M-3, however, is lower by ½ percentage point. This lower M-3 range now appears more consistent with the ranges shown for M-1 and M-2, given the staff's current projection of deposit flows at thrift institutions over the next four quarters. Alternative A encompasses a little more 1/ Growth in the bank credit proxy--the sum of all deposits and certain borrowings of member banks--has been consistently below the targets adopted by the Committee, and has in the past year diverged increasingly from bank credit, as may be seen from the table on p. 4. With the relatively rapid growth of nonmember deposits and the greater use by banks of reserve-free borrowings as a source of funds the bank credit proxy (i.e. essentially total member bank deposits) has become a much more imperfect statistical series. Bank credit, as measured by the end-ofmonth series for loans and investments or by a new average series for the month developed by the Board staff, has been closer to the Committee's longer-run ranges for bank credit. The Committee might therefore wish to consider substituting an all commercial bank credit measure for the proxy. The issues are discussed in more detail in Appendix III. rapid growth in all of the monetary aggregates than B, and alternative C a little slower growth. The differences among these alternatives are in line with the size of changes in longer-run ranges that the Committee has actually made in its quarterly reviews of the one-year ranges. The specifi- cations of alternative D, however, involve a larger adjustment in the ranges, with the midpoint of the growth range for M-1 reduced to 4¾ per cent over the QII '77-QII '78 period. This alternative would compensate for the second quarter overshoot in growth of M-1; that is, it would result in expansion of M-1 over the five quarters, QI '77-QII '78, at a 5½ per cent annual rate--the midpoint of the M-1 range adopted by the Committee in April for the QI '77-QI '78 period.1/ M-2 growth over the five quarter period under this alternative would be at about an 8 per cent annual rate, however, a shade below the midpoint of the current M-2 range. (10) Shorter-run specifications for the monetary aggregates and the Federal funds rate that are thought to be consistent with the various long-run ranges are presented below. (Detailed data are shown in the tables on pp. 7 and 8.) Alt. A Alt. B Alt. C (or D) Ranges for July-August M-1 4½-8½ 4-8 3½-7½ M-2 7½-11½ 7-11 6½-10½ Federal funds rate (Intermeeting period) 1/ 4½-5¼ 5¼-5¾ 5½-6¼ Appendix I compares various terminal levels of M-1 and M-2 under the proposed alternative with levels implicit in the current ranges. Alternative Levels and Growth Rates for Key Monetary Aggregates M M2 Alt. A Alt. B Alt. C Alt. D Alt. A Alt. B Alt. C Alt. D 1977 June July August 322.0 324.0 325.5 322.0 324.0 325.3 322.0 324.0 325.0 322.0 324.0 325.0 772.8 779.4 785.0 772.8 779.4 784.4 772.8 779.4 783.8 772.8 779.4 783.8 1977 QII 321.1 325.7 330.2 321.1 325.4 329.7 321.1 325.3 329.4 321.1 325.2 329.2 768.3 785.1 801.6 768.3 784.6 800.4 768.3 784.1 799.0 768.3 784.1 798.5 334.9 339.5 334.1 338.8 333.3 338.0 332.9 336.3 818.2 834.0 816.2 832.4 814.1 830.6 812.8 10.2 8.6 10.2 7.7 10.2 6.8 10.2 6.8 QIII QIV 1978 QI QII Growth Rates Monthly: 1977 July August Quarterly Average: 1977 QII QIII QIV 7.5 4.8 8.5 5.7 5.5 8.5 5.4 5.3 8.5 5.1 4.9 9.2 8.7 8.4 9.2 8.5 8.1 9.2 8.2 7.7 QI QII 5.7 5.5 5.3 5.6 4.5 4.1 8.3 7.7 7.9 7.9 7.6 8.1 Semi-Annual: QII '77-QIV '77 QIV '77-QII '78 5.7 5.6 5.4 5.5 5.0 4.3 8.7 8.1 8.4 8.0 8.0 7.9 Annual: QI '77-QI '78 QI '77-QII '78 QII '77-QII '78 6.5 6.4 5.7 6.3 6.2 5.5 5.9 5.6 4.7 8,9 8.8 8.6 8.7 8.7 8.3 8,4 8.5 8.1 1978 826.5 7.2 6.7 8.2 8.0 7.6 Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) Bank Credit Alt. A Alt. B Alt. C Alt. D Alt. A Alt. B Alt. C Alt. D June July August 1299.1 1310.5 1321.1 1299.1 1310.5 1320.4 1299.1 1310.5 1319.5 1299.1 1310.5 1319.5 826.7 832.7 838.6 826.7 832.7 838.5 826.7 832.7 826.7 832.7 838.4 QII QIII QIV 1289.8 1321.1 1351.4 1289.8 1320.5 1349.4 1289.8 1319.6 1347.2 1289.8 1319.6 1345.9 820.6 840.0 859.2 820.6 839.4 857.8 820.6 839.2 857.1 839.2 856.0 QI QII 1380.2 1407.5 1377.3 1405.1 1374.5 1402.9 1371.1 1395.3 877.3 895.2 875.3 893.4 874.1 892.0 872.0 887.2 Growth Rates Monthly: 1977 July August 10.5 9.7 10.5 9.1 10.5 8.2 10.5 8.2 8.7 8.5 8.7 8.4 8.7 8.2 Quarterly Average: 1977 QII QIII QIV 10.0 9.7 9.2 10.0 9.5 8.8 10.0 9.2 8.4 10.0 9.2 8.0 9.9 9.5 9.1 9.9 9.2 8.8 9.9 9.1 8.0 QI QII 8.5 7.9 8.3 8.1 8.1 8.3 7.5 7.1 8.4 8.2 8.2 8.3 7.9 8.2 7.5 7.0 Semi-annual: QII '77-QIV '77 QIV '77-QII '78 9.6 8.3 9.2 8.3 8.9 8.3 8.7 7.3 9.4 8.4 9.1 8.3 8.9 8.1 8.6 7.3 Annual: QI '77-QI '78 QI '77-QII '78 QII '77-QII '78 9.7 9.5 9.1 9.4 9.3 8.9 9.2 9.2 8.8 9.0 8.7 8.2 9.6 9.4 9.1 9.3 9.3 8.9 1977 1977 1978 1978 838.4 820.6 8.9 8.6 8.1 -9(11) Under alternative B, the proposed Federal funds rate range is the same as that adopted by the Committee at its previous meeting. If the funds rate remains near the recently prevailing 5-3/8 per cent level, the staff would expect M-1 growth for the July-August period to be at about a 6 per cent annual rate. With the public's adjustment to the April bulge in M-1 now completed, the transactions demand for money is expected to rise more in line with the continued growth in nominal GNP. Growth in M-2 is expected to be in a 7-11 per cent annual rate range during the July-August period, as the time and savings deposit component of that aggregate continues to expand at near its recent pace. (12) Credit demands may remain substantial over the