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. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing). 2 A two-step process was used. An advanced optimal character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. Strictly Confidential (FR) Class I FOMC April 14, 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 April 14, STRICTLY CONFIDENTIAL (FR) FOMC CLASS I 1978 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) Growth in M-1 was at a moderate annual rate of 3.5 per cent in March, but it is projected to accelerate to a rate of almost 10 per cent in April. Over the March-April period, growth of M-1 is thus projected at about a 6-3/4 per cent rate, somewhat above the mid-point of the range specified by the FOMC at its March meeting. The interest- bearing component of M-2 has been increasing at a rate near the reduced pace of recent months, and M-2 appears to be expanding over March and April at a 7 per cent annual rate, near the mid-point of the Committee's range. Deposit growth at nonbank thrift institutions remained weak in March. Growth in Monetary Aggregates over March-April Period Memo: Ranges Latest Estimates M-1 4 to 8 6.7 M-2 5-1/2 to 9 7.1 Federal funds rate (per cent per annum) Avg. for statement week ending Mar. 22 6.77 6.82 29 Apr. 5 6.86 6.74 12 -2(2) The System Account Manager continued to aim for a Federal funds rate of around 6-3/4 per cent throughout the intermeeting period. The actual rate tended to exceed this target in late March when Desk operations were constrained by a shortage of readily available collateral. The shortage was alleviated in early April by the Treasury's issuance of $6 billion of cash management bills, and most recently funds have generally traded at around 6-3/4 per cent. (3) Even though the Federal funds rate returned to around 6-3/4 per cent, market interest rates generally were under upward pressure through most of the intermeeting period, rising 15 to 20 basis points. These pressures appeared to reflect the recent deterioration of the U.S. balance of payments position, the accelerated increase in the wholesale and retail price indexes, and concern about a possible surge in growth of the monetary aggregates in April. In private short- term markets, rate increases also have been associated with continued sizable offerings of large CD's and a pickup in commercial paper issuance by nonfinancial corporations. In longer-term markets, the volume of bonds offered by corporations and State and local governments also expanded markedly in March. Most recently, however, following publication of increases in the monetary aggregates for early April that were much lower than many had anticipated, Treasury bill rates have retraced their earlier increases, and the 3-month bill rate is now below the level at the time of the last FOMC meeting. (4) Commercial bank credit expanded in March at a 9 per cent annual rate--a bit slower than the rate earlier in the first -3quarter--as a decline in investment holdings partly offset a further sharp rise in loan portfolios. The growth in loans was widespread among major categories, with business loan expansion particularly strong. A significant part of the growth in banks' earnings assets was financed by issuance of large-denomination time deposits. (5) With deposit flows at nonbank thrift institutions remain- ing relatively weak, conditions in the mortgage market have continued to tighten in recent weeks. Yields on new conventional mortgages have edged up further, and field reports indicate that the thrifts have become less accommodative in extending new commitments and in making "spot" loans. A significant proportion of S&L's surveyed at the end of March reported that the present supply of mortgage funds was below normal for this period of the year. (6) The table on the next page shows percentage annual rates of change in related monetary and financial flows over various time periods. Past Past Past 1976 & 1977 Average Twelve Months Mar. '78 over Mar. '77 Six Months Mar. '78 over Sept. '77 Three Months Mar. '78 over Dec. '77 Past Month Mar. '78 over Feb. '77 Nonborrowed reserves 1.5 5.6 8.2 7.9 Total reserves 2.1 6.2 6.3 5.1 Monetary Base 7.6 8.9 8.7 7.6 2.0 6.9 6.8 5.1 4.0 3.5 M-2 (M-1 plus time deposits at commercial banks other than large CD's) 10.3 8.2 6.6 6.2 5.1 M-3 (M-2 plus deposits at thrift institutions) 12.2 10.0 8.0 6.8 5.9 M-4 (M-2 plus CD's) 8.8 10.0 10.4 9.3 8.3 M-5 (M-3 plus CD's) 11.1 11.0 10.2 8.6 7.8 Month-end basis 9.5 10.4 9.5 10.5 9.1 Monthly Average 9.3 10.7 10.3 11.8 7.2 -0.3 1.7 3.0 2.7 2.6 0.2 0.2 0.1 -0.1 1.3 -9.6 -12.0 Concepts of Money M-1 (Currency plus demand deposits) 1/ 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. -5Prospective Developments (7) The table below presents for Committee consideration alternative longer-run growth ranges for the monetary aggregates over the QI '78 to QI '79 period, along with ranges currently in place. Alternative B would continue the ranges for M-1 and M-2 adopted by the Committee in February for the QIV '77 to QIV '78 period. The longer-run range for M-3 has been reduced, however, largely because higher market rates of interest are now projected for late 1978 and early 1979 and because recent deposit inflows to thrift institutions have continued relatively weak. Alternatives A and C represent, respectively, somewhat more and somewhat less expansive policies.