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 June 16, 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 (FR) CLASS I - FOMC June 16, 1978 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) Growth in M-1 slowed to an annual rate of 6.3 per cent in May, reflecting in part the unwinding of tax-related factors that had contributed to a sharp acceleration of this aggregate in April. However, data available by mid-June suggested that M-1 growth may accelerate to an 8 per cent annual rate in June, bringing growth over the May-June period to an estimated 7½ per cent rate, just below the upper limit of the Committee's 3 to 8 per cent short-run operating range. at a 7 1/ Growth of M-2 in the May-June period is projected per cent annual rate, as compared with the 4 to 9 per cent range adopted by the FOMC. Flows into savings deposits at banks slowed in May, but this decline was offset by a sharp rise in large-denomination time deposits included in M-2. Although deposit inflows at thrift institutions accelerated somewhat in May, they remained substantially below the pace of last year. 1/ These figures do not incorporate the benchmark revisions based on recently available December 1977 Call Report data for nonmember banks; the revised aggregates will be published on June 22. As shown in Appendix Table III, the benchmark revision increases the growth rates for M-1 and M-2 by an average of about three-tenths of a percentage point in the fourth quarter of 1977 and the first two quarters of 1978. All tables on subsequent pages of this report (with the exception of the first table following the appendices) are based on the revised series. -2Growth in Monetary Aggregates over May-June Period Ranges Memo: Latest Estimates M-1 3 to 8 7.5 M-2 4 to 9 7.5 Federal funds rate (per cent per annum) (2) Avg. for statement week ending 7¼ to 7¾ May 17 7.34 24 31 June 7 14 7.43 7.36 7.47 7.49 In accordance with the Committee's instructions, the Account Manager sought a slight firming in the Federal funds rate to 7 per cent in the days immediately following the May meeting. The target rate for Federal funds has been maintained at this level in subsequent weeks as incoming data, until recently, suggested that growth in both M-1 and M-2 would be well below the upper limits of the Committee's ranges. While M-1 strengthened most recently, the Committee concurred in the Chairman's recommendation to hold the funds rate at 7 meeting. per cent in view of the proximity of the forthcoming FOMC The rapid growth in deposits in April and early May and the decline in average member bank borrowing since the discount rate was raised in mid-May have increased member bank demand for nonborrowed reserves, which are expected to rise at a 9½ per cent annual rate over May and June. (3) Short-term interest rates generally have increased from 15 to 60 basis points since the last meeting. The largest increases were on CD's and commercial paper, reflecting strong short-term business credit demands. In May, bank loans to businesses rose at a 33 per cent annual rate. Although bond issuance by corporations remained close to the moderate pace of earlier months this year, long-term yields rose 5 to 20 basis points over the same period, apparently in response to the rise in short-term rates and renewed concern about the prospects for inflation. After paying down debt earlier in the second quarter, the Treasury returned to the credit markets following the May FOMC meeting to raise new cash through the sale of $2.6 billion of 4-year notes and $6.0 billion of short-term cash management bills timed to mature after the June tax date. In addition, the Federally-sponsored housing agencies have stepped up their demands on credit markets; both the FHLB and FNMA raised sub- stantial amounts of new cash in conjunction with refundings of outstanding debt in late May and early June. Bond issuance by State and local governments, on the other hand, has fallen off substantially since mid-May; nearly all this decline has been accounted for by a reduction of advance refunding operations, which were curtailed after the May 16 effective date of the new IRS ruling. (4) The increase in business loan growth led to an acceleration of total bank lending in May. However, banks kept their holdings of investment securities about unchanged, following a surge in April, and, consequently, growth in total bank credit slowed somewhat in May. But, with the slowing of both the growth of demand deposits and interest-bearing deposits subject to regulatory ceilings, banks sharply increased their issuance of large CD's. (5) Conditions in mortgage markets have continued to tighten, with two-thirds of savings and loans reporting funds in short supply. The average rates on primary conventional mortgages have risen one- -4eighth of a percentage point to 9.70 per cent since mid-May and ceilings on FHA/VA mortgages were raised to 9 per cent. In almost half of the states, usury ceilings have been constraining origination of conventional mortgages, prompting more stringent non-rate terms, or giving rise to larger discounts where not prohibited by law. (6) The table on the next page shows percentage annual rates of change in related monetary and financial flows over various time periods. 