weeks ahead, although State and local government and business demands may slacken from their exceptional June pace. While the Treasury is expected to raise about $3-1/2--4 billionof new money before the next meeting, mainly in conjunction with its mid-August refunding of $3.3 billion of maturing publicly held coupon issues, the Treasury securities market appears to be in a technically strong position. Thus, there is likely to be little upward interest rate pressure generated by market demand forces over the next few weeks. However, in the late summer and early fall, with Treasury borrowing expanding considerably further and demands for money and liquidity pressing against the available supply, upward pressures on interest rates are likely to develop. (13) Further increases in interest rates are likely to develop late this year and in the first half of next year if the midpoints of the -10- longer-run growth ranges contemplated under alternative B are to be achieved. The funds rate might need to rise to about 6 per cent by year- end and to about 6¼ per cent by the second quarter of 1978. This would be an appreciably smaller rise in interest rates than the staff thought likely last month. It allows for the higher average level of the money stock over the next year that results from applying an unchanged growth rate to a new base period in which there has been a substantial overshoot. (The Federal funds rate projections four quarters ahead are shown in Appendix II). (14) As noted earlier, both alternatives C and D contemplate lower longer-run growth ranges for the monetary aggregates than alternative B. While the reduction is substantially larger in the case of alternative D, in either case the Committee may wish to consider a rise in the funds rate between now and the next meeting to around 5-7/8 per cent, the midpoint of a 5½-6¼ per cent range. Such a funds rate increase is likely to be accompanied by an increase in short-term rates of interest generally of about ½ percentage point. Member bank borrowings from the discount window may rise $50-100 million further, and markets may come to anticipate a rise in the discount rate from its current 5¼ per cent level. (15) With the funds rate rising over the next few weeks as specified above, we would expect M-1 in the July-August period to expand in a 3½-7½ per cent annual rate range and M-2 in a 6½-10½ per cent range. Net inflows of shorter-term small denomination time deposits to banks and thrift institutions may slow at the higher interest levels, and there may also be a further outflow of interest-sensitive savings deposits of individuals, businesses, and State and local governments. -11Banks may be expected to adapt to such developments by more aggressively offering large denomination time deposits; except for negotiable deposits offered by large banks, these deposits are included in M-2. Even under the short-run specifications of alternative C, there would appear to be sufficient leeway between ceiling rates in time certificates maturing in four years or more and yields on market instruments to enable banks to retain the funds involved in maturing "wild card" certificates. They could, however, lose some funds to thrift institutions, which can offer somewhat higher rates. (16) The rise in market rates of interest over the next few weeks accompanying short-run alternative C (or D) would probably carry the 3-month Treasury bill rate above the 5¼ per cent ceiling rate on thrift institution savings deposits. This may trigger an increased diversion of these deposits to market instruments. Under alternative C we would expect that thrifts would become less willing to commit funds to the mortgage market at near the recent pace. In addition, given the substantial mortgage takedowns in train, these institutions would have to draw down their liquid assets and borrow more heavily from the FHL Banks; the need for secondary mortgage market support by FNMA would also increase. But the rise in mortgage rates may be limited if insurance companies, for example, become more active in the mortgage market as a result of the continuing favorable spread of mortgage rates over corporate bond yields. In any event, upward pressures on corporate and tax exempt bond yields are likely to be relatively modest, given the substantial supply of investible funds at insurance companies and other institutional investors. -12(17) If the Committee wishes to achieve the midpoints of the longer-run growth ranges for alternative C--indexed by an M-1 range of 4-6 per cent--the staff expects that the funds rate would need to rise only a little further and would top out at around 6¼ per cent in the first quarter of 1978. The greater restraint on growth of the monetary aggregates over the longer-run under alternative D would require a larger rise of interest rates to levels closer to those projected at the previous FOMC meeting. The funds rate may rise to around 6½ per cent in the first quarter of next year and probably further to a level of 6¾ per cent by the second quarter. (18) Alternative A contemplates an easing of money market conditions between now and the next Committee meeting. Interest rates may tend to decline rather substantially as the funds rate begins to drop, particularly in the intermediate-term Treasury area where dealers have a net short position. But assuming that incoming economic news does not cast doubt on the fundamental strength of the economy, interest rate declines may be limited over the next month or so as corporations and State and local governments increase