-1/ 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 7 to 9½ 6½ to 9 6 to 8½ 7½ to 10 Bank credit 8 to 11 7½ to 10½ 7 to 10 7 to 10 (8) The demand for M-1 is expected to be quite strong over the one-year period from QI '78 to QI '7 9 , when nominal GNP is projected to rise at a rate of almost 12 per cent, about one percentage point more than had been projected a month ago. A little more than half of the increase in the rate of expansion in nominal GNP for the QI '78QI '79 period reflects an upward revision in the projected rate of 1/ Each of the alternatives assumes that ceiling rates on small denomination time deposits at banks and thrift institutions will be raised 50 basis points this summer. Without such an increase in deposit rate ceilings, the level of market rates thought necessary to restrain M-1 growth to the midpoint of the indicated ranges would lead to expansion in M-2 and M-3 in the lower half of their respective ranges. inflation over the year. The balance reflects the weather- and coal- strike induced reduction in the rate of growth of real GNP in QI '78-projected to be largely made up in QII '78--which lowers the base quarter for the new four-quarter policy period. To hold M-1 growth over the coming year to a rate around the mid-point of the 4 to 6 per cent range of alternative B would, under the circumstances, require a larger increase in interest rates than the staff had earlier expected. As indicated in Appendix I, we would anticipate a Federal funds rate averaging around 8¾ per cent by early next year if the midpoints of the longer-run ranges of alternative B are to be attained. Interest rates would be slightly lower and slightly higher under alternatives A and C, respectively. (9) All of the alternatives imply relatively rapid increases in the income velocity of M-1, and also a rise in the income velocity of M-2, as shown in Appendix II. Assuming M-1 growth at the 5¼ per cent mid-point of the alternative B range, V-1 would be projected to rise by about 7 per cent over the coming four quarters, more than twice the average rate of the past two years. The projected rise in interest rates would tend to increase the public's willingness to economize on cash balances and thus would contribute to an acceleration in velocity growth. However, the staff has assumed that there also will be a further downward shift in the demand for money over the period ahead, partly because higher market interest rates may once again lead to new financial innovations that substitute for demand deposits, and to more intensive marketing of earlier innovations and cash management services, as financial institutions attempt to retain funds. Whether such a further downward shift in demand for M-1 will actually occur is quite uncertain, however. If it does not, efforts to constrain growth in M-1 to the mid-point of the ranges presented are likely to involve interest rate levels higher than those projected, and consequent growth in real GNP below the projected rate. (10) Even if growth in M-1 and M-2 were at the mid-points of their ranges over the year ahead, growth in these aggregates over more extended periods ending in QI '79 would--because of the relatively rapid rates of expansion of the aggregates in 1977--be above the mid-points of the proposed ranges under each alternative. For example, as shown in the table below, M-1 growth at around the 5¼ per cent mid-point of the alternative B range for the QI '78QI '79 period would lead to a 6.3 per cent annual rate of expansion over the 24-month period starting in the first quarter of 1977, almost 1/ at the upper end of the range.- M-1 growth over the next four quarters at around the 5 per cent mid-point of the proposed alternative C range would still imply M-1 growth over the 24-month period beginning in QI '77 at a rate well above the mid-point of the current FOMC range. 1/ Implied growth rates for even more extended periods are shown in the growth triangles in Appendix III. Growth Rates in Monetary Aggregates Assuming Growth over QI '78 to QI '79 Period at Mid-points of Ranges for Each Alternative (Annual rates, compounded quarterly) Alt. A Alt. B Alt. C M-1 Period QI '78 to QI '79 QIV '77 to QI '79 QIII '77 to QI '79 QII '77 to QI '79 QI '77 to QI '79 5.2 5.2 5.7 6.0 6.3 5.5 5.4 5.7 6.1 6.4 5.0 5.0 5.4 5.8 6.1 M-2 QI '78 to QI '79 QIV '79 to QI '79 QIII '77 to QI '79 QII '77 to QI '79 QI '77 to QI '79 (11) 7.3 7.2 7.3 7.8 8.0 7.7 7.5 7.6 8.0 8.1 8.0 7.7 7.8 8.2 8.3 Shorter-term specifications for the monetary aggregates and the Federal funds rate believed to be consistent with the longerrun alternatives are summarized below for Committee consideration. (More detailed and longer-term data are shown in the tables on pp. 9 and 10.) Alt. B Alt. A Alt. C Ranges for April-May 6 to 10 M-l 6k to 10k M-2 7 to 11 6 6 to 6k 64 to 7 Federal funds rate (intermeeting period) (12) to 10 to 9 5 6 to 10 7 to 7 The expected sharp rebound in GNP in the current quarter should be reflected in accelerated growth in M-l over the Alternative Levels and Growth Rates for Key Monetary Aggregates M-2 M-1 Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C 1978 March April May 340.1 343.0 344.9 340.1 342.9 344.6 340.1 342.8 344.3 820.1 826.6 832.1 820.1 826.2 831.3 820.1 826.0 830.7 1978 QI QII QIII QIV 339.5 345.0 350.0 353.8 339.5 344.7 349.4 353.1 339.5 344.4 349.0 352.3 816.8 832.2 849.7 866.8 816.8 831.4 849.2 864.8 816.8 831.3 848.8 862.5 1979 QI 358.2 357.3 356.5 882.5 879.6 876.6 10.2 6.6 9.9 5.9 9.5 5.3 9.5 8.0 8.9 7.4 8.6 6.8 Quarterly Average: 1978 QII QIII QIV 6.5 5.8 4.3 6.1 5.5 4.2 5.8 5.3 3.8 7.5 8.4 8.1 7.2 8.6 7.3 7.1 8.4 6.5 1979 5.0 4.8 4.8 7.2 6.8 6.5 Semi-Annual: QI '78-QIII '78 QIII '78-QI '79 6.2 4.7 5.8 4.5 5.6 4.3 8.1 7.7 7.9 7.2 7.8 6.6 Annual: QI '78-QI '79 5.5 5.2 5.0 8.0 7.7 7.3 Growth Rates Monthly: 1978 April May QI -10Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) M-3 Bank Credit Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C 1978 March April May 1397.3 1407.5 1417.3 1397.3 1407.0 1416.0 1397.3 1406.6 1414.8 894.3 902.5 910.3 894.3 902.5 910.0 894.3 902.5 909.7 1978 QI