1976 & 1977 Average Past Twelve Months May '78 over May '77 Past Six Months May '78 over Nov. '77 Past Three Months May '78 over Feb. '77 Nonborrowed reserves 2.5 4.3 5.6 -4.9 -10.4 Total reserves 3.2 7.1 7.4 3.9 11.0 Monetary Base 7.7 9.2 9.2 7.8 12.3 6.8 8.0 7.9 9.8 6.6 M-2 (M-1 plus time deposits at commercial banks other than large CD's) 10.4 8.6 7.6 8.2 7.2 M-3 (M-2 plus deposits at thrift institutions) 12.3 9.9 7.8 7.8 7.1 M-4 (M-2 plus CD's) 8.6 10.9 10.7 10.9 M-5 (M-3 plus CD's) 11.1 11.3 9.7 9.5 9.7 Month-end basis 9.8 11.5 11.8 14.0 15.7 Monthly average 9.5 11.7 10.4 10.7 11.1 -0.4 2.0 2.7 2.6 3.7 0.2 0.2 0.2 0.6 -0.1 Past Month May '78 over Apr. '77 Concepts of Money M-1 (Currency plus demand deposits) 1/ 11.3 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. -6Prospective developments (7) The table below presents for Committee consideration two alternative sets of specifications for the monetary aggregates and the Federal funds rate for the forthcoming intermeeting period.1/ (More detailed and longer-term data for the aggregates are shown in the tables on pp. 7 and 8.) Alt. A Alt. B Ranges for June-July M-1 7 to 11 6½ to 10½ M-2 7 to 11 6 to 10 Federal funds rate (intermeeting period) 7¼ to 7¾ 7 to 8 (8) Growth in M-1 is expected to accelerate over the June-July period in reflection of the relatively strong underlying demand for money associated with the prospective increase in nominal economic activity. Alternative A specifies a range for the Federal funds rate around its recently prevailing level of 7½ per cent and is expected to be associated with M-1 growth in a 7 to 11 per cent annual rate range over the forthcoming two-month period. The staff projection implies that growth in M-1 over the second quarter will be at a 9½ per cent annual rate, and that in July this aggregate 1/ The ranges are based on the newly benchmarked series for the (See Appendix III.) monetary aggregates. Alternative Levels and Growth Rates for Key Monetary Aggregates M-1 M-2 Alt. A Alt. B Alt. A Alt. B 1978 May June July 348.2 350.9 353.4 348.2 350.8 353.1 834.7 841.0 847.0 834.7 840.7 846.3 1978 QI QII QIII QIV 340.3 348.5 354.0 355.8 340.3 348.4 353.7 355.7 818.2 835.1 851.1 864.2 818.2 835.0 850.3 863.5 1979 QI 358.1 358.1 878.1 877.6 9.3 8.5 9.0 7.9 9.1 8.6 8.6 8.0 Growth Rates Monthly: 1978 June July Quarterly Average: 1978 QII QIII QIV 9.6 6.3 2.0 9.5 6.1 2.3 8.3 7.7 6.2 8.2 7.3 6.2 1979 QI 2.6 2.7 6.4 6.5 8.1 2.3 7.9 2.5 8.0 6.3 7.8 6.4 5.2 5.2 7.3 7.3 Semi-Annual: QI '78-QIII '78 QIII '78-QI '79 Annual: QI '78-QI '79 Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) M-3 Bank Credit Alt. A Alt. B Alt. A Alt. B 1978 May June July 1419.3 1429.9 1440.2 1419.3 1429.4 1438.9 914.5 922.1 929.4 914.5 922.1 929.1 1978 QI QII QIII QIV 1392.3 1420.0 1448.5 1473.3 1392.3 1419.9 1446.6 1470.4 891.7 915.0 939.0 960.1 891.7 915.0 938.6 959.2 1979 QI 1498.1 1494.8 980.5 979.1 9.0 8.6 8.5 8.0 10.0 9.5 10.0 9.1 Growth Rates Monthly: 1978 June July Quarterly Average: 1978 QII QIII QIV 8.0 8.0 6.8 7.9 7.5 6.6 10.5 10.5 9.0 10.5 10.3 8.8 1979 QI 6.7 6.6 8.5 8.3 QI '78-QIII '78 8.1 7.8 10.6 QIII '78-QI '79 6.8 6.7 8.8 8.6 7.6 7.4 10.0 9.8 Semi-Annual: 10.5 Annual: QI '78-QI '79 will remain well above the level implied by the upper end of the FOMC's longer-run range, as shown in Chart 1 on the following page.1/ (9) Expansion in M-2 under Alternative A is also likely to be in a 7 to 11 per cent annual rate range over the June-July period. Growth at the mid-point of this range would maintain M-2 near the upper end of the longer-run range adopted by the Committee for this aggregate, as shown in Chart 2. (10) The increase in M-2 growth in June-July reflects not only the strengthening of M-1 expansion, but also some pick-up in expansion of the interest-bearing component, due entirely to the growth of large denomination time deposits. Such deposits, as well as negotiable CD's not included in M-2, are expected to be issued aggressively so that banks may accommodate continued substantial growth in credit demands. Both the expected level of market rates of interest and shifts from savings accounts to the newly authorized 6-month money market certificate are likely to contribute to a contraction in savings accounts at both banks and thrift institutions. Commercial banks are expected to garner less new money from the new instrument than thrifts, and bank inflows of time deposits subject to rate ceilings are projected to moderate from their surprisingly well maintained pace of the last two or three months. 1/ The QI '78 base level for the FOMC's current longer-run ranges, shown in the chart, has been raised to reflect the benchmark revision in the series. Thus, the longer-run ranges now imply higher levels for the aggregates over the QI '78 to QI '79 period. To attain the QI '79 level of M-1 implicit in the mid-point of the long-run growth range set prior to benchmark revision would require that growth in M-1 from the revised QI '78 base be about 5 per cent rather than 5¼ per cent. Chart 1 RECENTLY ESTABLISHED M-1 GROWTH RANGES AND ACTUAL M-1 BILLIONS OF DOLLARS S % - Projection 01 '78-Q1 '79 /'* / 0 -360 350 #- 340 0 0 ,-* 04 '77-04 '78 3 50 S 340 _.. Q3 '77-03 .- '78 310 - 340 320 ~ 350 310 32'77- 340 Q2 '78 - 320 320 310 I I 977 I 1977 I I I I I 1 9 1978 i 1 I I 310 Chart 2 RECENTLY ESTABLISHED M-2 GROWTH RANGES AND ACTUAL M-2 BILLIONS OF DOLLARS 9% - Q1'78-Q1'79 , Projection - 875 S- S . - - 6 % 61/2% s 9% 0 - 860 - 845 -0 830 Q4'77-Q4'78 815 03'77-Q3'78 755 755 - 845 - S740 v 770 845 -830 9 Q2'77-Q2'78 0 890 -815 Q377-Q3800 755 740 7 85 770 755 740 1 1977 1 1 1978 8 -10(11) Reflecting the 25 basis point ceiling rate advantage enjoyed by them on the 6-month money market certificate, thrifts are expected to be able to use this instrument more effectively than banks. Both press and Redbook reports suggest that thrifts have aggressively promoted the new 6-month money market certificate, and sample data for early June indicate a moderate acceleration in aggregate deposit growth at such institutions from the pace of recent months. On balance, the staff is projecting that--under Alternative A--the recent regulatory changes will permit thrifts to maintain deposit flows this summer at near recent rates. (12) If the Federal funds rate were maintained around the currently prevailing levels of 7½ per cent, as envisioned under Alternative A, most