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. November 17, 1978 Strictly Confidential (FR) Class I FOMC MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Prepared for the Federal Open Market Committee By the staff Board of Governors of the Federal Reserve System STRICTLY CONFIDENTIAL CLASS I - FOMC (FR) November 17, 1978 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) Following a sharp September increase, M-1 slowed to a 3¼ per cent annual rate of growth in October, and appears to be expanding at a 2¼ per cent rate in November. The slower growth of M-1 this month reflects the impact on the daily average November level of what appears to be a transitory drop in demand deposits in late October; in addition, the introduction of Automatic Transfer Service (ATS) is also dampening M-l growth.1/ For October and November combined, growth is projected at a 2¾ per cent annual rate, well below M-2 appears to be expanding at about the limit set by the FOMC. Growth a 7½ per cent annual rate, the midpoint of its FOMC range. in small time deposits picked up in October, reflecting record inflows of the 6-month certificates, but savings deposits declined Growth in Monetary Aggregates over October-November Period Ranges M-1 Upper limit of 6½ M-2 Memo: Federal funds rate (per cent per annum) 2¾ 5½ to 9½ 7½ 8¾ to 9¼ until Oct. 31; Avg. for statement week ending 9½ to 9¾ Oct. 18 8.78 25 1 Nov. 8 15 9.24 9.29 9.77 9.68 since Nov. 1 1/ Latest Estimates Data from a sample of member and nonmember banks suggest that ATS balances at all commercial banks had risen to $765 million by Nov. 8. Respondents estimated that between 50 and 60 per cent of these balances came from demand deposits, and that only about 3 per cent came from thrift deposits. The average size of the ATS accounts was just over $6,000. -2and growth of large-denomination time deposits included in this measure, while accelerating at month-end, moderated on a daily average basis. Total deposit growth at nonbank thrift institutions also moderated a bit in October, despite increased issuance of the new money market time deposit. (2) Following the October FOMC meeting, the Account Manage- ment raised its funds rate objective to the 9 per cent mid-point of the 8¾ to 9¼ per cent range specified by the Committee. Funds generally traded around the upper limit of this range, however, as the Desk first encountered difficulty in providing reserves because of a shortage of collateral and then in the last days of October was reluctant to take aggressive action to reduce the rate in view of conditions in the foreign exchange market. To strengthen the dollar in foreign exchange markets and counter inflationary pressures, on November 1 the discount rate was raised one percentage point to 9½ per cent,1/reserve requirements on large denomination time deposits were increased 2 percentage points, and up to $30 billion of foreign currencies were mobilized for intervention in foreign exchange markets. funds rate range to 9½ to 9¾ per cent. The FOMC also raised its In light of the volatile conditions in foreign exchange markets, the Desk limited its reserve supplying actions in the days immediately following the announcement, and funds traded at rates somewhat above the upper end of the new range. In recent days, though, Federal funds have traded at rates within the Committee's new range--mainly within the upper part of the range. 1/ In the week following the discount rate action, member bank borrowing --which had averaged $1.3 billion in October--fell to $698 million; in the most recent statement week, borrowing averaged $631 million. -3(3) The trade-weighted exchange value of the dollar and the value of the dollar against key currencies have risen substantially since the November 1 announcement and, as can be seen in the table below, the value of the dollar has recovered to its August-September levels (with the exception of the mark). Operations in foreign exchange markets on behalf of the Treasury and System accounts since the November 1 announcement have resulted in net sales of $2.4 billion of German marks, $350 million of Swiss francs, and $200 million of Japanese yen. Recent Changes in Dollar Exchange Rates (per cent change) Aug.-Sept. average to Oct. 31 Oct. 31 to present Present level (Nov. 17) -11.0 -6.9 -7.3 9.8 14.9 9.0 1.926 DM/dollar 1.724 SF/dollar 195.6 Y/dollar -7.4 8.3 Major currencies: German mark Swiss franc Japanese yen Average foreign currency value of the dollar (trade weighted) (4) 90.0 (3/73=100) Private short-term interest rates generally rose following the October FOMC meeting and then increased further in response to the System's tightening moves in early November, recording gains of 1 percentage point or more over the intermeeting period. Rates have been under less upward pressure in the Treasury bill market, with the 3-month Treasury bill rate about unchanged on balance over the period and longer-term bills up 35 to 55 basis points. The difference in movement between Treasury and private rates appears mainly to reflect the impact of international financial flows. Foreign official institutions have made substantial purchases of bills over this period.1/ At the same time, it seems likely that private capital outflows have added to upward pressures on private short-term rates. For example, it appears that a substantial part of the large CD issuance by U.S. banks has been undertaken to finance both loans to foreign banks and advances to their own foreign branches. Recent Changes in Interest Rates Oct. 17 to present Oct. 31 to present Recent level (Nov. 16) +.96 +.02 +1.32 +1.28 +1.00 +.37 -.58 +.91 +.50 +.75 9.72 8.17 10.31 10.63 11.00 +.03 -.21 8.69 +.22 +.01 +.20 +.01 -.10 +.17 9.25 6.11 10.05 Change Short-term interest rates: Federal funds 3-month Treasury bills 3-month commercial paper 3-month CD (high quote) Bank prime rate Long-term interest rates: 20-year Treasury Aaa utility (recently offered) Municipal Bond Buyer Primary mortgage rate 1/ Since the October FOMC meeting, foreign central bank holdings of marketable Treasury securities in custody at the Federal Reserve Bank of New York have increased by about $8 billion, mainly in the form of Treasury bills, while foreign official holdings of nonmarketable debt have risen about $3 billion. (5) The November 1 announcement had a constructive impact on bond markets. Treasury bond yields dropped rather sub- stantially immediately after the announcement. They have fluctuated around these lower levels in subsequent market trading, although the Treasury has in recent weeks raised $2.7 billion in new cash through 1/ coupon issues.