market borrowing in anticipation of higher interest rates later on and as the market focuses on the Treasury's large fall cash need. (19) We would expect the funds rate to begin rising in the fall under alternative A if growth in the aggregates is to remain around the midpoints of the longer-run ranges for this alternative. Given the degree of near-term ease assumed, the funds rate by spring may have to be at or slightly above the level assumed at that time under alternative B in order to constrain monetary growth in the first half of next year to the indicated -13- rate. Meanwhile, however, for most of the one-year period ahead, short- term rates would have been lower than under alternative B, with consequent relatively easier credit and liquidity conditions at banks and other institutions. -14Directive language (20) Given below are alternatives for the operational paragraphs of the directive. The first formulation places main emphasis on near-term rates of growth in monetary aggregates. The second formulation, like the directive adopted at the last meeting, places main emphasis on money market conditions; it shows--in strike-through form--the specifications adopted at the last meeting. As suggested below, the particular language needed in the opening lines of the money market formulation would depend on the specific conditions sought; the three alternatives shown--calling, respectively, for somewhat easier, prevailing, and somewhat firmer money market conditions-are intended to be associated with the specifications discussed in the preceding section under alternatives A, B, and C. "Monetary Aggregates" Formulation The Committee seeks to encourage near-term rates of growth in M-1 and M-2 on a path believed to be reasonably consistent with the longer-run ranges for monetary aggregates cited in the preceding paragraph. Specifically, at present, it expects the annual growth rates over the July-August period to be within the ranges of ____ to ____ per cent for M-1 and ____ to ____ per cent for M-2. In the judgment of the Committee such growth rates are likely to be associated with a weekly-average Federal funds rate of about ____ per cent. If, giving approximately equal weight to M-1 and M-2, it appears that growth rates over the 2-month period will deviate -15- significantly from the midpoints of the indicated ranges, the operational objective for the Federal funds rate shall be modified in an orderly fashion within a range of ____ to____ per cent. If it appears during the period before the next meeting that the operating constraints specified above are proving to be significantly inconsistent, the Manager is promptly to notify the Chairman who will then decide whether the situation calls for supplementary instructions from the Committee. "Money Market" Formulation At this time, the Committee seeks to maintain about the prevailing money market conditions (OR TO ACHIEVE SOMEWHAT EASIER OR SOMEWHAT FIRMER MONEY MARKET CONDITIONS) during the period immediately ahead, provided that monetary aggregates appear to be growing at approximately the rates currently expected, which are believed to be on a path reasonably consistent with the longerrun ranges for monetary aggregates cited in the preceding paragraph. Specifically, the Committee seeks to maintain the weekly-average Federal funds rate at about[DEL: 5-3/8]_____ per cent, so long as M-1 and M-2 appear to be growing over the[DEL: June-July]JULY-AUGUST period at annual rates with ranges of [DEL: 2-1/2 to 6-1/2]____ per cent and [DEL: 6-to-10]____ TO ____ TO ____ per cent, respectively. If, giving approximately equal weight to M-1 and M-2, it appears that growth rates over the 2-month period are approaching or moving -16beyond the limits of the indicated ranges, the operational objective for the weekly-average Federal funds rate shall be 5-1/4 to 5-3/4] modified in an orderly fashion within a range of [DEL: ____ TO ____ per cent. If it appears during the period before the next meeting that the operating constraints specified above are proving to be significantly inconsistent, the Manager is promptly to notify the Chairman who will then decide whether the situation calls for supplementary instructions from the Committee. Appendix I Comparison of Levels of M1 and M2 Under Previous and Proposed Longer-run Ranges ($ billion, seasonally adjusted) Level based on growth from: QIV '76 Terminal quarters Levels based on longer-run growth from QII '77 at rates shown in QI '77 at 5k at 5k per cent annual rate per cent annual rate Alt. A Alt. B Alt. C Alt. D Mi QI '78 332.6 331.7 334.9 334.1 333.3 332.9 QII '78 337.2 336.3 339.5 338.8 338.0 336.3 M2 NOTE: Growth from QIV '76 at an Growth from QI '77 at an 8k per cent annual rate 8k per cent annual rate QI '78 812.0 813.0 818.2 816.2 814.1 812.8 QII '78 829.3 829.8 834.0 832.4 830.6 826.5 The last four columns assume growth around the midpoints of the proposed ranges is achieved and are the same numbers as shown in the table on p. The table above facilitates comparison of longer-run paths proposed in the current blue book with the Committee's current (QI '77 to QI '78) and immediately previous (QIV '76 to QIV '77) longer-run paths. The first column of the table shows the level of M 1 and M2 implied by the midpoint growth rate of the Committee's QIV '76 to QIV '77 longer-run range extended to the first and second quarters of 1978. of M1 and M 2 The second column shows the levels in the first and second quarters of 1978 implied by midpoint I - 2 growth rates of current longer-run paths (which take QI '77 as