other short-term rates would likely also show little net change over the very near term. Following their most recent increases, both commercial paper and CD rates now are aligned with the Federal funds rate in roughly the same relationship that has prevailed throughout the current expansion. Although the 3-month Treasury bill rate has risen in recent weeks, it still remains low relative to other short-term rates. However, its spread of 75 to 100 basis points below other rates is not likely to be closed significantly in the next few weeks. Available supplies will be depleted by Treasury redemptions of cash-management bills and by System purchases to offset the effects of the build-up in Treasury cash balances following the June tax date. With staff projections -11suggesting continued strength in the money stock, short-term rates could, nevertheless, begin to move higher during the intermeeting period if and as market participants come to anticipate further tightening of monetary policy. (13) Bond yields, too, could rise somewhat further if continued strength in the monetary aggregates adversely affects market expectations. But the volume of new security offerings is not in itself expected to exert additional upward pressure on rates over the weeks ahead. The volume of corporate bond offerings is expected to be quite moderate, and State and local bond issuance is expected to remain close to the reduced pace of recent weeks. Federal sector demands on long-term markets, while substantial, are unlikely to expand further from the pace of late May and early June. The Treasury is expected to maintain its semi-annual pattern of 15year bond offerings with the sale of about $1½ billion of such securities in late June, and FNMA also will be announcing an additional issue of bonds at that time. In the mortgage market, with credit demands remaining large, further increases in mortgage rates (and another near-term increase in FHA/VA mortgage rate ceilings) can be expected, even with the maintenance of thrift institution deposit inflows at around recent levels. (14) Alternative B calls for an increase in the Federal funds rate to around the mid-point of a 7½ to 8 per cent range between now and mid-July. M-1 growth would likely be in a 6½ to 10½ per cent annual rate range over June and July and M-2 growth -12in a 6½ to 10½ per cent range. The additional firming of ¼ percentage point in the funds rate under this alternative would likely be associated with upward adjustments in short-term market rates of the same magnitude, or perhaps a bit more since business short- and intermediate-term credit demands are expected to remain sizable. In addition to a probable further increase in the prime rate from the recently established 8¾ per cent level, banks and other lenders can be expected to continue to firm up non-rate loan terms and conditions. Borrowing from the Federal Reserve discount window would become even more attractive to member banks, and the resultant rise in such borrowings would increase pressure for another adjustment in the discount rate. (15) Bond yields could be expected to rise by less than money market rates, since the current level of long-term rates already appears to discount some further tightening of monetary policy. Moreover, pressures on the bond market would be eased by any temporary postponement of some scheduled bond issues, and a further shifting of financing to banks. However, upward pressures on primary and secondary mortgage rates are likely to intensify, as rising short rates slow thrift flows. (16) The staff believes that further substantial increases in interest rates will be required this summer and fall to restrain M-1 growth to the mid-point, or possibly even to the upper end, of the Committee's current 4 to 6½ per cent longer-run range. If M-1 expands at a 9½ per cent rate in QII, as currently estimated, -13- its growth would have to slow to a 3½ per cent annual rate over the following three quarters in order to achieve the 5¼ per cent midpoint of the Committee's QI '78 to QI '79 range. During those three quarters nominal GNP is expected to grow at about an 11 per cent annual rate, implying--as shown in Appendix II--rates of growth in velocity considerably larger than over the last two years. (17) Projections of the Federal funds rate over the four- quarter policy period are shown in Appendix I. Under Alternative A, the Federal funds rate might need to rise to 9 to 10 per cent by fall to restrain growth in the aggregates to within the longer-run ranges. Under Alternative B, restraint would be introduced earlier and, as a result, the level of the funds rate required in late 1978 and early 1979 would be somewhat less. As noted in recent Bluebooks, these pro- jections assume a resumption of a downward shift in money demand.1/ (18) With the projected increase in market rates of interest, the staff continues to believe that another adjustment in deposit interest rate ceilings will be needed to keep M-3 growth within its 7½ to 10 per cent range over the QI '78 to QI '79 period. 2/ Even with such an adjustment, our projections of financial flows call for continued erosion of the liquidity positions of all depository institutions, which will be required to draw down liquid assets and 1/ No allowance has been made in this projection for the effect on measured M-1 of automatic transfers from savings to demand deposits, scheduled to be authorized at commercial banks on November 1. 