- Municipal yields have also declined, though by less than Treasury yields, while corporate bond rates have stabilized. (6) Although bond yields have declined or shown little change since the beginning of the month, mortgage yields have risen. By mid-November the average yield on new mortgage loan commitments at savings and loan associations had moved to over 10 per cent, despite constraints imposed by usury ceilings in some States. The increase in yields reflects both the recent slowing of thrift deposit inflows and the continued strong demands for credit. Savings and loan associations increased outstanding mortgage commitments again in September, and growth in their mortgage holdings is estimated to have increased somewhat in October. (7) The table on the next page shows percentage annual rates of change in related monetary and financial flows over various time periods. 1/ The bulk of this new money was raised in the mid-November quarterly refunding in which the Treasury auctioned $2.5 billion of 3½-year notes, $2.5 billion of 10-year notes, and $1.75 billion of 30-year bonds. Record yields were set in the auction for each issue, but all issues are now trading at substantial premia. 1976 & 1977 Average Past Twelve Months Oct. '78 over Oct. '77 Past Six Months Oct. '78 over Apr. '78 Nonborrowed reserves 2.0 7.8 4.3 3.0 1.5 Total reserves 3.0 7.5 7.9 2.5 7.8 Monetary base 7.5 9.3 9.7 8.6 8.9 6.9 7.7 7.7 8.7 3.3 11.0 5.6 5.6 7.5 1.4 10.4 8.2 8.9 9.9 6.7 12.3 9.3 10.3 12.0 M-4 (M-2 plus CD's) 8.6 10.1 9.1 9.3 6.2 M-5 (M-3 plus CD's) 11.1 10.4 10.4 11.6 9.5 Month-end basis 9.7 11.0 10.7 8.3 9.5 Monthly average 9.5 11.1 10.5 9.6 -0.4 1.8 0.8 -.3 0.1 0.2 0.2 0.3 0.2 0.5 Past Three Months Oct. '78 over July '78 Past Months Oct. '78 over Sept. '78 Concepts of Money M-1 (Currency plus demand deposits) 1/ M-1+ (M-1 plus savings deposits at commercial banks, NOW accounts at banks and thrift institutions, credit union share drafts, and demand deposits at mutual savings banks). M-2 (M-1 plus time deposits at commercial banks other than large CD's) M-3 (M-2 plus deposits at thrift institutions) 10.0 Bank Credit Loans and investments of all commercial banks 2/ 11.1 Short-term Market Paper (Monthly average change in billions) Large CD's Nonbank commercial paper 1/ Other than interbank and U.S. Government. 2/ Includes loans sold to affiliates and branches. NOTE: All items are based on averages of daily figures, except for data on total loans and investments of commercial banks, commercial paper, and thrift institutions--which are derived from either end-of-month or Wednesday statement date figures. Growth rates for reserve measures in this and subsequent tables are adjusted to remove the effect of discontinuities from breaks in the series when reserve requirements are changed. Prospective developments (8) Two alternative specifications for the monetary aggregates and the Federal funds rate for the November-December period are shown below for Committee consideration. Both are believed con- sistent with the longer-run growth ranges adopted by the Committee last month for the QIII '78 to QIII '79 policy period. Alternative A calls for no near-term change in the Federal funds rate, while Alternative B increases policy restraint in coming weeks. (More detailed and longer-term data are contained in the tables on pp. 8 and 9). Alt. A Alt. B M-1 1 to 6 ½ to 5½ M-2 6½ to 10½ 6 to 10 M-1+ 2 to 6 1½ to 5½ Federal funds rate (Intermeeting period) 9¼ to 10 9¾ to 10½ Ranges for Nov.-Dec. Addendum: (9) Alternative A contemplates a Federal funds rate between now and the next meeting centered in the prevailing 9½ to 9¾ per cent range. Growth in M-1 over the November-December period is expected to be in a 1 to 6 per cent annual rate range--assuming that transfers to savings deposits because of ATS will reduce M-1 growth over these two months by 3 to 5 percentage points. in M-1 growth is anticipated in December. Some acceleration The relatively slow growth of October-November in part represented the public's adjustment to the very rapid expansion in money that occurred in September. In December, we expect the relatively strong underlying demand for money -8Alternative Levels and Growth Rates for Key Monetary Aggregates M-1 1/ M-1+ M-2 Alt. A Alt. B Alt. A Alt. B Alt. A Alt. B 1978 October November December 361.9 362.6 364.1 361.9 362.5 363.8 588.6 589.1 592.3 588.6 588.9 591.9 867.2 873.1 879.6 867.2 872.7 878.8 1978 QIII QIV 357.3 362.9 357.3 362.7 582.6 590.0 582.6 589.8 854.0 873.3 854.0 872.9 1979 QI QII QIII 364.9 366.4 368.7 364.4 366.1 368.7 597.0 604.5 613.1 596.0 603.7 612.8 889.9 905.9 922.5 888.6 904.7 922.0 2.3 5.0 2.0 4.3 1.0 6.5 0.6 6.1 8.2 8.9 7.6 8.4 Growth Rates Monthly: 1978 November December Quarterly average: 1978 QIV 6.3 6.0 5.1 4.9 9.0 8.9 1979 QI QII QIII 2.2 1.6 2.5 1.9 1.9 2.8 4.7 5.0 5.7 4.2 5.2 6.0 7.6 7.2 7.3 7.2 7.2 7.6 4.3 2.1 4.0 2.4 4.9 5.4 4.6 5.6 8.4 7.3 8.1 7.5 3.2 3.2 5.2 5.2 8.0 8.0 Semi-Annual: QIII '78-QI '79 QI '79-QIII '79 Annual: QIII '78-QIII '79 1/ The staff has assumed that over the longer-run policy period from QIII '78 to QIII '79 M-1 growth will be reduced 3 percentage points by ATS. In projecting GNP, monetary aggregates, and interest rates the staff has carried forward the assumption in most recent Bluebooks that M-l, in the absence of ATS, would increase at a 6k per cent annual rate over the longer-run. Thus, the observed growth of M-I is expected to be 3% per cent over the QIII '78 to QIII '79 period. Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) Bank Credit M-3 1978 1978 1979 Alt. A Alt. B Alt. A Alt. B October November December 1484.3 1496.3 1508.6 1484.3 1495.9 1507.7 955.9 964.5 973.4 955.9 964.5 972.8 QIII 1456.0 1456.0 939.9 939.9 QIV 1496.4 1496.0 964.6 964.4 QI QII QIII 1529.9 1561.6 1593.8 1528.2 1559.6 1592.9 988.6 1013.6 1038.6 987.5 1011.9 1034.8 9.7 9.9 9.4 9.5 10.8 11.1 10.8 10.3 11.1 11.0 10.5 10.4 9.0 8.3 8.2 8.6 8.2 8.5 10.0 10.1 9.9 9.6 9.9 9.1 10.2 8.4 9.9 8.5 10.4 10.1 10.1 9.6 9.4 10.5 10.1 Growth Rates Monthly: 1978 November December Quarterly Average: 1978 QIV 1979 QI QII QIII Semi-Annual: QIII '78-QI '79 QI '79-QIII '79 Annual: QIII '78-QIII '79 9.5 -10to reassert itself. Over the fourth quarter as a whole, M-1 growth is expected to be 6¼ per cent on the assumption that ATS effects reduce growth by 1 percentage point for the period. (10) The specifications in the table on page 7 also show the supplementary aggregate M-1+, should the Committee wish to provide additional quantitative guidance to the Desk during a period when measured M-1 growth will be reduced to an uncertain extent by ATS. Over the two-month policy period, this supplementary aggregate is expected to increase in a 2 to 6 per cent annual rate range--the midpoint of which is below the 6 per cent average annual rate of growth of this aggregate since mid-year. (11) Expansion of M-2 under alternative A is likely to be in a 6½ to 10½ per cent annual rate range over the November-December period. The interest-bearing component of this aggregate will be buoyed by shifts from demand to ATS savings accounts, as well as by some expected shifts of funds from thrift accounts and other nonbank sources as the public attempts to meet minimum balance requirements on the new transactions accounts. The total of other interest- bearing deposits in M-2 is expected to moderate slightly from the third quarter pace, despite the recent higher level of market rates of interest. Issuance of 6-month money market time deposits (MMTDs) and large-denomination certificates is expected to offset a further contraction of nontransferable savings accounts and fixed ceiling rate time deposits. Banks are likely to continue offering MMTDs and large-denomination time deposits aggressively in order to finance -11their lending. MMTDs are particularly attractive to large banks since their effective cost is currently below that on largedenomination CD's by about 1 percentage point. (12) The staff has reduced somewhat its projection of thrift flows for the current quarter in view of their recent slowing as well as the higher than previously assumed level of market rates. There may be some continuing tendency for thrifts to reduce promotion of MMTDs or to cease offering ceiling rates on such certificates, but by and large the institutions are expected to be under competitive pressure to continue offering ceiling rates, particularly after December 1 when outstanding MMTDs begin to mature. Furthermore, the FHLBB has made it known to S&Ls that advances will not be liberally available to institutions that do not make reasonable efforts to roll over maturing 6-month certificates. (13) If the Federal funds rate remains around the 9½ to 9¾ per cent level over the intermeeting period, as envisioned under alternative A, short-term market rates may show mixed changes. Private short-term credit demands are expected to remain relatively strong in coming weeks. Nonetheless, the relatively wide spread between rates on private short-term instruments and the Federal funds rate may tend to narrow as it becomes clear that the System is not tightening its policy stance further. The Treasury is expected to offer a sizable volume of cash management bills in early December and to continue to put more emphasis on 3-month bills in its weekly bill offering. Thus, rates on shorter-term Treasury bills may tend to -12move up somewhat from current relatively low levels, unless foreign central bank acquisitions of these instruments once again become sizable. With regard to longer-term markets, the expected issuance of foreign-currency denominated securities will likely reduce the volume of debt issued in the U.S. market over the next few months. With a modest calendar of corporate and tax-exempt issues also in prospect, bond yields are unlikely to rise from current levels and may even decline. Mortgage rates, on the other hand, can be expected to move higher as demands for loans continue strong at a time when the thrift inflows are expected to slow. (14) Under alternative B, the Federal funds rate would rise by mid-December to the midpoint of a 9¾ to 10½ per cent range. M-1 growth would likely be in a ½ to 5½ per cent annual rate range over November-December, and M-1+ and M-2, respectively in 1½ to 5½ and 6 to 10 per cent ranges. The further increases in short-term rates would slow M-2 and M-3 growth only modestly, as more aggressive offerings of 6-month certificates and large-denomination time deposits could be expected partly to offset weakness in other deposits. (15) A further increase in the funds rate against a backdrop of recent slow growth in the aggregates would add support to the view that the Federal Reserve is committed to an aggressive policy to counter inflation and support the dollar. In reaction, short-term interest rates would likely adjust promptly to the -13higher funds rate. However, the impact on bond yields is less clear. Although capital and money market yields generally tend to move together, they might not in this case if the inflation anticipations of market participants are lowered by this action. The dollar would also be expected to improve somewhat further in exchange markets. (16) Appendix I shows the expected Federal funds rate ranges over the QIII '78 to QIII '79 policy period. In view of the monetary restraint already in train, the midpoint of the alternative A path would call for no further increase in the funds rate over this period. The alternative B pattern contemplates that the increase in the funds rate in the intermeeting period would be maintained through the first quarter of 1979. This additional restraint on monetary expansion implies that the funds rate could be lower than