QII QIII QIV 1390.6 1417.3 1447.5 1478.4 1390.6 1416.0 1445.3 1473.3 1390.6 1415.4 1443.6 1468.2 887.7 910.1 929.4 948.4 887.7 909.9 929.0 947.5 887.7 909.7 928.6 946.7 1979 I 1508.2 1500.5 1493.2 969.4 967.6 965.8 8.8 8.4 8.3 7.7 8.0 7.0 11.0 10.4 11.0 10.0 11.0 9.6 Growth Rates Monthly: 1978 April May Quarterly Average: 1978 QII QIII QIV 7.7 8.5 8.5 7.3 8.3 7.7 7.1 8.0 6.8 10.1 8.5 8.2 10.0 8.4 8.0 9.9 8.3 7.8 1979 QI 8.1 7.4 6.8 8.9 8.5 8.1 QI '78-QIII '78 QIII '78-QI '79 8.2 8.4 7.9 7.6 7.6 6.9 9.4 8.6 9.3 8.3 9.2 8.0 Annual: QI '78-QI '79 8.5 7.9 7.4 9.2 9.0 8.8 Semi-Annual: -11April-May period. As contemplated under alternative B, a Federal funds rate centered on the recently prevailing 6-3/4 per cent level is likely to be associated with M-1 growth over the two-month period at an annual rate in a 6 to 10 per cent range. In terms of quarterly averages, we would expect expansion in M-1 from the first to the second quarter to be at a rate of about 6 per cent. However, growth would be more rapid over the course of the second quarter--with M-1 expansion at about an 7½ per cent rate from March to June. (13) Growth in M-2 over the April-May period is likely to be in a 6½ to 10½ per cent annual rate range under alternative B. Savings deposits at commercial banks are expected to show very small growth at best, though larger-than-seasonal tax refunds to individuals may temporarily strengthen flows into these deposits in coming weeks. With market yields remaining above ceiling rates, small-denomination time deposits at commercial banks are also likely to grow only moderately. However, in view of continued strong loan demands, banks probably will maintain their reliance on large-denomination time deposits. major portion of these deposits is Since a included in M-2, the interest-bear- ing component of this aggregate is expected to continue at near its recent pace. (14) Under alternative B, inflows to savings and loan associa- tions and mutual savings banks over the April-May period can be expected to remain at near the 6 to 7 per cent average monthly rate prevailing since year end. Consequently, thrifts are likely to continue to reduce -12their portfolio liquidity and to increase their borrowing from the Federal Home Loan Banks and others. At the same time, the commitment and other mortgage lending policies of thrift institutions are likely to be tightened further. (15) Even with the Federal funds rate remaining around 6-3/4 per cent over the intermeeting period, market interest rates may come under some upward pressure. Market expectations of a near-term tightening of monetary policy are likely to be stimulated again if, as seems likely, incoming data indicate a strengthening of economic activity, continued substantial advances in prices, and an acceleration of growth in the monetary aggregates. In addition, expected strong demands for short-term funds by nonfinancial businesses should result in further increases in commercial paper issuance and in continued heavy offerings of large CD's by banks seeking funds to accommodate business loan demands. Sponsored Federal agencies are also expected to continue issuing a substantial volume of short-term debt over this period. On the other hand, tendencies for bill rates to rise will be tempered by the Treasury's repayment of $12 billion of cash management bills in the latter half of April and the relatively low level of dealer bill inventories. It is also likely that the Treasury will engage in net debt repayment in the mid-May refunding. (16) In longer-term markets, offerings of corporate, municipal, and Federal agency issues are likely to remain sizable in the next few weeks. On April 26, the Treasury will announce the terms on which it -13will refund about $6 billion of publicly held issues maturing in mid-May. It is expected that the Treasury will offer a sizable amount of intermediate- and long-term securities in this operation. The recent increases in bond yields and the adjustments in dealer positions, with U.S. Government dealers now showing a sizable net short position in coupon issues, suggest that much of the impact of this additional supply may already have been discounted by the market. However, mortgage yields appear likely to continue to drift higher in response to the continued slow expansion of deposits at thrift institutions. (17) Over the balance of the year and into early 1979, both short- and long-term interest rates are likely to rise further as the Federal Reserve takes actions to restrain money growth. Such rate increases would be accompanied by a reduction in liquid asset holdings of depository institutions, continued large commercial bank offerings of large-denomination time deposits, and large additional borrowing by Federal housing agencies undertaken to support the mortgage market. As time goes on, the willingness and ability of depository institutions to finance credit demands may be significantly limited by growing strains on their balance sheets. While bond yields would also be under upward pressure, rate increases would be cushioned by a reduction of State and local advance refundings, a further shift of corporate financing from capital markets to banks, and continued substantial demands for longterm securities by insurance companies and pension funds. -14(18) Under alternative C the Federal funds rate would rise over the intermeeting period to the mid-point of a 7 to 7½ per cent range. M-1 growth would likely be in a 5½ to 9½ per cent annual rate range over April and May and M-2 growth in a 6 to 10 per cent range. Under these circumstances, private short-term rates would probably rise about percentage point, while Treasury bill rates may increase somewhat less because of sizable bill paydowns. The prime rate