the base). The last four columns show levels of M1 and M 2 for the first and second quarters of 1978 implied by the alternatives presented in this blue book (which take QII '77 as the base). As may be seen, alternatives A through C imply higher midpoint levels for both M and M 2 in QI '78 and QII '78 than would be implicit in extension of Committee ranges based on QI '77 or QIV '76. For example, under alternative B, M1 in QII '78 would be $2.5 billion (or .7 of a per cent) above the implied level for that quarter derived by extending the midpoint of the current M1 growth range to the second quarter of 1978 (shown in the second column). M 2 in QII '78 under alternative B would be .3 of a per cent above such an implied level. Alternative D would achieve the implied QII '78 level based on 5 per cent growth from QI '77, but it would fall slightly short of achieving the QII '78 level that would be implied if the base were carried back to QIV '76. Alternative D would also fall short of achieving the implied QII '78 levels for M 2 based on the earlier paths. Appendix II Projected Federal Funds Rate 1977 1978 Alt. A Alt. B Alt. C Alt. D QIII 5 5 5-7/8 5-7/8 QIV 5½ 5-7/8 6-1/8 6¼ QI 6 6-1/8 6¼ 6 QII 6½ 6¼ 6¼ 6¾ Appendix III Comparison of the Member Bank Credit Proxy and All Commercial Bank Credit In recent years the bank credit proxy--total member bank deposits plus Euro-dollar borrowings and loans sold to affiliates--has become much less useful than it had been as an indicator of the change in bank credit at all commercial banks. In the mid-1960's, when the credit proxy was developed, this measure was equal to approximately 80 per cent of the outstanding credit at all commercial banks. had declined to 67 per cent. By the end of 1976 the ratio The deterioration of the proxy has reflected the increasing proportion of total credit extended by nonmember banks and the increasing use by banks of nondeposit sources of funds not included in the proxy, such as borrowings from nonbanks through RP's and Federal funds.1/ The advantages of the credit proxy--its timeliness and its availability on a daily average basis rather than as of a single day--have increasingly been overshadowed by these problems. Because of shifts in sources of credit expansion at all commercial banks, the actual performance of the bank credit proxy has, with one exception, fallen well short of the FOMC's longer-run ranges for bank credit. The growth in total loans and investments of all commercial banks has actually been much more consistent, on average, with the FOMC's credit ranges, as may be seen from the table, which compares the Committee's growth ranges for bank credit to the actual growth in the member bank credit proxy and two measures of all commercial bank credit. 1/ The first It is estimated that in 1976 such borrowings increased nearly $23 billion --accounting for 3 percentage points of the rise in bank credit last year--and the total outstanding amount of such borrowed funds equalled roughly 8 per cent of total member bank deposits at the end of 1976. III - 2 of these measures is the Board's single-day last-Wednesday-of-the-month all commercial bank credit series, and the second is a new "monthly average" bank credit series that is derived by averaging Wednesday data.1/ The staff would recommend that the Committee no longer employ the bank credit proxy in view of its deterioration as an indicator of credit and since direct measures of commercial bank total loans and investments will readily serve as a measure for purposes of establishing longer-run ranges. 1/ Both measures of all commercial bank credit are based on reported data from all member banks and estimated data for nonmember banks. Large member banks report detailed bank credit data for each Wednesday. An abbreviated report showing three credit items (total loans, U.S. Government securities, and other securities) is also filed by small member banks each Wednesday. Small member banknonmember bank ratios are derived from call report data for the three reported credit items. The credit data reported by small member banks for Wednesdays are multiplied by these call report ratios to derive estimates of nonmember bank credit. The various credit components for large and small member banks and nonmember banks are aggregated to a gross loans and investments total. Interbank loans are estimated, based on reported member bank data and nonmember bank call report data, and subtracted from gross loans and investments to obtain a net total loans and investments measure. Data on loans sold to affiliates are reported for each Wednesday by large banks and are added to the net loans and investments series to complete the bank credit measure. The monthly average series averages the estimated Wednesday data for all banks. At this point in time the components of bank credit are estimated only monthly, but the staff could develop a monthly average series for the components also. III - 3 Table 1 Longer-run Bank Credit Targets and Growth Rates (per cent annual rates) Meeting Adopted Period Adopted Credit Proxy Growth Rate Range Actual Growth Rates Member SAll Commercial Bank Credit Bank Credit Proxy Month-end Basis Average of Wednesdays April 1975 March 1975March 1976 6 -9k 3.2 5.4 5.2 June 1975 June 1975June 1976 6 -9 3.2 6.1 6.9 July 1975 QII 1975QII 1976 3.1 6.0 6.1 Oct. QIII 1975QIII 1976 6-9 3.7 6.7 6.5 Jan. 1976 QIV 1975QIV 1976 6-9 4.3 8.0 7.7 Apr. QI 1976QI 1977 6-9 5.0 9.1 9.1 QII 1976QII 1977 5-8 5.8 9.9 9.9 1975 1976 July 1976 Appendix IV Expansion in Reserves Over the Period From