the alternative A path by next summer while still achieving the same growth in the aggregates over the QIII '78 to QIII '79 period. -14Directive language (18) Given below are suggested operational paragraphs for the directive. The language added last month "giving due regard . . . to uncertainties associated with the introduction of ATS" has been retained. The form of the first paragraph below is similar to the directive adopted at the last meeting, while additional alternative language is provided for placing main emphasis either on monetary aggregates or on money market conditions should the Committee wish to return to a formulation similar to that used for some time before the October meeting. Should the Committee wish to employ M-1+ as a guide for operations, appropriate language is shown in brackets. The specifications adopted at the September meeting are shown in strike-through form. In the short run, the Committee seeks to achieve bank reserve and money market conditions that are broadly consistent with the longer-run ranges for monetary aggregates cited above, while giving due regard to developing conditions in domestic and international financial markets/more generally and to uncertainties associated with the introduction of ATS. Early in the period before the next regular meeting, System open market operations are to be directed at attaining a weekly average Federal funds rate (A) (B) AT ABOUT THE CURRENT LEVEL. slightly above the current level. Subsequently, operations shall be directed at maintaining the 9¼ to weekly average Federal funds rate within the range of [DEL: -159¾] ____ TO ____ per cent. In deciding on the specific objective for the Federal funds rate, the Manager is to be guided mainly by a range of tolerance for the annual rate of growth [DEL: in M-2] over the period of [____ ____ [DEL: October-November] NOVEMBER-DECEMBER TO ____ PER CENT IN M-1+ AND] [DEL: 5½ to 9½] TO ____ per cent IN M-2, provided that the rate in M-1 does not appear to exceed [DEL: 6½] ____per cent. Money market emphasis THE OBJECTIVE FOR THE FUNDS RATE IS TO BE RAISED OR LOWERED IN AN ORDERLY FASHION WITHIN ITS RANGE IF THE RATES OF GROWTH OF [M-1+ AND] M-2 APPEARS TO BE CLOSE TO OR BEYOND THE UPPER OR LOWER LIMIT OF ITS RANGE. WEIGHT IS TO BE GIVEN TO M-1 IF IT APPEARS TO BE GROWING AT A RATE CLOSE TO OR ABOVE ITS LIMIT. Monetary aggregates emphasis THE OBJECTIVE FOR THE FUNDS RATE IS TO BE RAISED OR LOWERED IN AN ORDERLY FASION WITHIN ITS RANGE IF THE RATE OF GROWTH OF [M-1+ AND] M-2 APPEARS TO BE SIGNIFICANTLY ABOVE OR BELOW THE MIDPOINT OF THE INDICATED RANGE. BE GIVEN TO M-1 IF WEIGHT IS TO IT APPEARS TO BE GROWING AT A RATE CLOSE TO OR ABOVE ITS LIMIT. IF THE RATES OF GROWTH IN THE AGGREGATES APPEAR TO BE FALLING OUTSIDE THE LIMITS OF THE INDICATED RANGES AT A TIME WHEN THE OBJECTIVE FOR THE FUNDS RATE HAS ALREADY BEEN MOVED -16TO THE CORRESPONDING LIMIT OF ITS RANGE, PROMPTLY NOTIFY THE CHAIRMAN, THE MANAGER WILL WHO WILL THEN DECIDE WHETHER THE SITUATION CALLS FOR SUPPLEMENTARY INSTRUCTIONS COMMITTEE. FROM THE 1 Recently Established M-1 Growth Ranges and Actual M-1 CHART Billions of dollars 8% Projection 375 SQ3 '78-03 '79 ,..-2% - 365 S355 Q2 '7E8-Q2 '79 -P4% - 365 j 355 ,.0"" S365 *0 % Q1 '78-Q1 '79 -355 -1 365 325 1977 1978 1979 CHART 2 Recently Established M-2 Growth Ranges and Actual M-2 Billions of dollars 945 Projection-*9% - 930 Q3'78-Q3'79 -915 -. 900 00 885 870 855 '79 - 885 -870 810 855 795 S885 780 - 870 855 810 795 -1885 780 810 Q4'77-Q4'78 795 780 810 795 780 1977 1978 1979 Chart 3 Recently Established M-3 Growth Ranges And Actual M-3 Billions of dollars 1640 Projection -1610 10% Q3 '78-Q3 '79 -1580 % . 1550 1520 1490 1550 '79 1520 7%% - 1490 1550 S1520 S1490 S1550 -1520 -1490 Q4 '77-4 -1460 78 Q4 '77-04 '78 -1430 1310 -1400 370 -1370 -1340 I I 1310 Chart 4 Recently Established Bank Credit Growth Ranges and Actual Bank Credit Billions of dollars 1055 11t/% 03 Projection Q3'78-Q3'79 - 1035 -- - t-7's' - d.- -- 11 % 1015 6% 0278-02'79 - 995 - 975 1975 955 935 875 - 855 - / 9 75 935 -S.975 955 835 L 4 '77-Q4 '78 875-855 8 -935 15 -'7 9 Q'0'78- 835 -, 895 875 - - 875 855 - - 855 835 I I835 1977 1978 1979 CHART 5 Recently Established M-1+Growth Range and Actual M-1+ Billions of dollars -640 7%% SSQ3 '78-Q3 '79 620 0600 580 - 560 1977 1978 1979 Appendix I Projected Federal Funds Rate Alt. A Alt. B 1978 QIV 9k to 9% 93 to 10 1979 QI 9k to 10 9% to 10 QII 9 to 10% QIII 9 to 10% 9 to 10 8% to 10 APPENDIX II Implied Velocity Growth Rate Alt. B Alt. A V-1 (GNP/M-1) 1978--III IV 2.6 4.4 ( 3.3) 2.6 4.6 ( 3.4) 1979--1 II 8.5 7.5 ( 4.6) ( 3.9) 8.9 7.2 ( 5.0) ( 3.7) 5.6 ( 2.3) 5.3 ( 2.1) III V-1+ (GNP/M-1+) 1978--111 IV 5.0 5.7 5.0 5.9 1979--1 II III 5.9 4.0 2.5 6.3 3.9 2.2 1978--111 IV 1.3 1.6 1.3 1.9 1979--1 II 3.2 1.9 3.5 1.9 0.9 0.5 V-2 (GNP/M-2) III Note: Figures in parentheses reflect V-1 velocity without ATS. Appendix Table III-1 MONEY STOCK--M-1 (Annual rates of growth, compounded quarterly)1/ Ending Period 74IV 1975 I 2.1 7511 7511 75IV 761 7611 Base Period 76111 76IV 771 7711 7711 77IV 781 7811 II 4.3 6.5 III 5.2 6.7 7.0 IV 4.6 5.4 4.9 2.9 4.6 5.3 4.8 3.8 II 5.0 5.6 5.4 4.9 5.9 7.0 III 4.9 5.3 5.1 4.6 5.2 5.4 3.9 IV 5.2 5.7 5.5 5.2 5.8 6.2 5.8 5.4 5.8 5.8 5.6 6.1 6.4 6.2 7.4 7.2 II 5.7 6.1 6.1 6.0 6.5 6.9 6.8 7.8 7.9 III 6.0 6.4 6.3 6.3 6.8 7.1 7.1 7.9 8.0 8.3 IV 6.1 6.5 6.5 6.4 6.9 7.2 7.2 7.9 7.9 8.0 7.7 6.1 6.5 6.5 6.4 6.8 7.1 7.1 7.6 7.6 7.4 7.0 II 6.4 6.8 6.8 6.8 7.2 7.4 7.5 8.0 8.1 8.1 8.1 10.3 III 6.5 6.9 6.9 7.2 7.5 7.5 8.0 8.0 8.1 8.0 9.1 7.9 6.1 6.1 6.2 6.2 6.4 6.4 6.2 6.2 5.9 5.9 5.6 5.6 5.1 5.1 4.1 4.1 1976 I 1977 1 1978 I * * 1979 III Alt. A Alt. B 1/ 751 5.8 5.8 6.8 * ** 6.0 6.0 * A* *** 6.0 6.0 5.9 5.9 Based on quarterly average data. 78111 * 6.2 6.2 6.1 6.1 5.3 5.3 3.2 3.2 Appendix Table III-2 MONEY STOCK--M-1+ (Annual rates of growth, compounded quarterly)1/ Ending Period 74IV 1975 I 5.3 751 7511 7511 75IV 761 7611 Base Period 76111 761V 771 7711 771 77IV 781 II 8.5 11.9 III 9.4 11.6 IV 8.8 10.0 9.8 11.0 10.7 10.4 14.1 II 10.5 11.6 11.5 11.5 13.9 13.8 III 10.1 10.9 10.7 10.6 11.8 10.7 IV 10.7 11.5 11.4 11.5 12.6 12.2 11.3 15.1 11.0 11.7 11.7 11.8 12.8 12.4 12.0 14.1 13.2 II 10.8 11.4 11.3 11.3 12.1 11.7 11.2 12.4 11.1 8.9 III 10.5 11.1 11.0 10.9 11.5 11.1 10.6 11.3 10.1 8.6 8.2 IV 10.2 10.7 10.6 10.5 11.0 10.5 10.0 10.4 9.3 8.0 7.6 7.0 9.8 10.2 10.1 9.9 10.3 9.8 9.2 9.5 8.4 7.3 6.7 6.0 5.0 II 9.6 10.0 9.8 9.7 9.9 9.5 9.0 9.1 8.2 7.2 6.8 6.3 6.0 7.0 III 9.3 9.6 9.5 9.3 9.5 9.1 8.6 8.7 7.8 6.9 6.5 6.1 5.8 6.2 1976 I 1977 I 1978 I * * * * 7811 7811 11.3 9.1 k** ¢ 6.9 * ** 1979 III Alt. 8.5 8.6 8.4 8.3 8.4 8.0 7.5 7.5 6.8 6.2 5.9 5.7 5.5 5.6 5.3 5.2 Alt. 8.4 8.6 8.4 8.3 8.3 7.9 7.5 7.5 6.8. 