Bluebook

Prefatory Note The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that this document may contain occasional gaps in the text. These gaps are the result of a redaction process that removed information obtained on a confidential basis. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act. 1 In some cases, original copies needed to be photocopied before being scanned into electronic format. 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Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. Strictly Confidential (FR) Class I FOMC February 24, 1978 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 CLASS I FOMC (FR) February 24, 1978 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent Developments (1) M-1 increased at a 7-1/4 per cent annual rate in January, but it appears to be declining at a 1/2 per cent rate in February. Thus, growth over January and February combined is projected at around a 3-1/2 per cent annual rate, in the lower half of the FOMC's range. M-2 appears to be expanding at a 6-1/2 per cent annual rate over the January-February period, close to the mid-point of its range. Renewed expansion in savings and small denomination time deposits at banks and a continued rise in large denomination time deposits included in M-2 helped to maintain growth in this aggregate in January.1/ At thrift institutions, on the other hand, Growth in Monetary Aggregates over January-February Period (SAAR in per cent) Range M-1 2-1/2 to 7-1/2 3.4 M-2 5 to 9 6.6 Memo: Federal funds rate (per cent per annum) 1/ Latest Estimates 6-1/2 to 7 Average for statement week ending 6.78 Jan. 18 25 6.72 Feb. 1 6.80 8 6.75 15 6.76 22 6.78 Much of the January growth in savings and small denomination time deposits at banks occurred early in the month, and appears to reflect inadequate seasonal adjustment for interest crediting. After early January, such flows were considerably weaker. deposit inflows slowed further in January and seem at a reduced pace in February. to be continuing Over January and February, nonborrowed reserves are expected to increase at a 17 per cent annual rate, largely reflecting the surge in demand deposits around the turn of the year and a rise in excess reserves possibly associated with difficulties in reserve management due to severe weather. (2) With incoming data indicating that the monetary aggregates were growing at rates well within the Committee's ranges, the Account Management has continued to seek a Federal funds rate of around 6¾ per cent since the January FOMC meeting. Under these circumstances, short-term interest rates generally have changed little on balance since mid-January despite relatively strong short-term credit demands. The Treasury has begun to raise new cash in its weekly auctions of 3- and 6-month bills, and short-term borrowing by businesses continued sizable in recent weeks. Bank loans to businesses accelerated substantially in January and early February, more than offsetting a decline in commercial paper issuance by nonfinancial corporations. (4) In long-term credit markets, public bond offerings by corporations over the intermeeting period were modest, and rates on corporate bonds have changed little on balance since mid-January. At the same time, municipal bond yields have fallen somewhat, as demands for tax-exempt securities have continued to be quite strong. Mortgage interest rates in both primary and secondary markets, on the other hand, have edged upward further, reflecting pressures on fund availability resulting from the slowing of deposit inflows to thrift institutions. (5) Yields on Treasury coupon securities also have risen slightly since mid-January. Both the Treasury and Federally-sponsored agencies have been substantial net borrowers over this period. The Federal Home Loan Bank System, for example, raised $1.4 billion of new cash in conjunction with its February refinancing, to meet a growing demand for advances from member institutions. about The Treasury borrowed $6 billion of cash through regular issues of 2- and 4-year notes since the last FOMC meeting, and obtained an additional $2 billion in its regular mid-quarter refunding of $5 billion of maturing issues.1/ Noncompetitive tenders in the refunding auctions came to $2 billion, about $1 billion above the total in the November refunding. In the weeks following the auctions, the new issues have traded below their average auction prices. (6) The table on the following page shows (in terms of percentage annual rates of change) related monetary and financial flows over various time periods. 1/ In that refinancing, the Treasury sold $2¾ billion of 39-month notes at an average yield of 7.59 per cent, $3 billion of 7-year, 8 per cent notes at an average yield of 7.88 per cent, and $1 billion of reopened 27-year 8¼ per cent bonds at an average yield of 8.23 per cent. 1976 & 1977 Average Past Twelve Months Jan. '78 over Jan. '77 Past Six Months Jan. '78 over July '77 Past Three Months Jan. '78 over Oct. '77 Past Month Jan. '78 over Dec. '77 Nonborrowed reserves 1.5 4.9 7.9 21.0 25.9 Total reserves 2.1 6.1 8.7 11.1 22.6 Monetary Base 7.6 8.8 10.0 11.1 16.0 6.7 7.5 6.5 4.4 7.2 10.2 8.8 7.3 6.2 8.2 12.2 10.7 10.0 7.6 7.9 M-4 (M-2 plus CD's) 8.7 9.8 9.9 10.3 9.7 M-5 (M-3 plus CD's) 11.1 11.2 11.5 10.1 8.7 Month-end basis 9.5 11.1 9.0 7.8 12.1 Average of Wednesdays 9.3 10.9 10.1 10.1 15.6 -0.3 1.1 2.3 3.3 1.6 0.2 0.1 0.0 -0.2 -0.9 Concepts of Money M-l (Currency plus demand deposits) 1/ M-2 (M-1 plus time deposits at commercial banks other than large CD's) M-3 (M-2 plus deposits at thrift institutions) Bank Credit Loans and investments of all commercial banks 2/ 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 Wednesday statement date 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 (7) Shown below for Committee consideration are three alternative longer-run growth ranges for the monetary aggregates over the QIV '77-QIV '78 period, along with the ranges currently in place. Alt. A Alt. B Alt. C Current M-1 4 to 7 4 to 6½ 4 to 6 4 to 6½ M-2 7 to 9½ 6½ to 9 6 to 8½ 6½ to 9 M-3 7½ to 10 7 to 9½ 6½ to 9 8 to 10½ 7½ to 10½ 7 to 10 7 to 10 Bank credit (8) 8 to 11 Alternative B continues the