2/ Staff projections assume a 25 basis point increase in longer-term time deposit ceilings this fall. -14increase their reliance on managed liabilities to meet credit demands. Consequently, as the year progresses, the banks and thrifts may be expected to become much less willing lenders. -15Directive language (19) Given below are alternatives for the operational paragraphs of the directive.1/ The first formulation, like the directive adopted at the last meeting, places main emphasis on nearterm 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. In both formulations, variants are shown for particular phrases that are intended to be associated with the specifications discussed in the preceding section under alternatives A and B. "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, the ranges of May-June] tolerance for the annual growth rates over the JUNE-JULY[DEL: 3 to 8]____ period will be [DEL: [DEL: 4 to 9]____ TO____ TO ____ per cent for M-1 and 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 (A) AT ABOUT THE CURRENT LEVEL. (B) slightly (OR SOMEWHAT) above the current level. 1/ In a memorandum dated June 7, the staff proposed modified language for these operational paragraphs and for the preceding paragraphs dealing with the Committee's general policy stance and longer-run ranges for the aggregates. -16If, giving approximately equal weight to M-1 and M-2, it appears that growth rates over the 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 of to [DEL: 7¼ ____TO ____ per cent. 7¾] In the conduct of day-to-day operations, account shall be taken of emerging financial market conditions. 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 (A) to maintain about the prevailing money market conditions (or (B) to achieve slightly 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,1/ 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 (A) to maintain the weekly-average Federal funds rate at about the current level (or (B) to increase the weekly-average Federal 1/ If the Committee adopts this formulation, it may wish to replace the clause "at approximately the rates currently expected" with "at rates within the ranges of tolerance cited below." -17funds rate slightly or somewhat from the current level), so long as M-1 and M-2 appear to be growing over the June-July period at annual rates within ranges of tolerance of ____ cent and ____ to ____ per cent, respectively. to ____ per 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 ____ per cent. to ____ In the conduct of day-to-day operations, account shall be taken of emerging financial market conditions. 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. Chart 3 RECENTLY ESTABLISHED M-3 GROWTH RANGES AND ACTUAL M-3 BILLIONS OF DOLLARS -- 79 0178-Q1 1-' -Projection Projection 1530 010% - 1500 - 1470 1440 ,10% -- _ - Q4'77-Q4'78 s 1410 1380 1440 - 1410 1290 1290 - 10 % 1380 03'77-Q3'78 1260 -- 1440 8 % 1230 . _ . 0 4 - 1410 S1380 12900% % 1260 - 1440 Q2'77-2'78 1230- -1410 - 1290 1380 1350 1260 - 1230 1320 -' 1290 1260 1230 1977 1978 Chart 4 RECENTLY ESTABLISHED BANK CREDIT GROWTH RANGES AND ACTUAL BANK CREDIT BILLIONS OF DOLLARS 10o% 4 S-Projection Q1 '78-0 '79 970 - 930 - -910 o -- " -10% -890 S, . -930 910 7%% 9 10 Q4' 77-04'78 o 0 1- -- 890 -930 P%1 7Y "70 '77-02 '78 1977 1978 -' S 910 -J 890 APPENDIX I Projected Federal Funds Rate Alt. A Alt. B 1978--QII 7-1/4 7-3/8 QII 8 to 9 8-1/4 to 9-1/4 QIV 9 to 10 8-3/4 to 9-3/4 9 to 10 8-3/4 to 9-3/4 1979--QI Appendix II Implied Velocity Growth Rates V1 (GNP/M) 1 1978 1979 1979 Alt. B II 7.2 7.3 III 4.1 4.3 IV 8.2 8.0 I 8.8 8.7 V2 (GNP/M 1978 Alt. A 2) II 8.7 III 2.6 IV 4.2 I 4.9 Appendix III Comparison of Growth Rates--Old and Revised Money Stock Measures (Per cent annual rate) Annual Old Series M-1 Revised Series (1) (2) (2)-(L) (3) 7,9 0.1 Difference M-2 Revised Series Difference ()-(4) (4) (5) (6) 9.8 9.8 9.7 5.4 5.7 9.8 5.8 6.3 0.1 0.4 0.6 8.9 4.4 5.3 9.5 4.7 5.6 0,6 0.3 0.3 11.1 6.8 11.5 7.2 0.4 0.4 Old Series 1/ 1977 Quarterly 2/ 1977--QIV 7.2 7.5 0,3 1978--QI QII (proj.) 5.0 9.2 5.6 9.6 0.6 0.4 1977--Oct. Nov. Dec. 10.9 0.4 7.2 11.2 0.7 8.2 0.3 1978--Jan. Feb. Mar. 9.6 -1.1 3.5 10.3 -0.7 3.5 0.7 18.7 6.3 19.0 6.6 0.3 0,3 Monthly Apr. May I/ 2/ From QIV average to QIV average. Quarterly average. 0.3 1.0 0.4 m-- Appendix Table IV-1 MONEY STOCK--M-1 (Annual rates of growth, compounded quarterly)1/ 1975 1976 1977 1978 Base Period - Ending Period 741V 751 7511 751 751V 761 7611 76111 76IV 771 7711 77111 77IV 781 1 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 7.4 I 5.3 5.7 5.6 5.5 6.0 6.3 6.1 7.3 7.1 II 5.6 6.0 5.9 5.9 6.4 6.7 6.6 7.6 7.7 8.3 III 5.8 6.2 6.2 6.2 6.7 7.0 7.0 7.8 7.9 8.3 8.3 IV 6.0 6.3 6.3 6.3 6.8 7.1 7.1 7.8 7.9 8.1 8.0 7.7 I 6.0 6.3 6.3 6.3 6.7 6.9 6.9 7.4 7.4 7.5 7.3 6.7 5.7 Alt. A 5.8 6.0 6.0 6.0 6.2 6.4 6.3 6.5 6.5 6.4 6.1 5.7 5.3 5.2 Alt. B 5.8 6.0 6.0 6.0 6.2 6.4 6.3 6.5 6.5 6.4 6.1 5.7 5.3 5.2 1979 I 1/ Based on quarterly average data. Appendix Table IV-2 MONEY STOCK--M-2 (Annual rates of growth, compounded quarterly)Base Period Ending Period 1975 1976 1977 1978 74IV 7511 75 75IV 761 -r1 7611 - 76III 76IV 771 77II -- 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 10.0 10.0 10.4 10.3 10.2 10.5 9.8 9.3 9.3 I 9.5 9.7 9.7 10.0 9.9 9.8 9.9 9.3 8.8 8.6 * * ** 1979 751 771 77IV 781 9.9 9.7 8.9 *-k******** I Alt. 9.0 9.1 9.1 9.0 9.2 9.0 8.9 8.9 8.4 8.0 7.9 7.5 7.3 7.3 Alt. 8.9 9.1 9.0 9.0 9.1 9.0 8.9 8.9 8.4 8.0 7.8 7.4 7.2 7.3 Appendix Table IV-3 MONEY STOCK--M-3 (Annual rates of growth, compounded quarterly)1/ Base Period Ending Period 1975 1976 1977 1978 741V 1/ 7511 75111 75IV 761 7611 76111 761V 771 7711 77111 771V 781 8.3 I II 10.6 13.0 III 11.5 13.1 13.2 IV 11.1 12.0 11.5 9.8 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 11.9 12.2 12.1 12.0 12.2 12.2 12.2 12.4 11.7 11.4 11.8 11.2 I 11.6 11.8 11.7 11.6 11.8 11.7 11.6 11.6 11.0 10.5 10.5 9.6 8.0 **** 1979 751 * I Alt. 10.6 10.8 10.6 10.4 10.5 10.3 10.1 10.0 9.1 8.8 8.2 7.7 7.6 Alt. 10.6 10.7 10.5 10.4 10.4 10.2 10.0 9.9 8.9 8.7 8.1 7.5 7.4 Based on quarterly average data. 6/16/78 CHART I MONEY MARKET CONDITIONS AND INTEREST RATES MONEY MARKET CONDITIONS II INTEREST RATES Short-term PER CENT WEEKLY