6.2 5.9 5.6 5.4 5.5 5.2 5.2 1/ Based on quarterly average data. Appendix Table III-3 MONEY STOCK--M-2 (Annual rates of growth, compounded quarterly)1/ Ending Period 74IV 1975 I 6.4 51 7511 75111 75IV 761 7611 Base Period 76I11 76IV 771 II 8.3 10.2 III 8.9 10.2 IV 8.4 9.1 8.6 6.9 8.9 9.6 9.4 9.0 11.1 II 9.2 9.7 9.6 9.4 10.7 III 9.2 9.6 9.5 9.3 10.2 IV 9.7 10.2 10.1 10.1 10.9 10.9 11.2 13.3 9.8 10.2 10.3 10.3 11.0 11.0 11.2 12.3 11.2 II 9.8 10.2 10.2 10.2 10.8 10.7 10.8 11.4 10.4 9.5 III 9.9 10.2 10.2 10.2 10.7 10.6 10.7 11.1 10.3 9.9 IV 9.7 10.0 10.0 10.0 10.4 10.3 10.3 10.5 10.0 1976 I 1977 I 9.8 9.7 9.7 II 9.4 9.7 9.6 9.5 III 9.4 9.6 9.6 9.5 ** * * * 77111 77IV 781 7811 78111 10.3 9.5 1978 I 7711 * ** * * 10.3 9.7 9.0 10.2 9.8 9.4 9.3 8.3 9.9 9.8 9.9 9.3 8.8 8.5 7.7 7.0 9.8 9.7 9.6 9.7 9.1 8.6 8.4 7.8 7.6 9.8 9.6 9.6 9.6 9.1 8.7 8.6 8.2 8.1 ** 1979 III Alt. 9.1 9.3 9.2 9.1 9.3 9.2 9.1 9.1 8.7 8.4 8.3 8.1 8.1 8.2 8.3 8.0 Alt. 9.1 9.2 9.2 9.1 9.3 9.1 9.1 9.1 8.7 8.4 8.3 8.1 8.0 8.2 8.2 8.0 1/ Based on quarterly average data. Appendix Table III-4 MONEY STOCK--M-3 (Annual rates of growth, compounded quarterly)1/ Ending Period 74IV 1975 I 8.3 Base Period 751 7511 75III 751V 761_7I I 76III 76IV 771 7711 II 10.6 13.0 III 11.6 13.2 13.5 IV 11.1 12.1 11.6 11.4 12.2 12.0 11.2 12.7 II 11.6 12.2 12.0 11.6 12.5 12.3 III 11.5 12.1 11.9 11.5 12.1 11.8 11.3 IV 12.0 12.5 12.4 12.2 12.8 12.9 13.2 15.0 12.1 12.5 12.5 12.3 12.8 12.8 13.0 13.9 12.8 II 11.9 12.3 12.2 12.1 12.4 12.4 12.4 12.8 11.7 10.7 III 12.0 12.3 12.3 12.1 12.4 12.4 12.4 12.7 12.0 11.6 12.5 IV 11.9 12.2 12.1 12.0 12.3 12.2 12.2 12.4 11.7 11.4 11.8 11.6 11.9 11.8 11.6 11.8 11.7 11.6 11.6 11.0 10.5 10.5 II 11.3 11.6 11.4 11.3 11.4 11.3 11.1 11.1 10.5 10.0 III 11.3 11.5 11.4 11.2 11.3 11.2 11.1 11.0 10.5 10.1 Alt 10.9 11.0 10.9 10.8 10.8 10.7 10.6 10.5 10.1 9.8 9.7 Alt 10.9 11.0 10.9 10.7 10.8 10.7 10.5 10.5 10.1 9.8 9.7 1976 I 1977 I 1978 I 771II 77IV 781 7811 78III 9.8 9.9 10.0 11.1 9.5 7.9 9.0 8.0 8.0 9.3 8.8 9.2 9.4 9.2 9.4 9.7 9.5 9.4 9.1 9.3 9.6 9.4 10.4 1979 III 1/ Based on quarterly average data. Chart I 11/17/78 Rates Money Market Conditions and MONEY MARKET CONDITIONS cent INTEREST RATES Short-ter cent INTEREST RATES Long-term 10 Per cent - [Weekly BONDS Averages MUNICIPAL BOND BUYER Thursdays I I I I I 1977 1978 1977 1978 1977 I I I I I I I I I I I I I I I 1978 11 Table 1 MONETARY AGGREGATES NOV. CONFIDENTIAL (FR) II-FOMC CLASS 17, 1978 ACTUAL AND CURRENT PROJECTIONS, SEASONALLY ADJUSTED Money Supply Broad Narrow (M2) (Ml) 2 1 Period Total U.S. Govt. Deposits 1 3 Time & Savings Deposits Other Than CD's Other Savings otal 7 6 5 t Total 4 CD's Nondeposit Sources of Funds 2/ 8 9 MONThLY LEVELS-SBIL 1976--AUG. SEPT. OCT. NOV. % 356.7 360.9 361.9 (362.6) 853.5 862.4 867.2 (873.01 ( 14.9 15.7 19.7 19.0) 496.? 501.6 505.4 (510.51 583.0 589.7 593.6 (605.71 2e2.4 224.2 223.9 (223.7) 274.3 277.4 281.5 (4u6.8) ( 86.3 88.1 88.2 95.2) 71.3 72.8 78.1 ANNUAL GROWTH QUARTERLY 1978--IST 2ND 3RD QTR. QTR. QTR. 5.2 11.5 9.2 6.5 8.8 10.4 12.a 9.1 10.6 7.4 6.a 11.3 2.6 1.3 4.5 11.5 11.4 17.0 43.2 22.9 6.5 6.2 9.9 7.6 6.9 7.9 8.9 12.6 10.1 9.5 7.3 6.4 10.0 2.6 1.6 1.3 11.4 10.5 17.3 50.0 32.8 7.5 c.5 14.1 3.3 2.3) ( 10.4 12.5 6.7 8.0) ( 7.5 13.8 7.9 24.5) ( 11.5 11.8 9.1 12.1) ( 8.1 9.7 -1.6 -1.1) ( 14.2 13.6 17.7 22.6) ( -15.1 25.0 1.4 95.2) 2.) ( 7.4) ( 16.3) ( 10.6) ( -1.3) ( 20.3) ( 48.4) QUARTERLY-AV 1978--1ST 2ND 3RD QTR. QTR. QTR. MONTHLY 1978--4Ub. SEPT. UCT. NOV. OCT.-NOV. ( WEEKLY LEVELS-SBIL 1978-CT. NOV. NUTE: 1/ 2/ 4 11 18 25 1 P 8 P 505.0 50o.3 224.5 224.5 224.0 223.7 279.8 280.7 281.0 282.6 87.0 66.4 87.0 89.0 73.7 76.1 78.3 78.9 507.1 508.4 223.0 222.8 284.1 b85.6 91.8 93.9 81.9 360.2 364.3 364.3 358.8 864.5 869.4 869.3 865.1 16.4 19.9 22.8 20.8 591.2 591.5 592.0 595.3 504.2 361.0 362.1 868.1 870.5 18.6 20.1 598.9 602.4 505.1 P - PRELIMINARY DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. INCLUDES TREASURY DEPOSITS Al MEMBER BANKS AND FEDERAL RESERVE BANKS. BORROWINGS FROM OTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, INCLUDEL OR BORROWED MONEY, PLUS GROSS LIABILITIES TO OWN MENTS TO REPUkCHASE, AND OTHER LIABILITIES (EURODOLLAR tORROWINGb), LOANS SOLD TO AFFILIATES, LOAN RPS, AND OTHER MINOR ITEMS. SECURITIES SOLD UNDER FOREIGN BRANCHES AGREE- 1-A TIME AND SAVINGS DEPOSITS AT ALL COMMERCIAL BANKS Table SEASONALLY ADJUSTED EXCEPT AS NOTED Total Time TimeIndividual and Total an Savings Period OUTSTANDING Business Nonprofit (NSA) 17, 1978 Time Deposits Government SA ) (NSA) Total Memo Large Memo Large Large Small Negotiable CD's Denomination Denomination t t Denomina ionJDenomina ion (S BILLIONS) 556.7 561.7 565.2 571.6 574.5 579.4 583.0 589.7 593.6 220.9 221.0 221.6 222.0 221.7 220.9 222.4 224.2 223.9 205.2 205.8 206.3 206.5 206.1 206.0 207.7 209.2 208.7 10.5 10.5 10.6 10.7 10.8 10.6 10.8 11.0 11.0 55.3 17.7 16.9 1977--II IV 13.1 17.0 3.9 2.9 1978--I II III 17.3 14.1 13.6 5.0 3.5 6.4 2.9 4.9 3.6 6.7 3.9 1978--FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. CHANGES NOV. Savings Deposits ndi Nonprofit CONFIDENTIAL (FR) CLASS II FOMC 5.2 4.7 4.7 4.8 4.9 4.2 4.0 4.0 4.2 335.8 2.3 4.7 3.3 1.4 0.9 0.7 0.1 0.6 0.4 -0.3 -0.8 1.5 1.8 -0.3 79.4 82.0 83.4 87.1 86.7 87.4 86.3 88.1 88.2 165.4 343.6 349.7 352.8 358.5 360.6 365.5 369.7 170.4 174.3 176.1 181.2 182.7 187.2 188.7 191.9 192.8 -1.6 37.7 23.9 13.8 0.4 0.3 -1.2 -0.6 9.2 14.1 5.9 12.7 3.3 1.3 0.7 7.1 1.2 0.9 1.3 -0.2 0.2 0.1 0.3 -0.2 -0.7 16.0 13.2 12.8 14.5 10.4 9.3 1.5 2.8 3.6 8.8 6.5 1.6 0.6 0.5 0.2 0.0 0.1 0.1 0.1 -0.2 0.2 0.2 0.0 -0.5 3.9 1.8 5.1 1.5 4.5 1.5 3.2 0.9 1.1 1.0 1.0 1.6 1.2 0.6 1.7 3.3 2.6 1.4 3.7 340.8 166.5 167.5 168.5 170.1 171.3 171.9 174.6 176.9 (S BILLIONS) 1977 YEAR 11.3 QUARTERLY AVERAGE: MONTHLY AVERAGE: 1978-MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. 