ranges for M-1 and M-2 that were adopted by the Committee in October for the QIII '77-QIII '78 period. Alternatives A and C represent, respectively, somewhat more and somewhat less expansive policy alternatives. Under all three alternatives, the M-3 growth range is projected to be lower than the current range for this aggregate. Since around year end, net inflows of deposits to thrift institutions have persisted at a rate considerably lower than previously anticipated, and, as a result, the staff has reduced its projections of such inflows over the year ahead. (9) Each of the alternatives presupposes an upward adjustment in deposit ceiling rates at banks and thrift institutions of 50 basis points on small-denomination time deposits; the adjustments in ceiling rates are assumed to occur in April under alternative C, in May under B, and in June under A. Without such adjustments, the increase in market rates thought necessary to restrain M-1 growth to the mid-point of the indicated ranges would lead to growth in M-2 and M-3 near the lower ends of the ranges shown.1/ (10) The table below provides perspective on the relation- ship among growth rates proposed for the QIV '77 to QIV '78 period and the implied growth rates for more extended periods ending in QIV '78. 2/ It shows, for instance, that growth in M-1 at around the 5¼ per cent mid-point of the proposed alternative B range would lead to a 5.6 per cent annual rate of expansion over the 15-month period starting with QIII '77 and to a 6.3 per cent annual rate of growth over the 18-month period beginning with QII '77--in both cases within the current FOMC range but above the mid-point. The higher growth rates over these longer periods reflect the sizable overshoot in M-1 growth in the third quarter of last year and the more moderate overshoot in the fourth quarter. M-1 growth at around the 5 per cent mid-point of the proposed alternative C range would nearly compensate for the slight fourth quarter overshoot but not for the larger third quarter overshoot. 1/ AppendixIII shows projections of the interest-bearing components of M-2 and M-3, as well as for the aggregates themselves, with and without an adjustment in ceiling rates. 2/ Implied growth rates for even more extended periods are included in the growth triangles in Appendix IV. Growth Rates in Monetary Aggregates Assuming Growth over QIV '77 - QIV '78 Period at Mid-Point of Ranges for Alternatives (Annual rate, compounded quarterly) Alt. A Alt. B Alt. C Period QIV '77 to QIV '78 QIII '77 to QIV '78 QII '77 to QIV '78 5.5 5.8 M-1 5.2 5.6 5.0 5.4 6.4 6.3 6.1 Memo: 5.8 5.7 5.5 8.2 8.2 8.6 M-2 7.7 7.8 8.2 7.2 7.3 7.9 8.0 7.8 7.5 QIII 77 to QIII '78 QIV '77 to QIV '78 QIII '77 to QIV '78 QII '77 to QIV '78 Memo: QIII '77 to QIII '78 (11) Shorter-run specifications for monetary aggregates and the Federal funds rate believed consistent with the longer-run alternatives are summarized below for Committee consideration. (More detailed, and longer-term, data are shown in the tables on pp. 8 and 9.) Alt. A Alt. B Alt. C M-1 1½ to 6½ 1 to 6 to 5½ M-2 5 to 9 4½ to 8 4 to 8 6 to 6½ 6½ to 7 7 to 7½ Ranges for Feb.-March Federal funds rate (Intermeeting period) Alternative Levels and Growth Rates for Key Monetary Aggregates M-1 M-2 Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C 1978 January February March 337.4 337.3 339.6 337.4 337.3 339.3 337.4 337.3 339.1 812.0 815.4 821.3 812.0 815.4 820.8 812.0 815.4 820.3 1977 QIV 334.1 334.1 334.1 802.9 802.9 802.9 1978 QI QII QIII QIV 338.1 343.1 347.6 352.4 338.0 342.9 347.1 351.6 337.9 342.6 346.6 350.9 816.2 832.5 850.9 869.1 816.1 832.4 849.5 865.1 815.9 832.5 847.0 861.0 -0.4 8.2 -0.4 7.1 -0.4 6.4 5.0 8.7 5.0 7.9 5.0 7.2 Quarterly Average: 1978 QI QII QIII QIV 4.8 5.9 5.2 5.5 4.7 5.8 4.9 5.2 4.5 5.6 4.7 5.0 6.6 8.0 8.8 8.6 6.6 8.0 8.2 7.3 6.5 8.1 7.0 6.6 Semi-Annual: QIV '77-QII '78 QII '78-QIV '78 5.4 5.4 5.3 5.1 5.1 4.8 7.4 8.8 7.3 7.9 7.4 6.8 Annual: QIV '77-QIV '78 5.5 5.2 5.0 8.2 7.7 7.2 Growth Rates Monthly: 1978 February March Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) M-3 Alt. A 1978 Bank Credit Alt. B Alt. C Alt. A Alt. B Alt. C January 1383.0 1383.0 1383.0 879.9 879.9 879.9 February March 1389.2 1398.9 1389.2 1398.1 1389.2 1397.3 888.0 894.1 888.0 893.9 888.0 893.7 1977 QIV 1365.6 1365.6 1365.6 865.0 865.0 865.0 1978 QI QII QIII 1390.4 1418.4 1450.7 1390.1 1417.4 1447.5 1389.8 1416.6 1442.2 887.8 909.8 929.0 887.3 908.4 926.5 886.8 907.0 924.0 QIV 1483.8 1475.9 1467.2 945.8 942.7 940.0 February 5.4 5.4 5.4 11.0 11.0 11.0 March 8.4 7.7 7.0 8.2 8.0 7.7 Quarterly Average: 1978 QI QII QIII QIV 7.3 8.1 9.1 9.1 7.2 7.9 8.5 7.8 7.1 7.7 7.2 6.9 10.5 9.9 8.4 7.2 10.3 9.5 8.0 7.0 10.1 9.1 7.5 6.9 Semi-Annual: QIV '77-QII '78 QII '78-QIV '78 7.7 9.2 7.6 8.3 7.5 7.1 10.4 7.9 10.0 7.6 9.7 7.3 Annual: QIV '77-QIV '78 8.7 8.1 7.4 9.3 9.0 8.7 Growth Rates Monthly: 1978 -10(12) A Federal funds rate centered on the recently prevailing level of 6-3/4 per cent, as contemplated under alternative B, is likely to be associated with M-1 growth over February-March in a 1 to 6 per cent annual rate range. The February weakness in M-l, following several months of strong growth, is thought by the staff to be transitory. Money growth in March is expected to rebound to a little over a 7 per cent annual rate-mainly because of the increase in transactions demands associated with the projected strengthening of economic activity following the recent weatherinduced slowdown. The expected rebound in M-1 also reflects in some degree projections indicating that the volume of tax refunds to individuals will be large relative to other recent years. (13) The February-March growth rate of M-1 shown under alterna- tive B implies a first quarter expansion of about 4-3/4 per cent, annual rate, well within the Committee's 4 to 6-1/2 per cent longer-run range. However, the staff anticipates that further increases in market interest rates will be required in order to constrain M-1 growth over the oneyear QIV '77 - QIV '78 period to the mid-point of that range. Even though the staff has reduced its projection of economic growth this year, nominal GNP is still expected to increase at an 11-1/4 per