AVERAGES FEDERAL FUNDS RATE I S5 RESERVES BILLIONS OF DOLLARS 2 f 1976 1977 it, 1978 I 1976 1977 1978 1976 1977 1978 CONFIDENTIAL (FR) Class II-FOMC 6/16/78 II CHART ACTUAL AND PROJECTED RESERVES BILLIONS TOTAL NONBORROWED ANNUAL RATE, PER CENT S MONTHLY GROWTH RATES -20 TOTAL I+ -- u NONBORROWED 20 J F M A M J J 1977 A S O N D J F M A M J J 1978 A S O N D Table 1 MONETARY AGGREGATES JUNE CONFIDENTIAL (FR) CLASS II-FOMC 16, 1978 ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED Money Supply Period Narrow _(M11 1 ) Total Broad U.S. Govt. (M2) Deposits 1/ Time & Savings Deposits Total Il 1 ther Than CD's Thavins I Nondeposit Sources of CDs r ---v Funds 2 MONTHLY LEVELS-SBIL 340.1 345.4 347.2 (349.71 1978--MAR. APK. NAY JUNE t 820.2 827.8 832.5 (838.2) ( 562.1 565.9 572.4 (576.6) 7.9 8.3 7.3 10.6) 220.8 221.4 221.7 (221.3) 480.1 482.4 485.3 (488.5) 259.3 61.0 263.7 (267.21 ( b2.0 b3.4 87.1 68.1) o?. 1 65.7 67.6 ANNUAL GROWTH QUARTERLY 1977--4TH QTR. 1978--15T 2ND 7.0 6.2 QTR. OTR. ( 4.0 11.31 14.5 6.2 ( 8.8) 1 12.6 10.3) 1.6 1.3 7.8 S7.0) 2.4 0.9) ( 13.3 64.0 12.6 12.2) 43.2 2.6b) 44.9 QUARTERLY-AV L977---4TH OTR. 7.2 8.0 13.0 8.5 5 .4 11.4 1978--1ST OTR. 2ND OTk. 5.0 9 .3) 6.4 7.81 1 13.1 10.9) 1 7.5 6.8) 2.2 1.5) 12.0 11.7) 5.3 11.1 6.8 S 8.2) 1 11.4 8.1 13.b 8.8) 6.5 5.7 7.2 S7.9) 7.5) 1 11.3) ( 1 ( i 50.0 35.4) MON1HLY 1978--MAR. APR. MAY JUNE 3.5 18.7 6.3 8.6) NAY-JUNE WEEKLY ( 1 7.6) 12.2 7.9 12.4 15.91 39.3 20.5 53.2 13.b) -0.3) 14.3) 33.b) LEVELS-SBIL 1978-MAY JUNE NOTES 1/ 2/ 7.5) 0.5 3.3 1.6 -2.2) 3 10 17 24 31 7 P 350.5 346.3 346.3 345.4 349.7 833.6 830.3 b31.6 831.5 u37.3 7.5 6.9 7.4 6.5 5.7 568.8 570.7 572.2 573.7 575.3 483.1 484.0 485.3 486.1 487.6 221.3 221.8 221.6 221.8 221.8 261.8 262.2 263.7 264.4 265.7 85.8 86.7 86.9 87.6 87.b 349.7 637.4 8.6 575.1 487.8 221.5 266.3 67.3 67.3 68.9 65.0 68.9 67.8 DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. P - PRELIMINARY INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. SECURITIES SOLD UNDER AGREEINCLUDES BORROWINGS FROM OTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, AND OTHER LIABILITIES FOR BORROWEO MONEY, PLUS GRUSS LIABILITIES 10 OWN FORtlNN BRANCHES 'MENTS TO REPURCHASE, LOAN< SrLO TO AFFILIATES, LOAN RPS. AND UTHER MINOR ITEMS. (EURODOLLAR BORROWINGS). Table 1-A TIME AND SAVINGS DEPOSITS AT ALL COMMERCIAL BANKS SEASONALLY ADJUSTED EXCEPT AS NOTED OUTSTANDING is 1 16, 1976 Time Deposits Total Individual niiual Nonprofit Business (NSA) Government (NSA) 2 3 4 56 Memo: Large Memo. Large Small Negotiable CD's Denomination Denomination TotLarge 8 997 BILLIONS) 1977--SEPT. DCT. NOV. DEC. 19" 8--JAN. FEB. MAR. APR. MAY CHANGES Time and Savings JUNE Savings Deposits l -- Total STime Period CONFIDENTIAL (FR) CLASS II-FOMC i 1.8 219. 525.9 531.9 540.2 545.2 203.2 204.1 204.2 204.2 205.2 205.4 ;05.6 206.4 206.7 219.4 219.6 220.7 220.9 221.0 221.6 551.0 557.5 56i2,9 566.8 573.6 222.0 5.1 5.0 4.5 4.5 5.0 5.2 5.0 4.9 4.7 10.6 10. 10.8 10.b 10.5 10.4 10.4 10.4 10.5 163.6 164.5 164.0 165.0 166.2 166.5 16b.2 169.8 171.1 143.6 307.1 31 .3 320.7 325.7 330.3 336.6 342.0 345.2 147.9 156.8 160 6 164.1 170.1 173.7 175.4 180.5 351.6 63.8 66.4 70.9 74.0 76.3 79.4 82.0 83.4 87.1 4( BILLIONS) 17.7 1977 YEAR 13.9 37.9 11.3 QUARTERLY AVERAGES 1977--I 10.4 13.1 17.1 IV 1.2 0.8 0.4 0.3 2.9 18.0 19 78-I MONThLY 10.5 4.6 3.9 14.8 II -0.3 1.4 0.5 -0.3 1.8 -0.2 -1.2 -0.6 4.5 5.7 1.2 14.2 1.0 -0.7 12.7 3.4 6.6 3.3 1.4 0.4 16.7 14.2 Z.5 6.8 -0.1 -0.5 0.0 0.5 0.2 -0.2 -0.1 -0.2 5.2 4.3 8.9 3.8 3.5 6.0 3.6 1.7 5.1 0.9 -0.5 1.0 1.2 0.3 1.7 1.6 1.3 2.6 5.9 0.7 7.1 AVERAGES 1977-OCT. NOV. DEC. 1978--JAN. FEB. MAR. APR. MAY 6.0 8.3 5.0 5.8 6.5 5.4 3.9 6.8 -- MOTES COLUMNS I1), (2), AND (9) ON AGGREGATES. FIGURES IN COLUMNS (1)i DERIVED FROM DATA REPORTED BY SMALL GOVERNMENTAL UNITS-COLUMNS (4) AND WEDNESDAY bY LARGE COMMERCIAL BANKS SHIPS. -0.1 0.3 0.0 -0.3 -0.1 0.0 0.0 0.1 0.6 -0.2 0.2 1.1 0.2 0.1 0.6 0.4 - ~ A - I 8.4 5.0 4.6 6.3 5.4 3.2 6.4 A 4.5 3.1 2.3 3.1 2.6 1.4 3.7 I THIS TABLE CORRESPOND TO COLUMNS (4), 16), AND (,). RESPECTIVELY, ON TABLE I-MONETARY (2), AND 16) REFLECT DAILY DATA REPORTED BY MEMbER bANKS, WITH ESTIMATES FOR NUNMEMbER BANKS MEMBER 6ANKS. BENCHMARKED TO NONMEMBER CALL REPORT FIGURES. SAVINGS DEPOSITS OF BUSINESS AND (5)-- AND LARGE DENOMINATION TIME DEPOSITS -- LOLUNN (7)--REFLECT BREAKDOWNS REPORTEDO ACH BLOWN UP TO REPRESENT DEPOSITS AT ALL COMMERCIAL BANKS ON IkH BASIS OF CALL kEPOR RELATION- CONFIDENTIAL (F.R.) CLASS II-FOMC TABLE 2 BANK RESERVES ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED BANK RESERVES Period JUNE 16, 1978 REQUIRED RESERVES Total Nonborrowed Reserves Reserves Monetary Base Total Required Private Demand Total Time Deposits Gov't. and Interbank 1 2 3 4 5 6 7 36,667 36,954 37,293 (37,6791 36.339 36,397 36,081 (36,9691 MONTHLY LEVELS-$MILLIONS 1978-MAR. APR. MAY JUNE 130.464 131,337 132.680 (133,930) 36.468 36,806 37,054 (37,553) 21,420 21.598 i1.879 (21,993) 13,241 13,293 13,426 (13,600) ( 1,807 1,915 1,747 1,960) PERCENT ANNUAL GROWTH QUARTERLY 1977-4TH OTR. 7.6 7.1 1978-1ST QTR. 2ND QTR. ( 5.8 11.0) ( 9.6 8.6 6.9) ( 7.8 10.6) 7.3 ( 5.7 11.91 5.2 -1.1 10.7) ( 13.5 ( 12.9 10.81 (tUAR1ERLY-AV 1977-4TH QTR. 197--1ST 2ND 6.1 QTR. QTR. ( 8.5 6.3) 3.5 ( 14.5 1.7) -8.6 9.4 11.0 12.4) ( -6.2 1.9 -10.4 29.5) 11.83 1 9.4) 9.1 9.6 8.1) 6.3 ( 8.3 7.0) ( 3.0 7.6 12.3 11.3) ( -7.3 11.1 8.1 16.2) I 11.81 ( 12.2) 1 6.1 3.6 4.0) 9.1 ( 12.8 11.b) -20.6 10.0 15.6 ( 6.31 4 19.4 4.7 12.2 15.4) 1 ( 13.9) ( MONTHLY 1978-MAR. APR. MAY JUNE I MAY-JUNE 1 11.0) MEEK:LY LEVELS-SMILLIONS 1978-MAY JUNk NOTE: 3 10 17 24 31 37,285 37.218 37,484 37,022 37#450 35,621 35,530 36,618 36*321 36,051 132,326 132,171 132,857 132,546 133,299 36,970 37,035 37,478 36,775 36,963 21,724 21,826 22,241 21,747 21,769 13,304 13,360 13,416 13,470 13,519 1,942 1,849 1,821 1557 1,676 7 14 37,134 