QII '77 to QIV '77 Consistent With Proposed Alternatives (Seas. adj. annual rates) Alt. A Alt. B All . C Alt. D Nonborrowed Reser ves 5.2 3.4 2.7 1.3 Total Reserves 5.6 5.5 5.5 5.3 Monetary Base 7.9 7.8 7.8 7.7 Shown above are 6-month growth rates in various reserve measures consistent with the midpoints of the alternative longer-run paths for the monetary aggregates presented in this blue book. Appendix V Implied Velocity Growth Rates V (GNP/M1 1977 1978 Alt. A Alt. B Alt. C Alt. D III 6.0 6.3 6.4 6.4 IV 6.7 6.7 6.9 7.0 I 5.7 5.9 6.3 6.2 II 5.2 4.8 4.5 5.6 III 3.3 3.5 3.3 IV 3.9 4.4 4.6 I 3.4 II 2.4 V2 (GNP/M2) 1977 1978 7/ 15; 77 CHART 1 MONETARY AGGREGATES NARROW MONEY SUPPLY M1 6%% growth for June-Ju ly /6/77) BROADER MONEY SUPPLY M 2 growth % growth 2/2% i 1976 I I I I I 1977 1977 I , 7/15/77 CHART 2 MONETARY AGGREGATES ADJUSTED CREDIT PROXY BILLIONS OF DOLLARS RESERVES - 560 - 550 - 540 - 530 - 520 BILLIONS OF DOLLARS 36 TOTAL NONBORROWED 1977 - 35 - 34 CHART 3 7/15/77 MONEY MARKET CONDITIONS AND INTEREST RATES MARKET CONDITIONS INTEREST RATES Long-term PER CENT ERAGES , F.R. DISCOUNT RATE FEDERAL FUNDS RATE J RESERVES BILLIONS OF DOLLARS 1 0 1976 1977 1976 1977 1976 1977 Table 1 CONFIDENTIAL (FR) MONETARY AGGREGATES JULY 15, CLASS IT1FOMC -I ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED Money Supply Narrow Broad (Ml) (M2) Period MONTHLY Adjusted Credit Proxy Total U.S Govt. Deposits Totl To 4 5 6 7 8 505.7 509.2 514.8 (518.9) 444.1 446.9 410.8 (455.4) 11.9 212.7 1L.3 (212.8) 232.2 234.2 238.5 (242.6) 1 2 3 320.5 320.7 322.0 1324.0) 764.6 767.6 772.8 (779.4) 546.1 545.4 552.7 (554.0) Time and Savings Deposits Other Than CD'S Total Savings Other Nondeposit Member Sources of U S.Govt Funds Deposits 9 10 11 7.7 7.A 8.4 8.2) '.6 Z.1 3.7 2.9) LEVELS-$BIL 1977--APR. MAY JUNE JULY , ANNUAL I 10.8 10.6 10.1 11.5) ( 61.6 62.3 63.9 63.') 1 ( GROWTH QUARTERLY 1976-4TH QTR. 1977-1ST QTR. 2ND QTR. 7.2 3.8 8.4 13.4 8.5 8.8 11.5 3.0 7.2 15.7 9.5 9.5 18.1 11.9 9.3 2/.5 15.4 4.0 10.0 8.7 14.1 6.5 4.2 8.5 12.5 9.9 9.2 8.2 5.4 5.2 12.2 12.5 8.3 17.1 14.0 9.8 24.7 21.9 7.9 10.8 7.1 11.6 -18.9 1.9 -1.9 ( 6.9 8.3 13.2 9.6) 1 9.5 7.6 10.5 12.2) ( 9.7 4.5 -2.3 2.8) ( 9.4 10.3 22.0 20.6) ( -11.6 13.6 30.8 -7.5) ( 11.4) 1 11.4) ( 0.3) ( 21.5) ( 11.6) 1.3 -7.0 10.9 QUARTERLY-AV 1976-4TH OTR. 1977-1ST QTR. 2ND QTR. MONTHLY 1977--APR. MAY JUNE JULY JUNE-JULY ( 19.4 0.7 4.9 7.5) ( 6.2) ( 13.5 4.7 8.1 10.2) 1 7.1 -1.5 16.1 2.8) 1 9.2) ( 9.5) WEEKLY LEVELS-$BIL 1977-JUNE 1 8 15 22 29 320.7 321.5 320.9 322.5 322. 769.5 771.6 771.1 774.1 774.4 546.6 551.0 552.1 555.9 551.9 8.3 7.5 6.5 12.5 12.1 511.7 513.3 513.9 515.6 516.8 448.8 450.1 450.2 451.6 452.0 212.4 212.7 212.3 212.2 211.9 236.4 237.4 237.9 239.4 240.1 62.9 63.2 63.7 64.0 64.8 7.5 7.8 8.0 9.5 8.4 2.6 4.3 4.8 4.6 2.4 JULY 6 325.6 780.0 555.7 10.8 518.4 454.4 212.4 242.0 64.0 8.7 1.8 NOTE: 1/ P - DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE PRELIMINARY BANKS. CONFIDENTIAL (F.R.) CLASS I-FOMC TABLE 2 BANK RESERVES ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED BANK RESERVES Period Total Reserves MUNTHLY Monetary Base 34,606 34.517 34,605 (35,064) 120,749 121,376 122,030 (123,261) 15, 1977 REQUIRED RESERVES Total Required Private Demand Total Time Deposits 34,488 34,515 34,714 134.979) 20,608 20,706 20,601 (20.860) L2,162 12,116 12,306 (12,416) Gov't. and Interbank LEVELS-$MILLIONS 1977--APR. MAY JUNE JULY PERCENT * Nonborrowed Reserves JULY 34,680 34,723 34,868 (35,296) 1t718 1,692 1,807 1,702 1 ANNUAL GROWTH QUARTERLY 1976--4TH OTR. 7.6 -1.8 6.5 1977--1ST QTR. 2ND QTR. 7.7 -2.4 4.7 8.0 5.1 0.2 6.8 -1.1 7.3 1.6 3.7 3.9 8.0 6.9 6.0 4.0 3.0 3.5 3.2 5.0 3.0 -0.7 9.5 4.0 OUARTERLY-Av 4.4 2.7 3.1 4.8 2.6 1.9 7.1 6.8 7.2 ( 13.0 1.5 5.0 14.71 14.1 -3.1 3.1 15.91 11.8 6.2 6.5 12.1) 1 9.9) 9.5) 1976-4TH QTR. 1977-17T QTR. 2ND QTR. MONTHLY 1977--APR. MAY JUNE JULY JUNE-JULY 13.9 0.9 6.9 S9.23 I 9.3) ( 6.1) 12.1 5.7 -6.1 15.1) ( 3.9 -4.5 18.8 10.71 S 4.5) 1 14.9) WEEKLY LEVELS-SMILLIONS 1977-JUNE 1 B 15 22 29 34,759 34,507 34,686 34,980 35,184 34,529 34,281 34,463 34,709 34,850 121,878 121,208 121,546 122,217 122,959 34,350 34,474 34,440 34,907 35,014 20,596 20,655 20t448 20,623 20,631 12,207 12,240 12,290 12,348 12,350 1,548 1,580 1,702 1,936 2,033 JULY 6 13 35,764 35,166 35,499 35,007 123,512 123,032 35,216 34,680 20,922 20,743 12,386 12,450 1,908 1t488 1. NOTE: I_ _ _ RESERVE SERIES HAVE BEEN ADJUSTED TO REMOVE DISCONTINUITIES DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. _ _ _ __ .1_ ASSOCIATED WITH CHANGES _ IN RESERVE _ _ REQUIREMENT RATIO. STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JULY 15, 1977 TABLE 3 NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES ($ millions, not seasonally adjusted) Treasury Bills Within Net Change 2/ 1 year Period Treasury Coupons Net Purchases 3/ Over 1 -5 5 - 10 10 Total Federal Agencies Net Purchases 4/ Over 1- 5 5 - 10 10 Within 1 year Total Net Change Outright Holdings Total 5/ Net RP's 6/ -490 7,232 1,280 -468 863 789 579 797 3,284 3,025 539 500 434 1,510 1,048 167 129 196 1,070 642 1,582 1,415 1,747 6,202 5,187 592 400 1,665 824 469 1,059 864 3.082 1,613 891 1,631 9,273 6,303 7,267 6,227 -1,358 -46 -154 1,272 3,607 1976--Qtr. II Qtr. III Qtr. IV 2,067 45 -886 796 881 794 245 345 232 134 160 192 1,284 1,557 1,294 140 240 115 3,371 1,398 436 1.654 392 304 1977--Qtr. I Qtr. II 1,164 2,126 997 526 325 171 165 152 1,680 959 726 2,738 3,666 -4,771 4,175 1977--Jan. Feb. Mar. 2,222 -691 -368 475 348 174 128 151 46 - 2,908 ---125 -6,877 1.931 175 Apr. May June 1,392 -208 942 2,822 -3,207 4,561 2,779 -2,892 -2,841 -2,697 1977--May June July 4 11 18 25 533 245 11 -125 1 8 15 22 29 -702 -1,442 -33 1,023 6 13 20 27 -145 -581 LEVEL--July 13 (in billions) 1,506 192 109 41 S - 406 251 S -- - - - - -- - 68 - -- -- -- ----- -- -45 - 173 138 -- ----- 35 346 - 233 113 33 380 2,176 ---254 1,744 173 -- 138 -- 35 -- 346 -- 866 227 - -- -- - - - -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ---- -- -- -- -- -- --- --- --- --- ----- --- --- --- --- -- -- -- -- -- 89 -- 200 -- 68 -- 114 -- 470 -- --- 233 -- 113 -- 33 -- 380 -- 1,870 1,503 47 -6,501 3,444 7,833 1,066 --- --- --- --- ------ --- --- --- --- -159 -589 -5,780 586 -- -- -- -- -- 7.4 3 -133 -704 -1,445 -58 105.9 Change from end-of-period to end-of-period. Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions. Outright transactions in market and with foreign accounts, and short-term notes acquired in exchange for maturing bills. Excluding redemptions, maturity shifts, rollovers of maturing coupon issues, and direct Treasury borrowings from the System. Outirght transactions in market and with foreign accounts only. Excludes redemptions and maturity shifts. In addition to net purchases of securities, also reflects changes in System holdings of banker's acceptances, direct Treasury borrowings from the System, and redemptions (-) of Agency and Treasury coupon Issues. Includes changes in both RP's (+) and matched sale-purchase transactions (-). -1.8 STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JULY 15, 1977 TABLE 4 SECURITY DEALER POSITIONS AND BANK POSITIONS (millions of dollars) U.S. Govt. Security Dealer Positions Bills i1) Coupon,^ Issues " ,.. Underwriting Syndicate Positions Municipal Corporate Bonds Bonds , ta, Member Bank Reserve Positions Basic Reserve Deficit** Borrowinq at FRB** Excess** Reserves " 'r V) Total P (b) Seasonal 8 New York 38 Others (7) 1976--High Low 8,896 3,668 3,046 175 655 -180 242 24 34 8 -8,161 -2,367 -12,744 - 6,908 1977--High Low 7,234 1,729 3,017 *-300 578p -111 339 20 68p 8 -8,742 -4,293 -13,975 - 8,733p 1976--June July Aug. Sept. Oct. Nov. Dec. 4,996 582 214 127 20 -4,219 - 9,158 5,743 6,174 7,838 904 1,686 1,509 234 207 205 132 100 63 25 31 31 -4,756 -4,624 -5,703 - 9,399 - 9,691 - 9,716 6,271 6,876 8,005 1,832 2,418 2,443 221 257 274 94 72 53 32 22 13 -6,428 -6,289 -7,168 -10,527 1977--Jan. Feb. Mar. 6,406 4,450 4,906 2,320 1,605 972 265 198 214 68 72 103 10 12 13 -6,421 -5,604 -5,661 -11,504 -11,503 -10,912 Apr. May June 4,567 3,072 *4,752 696 123 *206 192 213 162p 73 206 262p 14 30 54 -6,586 -5,693 -5,353p -11,409 -10,175 -10,998p 4 11 18 25 2,474 2,778 3,232 2,837 421 199 -289 -83 302 46 218 157 215 156 127 311 18 22 28 34 -5,840 -7,349 -5,627 -5,133 - 9,209 -10,843 -11,054 - 9,817 June 1 8 15 22 29 4,172 5,579 5,711 *4,345 *3,477 681 281 164 *-300 *435 409 33 246 104p 170p 230 226 223 271p 334 p 44 50 47 51p 68p -4,392 -6,163 -5,414 -5,612 -4,269p - 9,433 -12,044 -12,543 -11,209 - 8,733p July 6 13 20 27 *4,617 *4,211p *800 *230p 578p n.a. 265p n.a. 58p n.a. -5,990 p n.a. - 8,803p n.a. 1977--May -11,618 -11,449 NOTE: Government security dealer trading positions are on a commitment basis. Trading positions, which exclude Treasury securities financed by repurchase agreements maturing in 16 days or more, are indicators of dealer holdings available for sale over the near-term. Underwriting syndicate positions consist of 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 municiapl issues in syndicate which are Friday figures. * STRICTLY CONFIDENTIAL. ** Monthly averages for excess reserves and borrowings are weighted averages of statement week figures. p Average through close of business Monday. TABLE 5 SELECTED INTEREST RATES (per cent) STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JULY 15, 1977 Short-term Treasury Federal 90-Day Funds (1) ' () 1976--High Low 5.58 4.63 5.53 4.27 1977--High Low 5.45 4.47 5.14 4.41 1976--June 5.48 5.41 July Aug. Sept. 5.31 5.29 5.25 5.23 5.14 5.08 Oct. Nov. Dec. 5.03 4.95 4.65 4.92 4.75 4.35 1977--Jan. Feb. Mar. 4.61 4.68 4.69 4.62 4.67 4.60 Apr. May June 4.54 4.96 5.02 4 11 18 25 4.73 5.35 5.39 5.15 5.31 5.34 5.45 June 1 8 15 22 29 5.36 5.31 5.37 5.43 5.43 5.02 5.04 5.04 5.01 4.97 July 6 13 5.35 5.33 5.06 5.14 5.35 5.26 5.11 5.16 1977--May 4.65 4.87 4.99 5.11 Bills Commercial CD's New Paper I ssue-NYC 1-Year 90-119 Day 60-Day 90-Day (3) (4) (5) (6) 5.90 5.63 5.75 6.32 4.63 4.62 4.40 4.50 5.50 5.53 5.30 5.44 4.63 4.48 4.63 4.67 5.83 5.55 5.68 6.12 5.82 5.54 5.30 5.42 4.35 5.23 5.31 5.64 5.33 5.11 5.24 5.50 5.19 5.10 5.04 4.90 4.98 4.84 4.94 5.00 4.64 4.66 4.68 4.50 4.72 4.61 4.68 5.00 4.76 4.70 5.16 4.58 4.75 5.19 4.58 4.72 4.75 5.10 4.57 4.67 5.26 5.16 5.43 5.04 5.42 5.24 5.35 5.41 4.83 5.24 4.65 4.80 5.41 5.05 5.00 5.13 5.35 5.46 5.25 5.28 5.48 5.53 5.25 5.44 5.42 5.50 5.30 5.40 5.46 5.25 5.43 5.38 5.44 5.25 5.41 5.35 5.40 5.20 5.42 5.30 5.39 5.39 5.20 5.30 5.38 5,13 5.25 5.43 5.48 5.38 n.a. n.a. U.S. Govt.-Constant Maturity Yields 3-yr 7-yr 20-yr (7) Ls) k9) 7. .52 7.89 8.17 5..65 6.33 7.23 6 .58 7.31 7.78 6.59 5 .83 7.26 7..32 7.76 8.03 7 .12 7.70 8.00 7.58 7.91 6 .86 6 .66 7.41 7.78 7.16 7.70 6 .24 6. .09 6.86 7.64 5..68 6.37 7.30 6. .22 6.92 7,48 6. .44 7.16 7.64 6. .47 7.20 7.73 6. .32 7.11 7.67 6..55 7.26 7.74 6.,39 7.05 7.64 7.27 6. .49 7.74 6..58 7.31 7.78 6. .57 7.25 7.74 6. .56 7.21 7.70 6. .49 7.17 7.68 6. .46 7.13 7.68 6. .35 7.01 7.63 6. .35 7.01 7.63 6.98 7.57 6. 32 6. 40 7.08 7.58 7.09p 7.60p 6. 45p Long- ern Home Mortgages Corp.