would also be likely to increase, particularly since loan demands are expected to remain strong, and bond yields should continue to move up somewhat. With the rise in market rates, member bank borrowing from Federal Reserve Banks would expand sharply from recently reduced levels, increasing pressures for a discount rate advance. The rise in short-term rates under alternative C may provide some support for the dollar in international exchange markets. (19) The near-term increase in interest rates under alternative C would be a step toward reducing the longer-run rate of growth of the monetary aggregates, but further upward adjustments in interest rates over the coming year would be required to limit M-1 growth to the mid-point of its 4 to 6 per cent longer-run range. The funds rate would probably have to rise to 9 per cent by late this year. (20) Alternative A calls for a reduction in the Federal funds rate over the intermeeting period to the mid-point of a 6 to 6 per cent range. Such an action would surprise market participants, in view of the increased rate of inflation and the probability that the data to be published in coming weeks will be indicating more -15rapid M-1 growth. Downward pressure on short-term rates would tend to be moderate since participants would expect a reversal in the funds rate over the near term. Thus, the 3-month bill rate might still remain somewhat above 6 per cent, and private short-term rates would decline only marginally. be little affected. Long-term rates probably also would On the other hand, the dollar would almost certainly decline in foreign exchange markets. (21) Alternative A is consistent with a policy designed to encourage more rapid growth in the aggregates over the longer-run. However, given expected nominal GNP growth over the policy period, the near-term decline in the funds rate would soon have to be reversed to restrain growth in M-1 to the mid-point of its longer run range. By late spring, the funds rate would have to begin rising again, reaching 8 per cent by late in the year. -16Directive language (22) Given below are alternatives for the operational paragraphs of the directive. The first formulation, like the direc- tive adopted at the last meeting, places main emphasis on near-term rates of growth in monetary aggregates; it shows--in strike-through form--the specifications adopted at the last meeting. The second formulation places main emphasis on money market conditions. 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 March-April]APRIL-MAY period to be annual growth rates over the [DEL: 5-1/2 4 to 8] ____ TO ____ per cent for M-1 and [DEL: within ranges of [DEL: to-9] ____TO ____ per cent for M-2. In the judgment of the Com- mittee such growth rates are likely to be associated with a 6-3/4] ____per cent weekly-average Federal funds rate of about [DEL: (or at about the current level). If, giving approximately equal weight to M-1 and M-2, it appears that growth rates over the -172-month period will deviate 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 [DEL: 6-1/2 to 7] ____ TO ____ per cent. In the conduct of day-to-day operations, account shall be taken of emerging financial market conditions, including the 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 weekly-average Federal funds rate at about the current level (or to reduce or to increase the weekly-average Federal funds rate somewhat from the current level), so long as M-1 and M-2 appear to be growing over the April-May period at annual rates within -18ranges of ____ respectively. to ____ per cent and ____ to ____ per cent, 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 weekly-average Federal funds rate shall be modified in an orderly fashion within a range of ____ to ____ per cent. In the conduct of day-to-day opera- tions, account shall be taken of emerging financial market conditions, including the 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 1978 1979 Alt. B Alt. C 7k QII 6% QIII 7-7/8 8-1/8 QIV 8k 8s QI 8k 9 7 Appendix II Implied Velocity Growth Rates V, (GNP/M )~ 1978 1979 Alt. A Alt. B Alt. C II 7.4 7.5 7.8 III 5.4 5.4 5.3 IV 7.4 7.2 7.4 I 6.6 6.6 6.3 II 6.4 6.5 6.4 III 2.7 2.2 2.4 IV 3.7 4.0 4.6 I 4.4 4.6 v 2 (GNP/M 2 ) 1978 1979 Appendix Table III-1 MONEY STOCK--M-1 (Annual rates of growth, compounded quarterly)1/ Base Period Ending Period 1975 1976 1977 1978 74IV 751 7511 75111 751V 761 7611 76111 76IV 771 7711 77111 I 2.3 II 4.3 6.4 III 5.0 6.3 6.3 IV 4.4 5.1 4.5 2.8 I 4.5 5.0 4.6 3.7 4.7 II 4.9 5.4 5.2 4.8 5.9 7.0 III 4.7 5.1 4.9 4.6 5.2 5.4 3.8 IV 5.1 5.5 5.3 5.1 5.7 6.1 5.6 I 5.3 5.7 5.6 5.5 6.0 6.3 6.1 II 5.6 6.0 5.9 5.9 6.4 6.7 6.6 8.3 III 5.8 6.2 6.2 6.2 6.7 7.0 7.0 8.3 8.3 IV 6.0 6.3 6.3 6.3 6.7 7.0 7.0 8.0 7.8 7.4 I 5.9 6.2 6.2 6.2 6.6 6.8 6.8 7.3 6.9 6.2 * * * * * * * * * * * 77IV 781 *,, 1979 I 1/ Alt. 6.0 6.0 6.0 6.2 6.4 6.3 6.6 6.5 6.4 6.1 5.7 5.4 5.5 Alt. 6.0 5.9 5.9 6.2 6.3 6.2 6.5 6.3 6.3 6.0 5.7 5.2 5.2 Alt. 5.9 5.9 5.8 6.1 6.1 6.4 6.2 6.1 5.8 5.4 5.0 5.0 Based on quarterly average data. 6.2 Appendix Table III-2 MONEY STOCK--M-2 (Annual rates of growth, compounded quarterly) Base Period Ending Period *1975 1976 1977 1978 74IV 751 75III 75IV 761 7611 761 76IV 771 7711 77111 I 6.4 II 8.3 10.2 III 8.8 10.1 IV 8.3 9.0 8.4 6.9 I 8.9 9.5 9.3 8.9 11.0 II 9.1 9.7 9.5 9.4 10.7 10.4 III 9.1 9.5 9.4 9.3 10.1 9.6 IV 9.6 10.1 10.0 10.1 10.9 10.8 11.1 13.2 I 9.8 10.2 10.2 10.3 11.0 10.9 11.1 12.3 11.3 II 9.7 10.1 10.1 10.1 10.7 10.6 10.7 11.3 10.3 9.4 III 9.8 10.1 10.1 10.2 10.6 10.6 10.6 11.0 10.3 9.8 10.3 IV 9.7 10.0 9.9 9.9 10.3 10.2 10.2 10.5 9.8 9.3 9.2 8.2 I 9.4 9.7 9.6 9.6 * 1979 7511 * 771V 9.9 * ** 8.9 9.9 9.8 9.7 9.8 9.1 8.6 8.3 7.4 * * I Alt. A 9.1 9.3 9.2 9.3 9.2 9.1 9.1 8.6 8.3 8.2 7.8 Alt. B 9.0 9.2 9.1 9.2 