cent rate over the QIV '77 - QIV '78 period, leading to relatively strong money demand. In addition, the restraining impact on money demand from the relatively sharp 1-3/4 percentage point increase in short-term interest rates that took place between the spring and fall of last year will be exhausted relatively soon; since October short-rates have risen only about another -111/4 percentage point. Even assuming some further moderate downward shift in money demand relative to income, the Federal funds rate would probably have to begin rising again in April and reach 8 per cent by fall in order to constrain M-1 growth for the QIV '77-QIV '78 period to the mid-point of the 4 to 6-1/2 per cent alternative B range.1/ (14) Growth in M-2 over the February-March period is likely to be in a 4-1/2 to 8-1/2 per cent annual rate range under alternative B. With market yields above the ceiling rates on savings deposits and all maturities of small denomination time deposits at commercial banks, inflows of such deposits are likely to remain modest in February-March. However, growth in large denomination time deposits included in M-2 are expected to continue to offset slow growth of deposits subject to Regulation Q ceiling as banks aggressively seek funds to finance credit demands. (15) At thrift institutions the relatively attractive yields available in the market for shorter-term investments have slowed total deposit inflows so far in 1978, although ceiling rates on the longestterm deposits are still somewhat above those on market instruments. With no further increase in short-term interest rates, growth in deposits at thrift institutions can be expected to remain modest in the near-term. Consequently, S&L's are likely to limit their new commitment activity and also--in financing takedowns of their record level of outstanding commitments--to reduce their own liquidity and further increase borrowing 1/ See Appendix I. The implied increases in the velocity of M-1 and M-2 over 1978 are shown in Appendix II. -12from FHL Banks. Although thrift deposit inflows are expected to rise from their depressed first quarter pace if ceiling rates are raised in the spring (as we are assuming), inflows will probably remain considerably below the strong pace of expansion of 1977. (16) With the Federal funds rate remaining near its present 6-3/4 per cent level, as envisioned under alternative B, interest rates generally are likely to fluctuate within a relatively narrow range over the intermeeting period. A little upward rate pressure might develop in short-term credit markets; the Treasury is expected to raise $10 billion of new money in the bill market prior to the March and April tax dates, and depository institutions are likely to continue liquidating shorterterm Treasury issues to meet loan demands. However, intermediate- and long-term market rates might decline a bit in the weeks immediately ahead. Treasury demands in these maturity ranges are not likely to be unusually large. In addition, the pace of new offerings by corporations and State and local governments is expected to remain moderate, while the institutional demand for bonds is likely to continue to be quite strong. Both primary and secondary mortgage rates will probably continue to be under upward pressure, given the slowing of deposit growth at the thrift institutions. (17) Over the longer-run both short- and long-term interest rates are likely to rise. Given the strength that is projected in economic activity, rate pressures may become evident in spring and summer as a result of expanding private credit demands and Federal Reserve efforts -13to restrain money growth. Further increases in short- and intermediate- term rates will be accompanied by reduced liquid asset holdings of depository institutions, by increased commercial bank offerings of large denomination time deposits, and by stepped up borrowing demands of Federal housing agencies. The increases in short- and intermediate- term rates will probably be transmitted to some extent to long-term markets. However, as in 1977, such increases will be limited by the continued high cash flows of insurance companies and pension funds. (18) Under alternative C the Federal funds rate would rise over the intermeeting period to the mid-point of a 7 to 7-1/2 per cent range, and the February-March annual rate of growth of M-1 and M-2 would likely be in 1/2 to 5-1/2 and 4 to 8 per cent annual rate ranges, respectively. The 3-month Treasury bill rate would probably rise to about 7 per cent by mid-March, with commensurate adjustments in other short rates. Member bank borrowings could be expected to rise sharply once again, increasing pressures for a discount rate increase. At the same time, the rise in short-term interest rates associated with this alternative would tend to strengthen the dollar on international exchange markets. (19) The tightening of money market conditions contemplated under alternative C would further slow the net inflow of deposits subject to rate ceilings in the weeks immediately ahead and thus would increase the need for an adjustment in deposit ceiling rates. Lending policies of banks and thrift institutions would become more restrictive. There would be increased pressure on Government support programs in the -14mortgage area. The Home Loan Bank System would be expected to turn more and more to the market to raise cash to support advances to savings and loan associations, and mortgage bankers would increase takedowns of existing FNMA commitments while also aggressively seeking new commitments. In such an environment, the increase in short-term rates would probably be rather promptly transmitted to the intermediate- and longterm sectors of the market, where Government security dealers still have a long position of moderate size in Treasury coupon issues. (20) The near-term increase in interest rates under alterna- tive C would work toward a reduction in growth of the longer run. the aggregates over However, given the projected strength of money demand, a further increase in interest rates would be required in order to limit M-1 expansion to the mid-point of the 4 to 6 per cent alternative C range over the QIV '77-QIV '78 period. The staff would expect the funds rate under this alternative to average 7-3/4 per cent in the second quarter and to rise to 8-1/4 per cent by fall. (21) Alternative A involves a reduction in the Federal funds rate over the intermeeting period to the 6-1/2 per cent mid-point of a 6 to 6-1/2 per cent range. Such an action would be accompanied by a reversal of the early January rise in short-term interest rates. Long- term rates, on the other hand, might not retrace all of their recent increases if, as appears likely at the moment, market participants concluded that the decline in short-term rates was likely to be temporary. Meanwhile, the dollar would probably tend to soften in international exchange markets. -15(22) The approach of alternative A appears most consistent with a monetary policy that encourages more rapid growth in the monetary aggregates over the longer-run than under either alternatives B or C. Nevertheless, given the strength projected for economic activity, the near-term decline in the funds rate under A would probably soon have to be reversed to restrain growth in the aggregates to rates consistent with the mid-points of longer-run ranges for alternative A. The funds rate would have to begin rising again in the second quarter and might reach a high for the year of about 7-3/4 per cent by fall. -16Directive language (23) 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 strikethrough 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 February-March 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 -17the 2-month period will deviate significantly from the mid-points of the indicated ranges, the operational objective for the Federal funds rate shall be modified in an orderly fashion within a range for ____ to ____ per cent. In the conduct of day-to-day operations, account shall be taken of emerging financial market conditions, including the unsettled conditions in foreign exchange markets. 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 longer-run ranges for monetary aggregates cited in the preceding paragraph. Specifically, the Committee seeks to maintain the the current level] weekly-average Federal funds rate at about [DEL: ____ per cent, so long as M-1 and M-2 appear to be growing over the[DEL: January-February]FEBRUARY-MARCH period at annual rates within -18ranges of [DEL: 2½ to 7½]____ TO ____ per cent and [DEL: 5-to-9] ____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 beyond the limits of the indicated ranges, the operational objective for the weeklyaverage Federal funds rate shall be modified in an orderly fashion within a range of [DEL: 6½10 7] ____ TO ____ per cent. In the conduct of day-to-day operations, account shall be taken of emerging financial market conditions, including the unsettled conditions in foreign exchange markets. 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 Projected Federal Funds Rate Alt. A Alt. B Alt. C 6-5/8 6¾ 6-7/8 QII 7¼ 7½ 7¾ QIII 7-5/8 7-7/8 8-1/8 QIV 7¾ 8 8¼ 1978--QI Appendix II Implied Velocity Growth Rates Alt. A Alt. B I 6.5 6.5 6.6 II 4.7 4.8 4.8 4.9 5.0 5.0 6.0 6.1 6.0 I 4.6 4.6 II 2.6 2.6 III 1.4 1.8 IV 3.0 3.8 Vi (GNP/M 1978 1 IV V2 (GNP/M2 ) 1978 Alt. C Appendix III The following table compares M-2 and M-3 growth patterns (and their respective interest-bearing components) with and without a onehalf percentage point increase in the ceiling rate on small denomination time deposits.1/ All data in the table are per cent changes at seasonally adjusted annual rates. 1978--I III IV Without a With a 1/ change in ceiling ratechange in ceiling rate A B C A B C Interest-bearing Component of M-2 7.9 7.9 7.9 7.9 7.9 8.8 8.4 9.4 9.5 10.0 7.9 8.9 11.4 10.5 8.6 9.0 8.1 9.2 8.7 8.1 10.6 8.8 7.8 QIV '77 to QIV '78 9.1 8.7 8.2 1978--I II III IV 6.6 7.2 7.2 7.4 6.6 6.9 QIV '77 to QIV '78 10.2 9.5 8.8 7.1 7.1 6.5 6.7 7.2 7.3 6.6 8.0 8.8 8.6 6.6 8.0 8.2 7.3 6.5 8.1 7.0 6.6 7.3 7.2 7.1 8.2 7.7 7.2 1978--I II III IV 8.1 7.3 6.7 6.8 8.0 6.5 6.0 6.0 8.0 7.0 7.7 7.4 QIV '77 to QIV '78 7.6 1978--I II III IV 7.3 7.4 7.2 7.3 7.5 M-2 Thrift Deposits 8.0 8.1 6.3 8.3 5.8 9.4 5.9 9.9 8.0 7.6 9.0 8.6 6.9 6.7 9.2 8.5 7.7 7.2 7.1 6.8 6.8 6.8 6.5 6.6 6.8 7.3 8.1 9.1 9.1 7.2 7.9 8.5 7.8 7.1 7.7 7.2 6.9 7.1 6.9 8.7 8.1 7.4 M-3 QIV '77 to QIV '78 1/ The staff has assumed that the deposit ceiling rate is increased in June under Alternative A, May under B, and April under C. Appendix Table IV-1 MONEY STOCK--M-1 (Annual rates of growth, compounded quarterly)Base Period .g Ending Period 1975 1976 1977 1978 1/ 741V 751 7511 75111 75IV 761 7611 76111 76IV 771 7711 7711 771V I 0.7 II 3.9 7.1 III 5.0 7.2 7.3 IV 4.4 5.6 4.9 2.5 I 4.1 4.9 4.2 2.7 2.9 II 4.8 5.6 5.3 4.6 5.6 8.5 III 4.7 5.4 5.1 4.5 5.2 6.4 4.4 IV 5.0 5.6 5.4 5.0 5.6 6.5 5.6 6.7 I 4.9 5.4 5.2 4.9 5.3 6.0 5.1 5.5 4.3 II 4.3 5.8 5.6 5.4 5.9 6.5 6.0 6.5 6.5 8.7 III 5.7 6.2 6.1 5.9 6.4 7.0 6.7 7.3 7.5 9.2 9.7 IV 5.8 6.3 6.2 6.0 6.5 7.0 6.8 7.3 7.4 8.4 8.3 7.0 Alt. A 5.7 6.0 6.0 5.9 6.2 6.5 6.3 6.5 6.5 6.7 6.4 5.8 5.5 Alt. B 5.6 6.0 5.9 5.8 6.1 6.4 6.2 6.4 6.3 6.6 6.3 5.6 5.2 Alt. C 5.6 5.9 5.8 5.7 6.0 6.3 6.1 6.3 6.2 6.5 6.1 5.4 5.0 IV Based on quarterly average data. Appendix Table IV-2 MONEY STOCK--M-2 (Annual rates of growth, compounded quarterly)Base Period g En Ending Period 1975 1976 1977 74IV 751 1/ 75111 75IV 761 7611 76111 76IV 771 7711 77 II I 5.8 II 8.1 10.4 III 8.9 10.4 10.5 IV 8.3 9.2 8.5 6.6 I 8.7 9.4 9.1 8.4 10.2 II 9.1 9.7 9.6 9.3 10.6 10.9 III 9.1 9.7 9.5 9.3 10.2 10.2 9.4 TV 9,6 10.2 10.1 10.0 10.9 11.1 11.2 13.1 I 9.7 10.2 10.1 10.1 10.8 10.9 10.9 11.7 10.3 II 9,7 10.1 10.1 10.0 10.6 10.7 10.6 11.0 9.9 III 9.8 10.2 10.1 10.1 10.6 10.7 10.6 10.9 10.2 10.1 10.7 TV 9;6 9.9 9,9 9.8 10.2 10.2 10.1 10,3 9.6 9,2 9.2 7.8 77IV 9.5 **-* ******** 1978 7511 IV Alt. A 9.3 9.5 9.4 9.3 9.6 9.5 9.4 9.4 8.9 8.7 8.6 8.2 8.2 Alt. B 9.1 9.4 9.3 9.2 9.4 9.3 9.2 9.1 8.7 8.4 8.2 7.8 7.7 Alt.C 9.0 9.2 9.1 9.0 9.2 9.1 9.0 8.9 8.4 8.1 7.9 7.3 7.2 Based on quarterly average data. Appendix Table IV-3 MONEY STOCK--M-3 (Annual rates of growth, compounded quarterly)-/ Base Period g En Ending Period 1975 1976 1977 1978 I/ 74IV I 751 7511 75111 75IV 761 7611 76111 761V 771 7711 77111 77IV 8.0 II 