1 12), AND (9) ON COLUMNS (1), NOTES FIGURES IN COLUMNS (1), AGGREGATES. DERIVED FROM DATA REPORTED BY SMALL (4) AND GOVERNMENTAL UNITS-COLUMNS WEDNESDAY BY LARGE COMMERCIAL BANKS SHIPS. 1 -0.4 -0.1 1.7 1.5 -0.5 I _ I 5.0 2.8 6.1 3.1 5.7 2.1 4.9 4.2 0.0 0.1 0.1 -0.7 -0.2 0.0 0.2 I II I -0.4 0.7 -1.1 1.8 0.1 I ON TABLE I-MONETARY AND (8), RESPECTIVELY, THIS TABLE CORRESPOND TO COLUMNS (4), (6), (2), AND (6) REFLECT DAILY DATA REPORTED BY MEMBER BANKS, WITH ESTIMATES FOR NONMEMBER BANKS SAVINGS DEPOSITS OF BUSINESS AND MEMBER BANKS, BENCHMARKED TO NONMEMBER CALL REPORT FIGURES. (71--REFLECT BREAKDOWNS REPORTED EACH (5)-- AND LARGE DENOMINATION TIME DEPOSITS -COLUMN 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 NOV. 17, 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 40,835 41,110 41,377 39,696 40,050 40,099 140,718) 138,240 139,688 140,721 (141,455) MONTHLY LEVELS-$MILLIONS 1978--AUG. SEPT. OCT. NOV. PERCENT (41,3841 40,668 40,917 41,200 (41,394) 22,578 22,845 23,059 22,721) 1o,55, 16,578 16,557 I 1 I 16,8I. 1, 58 1,394 1,584 1.523) ANNUAL GROWTH QUARTERLY 1978--IST 2ND 3R8 QTR. QTR. QTR. 8.0 11.4 4.6 8.9 3.7 5.0 10.4 8.5 6.2 11.7 4.4 8.8 6.6 8.2 14.4 1.1 6.1 9.7 8.1 9.0 8.6 7.2 8.2 ( -7.4 7.3 8.3 -3.11 1 2.6) 6.3 -0.Z 13.1 8.3 12.9 10.1 4.5 4.3 5.0 9.5 12.9 11.5 6.6 QUARTERLY-AV 1978--1ST QTR. 2ND QTR. 3RD QTR. MONTHLY 1978--AUG. SEPT. OCT. NOV. OCT-NOV. ( -8.3 8.1 7.8 0.21 I 4.0) -3.2 1.5 18.51 I 4.2 12.6 8.9 6.3) 10.0) I 1.6) 10.7 5.1 14.2 11.2 -17.6) 1.1 9.1 -8.[ 21.3) ( S 6.21 -3.3) WEEKLY LEVELS-SMILLIONS 1978-OCT. 25 41,610 41,471 41,459 41t156 40,324 40,232 40,209 39,842 140,665 140,367 140,857 140 ,476 41 487 41,121 41,578 40,789 22,949 22,913 22,864 23.194 16, 7 4 16,573 16,551 16,487 1,764 1,575 2,163 1, 109 1 8 41,276 41.253 39,967 40,555 141,305 140 329 41,138 40.856 23,302 2,560 16,482 16,642 1,355 1,653 4 11 18 NOV. I NOTE: I I __ __________*1 RESERVE SERIES HAVE BEEN ADJUSTED TO REMOVE DISCUNTINUITIES ASSOCIATED DATA SHOWN IN PARENTHESES ARE CURRENT PROJECTIONS. I __________ WITH CHANGES IN RESERVE HtRUIREM.ENT I RATIO. STRICTLY CONFIDENTIAL (FR) TABLE 3 NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES1/ ($ million, not seasonally adjusted) Treasury Coupons Net Purchases 3/ Treasury Change 2/ 1972 1973 1974 1975 1976 1977 Within year -490 7,232 1,280 -468 863 4,361 1977--Qtr. III Qtr. IV 886 186 1978--Qtr. I Qtr. II Qtr. III -2,655 5,444 3,152 1978--May June July Aug. Sept. Oct. 1978--Sept. 6 13 20 27 Oct. Nov. 116 99 53 135 -170 73 4 11 18 25 721 100 1 8 15 22p -1,667 -2,052 -923 5 -10 10 5 10 ver 10 Over Total 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 4,660 681 628 96 166 128 108 1,021 1,001 1,123 1,156 774 -620 4,395 235 283 2,635 634 2,001 1-55 290 631 101 176 74 115 Within I year 592 400 1,665 824 469 792 S - - 168 350 110 139 1,059 864 3,082 1,613 891 1,433 1,631 9,273 6,303 7,267 6,227 10,035 -1,358 -46 -154 1,272 3,607 -2,892 145 707 4,273 -643 -2,331 34 -- -24 -- --301 -173 ---555 7,930 4,632 -1,133 1,224 266 -24 --301 ---135 5,724 -699 2,950 231 1,043 3,358 -2,536 1,701 1,102 625 -6 -6 -1,594 2,175 2,246 1,697 46 -92 127 -81 104 - 519 1,057 46 127 104 -92 -81 -- 807 -- -- -- -- -- -- -- 122 -751 --- -- -- - -- - -173 -- -- -- -- -- -- -- -- -- -- 634 2,751 -- -- --- --- --- 712 807 -- 807 -- -- -- -- -- - -- -- - - - - ---- ---------- ---- ---- ---- ---- 139 ---- ---- ---- 628 163 108 Total 5/ Net Ne 6/ 6/ 177 139 S Net Change Outright 386 S 87 NOVEMBER 17, 1978 Federal Agencies Net Purchases 4/ verHoldings 10 1-5 5 -10 Over 10 Total S 507 CLASS II - FOMC -22 -7,473 2,869 145 5,729 -3 -6,270 5,822 -6,962 6,923 -1,672 -2,052 -923 -1,809 -6,663 1,783 100 1,037 29 LEVEL--Nov. 15 45.1 10.0 31.2 14.6 10.6 66.3 1.9 3.7 1.5 .9 7.9 119,3 (in billions) 1/ Change from end-of-period to end-of-period. 2/ Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions. 3/ Outright transactions in market and with foreign accounts, and short-term notes acquired in exchange for maturing bills. Excludes redemptions, maturity shifts, rollovers of maturing coupon issues, and direct Treasury borrowing from the System. 4/ Outright transactions in market and with foreign accounts only. Excludes redemptions and maturity shifts. 5/ In addition to net purchases of securities, also reflects changes in System holdings of bankers' acceptances, direct Treasury borrowings from the System, and redemptions (-) of Agency and Treasury coupon issues. 6/ Includes changes in both RP's (+) and matched sale-purchase transactions (-). -3.2 TABLE 4 SECURITY DEALER POSITIONS AND BANK POSITIONS (millions of dollars) U.S. Govt. Security Underwriting Dealer Positions Syndicate Positions STRICTLY CONFIDENTIAL CLASS II - FOMC NOVEMBER 17, 1978 Member Bank Reserve Positions Excess** Borrowing at FRB** es REes R rves Total To 38 Others 131 8 -9,151 -4,234 -13,975 - 8,206 1,716 172 220 25 -8,224 -2,839 -14,602 - 8,273 210 251 193 1,305 863 570 112 83 55 -6,480 -6,971 -7,403 -11,511 -11,825 -11,350 327 1,492 740 268 243 200 484 406 328 32 49 47 -6,047 -4,980 -6,778 -12,299 -12,603 -11,060 3,183 1,203 2,847 -183 5 78 149 219 178 557 1,212 1,094 44 92 120 -6,196 -4,038 -4,514 -12,998 -11,653 -12,202 1,196 1,994 2,571 -626 423 125 197 168 193 1,317 1,139 143 189 191 -3,651 -4,793 -5,098 -10,204 -11,089 -11,357 *1,495 *-309 181p 1, 7 p 223p -4,651 -11,551 2,338 3,086 3,606 1,533 352 455 52 -297 305 113 175 223 1,165 510 923 1,560 186 174 189 205 -4,707 -5,502 -4,971 -5,122 -11,622 -13,362 -11,031 - 9,861 4 11 18 25 1,676 1,393 1,507 *1,255 -19 -369 123 367 -119 1,286 1,239 1,250 4 1,31 p 213 209 220 236p -5,173 -6,292 -4,918 -3,139 -10,398 -12,406 -13,059 -10,731 1 8 15 *1,786 *1,639 *1,660 234p 190p 189 p -3,843 -4,331p -5,009p -10,522 2 -1 ,323p -13,512p Coupon Issues 7,234 1,729 3,017 -1,445 513 -111 1,861 20 1978--High Low 5,625 278 2,043 -1,076 719 -227 1977--Oct. Nov. 4,142 3,617 4,257 -360 610 804 1978--Jan. Feb. Mar. 4,127 3,418 2,713 Apr. May June July Aug. Sept. 1977--High Low Dec. Oct. 1978--Sept. 6 13 20 27 Nov. Basic Reserve Deficit** 8 New York Bills Oct. (FR) -528 *-290 *12 *1,032 *687 Corporate Bonds Municipal Bonds 367p 138 p 3 97 p 6 3 3p Seasonal 1,060 2 8 9 1,30 p 8 69 p 632p 22 29 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) I Rate (7) 3-yr (8) 7-yr (9) 20-yr (10) Long-Term Home Mortgages Corp.