9.1 8.9 9.0 8.5 8.1 8.0 7.6 Alt. C 8.9 9.1 9.0 9.1 8.9 8.8 8.8 8.3 8.0 7.8 7.3 1/ Based on quarterly average data. 6.6 781 Appendix Table III-3 MONEY STOCK--M-3 (Annual rates of growth, compounded quarterly)1/ Base Period Ending Period 1975 1976 1977 1978 74IV 1/ 75111 75IV 761 7611 76111 76IV 771 7711 77111 77IV 781 8.3 I II 10.6 13.0 III 11.5 13.1 13.2 IV 11.1 12.0 11.5 I 11.4 12.2 11.9 11.2 12.7 II 11.5 12.2 12.0 11.6 12.5 12.2 III 11.5 12.0 11.8 11.5 12.1 11.8 11.3 IV 11.9 12.5 12.4 12.2 12.8 12.8 13.1 15.0 I 12.0 12.5 12.4 12.3 12.8 12.8 13.0 13.9 12.7 II 11.9 12.3 12.2 12.0 12.4 12.4 12.4 12.8 11.7 10.6 III 11.9 12.3 12.2 12.1 12.4 12.4 12.4 12.7 11.9 11.5 12.5 IV 11.8 12.2 12.1 12.0 12,2 12.2 12.2 12.3 11.7 11.4 11.7 11.0 I 11.5 11.8 11.7 11.5 11.7 11.6 11.5 11.5 10.9 10.4 10.3 9.3 * 1979 7511 751 * * * * * ** * * * 9.8 * * I Alt. 10.8 10.9 10.8 10.6 10.7 10.5 10.4 10.3 9.8 9.4 9.3 8.7 8.3 8.5 Alt. 10.7 10.8 10.7 10.5 10.5 10.4 10.2 10.1 9.5 9.1 8.9 8.4 7.8 7.9 Alt. C 10.5 10.7 10.5 10.3 10.4 10.2 10.0 9.3 8.9 8,6 8.0 7.4 7.4 Based on quarterly average data. 9.9 CHART 1 4/14/78 MONETARY AGGREGATES NARROW MONEY SUPPLY M1 BILLIONS OF DOLLARS 350 330 310 II I 200 -1 840 1830 820 810 800 1978 1977 1978 1977 1978 CHART 2 4/14/78 MONETARY AGGREGATES BANK CREDIT BILLIONS OF DOLLARS 940 F END OF MONTH I I I J I I I I I I BILLIONS OF WEEKLY AVERAGES TOTAL 1976 1977 1978 - 900 - 860 - 820 - 780 740 CHART 3 4/14/78 MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDITIONS WEEKLY AVERAGES PERCENT 7 INTEREST RATES Short-term PERCENT INTEREST RATES L WEEKLY AVERAGES FEDERAL FUNDS WEEKLY - - 8 = FHA MORTGAGE FNMA MONDAY AU( RATE -6 F.R. DISCOUNT RATE EURO-DOLLARS 7 - 3-MONTH Aaa UTIL NEW ISSUE 5 PRIME COMMERCIAL PAPER 4-6 MONTHGOVT. - RESERVES GOVT. BC - - 6 - BORROWED MUNICIP BOND BI 1 S- 5 NET BORROWED 1976 10-YEAR A\ BILLIONS OF DOLLARS 1977 - 1978 - THURSDAY -4 - 1 1976 1977 1978 1976 1977 1978 Table 1 CONFIDENTIAL (FR) CLASS II-FOMC 1978 APR. 14, MONETARY AGGREGATES ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED Money Supply Broad Narrow (M2) (M1) 1 2 Period MONTHLY Total U.S. Govt Deposits 1/ 3 Time & Savings Deposits Other Than CD's Other Savings O 5 6 7 Total 4 CD's Nondeposit Sources of Funds 2/ 8 9 LEVELS-SBIL 339.4 339.1 340.1 (342.9) 1978-JAN. FEB. MAR. APR. 813.6 816.6 820.1 (826.2) ( 550.5 556.8 562.1 (566.5) 9.7 7.5 7.9 8.8) 474.2 477.5 480.0 (483.4) 220.6 220.7 220.8 (221.31 253.6 256.7 259.3 (262.1) 76.3 79.4 82.0 I 83.2) 63.8 66.3 67.4 2 ANNUAL GROWTH QUARTERLY 1977--3KD QTR. 4TH QTR. 9.0 6.2 10.1 7.0 9.9 14.5 10.8 7.6 10.9 1.3 10.8 13.3 3.2 64.0 1978-1ST QTR. 4.0 6.2 12.6 7.7 2.4 12.6 43.2 8.1 7.2 9.9 8.0 10.3 13.0 11.2 8.5 7.3 5.4 14.6 11.4 4.5 44.9 5.0 6.4 13.1 7.4 2.2 12.0 50.0 ( 9.6 -1.1 3.5 9.9) ( 8.9 4.4 5.1 8.9) ( 12.3 13.7 11.4 9.4) ( 8.4 8.4 6.3 8.5) I 6.0 0.5 0.5 2.7) 1 10.5 14.7 12.2 13.0) ( 37.3 48.8 39.3 17.6) ( 6.7) ( 7.1) ( 10.5) ( 7.4) ( 1.6) ( 12.6) I 28.7) QUARTERLY-AV 1977-3RD OTR. 4TH QTR. QTR. 1978--1ST MONTHLY 1978--JAN. FEB. MAR. APR. MAR.-APR. WEEKLY LEVELS-SBIL 1978-MAR. 1 8 15 22 29 339.3 339.3 338.5 340.7 341.3 817.5 818.7 818.2 821.6 821.8 6.1 7.3 7.0 9.4 7.7 559.0 561.2 561.8 562.9 562.8 478.2 479.3 479.6 480.9 480.5 220.7 220.9 220.8 220.8 220.8 257.5 258.4 258.8 260.1 259.7 80.9 81.8 82.2 82.0 82.3 APR. 5 341.7 823.6 8.4 564.0 481.8 221.2 260.6 82.1 NOTE: 1/ 2/ P - PRELIMINARY DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. INCLUDES BORROWINGS FROM OTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, PLUS GROSS LIABILITIES TO OWN AND OTHER LIABILITIES FOR BORROWED MONEY, MENTS TO REPURCHASE, LOAN RPS, AND OTHER MINOR ITEMS. LOANS SOLD TO AFFILIATES, (EURODOLLAR BORROWINGS), 69.1 68.8 65.9 64.9 68.8 SECURITIES SOLD UNDER FOREIGN BRANCHES AGREE- Table 1-A TIME AND SAVINGS DEPOSITS AT ALL COMMERCIAL BANKS SEASONALLY ADJUSTED EXCEPT AS NOTED erod OUTSTANDING (S ($ Total Savings Deposits Individual dv a Business Nonprofit (NSA) CLASS II FOMC APR. 14, 1978 Time Deposits Government (NSA) Total Memo Large Large Small Negotiable CD's Denomination Denomination BILLIONS) 1977--JULY AUG. SEPT. OCT. NOV. DEC. 1978-JAN. FEB. MAR. CHANGES Total Time and Savings CONFIDENTIAL (FR) 518.3 521.9 525.9 531.9 540.0 544.9 550.5 556.8 562.1 214.1 217.0 218.8 219.5 219.4 219.5 220.6 220.7 220.8 198.4 201.2 203.2 204.1 204.5 204.7 205.8 206.0 206.2 10.2 10.5 10.6 10.5 10.6 10.6 10.2 10.1 10.1 17.6 17.4 2.1 5.5 5.3 5.1 4.9 4.3 4.2 4.5 4.7 4.5 304.2 304.9 307.1 312.3 320.6 325.4 329.9 336.1 341.3 141.5 142.0 143.6 148.1 157.6 162.1 165.9 171.9 175.6 162.7 162.9 163.6 164.2 163.0 163.3 164.0 164.2 165.7 62.8 63.2 63.8 66.4 70.9 74.0 76.3 79.4 82.0 12.2 11.3 BILLIONS) 1977 YEAR -1.9 37.6 QUARTERLY AVERAGE: 1977-1 It III IV 1978--I 14.8 10.4 13.1 16.9 10.5 4.6 3.9 2.9 7.3 4.1 4.7 3.5 17.6 1.2 1.6 1.2 0.8 0.4 0.2 -0.5 1.8 3.4 -1.2 -0. 4.5 5.7 9.2 14.0 1.0 -0.7 5.9 13.5 6.6 3.3 0.4 0.5 -0.3 0.7 7.1 0.1 16.4 15.2 1.1 8.8 0.2 0.7 0.6 -1.2 0.3 0.7 0.2 1.5 0.4 0.6 2.6 4.5 3.1 2.3 3.1 2.6 -0.2 MONTHLY AVERAGE: 1977-AUG. SEPT. OCT. NOV. DEC. 1978--JAN. FEB. MAR. 3.6 4.0 6.0 8.1 4.9 5.6 6.3 5.3 (2), AND 19) ON COLUMNS (1), NOTES FIGURES IN COLUMNS (111 AGGREGATES. DERIVED FROM DATA REPORTED BY SMALL GOVERNMENTAL UNITS-COLUMNS (41 AND WEDNESDAY BY LARGE COMMERCIAL BANKS SHIPS. 