-Aaa Utilit Municipall New Recently Bond Primary Secondary Market Issue Offered Cony. FNMA Auc. GNMA Sec. Buyer (10r) ( i) (1Z) (13) (14) 15T) 8.95 8.94 7.13 9.10 9.20 8.45 7.93 7.84 5.83 8.70 8.39 7.57 8.34 8.33 5.93 8.95 8.79 8.08 7.90 7.95 5.55 8.65 8.46 7.56 8.72 8.73 6.87 8.85 9.13 8.35 8.63 8.52 8.29 8.63 8.50 8.33 6.79 6.61 6.51 8.93 9.00 8.98 9.05 8.99 8.88 8.37 8.30 8.10 8.25 8.17 7.94 8.24 8.18 7.93 6.30 6.29 5.94 8.93 8.81 8.79 8.75 8.66 8.45 7.98 7.93 7.59 8.08 8.22 8.25 8.09 8.19 8.29 5.87 5.89 5.89 8.72 8.67 8.69 8.48 8.55 8.68 7.83 7.98 8.06 8.26 8.33 8.08 8.22 8.31 8.12 5.73 5.75 5.62 8.75 8.83 8.86 8.67 8.74 8.75 7.96 8.04 7.95 - 8.33 8.32 8.31 8.28 5.76 5.82 5.70 5.71 8.78 8.83 8.85 8.85 8.70 -8.74 -- 8.06 8.08 8.04 8.04 - 8.22 8.22 8.06 8.06 8.03 5.72 5.65 5.55 5.61 5.56 8.85 8.85 8.85 8.88 8.95 8.79 -8.77 -8.73 7.99 7.99 7.99 7.92 7.90 8.10p n.a. 5.63 n.a. 8.93 'n.a. -8.72 7.97 7.97 8.32 8.34 8.15 8.11 8.01 8.07 8.14p n.a. 20 27 Daily--July 7 13 5.45 5.49 5.38 5.38 - - 6.39 6.42 7.07 7.05 7.57 7.58 NOTE: Weekly data for columns 1 to 4 are statement week averages of daily data. Columns 5 and 6 are 1-day Wednesday quotes (prior to 1976, figures shown are for 60-89 day and 90-119 day ranges, respectively). For columns 7 through 10, the weekly date is the mid-point of the calendar week over which data are averaged. Columns 11 and 12 are 1-day quotes for Friday and Thursday, respectively, following the end of the statement week. Column 13 is an average of contract interest rates on commitments for conventional first mortgages with 80 per cent loan-to-value ratios made by a sample of insured savings and loan associations on the Friday following the end of the statement week. Column 14 gives FNMA auction data for Monday preceding the end of the statement week. Column 15 is a 1-day quote for Monday preceding the end of the statement week. The FNMA auction yield is the average yield in bi-weekly auction for shortterm 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 coupon rate 50 basis points below the current FHA/VA ceiling. 1-A MONEY AND CREDIT AGGREGATE MEASURES APPENDIX TABLE 15, 1977 MONEY STOCK MEASURES BANK CREDIT MEASURES BANK RESERVES JULY Total r iredit 1 brwd Base 2 3 and ,roxy Invests ments p 4 M M 1 6 5 M 7 8 M4 M5 9 10 M 11 M7 12 (Per cent annual rates of growth) ANNPUALLY: 1974 197 1976 7.0 -0.2 1.0 7.7 3.2 1.2 .8 -1.5 3.6 -1.3 3.7 2.4 6.1 6.7 e.0 2.9 2.3 5.3 0:6 7.6 1.3 7.7 e.s 7.1 11.1 10.5 12.8 9.9 1.5 10C. 10.2 5.b 5.5 11.8 13.1 9." 10.3 4 .6 10.4 10.5 0.4 10.8 10.0 10.3 1.8 11.5 7.2 11.2 4.9 7.2 12.9 14.5 9.3 11.8 9.5 11.5 -2.4 4.7 3.0 7.2 9.5 11.2 3.8 8.4 10.0 9.8 9.8 9.5 10.2 9.9 2.7 4.4 2.6 4.8 3.9 R.2 6.9 10.8 4.4 6.5 11.4 9.2 11.1 9.6 10.9 2.7 3.1 2.6 1.9 5.4 5.2 8.8 11.9 4.2 9.5 11.3 10.0 10.5 9.2 10.6 9.7 4.1 2.0 5.9 -6.2 6.0 11.8 4.9 3.7 1.8 7.0 -4.8 4.9 12.6 5.6 13.5 3.2 0.7 1.6 11.9 11.3 10.8 7.9 4.1 9.7 7.6 13.5 11.1 8.6 7.1 12.8 6.2 11.5 1.6 13.7 0.0 7.7 12.3 13.3 16.9 12.6 7.6 8.6 14.0 13.4 10.5 9.2 11.8 7.7 8.7 13.7 10.3 10.2 10.9 -13.1 -3.1 13.0 1.5 5.0 10.4 -13.3 -4.3 14.1 -3.1 3.1 4.5 -2.9 7.6 7.1 -1.5 16.1 3.7 14.7 10.0 14.0 10.3 8.q 5.4 0.8 5.4 19.4 0.7 4.9 11.4 7.3 10.8 11.0 7.2 10.7 7.5 9.4 10.1 10.1 5.1 1 7. SEMI-ANNUALLY: 1lT HALF 1976 2ND HALF 1976 IST HALF 1977 QUARTERLY: 3RD QTR. 1976 47H QTR. 1976 1ST QTR. 2ND QTR. 1977 1977 -1.8 6.5 QUARTERLY-AV: 3RD QTR. 1976 4TH QTR. 1976 1ST QTR. 2ND QTR. 1977 1977 14.4 MONTHLY: 1976--JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1977--JAN. FEB. MAR. APR. MAY JUNE P NOTESs 1/ 2/ P - 7.1 5.9 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. BASED ON QUARTERLY AVERAGE DATA. PRELIMINARY 8.9 9.4 12.4 SUBJECT TO RESERVE REQUIREMENTS, 10.7 LOANS SOLD 10 BANK- 11.0 11.3 7.9 11.0 8.2 10.3 JULY APPENDIX TABLE 1-B 15, 1977 MONEY AND CREDIT AGGREGATE MEASURES SEASONALLY ADJUSTED, BILLIONS OF DOLLARS Period Total Mo borrowed MONEY STOCK MEASURES BANK CREDIT MEASURES BANK RESERVES V n a ry Base Adj. Credit proxy Total Loans and Investments 5 M1 M M3 M4 M5 M6 M7 6 7 8 9 10 11 12 1 2 3 34,174 34,015 34,465 33,447 33,885 34,412 104,380 110,394 118,054 494.6 513.8 538.8 695.2 725.5 788.2 283.1 294.8 312.4 612.4 664.3 740.3 981.5 1092.6 1237.1 701.4 746.5 803.5 1070.5 1174.7 1300.3 1181.2 1308.3 1438.9 1221.6 1351.1 1488.4 33,776 33,650 114,009 521.4 753.3 303.2 698.2 1156.5 768.4 1226.7 1365.7 1413.2 JULY AUG. SEPT. 33,833 33,998 33,823 33,701 33,897 33,761 114,625 115.252 115,739 522.8 523.1 523.8 755.9 762.0 766.8 305.0 306.5 306.9 705.2 710.4 716.3 1168.8 1180.8 1193.9 774.1 775.4 779.4 1237.7 1245.8 1257.0 1378.8 1387.5 1397.5 1427.1 1436.3 1446.7 OCT. NOV. DEC. 33,992 34,325 34,465 33,898 34,253 34,412 116,424 117,304 118,054 529.0 534.0 538.8 775.4 782.6 788.2 310.4 310.4 312.4 725.9 732.3 740.3 1210.7 1223.4 1237.1 788.2 794.6 803.5 1273.0 1285.6 1300.3 1413.8 1426.4 1438.9 1463.2 1475.8 1488.4 1977--JAN. FEB. MAR. 34,778 34,397 34,308 34,710 34,326 34*204 119,100 119,077 119,572 540.6 539.5 542.9 790.6 800.3 807.0 313.8 314.0 315.4 746.3 750.7 756.1 1248.9 1258.2 1268.1 809.3 814.0 818.2 1312.0 1321.5 1330.3 1451.9 1465.2 1474.0 1502.0 1516.2 1526.2 34,680 34,723 34,868 34,606 34,517 34,605 120,749 121,376 122,030 546.1 545.4 552.7 816.4 823.4 829.5 320.5 320.7 322.0 764.6 767.6 772.8 1281.2 1289.0 1299.1 826.2 829.9 836.8 1342.8 1351.3 1363.1 1487.1 1496.4 1509.0 1540.2 1550.7 1564.0 11 18 25 34,686 34,829 34,277 34.530 34,702 33,966 120,990 121,488 121,061 543.6 545.8 547.2 320.1 321.3 321.5 766.2 768.4 769.1 828.2 830.7 831.8 JUNE 1 8 15 22 29P 34,759 34,507 34,686 34,980 35,184 34,529 34,281 34,463 34,709 34,850 121,878 121,208 121,546 122,217 122,959 546.6 551.0 