38,140 36,488 37,345 133t026 134*218 37,065 38.013 21,629 22,117 13,567 13,609 1,870 2,288 RESERVE SERIES HAVE BEEN ADJUSTED TU REMOVE DISCONTINUITIES ASSOCIATED WITH f DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. CHANGtS IN RESERVE REQUIREMENT RAIIO. TABLE 3 NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES1/ ($ million, not seasonally adjusted) Treasury Bills Net h ne 2/ Change Treasury Coupons Net Purchases 3/ Over 1-5 5 10 Total 87 207 320 337 472 517 789 579 797 3,284 3,025 2,833 539 500 434 1,510 1,048 758 167 129 196 1,070 642 553 1,582 1,415 1,747 6,202 5,187 4,660 186 192 109 116 99 997 526 681 628 325 171 96 166 165 152 128 108 1,680 959 1,021 1,001 -2,655 345 1,123 459 247 2,175 1977--Dec. 2,798 93 628 166 108 1,001 1978--Jan. Feb. Mar. -627 -2,695 668 56 311 89 100 556 288 813 370 147 1,618 Apr. May 1,670 -620 100 53 235 290 191 101 145 74 671 519 -490 7,232 1,280 -468 863 1972 1973 1974 1975 1976 1977 4,361 1977--Qtr. Qtr. Qtr. Qtr. I II II] IV 1978--Qtr. I 1978--Apr. 1,164 2,126 886 Within I year Federal Agencies Purchases 4/ Net 5 Within 1 year -5 5 - 10 ver 10 Total 592 400 1,665 824 469 792 1,059 864 3,082 1,613 891 1,433 406 726 386 707 -- -386 177 S - -- ---- ---- 145 -- 707 -- 5 12 19 26 May 3 - 10 17 24 53 7 14 1p 28 -- - - - 41,9 Net Change Outright Holdings Total 5/ 2,738 3,666 4,273 -643 -4,771 4,175 -2,331 34 -555 -1,133 4,474 3,568 -71 -2,717 2,233 -7,149 4,141 1,874 2,341 -135 ---- -1,026 -699 1,004 108 1,499 563 -7,652 636 1,693 2,671 - 2,284 - -- -- ---- -- 238 344 -291 ---- -- -- -- -- -- -426 - - 290 101 --74 -- -- -- -- -- ------ - 135 631 176 115 1,057 12.4 29.7 11.8 8.9 62.7 1.7 3.8 1.5 - - .8 7.9 / -1,358 -46 -154 1,272 3,607 -2,892 - 519 -- Net R 1,631 9,273 6,303 7,267 6,227 10,035 - S S - 2 LEVEL--June 14 -- S 31 June STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JUNE 16, 1978 -415 -7,568 4,507 16 253 333 -3,973 -3,060 112.5 -8.0 (in billions) 1/ 2/ 3/ 4/ 5/ 6/ 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 (4) and matched sale-purchase transactions (-). TABLE 4 SECURITY DEALER POSITIONS AND BANK POSITIONS (millions of dollars) STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JUNE 16, 1978 ... ... U.S. Govt. Security Member Bank Reserve Positions Underwriting * Syndicate Positions Dealer Positions Municipal Bonds Reserves Total 3,017 -1,445 487 116 513 -111 1,861 20 5,625 278 2,043 -739 349 151 370 -57 1977--May June 3,072 4,752 123 206 228 217 July Aug. Sept. 3,899 2,533 4,812 -309 -933 -313 Oct. Nov. Dec. 4,142 3,617 4,257 1978--Jan. Feb. Mar. Apr. Bills Coupon Issues 7,234 1,729 1978--High Low 1977--High Low May 1978--Apr. 5 12 19 26 May June 3 10 17 24 31 7 14 21 28 Corporate Bonds Borrowing at FRB** Seasonal Basic Reserve Deficit** 8 New York 38 Others 131 8 -9,151 -4,234 -13,975 - 8,:06 1,688 172 91 25 -8,224 -3,480 -14,602 - 8,533 213 154 206 262 30 54 -5,693 -5,341 -10,175 -10,332 209 199 230 275 200 209 323 1,084 626 60 102 112 -6,391 -5,581 -7,333 -11,012 -11,452 -11,120 -360 610 804 186 210 367 210 251 193 1,305 863 570 112 83 55 -6,480 -6,971 -7,403 -11,511 -11,825 -11,350 4,127 3,418 2,713 327 1,492 293 197 268 268 243 200 484 406 328 32 49 47 -6,047 -4,980 -6,778 -12,299 -12,603 -11,060 3,183 *1,023 -183 202 264 149 2391 557 2 2 1, 1 p 44 92p -6,196 -4,038 -12,998 -11,653 -310 -351 33 189 186 185 248 275 12 305 -57 304 172 238 809 45 37 36 49 -6,383 -8,224 -6,336 -5,356 -10,673 -14,602 -13,831 -12,667 -287 189 -739 *-641 *51 281 191 290 294 213 315 183 6 247 4871 1,664 1,688 866 701 399 1, p 60 72 91 104 115p -3,641 -4,884 -4,357 -3,602 -3,480 -12,215 -12,180 -11,933 -11,731 -10,529 646p 794p lllp 6 10 p -6,889p -5,127p -1 ,435p -13,776p 4,398 4,083 3,767 1,325 1,624 1,249 278 *531 *1,929 *3,835 *3,918 740 *5 2 *752 *81 20 60 p 174 165p 4 NOTE: Government security dealer trading positions are on a commitment basis. Trading positions, which exclude Treasury securities financed by repurchase agreements maturing in 16 days or more, are indicators of dealer holdings available for sale over the near-term. Underwriting syndicate positions consist of issues still in syndicate, excluding trading positions. The basic reserve deficit is excess reserves less borrowing at Federal Reserve less net Federal funds purchases. Weekly data are daily averages for statement weeks, except for corporate and 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) Short-Term s CD's New Long-Term Corp.-Aaa unicipa Home Mortgages Utility nlcpa Secondary Market N ew is Recent ly B uyerCny. Auc. Sec. Offered (16) (14) (15) (12) (13) (11) (1) T y B TIssueMarket 1-yr 3-mo (3) (2) (7) (8) (9) (10) 1977--High Low 6.65 4.47 6.27 4.41 6.62 4.67 6.51 4.56 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 7.49 6.58 6.63 6.16 7.41 6.55 7.16 6.42 7.58 6.65 7.54 6.68 8.50 7.75 8.19 7.40 8.35 7.72 8.49 8.01 9.04 8.61 9.10 8.48 6.19 5.58 9.70 8.98 9.86 9.13 9.04 8.43 1977--May June 5.35 5.39 4.96 5.02 5.43 5.41 5.19 5.20 5.16 5.35 5.26 5.42 6.41 6.75 6.55 6.39 7.26 7.05 7.74 7.64 8.33 8.08 8.31 8.12 5.75 5.62 8.83 8.86 8.74 8.75 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 5.35 5.81 5.99 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 6.41 6.43 6.38 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 6.70 6.78 6.79 6.44 6.45 6.29 6.80 6.86 6.82 6.68 6.74 6.64 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 6.89 7.36 6.29 6.41 6.96 7.28 6.70 7.02 6.84 7.20 6.82 7.06 8.00 8.27 7.85 8.07 8.06 8.25 8.32 8.44 8.90 8.95 8.85 8.98 5.80 6.03 9.36 9.57 9.44 9.66 8.71 8.90 5 12 19 26 6.86 6.74 6.78 7.00 6.39 6.35 6.20 6.22 6.94 6.95 6.88 6.99 6.72 6.74 6.56 6.78 6.75 6.83 6.83 6.95 6.76 6.80 6.79 6.86 8.00 8.00 8.00 8.00 7.82 7.81 7.83 7.95 8.04 8.04 8.04 8.13 8.31 8.33 8.30 8.36 8.88 8.88 8.93 8.92 8.82 8.84 8.84 8.91 5.76 5.74 5.79 5.89 9.28 9.33 9.38 9.43 9.44 -9.44 -- 8.70 8.67 8.67 8.81 May 3 10 17 24 31 7.27 7.32 7.34 7.43 7.36 6.38 6.39 6.30 6.43 6.59 7.16 7.21 7.28 7.37 7.40 6.94 6.99 7.01 7.14 7.16 7.05 7.13 7.20 7.28 7.36 6.91 6.96 7.06 7.14 7.19 8.00 8.21 8.25 8.25 8.46 7.99 8.06 8.07 8.15 8.19 8.16 8.25 8.26 8.30 8.34 8.40 8.44 8.44 8.47 8.49 -8.87 8.95 9.02 -- 8.90 8.92 8.98 9.10 9.05 5.98 5.99 5.98 6.16 6.19 9.48 9.55 9.58 9.68 9.68 9.52 -9.63 -9.83 8.80 8.86 8.85 8.96 9.04 June 7 14 21 28 7.47 7.49 6.61 6.63 7.35 7.41 7.10 7.12 7.35 7.58 7.34 7.54 8.50 8.50 8.16 8 8 .1 p 8.30 8.35p 8.47 4 8. 