10.4 13.0 III 11.5 13.3 13.7 IV 11.1 12.2 11.8 9.9 I 11.3 12.1 11.8 10.9 11.9 II 11.4 12.2 12.0 11.4 12.1 12.3 III 11.5 12.1 11.9 11.5 12.0 12.1 11.9 IV 12.0 12.5 12.5 12.2 12.8 13.1 13.5 15.2 I 11.9 12.5 12.4 12.2 12.6 12.8 12.9 13.5 11.8 II 11.8 12.2 12.1 11.9 12.2 12.3 12.3 12.5 11.1 10.4 III 11.9 12.3 12.2 12.0 12.3 12.4 12.4 12.6 11.7 11.7 13.0 IV 11.8 12.2 12.1 11.9 12,2 12.2 12.2 12.3 11.6 11.5 12.1 11.2 Alt.A 11.0 11.2 11.1 10.9 11.0 10.9 10.8 10.7 10.1 9.9 9.8 9.2 8.7 Alt. B 10.9 11.1 10.9 10.7 10.8 10.7 10.5 10.4 9.8 9.5 9.4 8.7 8.1 Alt. C 10.7 10.9 10.8 10.5 10.6 10,5 10.3 10.1 9.5 9.2 9.0 8.2 7.4 IV Based on quarterly average data. CHART 1 2/24/78 MONETARY AGGREGATES NARROW MONEY SUPPLY 340 335 BROADER MONEY SUPPLY M 2 330 325 820 810 800 1976 1978 O N 1977 D J F 1978 CHART 2 2/24/78 MONETARY AGGREGATES BANK CREDIT SEND BILLIONS OF DOLLARS OF MONTH I I I - 900 - 860 - 820 - 780 I 740 BILLIONS OF DOLLARS 37 WEEKLY AVERAGES TOTAL - 36 35 34 NONBORROWED SI 1976 1977 I I I I I 1978 I33 CHART 3 2/24/78 MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDI TIONS PERCENT INTEREST RATES Short-term PERCENT 7 INTEREST RATES Long-term PER CENT WEEKLY AVERAGES -6 - RESERVES 5 BILLIONS OF DOLLARS 2 ---- Il 1976 1977 I 1I I I I 1978 + 21 1976 1977 1978 1976 1977 1978 CONFIDENTIAL (FR) Table 1 , F4 2 EB. ADJUSTED ACTUAL AND CURRENT PROJECTIONS, SEASONALLY Money Supply Broad (M2) Narrow (Ml) Period Total 3 4 2 1 Time & Savings Deposits Other Than CDs Other avin CD's Nondeposit Sources of Funds 2/ 8 9 _ 7 6 5 197 8 LEVELS-$BIL MONTHLY 1977--NOV. DEC. 1978--JAN. FEB. 5 Total U.S. Govt. Deposits / II-FOMC CLASS MONETARY AGGREGATES ANNUAL 333.3 335.4 337.4 (337.3) 802.7 806.5 812.0 (815.4) 8.2 10.6 6.1 8.8 10.4 6.9 8.4 9.3 6.8 9.2 10.3 7.6 469.4 471.1 474.6 (478.11 -39.3 23.8 26.2 9.5 8.5 15.2 9.4 10.4 7.3 5.1 9.6 0.9 13.2 11.1 13.1 10.9 -4.4 72.8 -18.2 15.2 -51.4 8.3 10.0 12.9 9.8 10.9 8.1 8.5 6.6 4.4 10.8 15.0 11.2 -1.9 3.2 48.2 ( 81.3 64.3 25.7 47.2) ( 36.9) 9.7 ( 70.9 74.7 76.3 ( 79.3) 251.1 252.8 255.2 (258.4) 540.3 545.8 550.9 (557.4) 6.7 11.4 7.5) 218.3 218.3 219.4 (219.7) 60.0 61.6 63.8 GROWTH QUARTERLY TR. 1977--2ND 3RD OTR. 4TH QTR. QUARTERLY-AV 1977--2ND QTR. 3RD QTR. 4TH QTR. MONTHLY 1977--NOV. DEC. 1976--JAN. FEB. ( JAN.-FEB. ( -1.4 7.6 7.2 -0.4) 3.4) ( 4.7 5.7 8.2 5.0) -419.4 641.8 -178.9 (-272.2) ( 6.6) (-205.3) ( 18.3 12.2 11.2 14.2) ( 12.8) ( 9.0 4.3 8.9 8.9) ( 8.9) ( -0.5 0.0 6.0 1.6) ( 17.5 8.1 11.4 15.0) ( 3.8) ( 13.3) WEEKLY LEVELS-$BIL 1978-JAN. 4 11 18 25 340.2 336.6 337.2 337.4 813.1 810.7 812.0 812.6 10.4 10.4 9.3 9.3 549.6 550.1 550.4 551.5 472.9 474.1 474.8 475.3 218.5 220.0 219.9 219.9 254.4 254.1 254.9 255.4 76.6 76.0 75.7 76.2 65.4 65.2 62.5 64.4 FEB. 1 8 15 336.0 337.3 336.1 811.7 814.7 813.6 9.8 10.0 7.4 553.0 555.8 556.6 475.7 477.4 477.5 219.6 219.7 219.9 256.1 257.7 257.6 77.3 78.4 79.1 70.1 65.0 NOTE: I/ 2/ P - PRELIMINARY DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. SECURITIES SOLD UNDER INCLUDES BORROWINGS FROM OTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, PLUS GROSS LIABILITIES TO OWN FOREIGN BRANCHES AND OTHER LIABILITIES FOR BORROWED MONEY, MENTS TO REPURCHASE, ITEMS. LOAN RPS, AND OTHER MINOR LOANS SOLD TO AFFILIATES, (EURODOLLAR BORROWINGS), AGREE- Table 1-A TIME AND SAVINGS DEPOSITS AT ALL COMMERCIAL BANKS SEASONALLY ADJUSTED EXCEPT AS NOTED Time Period and Savings FEB. Total ndivdual d a Nonrot Nonprofit Business (NSA) 24, 1978 Time Deposits Savings Deposits Total erod CONFIDENTIAL (FR) CLASS II-FOMC Government (NSA) Total Memo: Large Large Small Negotiable CD's Denomination Denomination 6 OUTSTANDING ($ BILLIONS) 525.8 532.2 540.3 545.8 550.9 212.7 212.7 213.6 216.2 217.8 218.4 218.3 218.3 219.4 196.3 196.9 198.6 201.4 203.3 204.2 204.5 204.7 205.8 54.7 16.5 17.5 1976--IV 14.3 11.8 8.4 1977--I II III IV 15.1 10.4 12.7 16.8 10.4 4.4 3.5 2.4 0.9 2.6 1.6 0.6 -0.1 0.0 1.1 1977--MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1978--JAN. 509.2 514.8 519.5 522.5 9.9 9.9 9.9 10.1 10.1 10.0 10.1 10.1 9.7 6.6 6,0 5.0 4.8 4.4 4.2 3.7 3.6 3.9 296.4 302.1 305.9 306.3 308.0 313.9 322.0 327.5 331.5 133.5 137.9 140.8 141.0 142.0 147.2 156.6 161.8 164.9 162.9 164.2 165.1 165.3 166.0 166.7 165.4 165.7 166.5 62.3 63.9 62.8 63.2 63.2 66.4 70.9 74.7 76.3 CHANGES ($ BILLIONS) 1977 YEAR -2.5 38.2 24.4 13.7 11.4 1.4 1.9 2.5 -5.6 8.1 -3.1 7.1 4,4 4.9 3.4 1.2 0.7 0.1 0.1 2.1 -0.5 -1.8 -0.9 4.7 5.9 9.3 14.4 -0.2 -1.4 6.4 13.9 4.9 7.3 3.0 0.4 0.3 -0.3 0.5 7.6 1.7 2.8 1.9 0.9 0.3 0.2 1.1 0.0 0.2 0.0 -0.1 0.1 0.0 -0.4 -1.0 -0.2 -0.4 -0.2 -0.5 -0.1 0.3 3.8 0.4 1.7 5.9 8.1 5.5 4.0 2.9 0.2 1.0 5.2 9.4 5.2 3.1 0.9 0.2 0.7 0.7 -1.3 0.3 0.8 -1.1 0.4 0.0 3.2 4.5 3.8 1.6 1.6 QUARTERLY AVERAGE: MONTHLY AVERAGE: 1977--JULY AUG. SEPT. OCT. NOV. DEC. 1978--JAN. 4.7 3.0 3.3 6.4 8.1 5.5 5.1 COLUMNS (1), (2), AND (9) ON NOTE: FIGURES IN COLUMNS (1)t AGGREGATES. DERIVED FROM DATA REPORTED BY SMALL GOVERNMENTAL UNITS-COLUMNS (4) AND WEDNESDAY BY LARGE COMMERCIAL BANKS SHIPS. ON TABLE 1--MONETARY (6), AND (8), RESPECTIVELY, THIS TABLE CORRESPOND TO COLUMNS (4), (2)t AND (6) REFLECT DAILY DATA REPORTED BY MEMBER BANKS, WITH ESTIMATES FOR NONMEMBER BANKS SAVINGS DEPOSITS OF BUSINESS AND MEMBER BANKS, BENCHMARKEO TO NONMEMBER CALL REPORT FIGURES. (5)-- AND LARGE DENOMINATION TIME DEPOSITS -- COLUMN (7)--REFLECT BREAKDOWNS REPORTED EACH BLOWN UP TO REPRESENT DEPOSITS AT ALL COMMERCIAL BANKS ON THE BASIS OF CALL REPORT RELATION- CONFIDENTIAL (F.R.) CLASS II-FOMC TABLE 2 BANK RESERVES ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED BANK RESERVES Period Total Reserves ,a,'t Nonborrowed Reserves FEB. 24, 1978 REQUIRED RESERVES Monetary Base Total Required Private Demand Total Time Deposits Gev't. and Interbank 3 MONTHLY LEVELS-SMILLIONS 1977-NOV. DEC. 1978-JAN. FEE. 36,009 36,207 36,869 (37,072) 35 .147 35,637 36,405 136,652) ii 6,953 127,911 12 9,61 (13 0,312) 35,758 36,017 36,623 (36,691) 21,437 21,454 21,742 (21,885) 12,646 12,854 13,036 (13,072) ( 1,675 1,709 1,843 1,734) PERCENT ANNUAL GROWTH QUARTERLY 6.5 8.8 6.5 4,6 4.6 7.3 7.3 8.1 6.8 3.9 13.2 3.3 6.1 2.6 15.0 3.0 9.0 5.6 1.9 3.4 2.9 3.5 8.6 5.8 3.0 10.2 4.9 4.0 6.3 8.6 4 3.7 6.6 22.6 6.0) 19.3 16.7 25.9 S 8.1) 8.0 9.1 10.0 6.5) ( 14.3) 17.1) 11.3) 1977--2N0 QTR. 3RD QTR. 4TH QTR. QUARTERLY-AV 1977--2ND QTR. 3RD QTR. 4TH QTR. MONTHLY 1977-NOV. DEC. 1978--JAN. FEB. JAN.