552.1 555.9 551.9 320.7 321.5 320.9 322.5 322.4 769.5 771.6 771.1 774.1 774.4 832.4 834.9 834.8 838.2 839.2 JULY 6P 35,764 35,499 123,512 555.7 325.6 780.0 844.0 4 ANNUALLY: 1974 1975 1976 MONTHLY: 1976--JUNE APR. MAY JUNE P WEEKLY: 1977-MAY NOTESZ ADJUSTED CREDIT PROXY INCLUDES MAINLY TOTAL MEMBER BANK DEPOSITS SUBJECT TO RESERVE REQUIREMENTS, LOANS SOLO TO BANKRELATED INSTITUTIONS, AND EURODOLLAR BORROWINGS OF U.S.BANKS. WEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS. MONTHLY DATA ARE DAILY AVERAGES. WEEKLY DATA ARE NOT AVAILABLE FOR M3, MS, M6, M7, TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS. 1/ BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS. P - PRELIMINARY JULY APPENDIX TABLE 2-A 15, 1977 COMPONENTS OF MONEY STOCK AND RELATED MEASURES ITime Currency Period nd Deposits Mutual Savings Bank & and Savings Deposits Other Than CD's Total Total ______ Savings CD's Credit Union Savings 9 10 11 Shares S&L BndsJ Short Term U.S.Gov't Com Securities Shares-i Other c Paper 1i 8 5 6 7 (Per cent annual rates of growth) 12 1 2 3 4 10.3 8.8 9.6 3.6 2.9 4.3 14.7 8.0 8.1 10.1 11.7 15.2 6.5 17.4 25.0 12.7 7.8 1.7 36.5 -6.1 -23.5 5.6 15.5 15.6 12.3 19.4 17.8 4.7 6.2 6.9 13.5 33.4 7.2 29.a -1.0 18.6 10.7 8.0 4.0 4.6 6.3 9.7 14.1 15.2 27.6 19.7 3.0 11.4 -28.9 -21.1 13.8 16.2 16.6 17.6 6.3 7.2 16.6 -2.0 21.6 14.3 1977 8.5 5.7 10.5 12.1 15.1 9.4 0.0 12.2 15.6 6.4 8.2 19.0 1976 1976 8.8 6.6 3.7 7.4 6.2 15.7 14.5 18.1 19.5 27.5 10.3 10.0 -40.5 1.3 16.9 15.9 17.9 18.2 8.1 6.2 0.0 -17.8 15.2 2.4 IST QTR. 1977 2ND QTR. 1977 8.4 8.8 2.2 8.2 9.5 9.5 11.9 9.3 15.4 4.0 8.7 14.1 -7.0 10.9 12.0 10.9 16.4 12.8 6.1 6.6 24.0 6.2 22.6 20.1 3RD QTR. 1976 4TH QTR. 1976 7.8 8.1 3.2 6.0 7.0 12.2 12.8 17.1 13.8 24.7 11.7 10.8 -24.6 -18.9 14.6 17.2 15.9 18.5 7.0 7.4 9.2 -13.0 Z2.6 5.7 1ST QTR. 2ND QTR. 7.5 9.3 3.1 8.3 12.5 8.3 14.0 9.8 21.9 7.9 7.1 11.6 1.9 -1.9 13.3 10.8 16.7 14.0 6.7 6.1 7.0 9.2 14.6 22.7 3.1 9.3 7.7 9.2 9.1 6.0 4.5 -3.2 6.9 5.3 -1.1 15.3 -2.1 8.9 12.0 9.5 -0.3 9.2 13.5 16.1 17.1 9.2 15.2 11.4 16.3 17.9 18.8 16.8 0.0 12.6 23.3 19.6 29.9 31.0 17.0 17.3 2.2 11.0 15.8 9.7 4.3 28.0 -22.2 -67.9 -35.1 -15.2 -1.9 21.2 10.9 13.9 18.0 18.0 18.0 15.3 13.8 13.6 16.8 16.6 19.6 19.3 15.8 18.8 7.0 5.. 6.6 10.3 5.1 6.8 6.7 10.4 29.3 0.0 -28.6 -1.7 -5., -46.8 33.8 20.3 14.9 9.8 4.9 0.0 2.4 8.9 10.4 5.9 13.1 7.2 5 .. 7 4.1 -3.1 5.7 21.6 -1.5 4_..6 11.0 10.7 6.7 6.9 8.3 13.2 12.9 11.7 10.7 9.5 7.6 10.. 21.9 13.4 10.4 9.7 4.5 -2.-A3 4.8 10.6 10.5 9.4 10. 22.0- -3. 3.8 -20.9 -11.6 13.6 14.2 11.4 10.0 10.4 11.1 11-0. 15.4 15.2 18.0 11.8 11.7 14.S. 6.7 6.6 5.0 6.6 6.5 &F- 18.0 60.4 -6.8 6.8 5.1 . - 14.5 24.0 28.2 18.4 I7.1 1 2/ ANNUALLY 1974 1975 1976 2/ SEMI-ANNUALLY: 1ST HALF 1976 2ND HALF 1976 1ST HALF QUARTERLYs 3RO OTR. 4TH QTR. QUARTERLY-AV: 1977 1977 MONTHLY: 1976--UNt JULY AUG. SEPT. OCT. NOV. DEC. 1977--JAN. FEB. MAR. APR. MAY JUNE P 1. GROWTH RATES AkE BASED ON ESTIMATED PREVIOUS MONTH REPORTED DATA. 2/ BASED ON QUARTERLY AVERAGE DATA. P - PRELIMINARY. 1/ MONTHLY AVERAGE 21.7 LEVELS DERIVED 30.- 1 BY AVERAGING .1. END OF CURRENT .. MONTH I5 AND ENU UF APPENDIX TABLE 2-B 15, JULY COMPONENTS OF MONEY STOCK AND RELATED MEASURES Period Currency Demand Deposit Time and Savings Deposits otal ___ _ 1 .2 3 Other Than CDs Total 4 Savings| Other 5 6 ShortTerm D's Mutual Savings Credit k Union Saings & S&L Shares Bods Gov't Conmercial Paper 7 Shares 8 12 9 1977 Total NonGov't Deposit Funds Demand Deposip 9 1 10 Sec j 11 63.3 67.3 71.9 47.4 457.8 27.6 33.0 39.0 66.6 40.4 42.8 49.5 422.5 35.7 69.4 69.7 47.4 13 14 ANNUALLY 491.1 329.3 369.6 427.9 136.2 161.0 202.4 193.1 208.6 225.5 225.6 465.3 395.1 180.6 214.5 78.1 78.6 79.2 226.9 227.9 227.7 469.0 468.9 472.5 400.1 403.9 409.4 182.5 185.8 189.4 217.6 218.0 220.0 68.9 65.0 63. 1 427.4 433.6 440.3 36.2 36.7 37.3 69.7 70.2 70.b 71.4 71.4 69.7 4u.2 48.8 49.2 OCT. NOV. DEC. 79.8 80.2 80.5 230.6 230.2 21 .9 477.8 484.2 491.1 415.5 422.0 427.9 192.5 197.3 2U2.4 222.9 224.7 225.5 o2.3 446.9 452.6 457.8 37.9 38.4 39.0 71.1 71.5 71.9 69.6 69.3 66.6 49.4 49.4 49.5 1977--JAN. FEb. MAR. B1.1 81.6 82.2 232.7 232.1 233.2 495.6 500.0 502.8 432.5 436.7 440.6 20b. I 208.4 210.2 226.4 228.4 230.4 63.3 62.2 463.2 467.6 471.5 39.5 40.0 40.6 72.3 72.7 73.0 67.6 71.0 70.6 5U.1 51.1 52.3 P 83.1 83.6 84.0 237.4 237.1 238.0 505.7 509.2 514.6 444.1 446.9 450.8 211.9 214.7 212.3 232.2 234.2 238.5 61.6 62.3 63.9 475.6 480.0 464.4 41.0 41.4 41.9 73.4 73.0 74.2 71.0 71.3 71.7 53.1 54.3 55.0 11 18 25 83.4 83.6 83.7 236.7 237.6 237.8 508.1 509.5 510.3 446.2 447.1 447.6 21.2 212.9 212.9 232.9 234.2 234.7 62.0 62.4 62.7 511.7 513.3 513.9 515.6 516.8 44B.8 450.1 450.2 451.6 452.0 212.4 212.7 212.3 212.2 Z11.9 236.4 237.4 237.9 239.4 240.1 62.9 63.2 63.7 64.0 64.8 518.4 454.4 212.4 242.0 64.0 END * n *OF PREVIOUS 67.8 73.7 80.5 215.3 418.3 221.0 451.7 231.9 1976--JUNE 77.5 JULY AUG. SEPt. 1974 1975 197b n9.0 9 *0 82.1 683.3 341.5 395.2 66.3 MONTHLY: APR. MAY JUNE 02.d 63.3 63.1 WEEKLY: 1977-MAY JUNE 1 8 15 22 29P 84.1 83.8 83.8 84.2 84.6 236.7 237.8 237.1 238.3 237.8 JULY 6P 85.0 24U.6 1/ 2/ P - SS. - SS * - - ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND INCLUDES TREASURY UEPOSIT5 AT MEMBER BANKS AND FEDERAL RLSERVE bANKS. PRELIMINARY S - MONTH REPURElt .- * UA[A. 

Federal Reserve (1977, July 18). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19770719

@misc{wtfs_bluebook_19770719,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1977},
  month = {Jul},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19770719},
  note = {Retrieved via When the Fed Speaks corpus}
}