-Aaa tility MuncipalecondaryMarket New R e ely B Cmry r FNMA Con. Auc. Buyer (14) (15) (11) (12) (13) Short-Term SCD's Federal Funds ( (1) yBills Trea Auction Marke S 1-yr 6-mo 3-mo (3) (4) (2) STRICTLY CONFIDENTIAL CLASS II - FOMC NOVEMBER 17, 1978 New ssueNYC 90-Day (5) Comm. Paper 90-119 Day (6) Ba n k U.S. Govt.-Constant Maturity Yields (FR) GNMA Sec. (16) 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 9.77 6.58 8.85 6.16 9.28 6.55 9.42 6.42 10.25 6.65 10.24 6.68 10.75 7.75 9.12 7.40 8.84 7.72 8.81 8.01 9.30 8.61 9.31 8.48 6.32 5.58 10.05 8.98 10.27 9.13 9.32 8.43 1977--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 6.75 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 8.06 8.25 8.40 8.32 8.44 8.53 8.90 8.95 9.09 8.85 8.98 9.07 5.80 6.03 6.22 9.36 9.57 9.70 9.44 9.66 9.91 8.71 8.90 9.05 8 197 --Jan. Feb. Mar. 6.70 6.78 6.79 6.80 6.86 6.82 6.68 6.74 6.64 6.82 Apr. May June 6.89 7.36 7.60 6.96 7.28 7.53 6.70 7.02 6.84 July Aug. Sept. Oct. Nov. Daily--Nov. 6.73 7.20 7.66 6.82 7.06 7.59 8.00 8.27 8.63 7.85 8.07 8.30 7.81 8.04 8.45 8.00 7.86 8.34 7.85 7.83 8.39 9.00 9.01 9.41 8.54 8.33 8.41 8.55 8.38 8.42 8.69 8.45 8.47 9.14 8.82 8.86 9.18 8.91 8.86 6.28 6.12 6.09 9.74 9.79 9.76 10.01 9.81 9.79 9.15 8.86 8.95 8.96 9.12 8.98 9.94 8.62 8.64 8.69 7.20 9.16p 9.13p 6.13 9.86 10.03 9.17 8.30 8.33 8.36 8.62 7.60 7.70 7.92 8.04 7.86 7.91 8.02 8.15 7.74 7.79 7.98 8.28 8.00 8.34 8,50 8.50 8.07 8.30 8.45 8.52 9.25 9.25 9.50 9.50 8.35 8.34 8.45 8.49 8.35 8.33 8.46 8.54 8.39 8.36 8.49 8.61 8.77 8.74 8.90 9.06 8.79 8.73 8.92 9.00 6.13 6.02 6.12 6.09 9.75 9.75 9.75 9.78 9.78 -9.79 -- 8.92 8.89 8.90 9.10 4 11 18 25 8.85 8.71 8.78 9.24 8.03 8.17 7.91 7.67 8.19 8.27 8.37 8.48 8.38 8.42 8.56 8.61 8.75 9.13 9.21 9.38 8.64 8.83 8.97 9.09 9.75 9.75 10.00 10.00 8.50 8.56 8.64 9.04 9.04 6.07 9.85 9.91 9.13 8.47 8.52 8.61 -- 9.03 6.10 9.85 -- 9.07 8.57 8.69 8.63 8.69 8.67 8.73 9.19 9.23 9.15 9.24 6.14 6.21 9.85 9.88 9.98 -- 9.10 9.20 1 8 15 22 29 9.29 9.77 9.68 8.35 8.85 8.38 8.92 9.28 9.22 8.98 9.42 9.29 10.00 10.00 10.25 9.33 10.01 10.24 10.25 10.61 10.75 9.12 9.10 8.98p 8.82 8.84 8.77p 8.80 8.80 8.73p 9.25 9.30 9.26p 9.28 9.30 9.25p 6.22 6.17 9.90 10.05 10.20 6.11 n.a. 10.27 2 9 16 9.89 9.75 9.72p 8.76 8.82 8.17 9.22 9.81 10.18 10.31 10.50 10.75 10.75 9.07 9.11 8.88p 8.72 8.85 8.70 F 8.72 8.81 8.69p 1978--Sept. 6 13 20 27 Oct. 6.77 9.38 9.02 9.32r 9.17r 9.18 Weekly data in column 4 are average rates set in the auctions of NOTE: Weekly data for columns 1, 2, 3, 6, and 7 are statement week averages of daily data. 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 through 11, the weekly date is the mid-point of the calendar week over which data are averaged. Columns 12 and 13 are 1-day quotes for Friday and Thursday, respecmortgages with 80 tively, following the end of the statement week. Column 14 is an average of contract interest rates on commitments for conventional first per cent loan-to-value ratios made by a sample of insured savings and loan associations on the Friday following the end of the statement week. Column 15 gives FNHA auction data for Monday preceding the end of the statement week. Column 16 is a 1-day quote for Monday preceding the end of the statement week. The FNMA GNMA yields are average net auction yield is the average yield in hi-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. NOV. 17, 1978 Appendix Table 1-A MONEY AND CREDIT AGGREGATE MEASURES Money Stock Measures Credit Bank Reserves Total Loans Period Invest- borrowed Base 2 3 -0.6 0.5 5.3 2.6 0.6 3.1 5.6 6.7 8.3 3.9 8.0 11.3 4.6 5.8 7.9 8.4 10.9 9.8 ments M' 1 4 AN ANNUALLY s 2/ 1975 1976 1977 5 6 7 (PER CENT ANNUAL RATES OF GROWTH) 8 9 10 11 11.1 12.8 11.7 6.6 7.1 10.1 9.7 10.3 11.6 10.5 9.9 11.6 9.8 10.0 11.b 10.2 12.3 10.4 12. 9.5 10.9 2/ SEMI-ANNUALLYt 1ST HALF 2ND HALF 1977 1977 3.8 6.8 3.2 2.9 7,3 9.0 11.3 10.7 7.8 7.8 10.1 9.1 11.4 11.4 9.4 10.3 10.8 12.1 1ST HALF 1978 7.8 7.6 9.0 11.4 8.1 7.4 7.8 10.3 9.5 QUARTERLY& 4TH QTR. 1977 7.5 8.2 9.6 9.5 6.6 7.2 9.3 11.5 11.8 12.0 12.7 IST QTR. 2NO QTR. 3RD OTR. 1978 1978 1978 6.3 11.4 4.6 8.9 3.7 5.0 0.0 10.4 8.5 9.5 13.5 10.7 5.2 11.5 9.2 6.5 8.8 10.4 7.0 8.4 11.8 9.6 10.0 10.0 8.9 9.2 11.5 8.9 9.1 10.4 10.5 10.2 10.3 12.7 12.7 9.9 8.9 8.9 11.3 10.. 9.3 QUARIERLY-AVI 4TH QTR. 1977 6.3 3.8 9.1 9.9 7.5 8.1 10.6 10.8 12.2 1ST QTR. 2ND QTR. 3RD QTR. 1978 1978 1978 8.8 6.6 8.2 14.4 1.1 6.1 9.7 8.1 9.0 9.6 13.0 11.0 6.2 9.9 7.6 6.9 7.9 0.9 7.7 7.8 10.0 10.3 10.1 8.8 9.8 9.1 9.9 9.4 6.2 6.7 -12.2 20.7 16.1 9.9 8.3 10.5 12.9 9.2 6.3 10.5 1.1 8.2 9.5 6.0 6.1 11.6 8.1 7.9 12.4 11.8 9.9 13.3 11.5 10.1 13.9 12.1 9.7 13.9 12.8 11.0 14.9 10.6 -6.6 8.9 10.2 14.9 14.0 -8.3 b.1 7.8 17.8 13.2 -4.3 2.0 -9.6 19.0 7.6 -3.2 10.7 13.4 6.9 3.4 7.7 12.0 11.1 8.5 4.2 12.6 8.9 13.6 7.9 6.9 16.5 15.6 6.0 16.7 5.2 9.9 9.5 11.3 0.4 3.9 19.6 7.2 7.5 4.8 8.5 14.1 3.3_ 9.5 4.7 5.1 11.2 7.1 7.8 8.0 10.4 12.5 .7 9.2 5.6 6.2 9.5 7.2 8.4 9.3 11.8 13.9 1 10.0 L 11.8 8.5 8.3 11.9 11.2 6.6 8.2 8.0 13.7 6.2. 10.6 7.9 8.0 10.2 9.6 7.6 9.3 10.3 14.6 9.5 11.3 7.8 7.4 10.2 9.7 7.2 7.5 9.2 14.1 .7 12.7 9.4 9.0 11.4 10.7 8.2 8.0 6.9 13.8 d6. MONTHLY: 1977-OCT. NOV. DEC. 1978-JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. P 1/ 2/ l 1 BASED ON DATA ADJUSTED FOR CHANGES BASED ON QUARTERLY AVERAGE DATA. IN RESERVE REQUIREMENTS. 