-FEB. 1 2.4 8.7 20.2 S2.2) ( 11.2) ( 3.0 1.0 16.1 7.9) ( 12.1) 1 18.3 19.7 17.2 3.1) S 10.2) MEEKLY LEVELS-$MILLIONS 1978-JAN. FEB. __ NOTE: 4 11 18 25 36,892 36,220 37 562 36 934 36,386 35,778 37,144 36,342 129,354 126 516 130,209 129,987 36,605 35,915 37,301 36,619 21,587 21,400 22,039 21,798 12,975 13,039 13,099 13,036 2,043 1,476 2,163 1,785 1 36,833 37.420 37 296 36 679 36,363 36,925 37,014 36,427 129,928 130,239 130,385 130,310 36,675 36,999 36,926 36,468 21,834 22,108 22,160 21,520 13,011 13,025 13,054 13,114 1,830 I _______ I I _______ RESERVE SERIES HAVE BEEN ADJUSTED TO REMOVE DISCONTINUITIES DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. L A L I ASSOCIATED WITH CHANGES IN RESERVE REQUIREMENT RATIO. 1*666 1,712 1,834 TABLE 3 1/ NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES($ million, not seasonally adjusted) Treasury Bills Net Change 2/ Within 1 year -490' 7,232 1,280 -468 863 4,361 1976--Qtr. IV 1977--Qtr. Qtr. Qtr. Qtr. I II III IV -886 1,164 2,126 886 186 636 1,385 1977--Aug. Sept. Treasury Coupons Net Purchases 3/ Over 1-5 5-10 10 Total 3,025 2,833 53,9 500 434 1,510 1,048 758 167 129 196 1,070 642 553 1,582 1,415 1,747 6,202 5,187 4,660 789 579 797 3,284 6,303 7,267 6,227 192 1,294 436 304 165 152 1,680 959 2,738 116 681 96 128 1,021 99 628 166 108 1,001 4,273 -643 -4,771 4,175 -2,331 34 116 681 96 128 1,021 1978--Jan. -627 56 311 89 100 556 1 8 15 22 115 9,273 325 171 1,001 Feb. 10,035 -1,358 -46 -154 1,272 3,607 -2,892 1,631 232 108 -347 696 -116 1,059 864 3,082 1,613 891 1,433 794 166 4 11 18 25 592 400 1,665 824 469 792 Total 997 526 628 1978--Jan. 5 - 10 5 Net RP's 6/ 77 9, 585 351 425 1,438 1- Over 10 Net Change Outright Holdings Total 5/ 192 109 -1,877 -736 2,798 7 14 21 28 Within 1 year FOMC FEBRUARY 24, 1978 Federal Agencies Net Purchases 4/ Oct. Nov. Dec. 1977--Dec. STRICTLY CONFIDENTIAL (FR) CLASS II - 37 -41 36 3,666 S - 386 - - - - --- --- -- 177 145 552 -1,353 4,881 1,883 ----4,380 -6,530 2,996 --- ---736 4,474 707 1,001 3,568 -71 -7,149 585 327 1,317 -4,553 6,709 3,099 1,425 2,145 -4,526 -860 -275 -1,358 200 -7,893 -- -- 56 --- - -- -- -- -- -- -- on -- -- -- -- -- 440 --- ----- --- --- -- -- -882 -- -- - - - -- -- 556 311 89 100 --- --- -- --- --- --- -- - - 5,232 -2,239 275 5,009 -5,745 1,358 200 4,629 2,408 LEVEL--Feb. 22 40.5 13.6 29.1 9.6 7.6 59.9 1.3 4.2 1.6 .9 8.0 108.4 (in billions) 1/ Change from end-of-period to end-of-period. 2/ Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions. 3/ Outright transactions in market and with foreign accounts, and short-term notes acquired in exchange for maturing bills. Excludes redemptions, maturity shifts, rollovers of maturing coupon issues, and direct Treasury borrowing from the System. 4/ Outright transactions in market and with foreign accounts only. Excludes redemptions and maturity shifts. 5/ In addition to net purchases of securities, also reflects changes in System holdings of bankers' acceptances, direct Treasury borrowings from the System, and redemptions (-) of Agency and Treasury coupon issues. 6/ Includes changes in both RP's (+) and matched sale-purchase transactions (-). TABLE 4 SECURITY DEALER POSITIONS AND BANK POSITIONS (millions of dollars) U.S. Govt. Dealer Security Positions - Member Bank Reserve Positions Underwriting Syndicate Positions Corporate Municipal Bonds Bonds STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC FEBRUARY 24 , 1978 Borrowing at FRB** Basic Reserve Deficit** Excess** Reserves Total Seasonal 8 New York 38 Others Bills Coupon Issues 1976--High Low 8,896 3,668 3,046 175 334 0 343 34 655 -180 242 24 34 8 -8,161 -2,367 -12,744 - 6,908 1977--High Low 7,234 1,729 3,017 -1,445 295 0 487 116 513 -111 1,861 20 131 8 -9,151 -4,234 -13,975 - 8,206 1977--Jan. Feb. Mar. 6,406 4,450 4,906 2,320 1,650 972 82 72 103 202 226 162 265 198 214 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 4,752 696 123 206 101 20 142 173 228 217 192 213 154 73 206 262 14 30 54 -6,586 -5,693 -5,341 -11,409 -10,175 -10,332 July Aug. Sept. 3,899 2,533 4,812 -309 -933 -313 143 71 128 209 199 230 275 200 209 323 1,084 626 60 102 112 -6,391 -5,581 -7,333 -11,012 -11,452 -11,120 Oct. Nov. Dec. 4,142 3,617 4,257 -360 610 804 83 36 195 186 210 367 210 251 193 1,305 863 570 112 83 55 -6,480 -6,971 -7,403 -11,511 -11,825 -11,350 1978--Jan. 4,127 327 56 293 268 484 32 -6,047 -12,299 1977--Dec. 7 14 21 28 3,397 5,059 4,877 4,023 1,026 447 256 1,375 160 283 121 116 281 420 487 428 15 313 145 245 583 509 527 686 70 56 53 53 -7,424 -9,151 -7,185 -6,165 -12,292 -11,736 -12,335 -10,246 1978--Jan. 4 11 18 25 4,416 5,625 3,565 3,167 1,247 369 -221 365 0 39 72 58 316 284 273 297 287 313 261 315 506 440 418 592 30 26 25 34 -6,675 -7,699 -6,352 -5,496 - 8,533 -13,055 -13,938 -12,729 Feb. 1 *3,599 *674 7 154 158 470 44 -3,993 -11,516 8 *3,842 *2,043 35 151 421p 495p 48p -5,056 -13,137 15 22 *4,128 *3,185 *1,264 * 968 0 20p 251 225p 370p 416p 282p 442p 48 p 53p 78 -4, 4p -5,697p -14,286p -12,455p Omtt OoverMnt security dealer trading positions are on a comitent basits. Trading positions, Vdich exclude Treasury securities financed by repurchase agrements maturing in 16 days or more, are Indicators of dealar holdings available for sale over the near-ters. Underwriting syndicate positions consist of issues still in syndicate, excluding trading positions. The basic reserve deficit is excess reserves less borrowing at Federal Ieserve 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. TABLE 5 SELECTED INTEREST RATES (per cent) STRICTLY CONFIDENTIAL CLASS II - FOMC FEBRUARY 24, 1978 Short-Term Long-Term Treasur Bills Federa Funds 90-Day Issue-NYC Paper 1-Year 90-Day 0-119 Day (1) (2) CD's Ne (FR) Comm. Bank U.S. Govt.-Constant Prime Rate Maturity Yields 3-yr 7-yr 20-yr Corp.