2.9 1.8 0.7 -0.1 0.1 1.1 0.1 0.1 2.8 2.0 0.9 0.4 0.2 1.1 0.2 0.2 0.3 0.1 -0.1 0.1 0.0 -0.4 -0.1 0.0 -0.2 -0.2 -0.2 -0.6 -0.1 0.3 0.2 -0.2 0.7 2.2 5.2 8.3 4.8 4.5 6.2 5.2 0.5 1.6 4.5 9.5 4.5 3.8 6.0 3.7 ON TABLE 1-MONETARY AND (8), RESPECTIVELY, THIS TABLE CORRESPOND TO COLUMNS (4), (6), 12) AND 16) REFLECT DAILY DAIA REPORTED BY MEMBER BANKS, WITH ESTIMATES FOR NONMEMBER BANKS SAVINGS DEPOSITS OF BUSINESS AND MEMBER bANKS, BENCHMARKEO TO NONMEMBER CALL REPORT FIGURES. (I)--AND LARGE DENOMINATION TIME DEPOSITS -- COLLUN (71--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 APR. 14, 1978 REQUIRED RESERVES Total Reserves Nonborrowed Reserves Monetary Base Total Required Private Demand Total Time Deposits Gov't. and Interbank 1 2 3 4 5 6 7 129,644 130,212 130,429 (131,431) 36,569 36,747 36,418 (36,766) 21,713 21,818 21378 (21,514) MONTHLY LEVELS-SMILLIONS 1978-JAM. FEB. MAR. APR. 36,835 36,988 36,618 (36,959) 36,351 36,582 36,290 (36,6943 13,014 13*083 13,227 (13,2833 4 1,843 1 ,846 1,813 1,9691 PERCENT ANNUAL GROWTH QUARTERLY 1977-3RD QTR. 4TH QTR. 8.0 7.4 3.8 u.2 9.2 9.7 7.3 7.7 11.3 4.9 2.9 13.8 1978-1ST QTR. 5.1 7.9 7.6 5.1 -1.9 12.2 1977-3RD OTR. 4TH QTR. 7.8 6.1 2.2 3.4 9.0 9.1 7.3 6.3 8.8 6.0 5.8 8.8 1978-1ST QTR. 9.2 9.9 9.1 4.0 14.4 15.6 5.3 2.0 9.2) 20.2 5.8 ( 5.6) 1 QUARTERLY-AV 15.3 MONTHLY 1978-JAN. FEB. MAR. APR. MAR.-APR. 22.6 5.0 -12.0 ( 11.2) ( 25.9 7.6 -9.6 13.4) -0.51 ( 1.8) ( 11.5) 13.0 5.8 -24.2 1 7.6) I 16.6 6.4 13.2 5.1) 0.3) -0.4) ( 9.21 -10.7 WEEKLY LEVELS-MILLIONS NOTEs 1978-MAR. 1 8 15 22 29 36,518 36,399 36,582 36,748 36,689 36,127 36,003 36,334 36,468 36,303 130,014 129*636 130,229 130,786 130,987 36,398 36,135 36,451 36,600 36,454 21,585 21,317 21,356 21,431 21,402 13,114 13,145 13,198 13,274 13,286 1,699 1,673 1,898 1,895 1,766 APR. 5 12 36,853 36,708 36,549 36,537 130,905 130,728 36,546 36,614 21,304 21,474 13,297 13,276 1,944 1,864 RESERVE SERIES HAVE BEEN ADJUSTED TO REMOVE DISCONTINUITIES ASSOCIATED DATA SHOMN IN PARENTHESES ARE CURRENT PROJECTIONS. WITH CHANGES IN RESERVE REQUIREMENT RATIO. STRICTLY CONFIDENTIAL CLASS II - FOMC APRIL 14, 1978 TABLE 3 NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES 1 ($ million, not seasonally adjusted) Treasury Bills Net Change 2 1977--Qtr. Qtr. Qtr. Qtr. I II III IV Within 1 year 1 5 5 5 Federal Agencies Net Purchases 4/ Over 15 10 10 539 500 1,048 758 1,164 2,126 886 186 997 526 681 628 325 171 96 166 165 152 128 108 1,680 345 1,123 459 247 2,175 --628 -- -166 --108 --1,001 556 1978--Jan. Feb. Mar. -627 56 311 -2,695 t88 -813 89 -- 100 -- 370 147 -- --- --- --- 668 1 -860 8 15 -275 -1,358 22 -200 1 -862 351 22 29 Apr. 592 400 1,665 2,833 3,025 -1,877 -736 2,798 8 15 1,582 1,415 4,361 1977--Oct. Nov. Dec. Mar. 1-5 167 129 196 1,070 642 553 434 1,510 -- -- -- -- --- 10 Over 10 Total 726 2,738 3,666 1,021 1,001 386 707 4,273 -643 r- ---- 1,618 --- -- --386 177 -145 --- -- -- - - -- -- -- - -- -- -- -- -- --- -- ---- --- --- -- -- -- -- -- - --- -707 4/ 5/ 6/ -71 -2,717 2,233 - -887 -275 -1,358 -200 -862 351 -44 1,016 79 365 95 93 594 S - - - -- - - -- - 19 26 1/ 2/ 3/ -4,380 -736 4,474 -- -- 41 14.5 29.4 9.9 7.8 61.5 -154 1,272 3,607 -2,892 -1,133 1,024 40.6 -4,771 4,175 -2,331 34 406 12 LEVEL--Apr. 12 (in billions) -1,358 -46 959 824 Net RP's 6/ 1,631 9,273 6,303 7,267 6,227 10,035 469 792 1,747 6,202 5,187 4,660 79 5 Net Change Outright Holdings Total 5/ 1,059 864 3,082 1,613 891 1,433 --- 5. Totalar Tr 789 579 797 3,284 --93 1978--Feb. Within -490 7,232 1,280 -468 863 -2,655 1978--Qtr. I Treasury Coupons Net Purchases 3/ (FR) 1.4 4.0 1.6 .9 7.9 1,004 (08 -6,530 2,996 3,568 -7,149 4,141 1,874 5,009 -5,745 4,629 2,408 -1,474 -4,050 612 3,386 2,615 -7,652 636 110.0 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. Excludes redemptions, maturity shifts, rollovers of maturing coupon issues, and direct Treasury borrowing from the System. Outright 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 bankers' 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 (-). TABLE 4 SECURITY DEALER POSITIONS AND BANK POSITIONS (millions of dollars) U.S. Govt. Security CLASS II - FOMC APRIL 14, 1978 Member Bank Reserve Positions Underwriting Borrowing at FRB** Syndicate Positions Dealer Positions STRICTLY CONFIDENTIAL (FR) Corporate Municipal Excess** ' sic Reserve Deficit** Bills Coupon Issues Bonds Bonds Reserves Total Seasonal 8 New York 38 Others 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 1978--High Low 5,625 *2,158 2,043 -221 215 0 349 151 370 120 592 248p 59 25 -7,699 -3,993 -13,938 - 8,533 1977--Mar. 4,906 972 103 162 214 103 13 -5,661 -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 r11,825 -11,350 1978--Jan. 4,127 327 42 293 268 484 32 r6,047 -12,299 Feb. 3,418 1,492 24 197 243 406 49 -4,980 -12,603 Mar. *2,713 *470 96 268 199p 328p 47p -6,787p -11,039p 1978--Feb. 1 8 15 22 3,599 3,842 4,128 3,185 674 2,043 1,264 968 7 35 0 55 154 151 251 231 158 370 185 292 470 493 281 446 44 48 48 53 -3,993 -5,056 -4,906 -5,241 -11,516 -13,137 -13,295 -12,344 Mar. 1 8 15 22 29 2,176 2,807 2,923 *2,705 *2,158 1,577 1,290 891 *450 *390 37 64 70 215 93 253 210 244 282 349 120 264 131 148 2 35p 391 395 248 280 38 6p 59 47 40 47 51p -4,836 r6,932 -7,537 -7,525 -5,510 -11,655 -11,783 -11,771 -11,473 -9,237 Apr. 5 12 19 26 *4,398 *4,078p *2 *-305p 189 175p 30 7p 91p 304p 172 p 45p 37p -6,511p .8,240p -10,356p -14,520p 23 55p NOTE: Government security dealer trading positions are on a commitment basis. Trading positions, which exclude Treasury oecurities 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 leas borrowing at Federal Reserve less net Federal funds purchases. Weekly data are daily averages fpr 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. p Preliminary STRICTLY CONFIDENTAL (FR) CLASS II - FOMC APRIL 14, 1978 TABLE 5 SELECTED INTEREST RATES (per cent) Long-Term Short-Term Treasury Federal SFunds Bills D's New Com. Issue-NY Paper 1-Year 90-Day O0-119 DaT (3) (4) (5) Bank Prime Rate (6) U.S. Govt.-Constant Maturity Yields 3-yr 7-yr 20year (7) (8) (9) Corp-Aaa Utiity New Recentl Issue Offered (10) (11) 4unicipa Bond Auyer (12) Home Nortgages Primar Secondary Market Cony. FNMA Auc GNA Sec. (13) (14) (15) (1) 90-day (2) 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 1978--High Low 6.86 6.58 6.50 6.16 6.95 6.55 6.88 6.65 6.80 6.68 8.00 7.75 7.82 7.40 8.05 7.72 8.34 8.01 8.88 8.61 8.86 8.48 5.76 5.58 9.28 9.44 8.70 8.98 9,13 8.43 1977--Mar. 