7p 9.04 9 2 .0 p 9.06 8.96p 6.18 6.16 9.70 n.a. -9.86 8.99 9.01 Daily--June 8 15 7.50 6.63 7.37 - - 7.50p 6.66 7.47 - - 7.46 7.64 8.50 8.50 8.15 8 8 .1 p 8.30 8.36p 8.47 8 4 6 . p Federal Funds 1978--Jan. Feb. Mar. Apr. May 1978--Apr. Auction 6-mo (4) NYC (5) Comm. Paper 90-119 DayIssue (6) STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JUNE 16, 1978 Bk Bank Ry U.S. Govt.-Constant Maturity Yields 20-yr NOTE: Weekly data for columns 1, 2, 3, 6, and 7 are statement week averages of daily data. Weekly data in column 4 are average rates set in the auctions of 6-month bills that will be issued on the Thursday following the end of the statement week. Data in column 5 are 1-day Wednesday quotes. For columns 8 thrcuht Columns 12 and 13 are 1-day quotes for Friday and Thursday, respec11, the weekly date is the mid-point of the calendar week over which data are averaged. mortgages with 80 Column 14 is an average of contract interest rates on commitments for conventional first tively, following the end of the statement week. Column 15 gives 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. The FNMA Column 16 is a 1-day quote for Monday preceding the end of the statement week. FNMA auction data for Monday preceding the end of the statement week. GNMAyields are average net auction yield is the average yield in bi-weekly auction for short-term forward commitments for Government underwritten mortgages. 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. JUNE l6, 1978 1-A MONEY AND CREDIT AGGREGATE MEASURES Appendix Table Nonborrowed Monetary Base B ik ,an Total Loans and Invest- 2 3 4 -0.3 1.0 5.2 3.2 1.2 2.7 5.9 7.0 8.3 11.3 4.4 5.7 7.9 8.3 10.9 9.8 11.0c 12 . 11.7 6.5 7.1 10.1 I Bank Reserves RreCredit Period Total Meney Stock Mesoure My M2 M M4 MS M 9 10 5 6 M 7 _ments 1 / ANNUALLY: 1915 1976 1977 3.9 6.U 7 4 (PER CENT ANNUAL RATES OF GROWTH) 9.6 10.3 11. 1. 9.o 11.5 11 10 .U 10.0 11.9 SEMI-ANNUALLY: 2N0 HALF 1976 3.0 3.2 6.6 9.1 5.5 10.8 1i.7 7.6 10.8 9.b 9.1 1ST HALF 2ND HALF 1977 19717 3.5 .6 2.9 2.6 7.3 9.0 11.3 1IL.7 7.6 7.9 10.1 9.1 11.3 11.5 9.3 10.3 10.8 12.1 10. : 12.2 10.7 12.5 2ND QTR. 3RD QTR. 4TH QTR. 1977 1977 1977 3.3 8.0 7.1 1.4 3.9 1.8 7.9 9.2 9.6 12.1 10.3 9.5 7.5 9.0 6.6 b.5 10.1 7.4 9.9 12.7 9.4 8.4 9.b 11.6 9.b 12.3 11.b b.5 12.9 11.9 9.2 12.5 13.2 QTR. 1978 5.8 6.6 7.9 9.5 4.4 6.6 7.1 9.7 9.0 9.7 9.5 OUARTERLY: 1ST , QUARTERLY-AV 2ND OTR. 3RD QTR. 4TH QTR. 1977 1977 1977 2.9 7.3 6.1 1.8 1.7 3.5 7.3 8.8 9.1 12.1 11.1 9.9 8.1 8.1 7.5 9.0 9.9 6.2 10.2 11.9 10.7 8.2 9.5 10.9 9.6 11.6 12.3 9.0 11.4 12.6 9.9 11.4 13.2 1ST 1978 8.5 14.5 9.6 9.6 5.6 b.9 7.7 10.4 9.8 10.4 10.8 1977--MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1.3 0.6 15.5 7.8 0.5 9.8 5.3 5.9 -3.3 -1.4 13.5 -17.4 15.7 -13.4 20.9 16.1 6.4 7.1 11.1 8.4 8.0 10.0 8.1 10.4 13.5 9.6 12.8 10.5 7.2 12.9 9.2 6.3 1.5 7.1 11.8 6.2 8.7 11.2 0.7 8.2 5.5 9.1 1.5 7.7 9.0 9.8 5.8 6.3 8.1 10.3 14.0 11.7 12.2 11.9 6.1 7.9 7.0 b.9 11.9 7.5 9.2 12.7 11.6 10.0 6.9 10.2 12.9 11.5 12.2 13.5 11.6 10.1 7.3 8.0 13.1 12.o 12.6 13.8 11.7 10.0 8.U 9.1 13.0 12.1 12.1 14.5 13.3 11.4 1978--JAN. FEB. MAR. APK. MAY P 15.2 10.9 -8.6 9.4 11.0 b1.3 13.7 -6.2 1.9 -10.4 13.5 7.0 3.G 7.6 12.3 13.6 7.9 6.9 18.5 15.7 10.3 -0.7 3.5 19.0 6.6 9.5 4.1 5.6 11.5 7.2 9.1 5.7 6.5 9.b 7.1 11. 8.5 8.7 12 . 11.3 10I.5 7.9 8.3 10.4 9.7 i1.7 b.9 b .3 9. 9.4 12.0 0TR. MONTHLY! 1/ 2/ P - 1 BASED ON DATA ADJUSTED FOR CHANGES BASED ON QUARIERLY AVERAGE DATA. PRELIMINARV IN RtSERVE REQUIREMENTS. 8.0 7.7 9.5 9., JUNE Appendix Table 1-B 16, 1976 MONEY AND CREDIT AGGREGATE MEASURES SEASONALLY ADJUSTED, BILLIONS OF DOLLARS Bnk Reserves 1 Money Stoek Meaures Bik Creit Total Perikod Total borrowed Base Sments and M1 M2 M3 M4 M5 M6 M7 Invest- ANNUALLY: 33,969 34,441 36,143 33,839 34,388 35,573 110,345 118,062 127,971 726.2 788.9 675.5 294.5 31'.6 331.2 664.1 739.6 806.4 1091.8 1235.6 1375.0 745.4 34,805 34821 34*599 34,559 121,448 122.163 627.1 633.7 322.4 324. 768.4 774.2 JULY AUG. SEPT. 35,271 35,501 35,517 34.948 34.440 14,892 123.294 124,155 124,984 842.6 b50.0 855.1 327.5 329.2 331.6 OCT. NOV. DEC. 35,808 35,965 36,143 34,503 35,103 35,573 126,025 126,872 127,971 864.3 870.9 875.5 1978-JAN. FEB. MAR. 36,600 36,933 36,667 36,116 36,526 36t339 129.409 130,159 10,4 64 369954 37.293 36,397 36.081 131,337 132.681 26 36,627 37,381 36,694 36,456 37,143 35,885 3 10 17 24 3 1P 37,285 37,218 37,484 37022 37,450 7P 37,134 1975 1916 1977 682.4 1173.2 1298.3 1449.0 1307.3 1436.7 1601.5 1350.3 1464.0 1663.4 1290.9 1302.0 631.3 837.5 1353.6 1365.3 1-95.9 1506.6 1549.7 1561.4 782.9 767.9 793.6 1317.2 1330.0 1343.5 845.8 851.1 857.6 1360.0 1393.2 1407.4 1523.0 1539.0 1555.1 1578.3 1594.4 1610.3 334.7 334.9 337.2 800.3 804.2 806.4 1356.8 1360.0 1375.0 866.7 b75.1 682.4 1423.2 1436.9 1449.0 1573.0 1588.3' 1601.5 1629.8 1647.8 1663.4 885.4 891.2 896.7 340.1 339.9 340.9 614.8 814.0 091.1 621.8 1385.4 1392.0 1399.5 1461.7 1471.3 1481.5 1617.1 1629.1 1640.3 1680.0 1692.0 1702.9 910.5 922.4 346.3 346.2 829.7 634.7 1410.9 1419.3 913.2 1494.3 1506.4 1653.7 1666.7 1716.4 1729.7 130t495 131,776 131,431 344.7 345.4 347.5 827.6 b29.3 831.5 910.1 912.5 915.9 35,621 35,530 36,618 36,321 36,051 132,327 132,170 132,657 132,547 133,300 351.5 347.3 347.3 346.5 350.8 a35.6 832.4 633.6 833.6 639.6 921.4 919.1 920.7 921.4 927.3 36,488 133,026 350.9 840.2 927.6 b62.3 MONTHLYs 1977--MAY JUNE APR. MAY P 897.4 903.9 921.6 WEEKLY: 1978-APR. MAY JUNE 12 19 WEEKLY DATA ARE DAILY AVERAGES POR STATEMENT WEEKS. MUINTHLY DATA ARk DAILY AVERA6tS. WEEKLY DATA ARE NOT AVAILABLE M3 45, M6, N7, TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS. L/ SASED ON DATA ADJUSTED FOR CHANGES IN RESERVE ktEUIREnENTS. DATA SHOWN IN MILLIONS OF DOLLARS. P - PRELIMINARY NOrESz FOR JUNE 16, APPENDIX TABLE 2-A 197 COMPONENTS OF MONEY STOCK AND RELATED MEASURES Mutual Time and Savings DepoHsts Period Snd avings Credit Union Shares Other Short Term Private U.S.Gov't Short-term Securitie Assets 11 1 Currncy mand Deposits 1 2 3 4 6.9 9.6 9.5 2.9 4.4 7.3 7.9 8.0 11.5 11.7 15.0 11.3 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 Ib.8 19.4 6.2 6.9 6.6 338. 