-Aaa Utility Municipal New Issue Recently Offered Bond Buyer Home Mortgages Primary Secondary Market Conv. FNMA AucGNMA Sec. (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) 1976--High Low 5.58 4.63 5.53 4.27 6.32 4.62 5.75 4.50 5.90 4.63 7.25 6.25 7.52 5.65 7.89 6.33 8.17 7.23 8.95 7.93 8.94 7.84 7.13 5.83 9.10 8.70 9.20 8.39 8.45 7.57 1977--High Low 6.65 4.47 6.27 4.41 6.62 4.67 6.70 4.50 6.66 4.63 7.75 6.25 7.39 5.83 7.70 6.59 7.99 7.26 8.36 7.90 8.48 7.95 5.93 5.45 9.00 8.65 8.98 8.46 8.39 7.56 1977--Jan. Feb. Mar. 4.61 4.62 5.00 4.68 4.72 6.25 6.22 6.92 7.48 8.08 8.09 5.87 8.72 8.48 7.83 4.68 4.67 5.16 4.70 4.76 6.25 6.44 7.16 7.64 8.22 8.19 5.89 8.67 8.55 7.98 4.69 4.60 5.19 4.72 4.75 6.25 6.47 7.20 7.73 8.25 8.29 5.89 8.69 8.68 8.06 Apr. May June 4.73 5.35 5.39 4.54 4.96 5.02 5.10 5.43 5.41 4.67 5.16 5.35 4.75 5.26 5.42 6.25 6.41 6.75 6.32 6.55 6.39 7.11 7.26 7.05 7.67 7.74 7.64 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 July Aug. Sept. 5.42 5.19 5.57 5.28 5.38 6.75 6.51 7.12 7.60 8.15 8.12 5.63 8.95 8.72 7.96 5.90 6.14 5.49 5.81 5.97 6.13 5.78 6.01 5.75 6.09 6.83 7.13 6.79 6.84 7.24 7.21 7.64 7.57 8.04 8.07 8.05 8.07 5.62 5.51 8.94 8.90 8.76 8.74 8.03 8.02 Oct. Nov. Dec. 6.47 6.16 6.52 6.53 6.51 7.52 7.19 7.44 7.71 8.23 8.22 5.64 8.92 8.82 8.16 6.51 6.10 6.52 6.56 6.54 7.75 7.22 7.46 7.76 8.28 8.25 5.49 8.92 8.86 8.19 6.56 6.07 6.52 6.65' 6.61 7.75 7.30 7.59 7.87 8.34 8.38 5.57 8.96 8.94 8.27 1978--Jan. 6.70 6.44 6.8Q 6.82 6.75 7.93 7.61 7.86 8.14 8.68 8.60 5.71 1977--Dec. 6.51 6.49 6.54 6.65 6.05 6.06 5.99 6.14 6.50 6.51 6.49 6.58 6.55 6.70 6.70 6.65 6.54 .6.60 6.64 6.66 7.75 7.75 7.75 7.75 7.27 7.27 7.33 7.39 7.54 7.56 7.63 7.70 7.81 7.84 7.92 7.99 8.35 8.36 --- 8.34 8.38 8.41 8.48 5.54 5.55 5.62 5.66 4 11 18 25 6.69 6.58 6.78 6.72 6.16 6.48 6.50 6.46 6.55 6.81 6.87 6.83 6.65 6.87 6.87 6.88 6.68 6.69 6.80 6.79 7.75 7.82 8.00 8.00 7.40 7.71 7.66 7.65 7.72 7.93 7.89 7.89 8.01 8.18 8.16 8.17 -8.70 8.68 -- 8.48 8.65 8.65 8.62 5.64 5.75 5.74 5.70 9.00 9.03 8.98 9.05 1 8 15 22 6.80 6.75 6.76 6.78 6.42 6.44 6.46 6.48 6.80 6.83 6.86 6.91 6.81 6.75 6.75 6.75 6.76 6.76 6.76 6.78 8.00 8.00 8.00 8.00 7.58 7.62 7.71 7.74p 7.85 7.91 7.99 8.00p 8.17 8.20 8.65 8.69 8.60 8.64 8.68 8.71p 5.63 9.13 -- 8.62 5.59 9.15 9.27 8.62 5.61 9.15 -- 8.65 5.65 n.a. 9.35 8.68 6.83 6.75p 6.51 6.43 6.94 6.88 --- 6.76 6.77 8.00 8.00 7.74 7.74p 8.01 8.00p 8.27 8.24 p 1978--Jan. Feb. )aily--Feb. 16 23 -- 8.25 8.25p 8.73p 8. 73p 9.17 8.89 8.98 -9.13 -9.21 8.43 8.54 8.60 8.59 NOTE: Weekly data for columns 1, 2, 3, 5, and 6 are statement week averages of daily data. Data in column 4 are 1-day Wednesday quotes. 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, resppectively, 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 short-term forward commitments for Government under written 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. FEB. 24, 1978 Appendix Table 1-A MONEY AND CREDIT AGGREGATE MEASURES dt Bank ReservesU Period Total Non- Monetary borrowed Base Invest- __ ments rn 1 Total Loans and Money Stock Mesures M1 5 2 ERCENT ANNUALLY: -0.2 1.0 5.2 1975 1976 1977 3.2 1.2 2.7 5.9 6.9 8.3 M2 M3 6 7 ANNUAL RATES OF GROWTH) 3.9 8.0 10.9 4.4 5.6 7.4 8.3 10.9 9.6 11.1 12.8 11.6 M4 M5 M6 8 9 10 9.7 10.3 11.7 10.5 10.0 11.3 10.1 10.2 11.4 M7 7 SEMI-ANNUALLY: 1976 3.6 3.7 6.8 8.9 5.5 10.9 13.1 11.1 10.3 10.4 1ST HALF 1977 2ND HALF 1977 2.9 7.4 2.3 3.2 7.0 9.2 11.6 9.7 6.4 8.2 9.7 9.0 10.8 11.7 9.0 10.2 10.3 12.4 10.2 11.9 10.4 11.7 -2.4 4.6 4.6 7.3 5.1 8.2 10.2 8.8 10.6 12.6 8.6 8.3 3.8 8.2 10.6 6.1 8.5 8.8 10.4 6.9 10.0 9.9 13.4 9.2 7.3 9.1 9.3 11.7 9.2 10.0 12.6 12.1 10.1 9.7 11.9 11.7 10.5 9.9 11.7 11.5 2.6 1.9 3.4 2.9 6.8 7.2 9.6 8.7 9.5 13.3 9.8 9.3 4.2 8.4 9.3 6.8 9.9 9.2 10.3 7.6 11.3 10.0 12.4 10.8 9.3 8.5 9.7 10.5 10.9 9.4 11.9 12.5 10.7 9.5 11.4 12.0 10.8 9.8 11.3 11.8 10.4 -13.3 -4.3 14.1 -3.1 2.9 14.9 -15.4 14.6 -14.1 19.3 16.7 10.6 -0.2 5.0 11.8 6.2 6.4 14.2 8.1 8.2 9.3 8.0 9.1 4.7 15.9 10.9 15.7 12.0 9.6 9.5 12.3 3.8 13.5 11.8 -0.7 5.4 0.8 5.4 19.4 0.7 4.5 18.3 5.9 7.3 12.0 -1.4 9.7 7.1 8.6 13.5 4.7 8.1 16.6 6.4 7.9 10.1 4.7 5.7 11.4 8.9 9.4 12.4 7.3 9.8 16.1 11.5 12.3 12.5 7.5 7.4 8.7 7.0 6.2 11.7 5.4 10.0 13.6 6.5 7.5 10.8 8.7 8.0 11.3 7.6 10.8 14.3 11.2 11.7 14.7 11.0 10.3 10.9 11.4 7.8 10.6 7.7 10.5 13.3 10.8 11.4 14.0 10.7 10.0 11.0 11.7 8.5 10.8 7.9 10.6 13.0 10.6 11.2 13.8 10.5 9.9 25.9 16.0 12.1 7.2 7.9 9.7 8.7 8.6 8.5 2ND HALF QUARTERLY: 1ST 2ND 3RD 4TH OTR. QTR. OTR. QTR. 1977 1977 1977 1977 -1.8 6.5 8.8 6.5 QUARTERLY-AV: 1ST Q7R. 1977 2ND QTR. 1977 3RD QTR. 1977 4TH QTR. 1977 2.7 3.0 9.0 5.6 MONTHLY: 1977--JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1978--JAN. 1/ 2/ P - 10.9 -13.1 -3.1 13.0 1.5 4.8 16.9 9.8 -0.5 9.1 3.7 6.6 22.6 BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE BASED ON QUARTERLY AVERAGE DATA. PRELIMINARY 7.6 REQUIREMENTS. 8.2 13.6 10.5 10.6 FEB. 24, Appendix Table 1-B 1978 MONEY AND CREDIT AGGREGATE MEASURES SEASONALLY ADJUSTED, BILLIONS OF DOLLARS Period Prd Total i Nonborrowed i Money Stock Measures Bank Credit Bank Reserves 1 Monetary Base ...... Tot I Loans and Investments M1 M2 M3 M4 M5 M6 M7 .. ANNUALLY: 34,015 34,465 36,207 33,885 34,412 35,637 110,394 118,054 127,911 725.5 788.2 870.0 294.8 312.4 335.4 664.3 740.3 806.5 1092.6 1237.1 1374.0 1977--JAN. FEB. MAR. 34,778 34,397 34,308 34,710 34,326 34,204 119,100 119,077 119,572 791.3 801.8 809.1 313.8 314.0 315.4 746.3 750.7 756.1 1248.9 1258.2 1268.1 809.3 APR. MAY JUNE 34, 80 34,723 34,862 34,606 34,517 34,599 120,749 121,376 122,027 819.7 827.9 834.5 320.5 320.7 321.9 764.6 767.6 772.8 JULY AUG. SEPT. 35,352 35,641 35,627 35,029 34,560 35,001 123.468 124,297 125,144 841.1 849.7 852.4 326.8 328.4 330.4 OCT. NOV. DEC. 35,897 36,009 36,207 34,591 35,147 35,637 126,109 126,953 127,911 862.0 870.5 870.0 1978--JAN. 36,889 36,405 129,612 878.8 1975 1976 1977 1174.7 1300.3 1448.8 1308.3 1439.1 1601.8 1351.1 1488.8 1657.7 814.0 818.2 1312.0 1321.5 1330.3 1452.2 1466.0 1475.5 1502.4 1517.1 1527.8 1281.2 1289.0 1299.5 826.2 829.9 836.8 1342.8 1351.3 1363.5 1488.5 1498.1 1511.2 1541.6 1551.8 1565.5 783.5 787.7 792.9 1316.9 1329.5 1343.1 846.3 850.9 856.2 1379.8 1392.7 1406.3 1528.0' 1541.7 1556.3 1582.4 1596.4 1611.3 333.7 333.3 335.4 799.6 802.7 806.5 1357.1 1365.6 1374.0 865.9 873.5 881.2 1423.5 1436.5 1448.8 1574.5 1588.5 1601.8 1629.8 1644.1 1657.7 337.4 812.0 1383.0 888.3 1459.3 1613.3 1669.5 746.5 803.5 881.2 MONTHLY: WEEKLY: 1977-DEC. 21 28 36,258 36,189 35,731 35,503 128,035 128,282 335.4 335.7 805.8 806.9 881.0 882.9 1978-JAN. 4 11 18 25 36,892 36,220 37,562 36,934 36,386 35,778 37,144 36,342 129,354 126,516 130,209 129,987 340.2 336.6 337.2 337.4 813.1 810.7 812.0 812.8 889.8 886.8 887.6 889.0 1 8P 15P 36,833 37.420 37,296 36,363 36,925 37,014 129,928 130,239 130,385 336.0 337.3 336.1 811.7 814.7 813.6 888.9 893.1 892.7 FEB. aI I I I a aWEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS. MONTHLY DATA ARE DAILY AVERAGES. WEEKLY M3, MS, M6, M7, TOTAL LOANS AND INVESTMENtS AND THRIFT INSTITUTION DEPOSITS. 