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 5.90 6.14 5.19 5.49 5.81 5.57 5.97 6.13 5.28 5.78 6.01 5.38 5.75 6.09 6.75 6.83 7.13 6.51 6.79 6.84 7.12 7.24 7.21 7.60 7.64 7.57 8.15 8.04 8.07 8.12 8.05 8.07 5.63 5.62 5.51 8.95 8.94 8.90 8.72 8.76 8.74 7.96 8.03 8.02 Oct. Nov. Dec. 6.47 6.51 6.56 6,16 6.10 6.07 6.52 6.52 6.52 6.53 6.56 6.65 6.51 6.54 6.61 7.52 7.75 7.75 7.19 7.22 7.30 7.44 7.46 7.59 7.71 7.76 7.87 8.23 8.28 8.34 8.22 8.25 8.38 5,64 5.49 5.57 8.92 8.92 8.96 8.82 8.86 8.94 8.16 8.19 8.27 1978--Jan. Feb. Mar. 6.70 6.78 6.79 6.44 6.45 6.29 6.80 6.86 6.82 6.82 6.77 6.73 6.75 6.76 6.75 7.93 8.00 8.00 7.61 7.67 7.70 7.86 7.94 7.95 8,14 8.22 8.21- 8.68 8,69 8.71 8.60 8.67 8.67 5.71 5.62 5.61 9.02 9.15 9.20 9.17 9.31 9.35 8.56 8.64 8.60 1978--Feb. 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 7.74 7.85 7.91 7.99 7.99 8.17 8.20 8.25 8.25 8.65 8.69 -8.71 8.60 8.64 8.68 8.70 5.63 5.59 5.61 5.65 9.13 9.15 9.15 9.15 -9.27 -9.35 8.62 8.62 8.65 8.68 Mar. 1 8 15 22 29 6.80 6.76 6.77 6.77 6.82 6.41 6.33 6.27 6.22 6.27 6.85 6.83 6.81 6.76 6.84 6.75 6.75 6.73 6.70 6.70 6.75 6.75 6,75 6.75 6.76 8.00 8.00 8.00 8.00 8.00 7.71 7.69 7.64 7.65 7.79 7.95 7.94 7.91 7.90 8.02 8.21 8.21 8.17 8.17 8.27 8.70 -8.61 8.83 8.70 8.65 8.64 8.64 9.75 5,63 5.58 5.58 5.59 5.69 9.15 9.15 9.23 9.23 9.25 -9.36 -9.33 -- 8.61 8.63 8.55 8.53 8.68 Apr. 5 12 6.86 6.74 6.39 6.35 6.94 6.95 6.75 6.83 6.76 6.80 8.00 8.00 7.82 82 7. p 8.04 8.05p 8.31 8.34p 8.88 8,88p 8.82 8.86p 5.76 5.74 9.28 n.a. 9,44 -- 8.70 8.67 Daily--Apr. 6 13 6.75 6.75p 6.41 6.28 6.97 6.92 6.78 6.80 8.00 8.00 7.83 7.81p 8.06 8.04p 8.32 8,34p - 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 Columns 11 and 12 are 1-day quotes for Friday and through 10, the weekly date is the mid-point of the calendar week over which data are averaged. 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 Column 15 is a 1-day quote for Monday preceding statement week. Column 14 gives FNMA auction data for Monday preceding the end of the statement week. forward commitments for Goverment The FNHA auction yield is the average yield in bi-weekly auction for short-tert the end of the statement week. 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. APR. 14, 1978 Appendix Table 1-A MONEY AND CREDIT AGGREGATE MEASURES Bank Reserves Period Total Nonborrowed Monetary Base Ban Credit Total Loans and Invest- Money Stock Measures M1 M2 M3 M4 M5 M6 M7 8 9 10 11 ments 1 2 3 4 -0.2 1.0 5.2 3.2 1.1 2.8 5.9 7.0 8.3 3.9 8.0 10.9 4.4 5.7 7.8 8.3 10.9 9.8 11.0 12.8 11.7 6.5 7.1 10.0 9.6 10.3 11.7 10.4 9.8 11.5 10.0 10.0 12.0 HALF 1976 3.3 3.4 6.6 8.9 5.5 10.8 12.7 7.8 10.8 9.8 9.9 1ST HALF 1977 2ND HALF 1977 3.3 7.0 2.6 2.8 7.2 9.1 11.6 9.7 7.6 7.7 10.1 9.0 11.3 11.4 9.3 10.2 10.8 12.0 10.3 12.0 10.9 12.4 2ND QTR. 1977 3RD OTR. 1977 4TH QTR. 1977 3.9 8.0 7.4 2.0 3.8 8.2 8.1 9.2 9.7 12.6 8.6 8.3 7.5 9.0 6.2 8.5 10.1 7.0 9.9 12.7 9.1 8.4 9.6 11.2 9.8 12.3 11.6 8.6 12.5 11.8 9.7 12.8 12.1 1ST QTR. 5.1 7.9 7.6 10.5 4.0 6.2 6.8 9.3 8.6 8.1 8.6 ANNUALLY2/ 1975 1976 1977 5 6 7 (PER CENT ANNUAL RATES OF GROWTH) 2/ SEMI-ANNUALLY: 2ND QUARTERLY: 1978 QUARTERLY-AV: 2ND QTR. 3RD QTR. 4TH QTR. 1977 1977 1977 2.4 7.8 6.1 1.3 2.2 3.4 7.1 9.0 9.1 13.3 9.8 9.3 8.1 8.1 7.2 9.0 9.9 8.0 10.2 11.9 10.6 8.2 9.5 10.7 9.6 11.6 12.1 9.0 11.4 12.3 10.1 12.0 12.5 1ST QTR. 1978 9.2 15.3 9.9 8.5 5.0 6.4 7.4 10.0 9.5 9.0 9.3 -1.4 8.7 1.4 1.4 17.1 8.0 -1.3 11.3 4.6 6.3 -2.5 9.8 -3.2 -0.5 15.1 -17.2 13.8 -11.9 20.2 16.4 5.8 10.4 6.4 7.3 11.6 8.4 7.5 10.4 7.9 10.5 10.9 15.7 12.0 9.6 9.5 12.3 3.8 13.5 11.8 -0.7 7.6 13.9 1.5 7.1 11.8 6.2 8.7 10.9 0.4 7.2 9.6 10.8 5.5 9.1 13.5 7.7 9.0 9.7 5.4 5.7 10.4 11.0 8.1 10.3 14.0 11.7 12.2 11.8 7.8 7.6 7.4 9.1 7.0 8.9 11.9 7.5 9.2 12.5 11.2 9.6 8.9 9.9 8.9 10.2 12.9 11.5 12.2 13.3 11.3 9.8 8.3 9.0 7.7 8.9 13.3 12.2 11.8 13.8 11.7 9.5 9.5 10.1 8.6 10.1 13.9 12.2 11.8 13.8 12.1 10.2 22.6 5.0 -12.0 25.9 7.6 -9.6 15.6 5.3 2.0 12.1 10.1 9.1 9.6 -1.1 3.5 8.9 4.4 5.1 8.7 5.5 5.9 11.3 8.2 8.3 10.2 7.7 7.8 9.1 7.1 7.8 9.4 6.8 9.4 MONTHLY: 1977--MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1978--JAN. FEB. MAR. 1/ 2/ P - P BASED ON DATA ADJUSTED FOR CHANGES BASED ON QUARTERLY AVERAGE DATA. PRELIMINARY IN RESERVE REQUIREMENTS. 1-B MONEY AND CREDIT AGGREGATE MEASURES APR. 14, 1978 Appendix Table SEASONALLY ADJUSTED, BILLIONS OF DOLLARS ank Resrve Period Total Non. borrowed V Moony Stock Measures Bank Credit 1 Monetary Base z Total Loans and Investments 4 MI M2 M3 M4 M5 M6 M7 ANNUALLY: 33,960 34,446 36,153 33,830 34,392 35,583 110,336 118,067 127,983 725.5 788.2 870.0 294.5 312.6 336.7 664.1 739.6 807.6 1235.6 1374.1 745.4 802.3 881.6 1173.2 1298.3 1448.1 1306.9 1436.2 1601.0 1349.9 1483.6 1663.4 1977--MAR. 34470 34,367 119,724 809.1 318.3 758.1 1270.6 820.3 1332.8 1476.1 1527.7 APR. MAY JUNE 34,720 34,761 34,803 34,647 34,555 34,540 120,762 121,404 122,144 819.7 827.9 834.5 322.0 322.4 324.3 764.9 768.4 774.2 1282.2 1290.9 1302.0 826.5 831.3 837.5 1343.8 1353.8 1365.3 1487.2 1496.8 1507.9 1540.5 1551.5 1564.6 JULY AUG. SEPT. 35,298 35,533 35,495 34,975 34,473 34,869 123,321 124,188 124,962 841.1 849.7 852.4 327.5 329.2 331.6 782.9 787.9 793.8 1317.2 1330.0 1343.5 845.8 851.1 857.6 1380.0 1393.2 1407.4 1524.6 1540.1 1555.2 1582.7 1598.8 1614.5 OCT. 35,829 35,965 36,153 34,523 35,104 35.583 126,046 126,872 127,983 862.0 870.5 870.0 334.6 334.7 336.7 800.2 803.8 807.6 1356.7 1365.5 1374.1 866.5 874.6 881.6 1423.0 1436.4 1448.1 1573.1 1588.4 1601.0 1633.0 1649.4 1663.4 36,835 36,988 36,618 36,351 36,582 36,290 129,644 130,212 130,429 878.8 886.2 892.9 339.4 339.1 340.1 813.6 