5.5 10.9 -0.7 13.9 24.8 Ttl To L Tol Total Other Thn CD's an Savings Other 2/ CD's Bank SAL Sharesi 5 g 7 8 (Per cant *nnual rates of grow* 9 Savings Bonds/ 0 10 11 12 ANNUALLY: 1975 1976 1977 2/ SENI-ANNUALLY: 2ND HALF 1976 7.8 4.7 9.3 14.9 19.8 10.6 -21.7 15.5 18.1 7.2 -4.6 13.0 IST HALF 2ND HALF 1977 1977 8.7 9.8 7.2 7.i 10.4 11.9 11.9 10.0 15.3 6.4 8.9 13.3 0.6 24.9 12.9 14.5 16.6 20.6 6.4 6.5 2.1 19.6 25.6 21.2 2ND tTR. 1977 3RD QTR. 1977 4TH QTR. 1977 8.7 10.0 10.7 7.1 U.7 5.4 8.9 9.9 14.7 9.2 10.8 7.9 5.5 10.9 1.5 12.5 10.8 13.6 7.1 3.2 64.0 11.6 16.2 11.6 15.7 21.7 16.8 6.6 6.5 6.4 -14.4 31.0 19.4 29.8 2.9 48.6 1ST 0TR. 1978 QUARTERLY-AV: 9.5 2.6 13.0 6.2 2.6 13.2 43.2 6.9 17.9 6.3 27.4 4.5 2ND QTR. 1977 3RD QTR. 1977 4TH QTR. 1977 8.8 9.1 10.3 7.8 7.7 6.6 8.3 10.3 13.1 9.7 11.2 8.6 8.8 7.3 5.4 10.5 14.6 11.6 -1.9 4.5 44.9 11.6 14.6 13.9 14.9 20.1 20.0 6.6 7.0 5.9 -1.2 11.7 26.7 39.3 11.2 30.4 1978 10.5 3.9 13.4 7.9 2.6 12.7 50.0 8.1 18.2 6.3 25.6 22.9 1977--AY JUNE JULY AUG. SEP1. OCT. NOV. DEC. 10.1 5.7 12.8 5.6 11.2 11.1 8.3 12.3 -1.5 7.5 11.0 6.9 7.9 11.3 -1.9 6.8 10.5 10.1 11.9 8.3 9.2 13.7 18.7 11.1 8.4 10.5 14.9 8.4 6.9 9.1 9.5 4.9 5.7 0.0 6.2 16.3 10.0 4.4 -1.1 1.1 10.9 20.1 22.8 1.5 7.9 13.3 18.5 6.6 25.3 7.6 -9.5 7.6 11.4 48.9 81.3 52.5 11.6 12.0 14.3 17.1 16.6 14.0 11.0 9.5 14.5 17.2 19. 19.5 24.7 21.5 15.8 18.2 6.5 6.5 8.1 6.4 4.6 6.4 6.3 6.3 -24.1 -e1.1 19.7 44.0 27.2 29.9 19.4 8.0 29.7 22.3 10.9 -2.2 0.0 1978--JAN. FEB. MAR. APR. MAY P 10.8 9.4 8.0 7.9 11.8 10.1 -4.3 1.9 23.5 4.2 12.8 14.2 11.6 8.3 14.4 8.9 8.6 7.0 6.2 7.7 6.0 1.1 0.5 3.3 i.2 11.4 15.1 12.6 8.8 12.4 37.3 48.8 39.3 20.5 53.2 7.8 6.2 0.6 6.4 7.0 17.9 15.2 20.0 14.7 12.1 6.3 6.2 6.2 6.2 6.1 41.2 30.6 9.0 4.4 5.9 21.3 -3.8 -3.8 1.9 5.7 QUARTERLY: 1ST QTR. MONTHLY: 1/ GROWTH RAITE ARE bAbEut UN ElIIMATEU PREVIOUS MON1H REPOITEU DATA. cr niu nkQTCIY V UVFAUr.F DATA. MONIHLY AVERAGE LEVELS UEkIVtL 8Y AVERA6ING END OF LURRNT MONTH AND END OF 34.8 54.9 50.5 APPENDIX TABLE 2-B JUNE 16, 1978 COMPONENTS OF MONEY STOCK AND RELATED MEASURES Mutual Savin Bank & S&L Shares and Savinls Time Time and Savings Deposits D its Currency Demand Deposits Period Other Than CD's Saving Other ot ____ l Total Total ISvins C Other Shares Short. Term U.S Gov't c Other Private Shortterm Assets 10 11 12 Credit Union Savings Shares Bonds D ill Sac _ at 1 Non total Gov't Deposit Demand Fund Deposits 13 1 2 3 4 5 6 73.7 60.7 220.8 231.9 248.6 450.9 489.7 545.2 369.6 427.0 471.2 160.5 201.9 88.6 219.6 209.1 225.1 251.6 81.3 6b.7 74.0 394.8 456.9 519.8 33.0 39.1 46.8 67.2 71.9 76.6 66.9 66.6 75.8 43.0 47.3 61.9 51.1 61.6 83.8 84.2 238.6 240.1 508.9 513.2 233.0 236.9 62.9 63.3 41.8 449.9 213.0 213.0 480.6 JUNE 485.4 42.4 73.8 74.2 68.3 67.1 53.6 54.8 53.8 53.2 JULY AUG. SEPT. 85.1 85.5 86.3 242.3 243.7 245.3 518.3 521.9 525.9 455.5 456.7 462.1 214.1 l17.0 218.8 241.4 241.7 243.3 62.8 63.2 63.8 491.2 498.2 505.1 43.1 43.8 44.7 74.7 75.1 75.4 68.2 70.7 72.3 55.3 55.2 55.2 53.6 55.9 57.5 OCT. 87.1 87.7 86.6 247.6 247.2 246.6 531.9 540.2 545.2 465.6 469.3 471.2 219.6 219.4 219.6 246.0 249.8 251.6 66.4 70.9 74.0 511.0 515.7 519.8 45.5 46.1 46.8 75.8 76.2 76.6 74.1 75.3 75.8 56.8 59.4 61.9 58.3 60.0 61.6 551.0 557.5 562.9 474.7 478.1 460.9 220.7 220.9 221.0 254.0 257.2 259.9 76.3 79.4 90.7 250.7 249.8 250.2 523.2 525.9 528.8 47.5 48.1 48.9 77.0 77.4 77.8 78.4 80.4 81.0 63.0 62.8 b2.6 66.0 66.7 67.1 91.3 92.2 255.1 256.0 566.8 573.6 483.4 486.5 221.6 222.0 261.8 83.4 o7.1 531.6 534.7 49.5 264.5 78.2 78.6 81.3 81.7 62.7 o3.0 65.7 67.6 12 19 26 90.9 91.3 565.4 567.1 568.4 482.9 463.9 484.0 222.3 221.7 221.3 260.6 262.2 91.5 253.8 254.2 256.0 262.7 62.5 83.2 b4.4 66.4 62.0 66.5 3 10 91.9 92.0 92.2 92.3 92.6 259.6 255.3 255.1 254.1 258.2 569.9 571.8 573.3 574.9 576.5 464.1 221.5 485.1 486.5 487.3 488.8 222.1 221.9 222.0 222.1 262.6 263.0 264.6 265.3 266.6 8.8 b6.7 86.9 87.6 87.8 67.3 68.9 65.0 68.9 67.6 92.8 258.1 576.7 489.3 221.9 267.4 87.3 7 9 ANNUALLY s 1975 1976 1977 33.8 MONTHLY: 1977--MAY NOV. DEC. 1978--JAN. FEB. MAR. 69.4 90.1 APR. MAY P 446.0 82.0 50.0 MEEKLY& 1978-APR. MAY 17 24 31P JUNE 1/ 2/ 3/ 4/ P - 7P ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA. INCLUDES PRIVATE LbMESTIC NONFINANCIAL INVESTORS' HOLDINGS UF COMMERCIAL PAPER, BANKEkS ACCEPTANCES, SECURITY RP'S AND MONEY MARKET MUTUAL FUND SHARES. BORROWINGS BY BANKS FROM OTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUND4 PURCHASEU, SECURITIES SOLO UNDER AGREEMENTS TO REPURCHASE, AND OTHER LIABILITIES FOR bURROMED MUNtY, PLUS GROSS LIABILITIES 1T OWN FOREIGN BRANCHES VEURODOLLAR BRAOWINGS)s LOANS SOLD TO AFFILIATES, LOAN RPS, AND OTHER MINOR ITtES. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE bANKS. PRELIMINARY 14 

Federal Reserve (1978, June 19). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19780620

@misc{wtfs_bluebook_19780620,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1978},
  month = {Jun},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19780620},
  note = {Retrieved via When the Fed Speaks corpus}
}