1/ BASED ON DATA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS. DATA SHOWN IN MILLIONS OF DOLLARS. P - PRELIMINARY NOTES: DATA a ARE a NOT AVAILABLE FOR FEB. APPENDIX TABLE 2-A 1978 24, COMPONENTS OF MONEY STOCK AND RELATED MEASURES Period CurrncyDemand Deposits Other Than CD's SavingCD's Total STotal 1 2 Mutual Time and Savings Deposits P d C 3 4 2/ Savings Other 5 6 Savings Credit Bank & S&L Union Shares / Other Short Term Savings Bonds/ Private U.S.Gov't Short-term Securities Assets _U 1I IShares 7 8 9 10 11 12 (Per cent annual rates of growth) ANNUALLY: 9.5 2.9 4.3 6.7 4.6 8.8 1975 1976 1977 9.6 17.5 25.0 10.5 7.8 7.7 11.7 -6.1 -23.5 12.9 15.5 15.6 14.2 19.4 17.8 20.3 33.4 7.5 9.9 -1.0 19.2 11.4 11.7 15.2 11.1 9.7 15.2 19.8 11.3 -21.1 16.2 17.6 -1.4 15.2 15.0 5.6 9.5 13.3 0.0 25.9 12.2 15.2 16.1 22.7 12.5 6.8 16.5 7.1 8.0 8.1 12.1 SEMI-ANNUALLY: 2ND HALF 1976 6.0 1ST HALF 2ND HALF 1977 1977 B.5 10.0 5.7 7.5 10.5 11.6 12.1 8.4 8.8 11.4 9.3 2.2 8.2 10.1 4.9 9.5 9.5 8.5 15.2 11.9 9.4 10.4 7.3 16.3 5.1 9.6 0.9 8.1 13.2 11.1 13.1 -7.0 10.9 -4.4 72.8 12.0 11.2 17.3 11.9 16.4 13.8 23.8 21.6 31.1 8.3 4.9 8.1 20.9 15.3 5.2 6.5 7.5 9.3 10.0 9.8 3.1 8.3 9.1 5.8 12.5 8.3 10.0 12.9 14.0 9.8 10.9 8.1 21.1 8.5 6.6 4.4 8.0 10.8 15.0 11.2 1.9 -1.9 3.2 48.2 13.3 10.9 15.2 14.6 16.7 15.0 19.3 24.8 11.1 13.6 5.5 8.1 12.9 19.5 7.4 6.6 1977--JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 8.9 10.4 5.9 13.1 7.2 5.7 15.7 5.6 12.6 9.7 9.6 8.2 4.1 -3.1 5.7 21.6 -1.5 4.6 18.7 6.0 5.4 12.8 -5.4 7.3 11.0 10.7 6.7 6.9 8.3 13.2 11.0 6.9 7.6 14.6 18.3 12.2 12.9 11.7 10.7 9.5 7.6 10.7 15.4 6.8 8.6 8.6 9.0 4.3 23.2 14.6 10.4 10.9 4.5 0.0 5.1 -3.8 3.8 -20.9 -11.6 13.6 8.9 3.3 -0.5 0.0 4.2 9.5 10.5 8.3 10.3 20.5 24.7 0.0 8.4 13.2 17.5 8.1 14.2 11.4 10.0 10.4 11.1 11.8 15.1 18.3 17.8 14.9 11.3 9.1 15.4 15.2 18.0 11.8 11.7 17.4 20.0 19.7 30.4 27.0 18.5 18.2 17.9 68.9 5.0 3.3 11.6 9.9 0.0 6.5 8.1 8.1 8.0 7.9 21.5 28.2 18.4 15.8 11.2 2.2 6.6 6.6 6.5 6.5 6.5 1978--JAN. 10.9 5.8 11.2 8.9 6.0 11.4 25.7 12.8 7.9 9.6 QUARTERLYS 1ST 2ND 3RD 4TH OTR. QTR. 07R. QTR. 1977 1977 1977 1977 QUARTERLY-AV: 1ST 2ND 3RD 4TH QTR. QTR. QTR. OTR. 1977 1977 1977 1977 MONTHLY: 14.6 30.8 -20.7 7.6 0.0 60.8 81.3 64.3 6.5 I & .1 d. I & I __________ I __________ 1/ GROWTH RATES ARE BASED ON ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA. 2/ BASED ON QUARTERLY AVERAGE DATA. __________________ 12.1 6.4 I ___ 1 APPENDIX TABLE 2-B FEB. 24, 1978 COMPONENTS OF MONEY STOCK AND RELATED MEASURES and Savings Deposits Time __ _ __ _ __ _ __ Currency Demand Deposits Period Total Other Than CD's Tta Sh Total 1 Mutual Bank & S&L _Savings _ CD's I Savings I Other Credit ShortTerm Other Private Union Savings Shares Bonds U.S. Gov't Shortterm har Assets Shares 2 3 4 5 6 7 8 221.0 231.9 247.0 451.7 491.1 545.8 369.6 427.9 209.1 226.0 252.8 82.1 471.1 160.5 201.8 218.3 395.2 457.8 520.7 232.7 232.1 233.2 495.6 500.0 502.8 432.5 436.7 440.6 205.7 226.8 208.2 228.6 230.6 63.1 63.3 62.2 505.7 509.2 514.8 444.1 211.9 212.7 212.7 232.2 446.9 450.9 Total NonGov't Deposit Funds Demand i/ 9 Sec y A . _ts 10 11 12 33.0 39.0 46.9 67.3 71.9 42.8 77.0 66.3 66.9 76.0 463.2 39.5 467.6 40.0 471.5 40.6 72.3 72.7 73.0 67.9 71.8 72.1 61.6 62.3 63.9 475.6 480.0 484.7 41.0 41.4 42.0 73.4 73.8 72.3 73.0 74.2 490.8 498.3 505.7 42.7 43.4 44.5 Deposit Deposits 13 14 ANNUALLY: 73.7 80.5 1975 1976 1977 88.4 63.3 74.7 33.7 51.4 61.6 8.3 11.2 11.4 50.2 51.1 52.3 49.9 10.0 11.7 11.2 73.6 53.1 53.8 54.3 50.8 54.6 53.5 10.1 74.6 75.0 75.5 73.6 74.0 74.5 54.4 54.7 55.0 53.3 55.6 57.7 11.6 10.2 10.7 49.7 55.9 MONTHLY: 1977--JAN. FEB. MAR. 81.1 APR. MAY JUNE 83.1 83.6 84.0 237.4 237.1 238.0 JULY AUG. SEPT. 85.1 85.5 86.4 241.7 242.9 244.0 519.5 522.5 525.8 456.7 459.3 462.6 213.6 216.2 217.8 243.1 243.1 244.8 62.8 63.2 OCT. NOV. DEC. 87.1 246.6 245.5 247.0 532.2 540.3 545.8 465.9 247.5 251.1 252.8 70.9 74.7 512.0 516.8 520.7 45.5 46.2 471.1 218.4 218.3 218.3 66.4 87.8 88.4 46.9 76.0 76.5 77.0 75.0 75.5 76.0 55.3 55.6 55.9 57.4 60.0 61.6 10.3 6.7 11.4 1978--JAN. 89.2 248.2 550.9 474.6 219.4 255.2 76.3 523.5 47.4 77.5 76.5 56.2 63.6 9.7 21 28 88.5 246.9 246.9 545.7 547.3 470.4 471.3 218.1 218.5 252.3 252.7 75.2 76.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 59.3 66.4 13.7 L-2.0 4 11 18 25 88.7 88.7 89.2 251.5 247.9 248.0 247.8 549.6 550.1 550.4 551.5 472.9 474.1 254.4 254.1 254.9 255.4 76.6 76.0 75.7 76.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 65.4 65.2 62.5 64.4 10.4 10.4 475.3 218.5 220.0 219.9 219.9 1 8P 15P 89.7 89.8 89.9 246.3 553.0 555.8 556.6 475.7 477.4 477.5 219.6 219.7 219.9 256.1 257.7 257.6 77.3 78.4 79.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 70.1 65.0 9.8 10.0 81.8 82.2 469.4 210.0 234.2 238.2 63.2 50.3 51.4 10.8 10,6 WEEKLY: 1977-DEC. 1978-JAN. FEB. 1/ 2/ 3/ 4/ P - 88.7 89.6 247.4 246.2 474.8 ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA. INCLUDES PRIVATE DOMESTIC NONFINANCIAL INVESTORS' HOLDINGS OF COMMERCIAL PAPER, BANKERS ACCEPTANCES, SECURITY RP'S AND MONEY MARKET MUTUAL FUND SHARES. BORROWINGS BY BANKS FROM OTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE, AND OTHER LIABILITIES FOR BORROWED MONEY, PLUS GROSS LIABILITIES TO OWN FOREIGN BRANCHES (EURODOLLAR BORROWINGS), LOANS SOLD TO AFFILIATES, LOAN RPS, AND OTHER MINOR ITEMS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. PRELIMINARY 9.3 9.3 7. 

Federal Reserve (1978, February 27). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19780228

@misc{wtfs_bluebook_19780228,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1978},
  month = {Feb},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19780228},
  note = {Retrieved via When the Fed Speaks corpus}
}