816.6 820.1 1384.1 1390.5 1397.3 889.9 896.0 902.2 1460.4 1469.8 1479.3 1613.2 1622.8 1633.3 1676.4 1685.9 1699.1 1975 1976 1977 1091.8 MONTHLYz NOV. DEC. 19?78-JAN. FEB. MAR.P MEEKLY: 1978-FEB. 8 15 22 37,202 37,273 36,932 36,709 36,992 36,486 130,106 130,458 130,308 339.4 338.9 339.4 816.4 816.1 817.5 894.9 895.1 897.2 MAR. I 8 22 29P 36,518 36,399 36,582 36,748 36,689 36,127 36,003 36,334 36,468 36,303 130,014 129,636 130,229 130,786 130,987 339.3 339.3 338.5 340.7 341.3 817.5 818.7 818.2 821.6 821.8 898.4 900.5 900.3 903.6 904.1 5P 36,853 36,549 130,905 341.7 823.6 905.7 15 APR. a aI i. . I& a a a WEEKLY DATA ARE NOT AVAILABLE WEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS. MONTHLY DATA ARE DAILY AVERAGES. M3, MS, M6. MT, 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: FOR APR. APPENDIX TABLE 2-A 14, 1978 COMPONENTS OF MONEY STOCK AND RELATED MEASURES (Per cent annual rates of growth) 2/ ANNUALLY: 1975 1976 1977 17 .5 25 .0 11 .1 7.8 7.4 11.4 -6.4 -23.4 12.8 15.3 15.5 14.2 19.5 18.8 19.4 33.8 5.6 11.4 -0.5 14.1 28.4 14.9 1.8 10.6 -21.7 15.5 18.1 -4.0 12.0 11.9 9.9 .3 .4 8.9 13.2 0.6 24.9 12.9 14.5 16.6 20.6 4.1 18.2 30.7 22.6 .5 .9 .3 12.5 10.8 13.3 7.1 3.2 64.0 11.6 16.2 11.6 15.7 21.7 18.8 -10.8 24.0 20.4 37.9 19.1 21.6 7.9 8.0 11.4 11.7 15.0 11.2 9.3 2/ SEMI-ANNUALLY: 2ND HALF 1976 10.4 11.8 1ST HALF 1977 2ND HALF 1977 5 QUARTERLYS 2ND QTR. 1977 3RD QTR. 1977 4TH QTR. 1977 8.7 10.0 10.2 8.9 9.9 14.5 1ST QTR. 1978 QUARTERLY-AV: 9.5 12.6 7.7 2 .4 12.6 43.2 6.7 16.2 0.0 21.1 2ND QTR. 1977 3RD QTR. 1977 4TH QTR. 1977 8.8 9.1 10.3 7.8 7.7 6.2 8.3 10.3 13.0 9.7 11.2 8.5 ).8 '.3 .4 10.5 14.6 11.4 -1.9 4.5 44.9 11.6 14.6 13.9 14.9 20.1 20.0 0.0 12.7 23.0 41.0 27.7 16.4 10.0 3.2 13.1 7.4 !.2 12.0 50.0 7.9 17.4 2.1 19.0 1977--MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 7.3 10.2 10.1 5.7 12.8 5.6 11.2 11.1 8.3 10.9 7.7 15.3 -1.5 7.5 11.0 6.9 7.9 10.8 -2.4 5.8 7.2 10.4 10.9 5.7 0.0 6.2 16.3 10.0 3.8 -0.5 0.5 11.6 6.3 10.9 20.1 22.8 1.5 7.9 13.3 18.0 8.2 -20.9 -11.6 25.3 7.6 11.0 10.9 11.6 12.0 14.3 17.1 16.6 14.0 11.0 9.3 14.9 10.5 10.1 11.9 8.3 9.2 13.7 18.3 10.9 11.0 8.5 8.4 10.5 14.9 6.4 8.9 8.8 9.3 4.6 1978--JAN. FEB. MAK.P 10.8 9.4 8.0 9.2 -4.8 1.9 12.3 13.7 11.4 8.4 8.4 6.3 6.0 0.5 0.5 10.5 14.7 12.2 37.3 1ST OTR. 1978 9.2 10.8 7.6 1 MONTHLY: 6.0 1/ GROWTH RATES ARE BASED ON ESTIMATED MONTHLY PREVIOUS MONTH REPORTED DATA. 2/ BASED ON QUARTERLY AVERAGE DATA. P - PRELIMINARY. AVERAGE LEVELS DERIVED -9.5 7.6 11.4 48.9 81.3 52.5 48.8 39.3 BY AVERAGING 7.9 6.0 6.2 0.0 48.3 14.7 -5.1 14.5 17.2 19.8 19.5 24.7 21.5 15.8 18.2 -13.7 -13.9 24.6 34.4 11.7 31.4 22.6 6.3 37.1 31.5 41.7 31.8 12.4 12.3 12.1 22.0 29.5 17.9 15.2 15.0 -6.3 -3.2 9.5 13.4 -1.9 51.3 END OF CURRENT MONTH AND END OF APPENDIX TABLE 2-B APR. 14, 1978 COMPONENTS OF MONEY STOCK AND RELATED MEASURES Demand Prid and Currency Period Deposits Time and Savings Deposits Mutual Bank _Savings Other Than CD's STotal vCD's STotal j Savings & S&L Sh L Sharest Other t Union Savings Shares Bonds Credit Shares 1/ id sTerm US. Gov't Gov't Sec 1 2 3 4 5 6 7 8 9 10 11 73.7 450.9 489.7 544.9 369.6 427.0 470.9 160.5 201.9 219.5 209.1 225.1 251.4 81.3 62.7 74.0 394.8 456.9 33.0 519.7 46.8 67.2 71.9 76.6 66.5 66.1 88.5 220.8 231.9 248.2 82.4 235.9 502.0 439.8 210.1 229.7 62.2 471.7 40.8 APR. MAY JUNE 83.1 83.8 84.2 238.9 238.6 240.1 504.5 508.9 513.2 442.9 446.0 449.9 212.0 230.9 233.0 476.0 480.6 41.3 213.0 213.0 61.6 62.9 63.3 JULY AUG. SEPT. 85.1 85.5 86.3 242.3 243.7 245.3 518.3 214.1 217.0 218.8 241.4 241.7 243.3 62.8 63.2 63.8 491.2 498.2 525.9 455.5 458.7 462.1 OCT. NOV. DEC. 87.1 87.7 88.5 247.5 247.0 248.2 531.9 540.0 544.9 465.5 469.1 470.9 219.5 219.4 219.5 246.0 249.7 251.4 1978--JAN. FEB. 89.3 90.0 90.6 250.1 249.1 249.5 550.5 556.8 562.1 474.2 477.5 480.0 220.6 220.8 89.9 555.4 556.2 557.8 477.0 477.2 478.1 PPrivate te Shortterm Assets Total Total Gov't Funds Demand Deposits F tel 12 Non NonDeposit I DemVA 13 14 ANNUALLY: 1975 1976 1977 60.7 76.2 47.4 62.5 33.7 51.4 61.6 8.3 11.2 11.4 73.0 70.3 51.7 51.4 11.2 73.4 73.8 74.2 70.0 69.2 68.4 53.3 50.8 10.8 54.7 56.6 54.6 53.5 10.6 10.1 505.1 74.7 75.1 75.4 69.8 71.8 72.5 58.1 43.8 44.7 58.7 59.3 53.3 55.6 57.7 11.8 10.2 10.7 66.4 70.9 74.0 511.0 515.7 519.7 45.5 46.1 46.8 75.8 76.2 76.6 74.4 75.8 76.2 59.9 61.0 62.5 57.4 60.0 61.6 10.3 6.7 11.4 253.6 256.7 259.3 76.3 523.1 525.7 528.4 47.5 48.1 75.8 75.6 76.2 63.2 63.8 63.1 66.3 48.7 77.0 77.4 77.8 65.8 67.4 9.7 7.5 7.9 220.9 221.1 220.9 256.1 256.1 257.1 78.5 79.0 79.7 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 65.0 61.3 69.3 10.0 7.3 6.3 80.9 81.8 82.2 82.0 82.3 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 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 69.1 68.8 220.8 257.5 258.4 258.8 260.1 259.7 6.1 7.3 7.0 9.4 7.7 221.2 260.6 82.1 0.0 0.0 0.0 0.0 0.0 39.1 43.0 MONTHLY: 1977--MAR. MAR.P 521.9 220.7 236.9 79.4 82.0 485.4 41.8 42.4 43.1 MEEKLY: 1978-FEB. MAR. APR. 1/ 2/ 3/ 4/ P - b 15 22 90.2 249.5 248.9 249.3 1 8 15 22 29P 90.1 90.3 90.5 90.9 91.0 249.2 249.1 248.0 249.8 250.3 559.0 561.2 561.8 562.9 562.8 478.2 220.7 479.3 220.9 220.8 220.6 5P 90.9 I250.8 564.0 481.8 90.0 479.6 480.9 480.5 0.0 0.0 65.9 64.9 68.8 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 CROSS LIABILITIES TO OWN FOREIGN BRANCHES (EURODOLLAR BORROWINGSS) LOANS SOLD TO AFFILIATES, LOAN RPS, AND OTHER MINOR ITEMS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. PRELIMINARY 8.4 

Federal Reserve (1978, April 17). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19780418

@misc{wtfs_bluebook_19780418,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1978},
  month = {Apr},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19780418},
  note = {Retrieved via When the Fed Speaks corpus}
}