1 1 Appendix Table 1-B NOV. 17, 1978 MONEY AND CREDIT AGGREGATE MEASURES SEASONALLY ADJUSTED, BILLIONS OF DOLLARS Bok Reservs 1 Period S Total Bnk Crok Non- Monetary borrowed Base Money Stock Moeaure Total Loans and MI Invest- M2 M3 M4 MS M6 M7 ments z a ANNUALLY: 1975 1976 1977 36,666 36,996 38,903 36,536 36,943 38,333 113,042 726.2 788.9 875.5 295.2 313.5 338.5 664.7 120,617 130,731 1977--OCT. NOV. DEC. 38,489 38,687 38,903 37,183 37,825 38,333 126,706 129,593 130,731 864.3 870.9 875.5 1978-JAN. FEB. MAR. 39,385 39,734 39,514 38,901 39,328 39,186 132,194 132,958 133,330 APR. MAY JUNE 39,808 40,148 40,645 39,251 38,936 39,551 JULY AUG. SEPT. 41,119 40,835 41,110 OCT. P MONTHL 809.5 1092.5 1236.5 1376.1 746.1 803.2 883.5 1173.6 1299.2 1450.1 1307.4 1437.6 1604.3 1350.7 1485.4 1660.5 335.9 336.2 338.5 801.4 805.4 809.5 1357.9 1367.1 1376.1 867.8 876.3 883.5 1424.3 1436.0 1450.1 1575.5 1591.4 1604.3 1628.1 1645.4 1660.5 885.4 891.2 896.7 341.7 341.8 342.9 815.9 819.1 822.6 1386.6 1393.1 1400.3 892.2 898.5 904.7 1462.9 1472.5 1482.3 1619.4 1629.9 1639.9 1678.1 1691.3 1704.0 134,191 135,535 16,792 910.5 922.3 926.9 348.5 350.6 352.8 830.3 835.2 840.6 1411.4 1419.9 1429.8 913.7 922.2 927.3 1494.9 1506.9 1516.5 1653.6 1667.1 1677.1 1720.2 1735.5 1747.4 39,801 39,696 40,050 137,760 138,240 139,688 939.8 943.9 951.7 354.2 356.7 360.9 846.2 853.5 862.4 1440.9 1455.1 1472.0 933.6 939.8 950.5 1528.3 1541.4 1560.1 1687.6 1700.5 1720.5 1759.1 1772.2 1792.6 41,377 40,099 140,721 959.2 361.9 867.2 1484.3 955.4 1572.5 1733.0 1805.4 40,839 40,817 41e416 40,329 39,894 39,856 139,223 139,364 140,353 360.5 361.1 361.8 861.7 862.6 864.1 950.3 951.8 951.7 41,610 41,471 41,459 41,156 40,324 40,232 40,209 39.842 140,665 140,362 140,857 140,476 360.2 364.3 364.3 358.8 864.5 865.1 951.4 955.8 956.2 954.1 41,276 41,253 39,967 40,555 141,305 361.0 362.1 868.1 870.5 959.9 964.4 740.5 Y WEEKLY: 1978-SEPT OCT. NOV. 4 11 16 25 IP 8P A .1 140t829 1 1. i1 869.4 869.3 A I I WEEKLY MONTHLY DATA ARE DAILY AVERAGES. MEEKLY DATA ARE DAILY AVERAGES FOR STATEMENT WEEKS. TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS. M3, MS, M6t M7, DATA SHOWN IN MILLIONS OF DOLLARS. 1/ BASED ON DAlA ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS. P - PRELIMINARY NOTES: I. DATA ARE NOT I AVAILABLE FOR Nov. APPENDIX TABLE 2-A 17, 1978 COMPONENTS OF MONEY STOCK AND RELATED MEASURES Period Dema Currency Demand 1 2 -_nd_ Other Than CD's 3 Total Savings Other 4 5 6 Credit S Bank & Union Saings 8 Private US.Gov't Short-term Sharesi 7 (Per cent annual rates 2/ Short Term Savings 1 9 10 11 1/ 12 of growth) ANNUALLY: 8.9 9.6 9.5 3.3 4.6 7.4 7.9 8.0 11.4 11.7 15.0 11.2 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 10.8 19.4 6.2 6.9 6.6 33.6 7.1 12.6 8.7 9.8 7.4 7.1 10.4 11.8 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 2.6 22.3 15.9 10.1 9.6 7.7 11.7 6.9 2.1 11.1 43.5 7.5 17.4 6.3 12.0 51.9 1977 10.7 5.4 14.5 7.7 1.5 13.5 64.0 11.6 18.8 6.9 23.5 32.2 IST QTR. 1978 2ND QTR. 1978 3RD OTR. 1978 QUARTERLY-AV: 9.5 9.3 10.3 3.8 12.0 8.9 12.3 9.1 10.6 7.4 6.8 11.3 2.6 1.3 4.5 11.5 11.4 17.0 43.2 22.9 6.5 6.9 7.3 13.8 17.9 14.7 15.0 6.3 5.7 4.6 11.3 9.5 -5.4 55.4 39.3 9.7 4TH (TR. 1977 10.3 6.4 13.0 8.5 5.4 11.6 44.9 13.9 20.0 6.4 29.7 12.9 1ST QTR. 2ND QTR. 3RD QTR. 1978 1978 1978 10.5 8.4 9.6 5.0 10.3 7.0 12.8 10.1 9.5 7.3 6.4 10.0 2.6 1.6 1.3 11.4 10.5 17.3 50.0 32.8 7.5 8.1 6.8 11.4 18.2 15.8 13.6 6.3 6.2 4.6 16.2 7.5 -5.9 52.3 45.o 19.3 1977--0CT. NOV. DEC. 11.1 8.3 12.3 10.2 -1.0 6.8 13.7 18.5 10.9 8.8 9.5 4.6 4.4 -1.1 1.1 13.3 18.0 8.7 48.9 61.3 52.5 14.0 11.0 9.5 21.5 15.8 18.2 8.0 6.3 6.3 36.0 25.4 7.8 11.5 31.9 51.1 1978-JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. P 10.8 9.4 8.0 6.6 11.8 9.1 6.5 9.0 15.3 10.1 11.0 -2.4 2.9 23.8 5.6 6.5 4.6 8.7 13.2 0.9 12.3 13.3 10.8 7.5 13.6 6.1 10.2 7.5 13.8 7.9 8.4 7.6 6.0 5.3 6.7 8.2 10.3 11.5 11.8 9.1 6.0 1.1 0.5 3.3 2.2 -1.6 -4.3 8.1 9.7 -1.6 10.0 13.2 10.8 6.5 11.5 16.0 22.5 14.2 13.6 17.7 37.3 48.8 39.3 20.5 53.2 -5.5 9.7 -15.1 25.0 1.4 7.8 6.2 6.6 6.6 6.8 8.3 11.4 14.1 15.5 14.4 17.9 15.2 20.0 14.7 12.1 16.8 11.6 11.7 20.9 18.3 6.3 6,2 6.2 6.2 6.1 4.o 6.1 3.0 4.5 3.0 29.4 9.1 -4.5 13.5 13.4 1.5 -25.0 -6.0 15.1 -1.5 51.2 55.2 52.8 43.1 34.3 36.9 17.0 3.4 8.4 5.0 1975 1976 1977 -7.0 11.9 13.4 2/ SEMI-ANNUALLYI 1ST HALF 2ND HALF 1977 1977 1ST HALF 1978 QUARTERLY: 4TH QTR. MONTHLY: GROWTH RATES ARE BASED ON ESTIMATED PREVIOUS MONTH REPORTED DATA. 2/ BASED ON QUARTERLY AVERAGE DATA. P - PRELIMINARY. 1/ MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF APPENDIX TABLE 2-B COMPONENTS OF MONEY STOCK AND RELATED MEASURES Time and Savings Deposits Timemand Currency Demand Deposits Period To_ 1 Other Than CD's s Total ISavingsI Other 5 6 4 2 3 73.7 80.7 88.6 221.5 232.8 249.9 450.9 489.7 545.0 369.6 427.0 471.0 201.9 MONTHLY: 1977-OCT. NOV. DEC. 87.1 87.7 88.6 248.7 248.5 249.9 531.9 540.1 545.0 465.5 219.6 469.2 471.0 1978--JAN. FEB. MAR. 89.4 90.1 90.7 252.2 251.7 252.3 550.6 556.7 561.7 APR. MAY JUNE 91.2 92.1 92.8 257.3 258.5 259.9 JULY AUG. SEPT. 93.3 94.0 95.2 CD s ' 7 Mutual ShortSavings Credit Term U.S. Union Savings Bank Govt & S&L Shares Bonds s h Shares 1/; / !J Sec 1/ 10 11 8 9 NOV. 17, 1978 Other Private NonTotal Gov't Short- Deposit Funds Demand term Deposits Assets 1/1 2/ V 13 14 12 ANNUALLY: 1975 1976 1977 160.5 209.1 225.1 251.5 81.3 62.7 74.0 394.8 456.9 519.8 33.0 39.1 46.8 67.2 71.9 76.6 66.3 66.5 77.6 43.3 47.8 56.3 34.4 51.0 62.0 8.3 11.2 11.4 219.4 219.6 246.0 249.7 251.5 66.4 70.9 74.0 511.0 515.7 519.8 45.5 46.1 46.8 75.8 76.2 76.6 75.5 77.1 77.6 52.6 54.0 56.3 58.1 60.1 62.0 10.3 6.7 11.4 474.3 477.3 479.7 220.7 220.9 221.0 253.6 256.4 258.7 76.3 79.4 82.0 523.2 525.9 528.8 47.5 48.1 48.9 77.0 77.4 77.8 79.5 80.1 79.8 58.7 61.4 64.1 65.3 66.6 67.0 9.7 7.5 7.9 565.2 571.6 574.5 481.8 484.5 487.8 221.6 222.0 221.7 260.1 262.6 266.1 83.4 87.1 86.7 531.7 534.7 538.4 49.5 50.0 50.7 78.2 78.6 78.9 80.7 81.6 81.7 66.4 68.3 70.4 68.1 68.2 69.2 8.3 7.3 11.3 260.9 262.8 265.7 579.4 583.0 589.7 492.0 496.7 501.6 220.9 222.4 224.2 271.1 274.3 277.4 87.4 86.3 88.1 543.5 549.9 557.0 51.2 51.7 52.6 79.3 79.5 79.8 80.0 79.6 80.6 71.4 71.6 72.1 69.2 71.3 72.8 14.2 14.9 15.7 96.0 265.9 593.6 505.4 223.9 281.5 88.2 563.7 53.4 80.0 80.5 72.4 78.1 19.7 1978-SEPT. 13 ,:0 27 95.0 95.1 95.4 265.5 266.0 266.4 589.8 590.6 589.9 501.2 501.5 502.3 224.1 224.1 224.2 277.1 277.4 278.1 88.6 89.1 87.5 70.7 74.1 75.5 14.3 16.2 16.5 OCT. 95.8 95.7 96.0 95.8 264.5 268.5 268.3 263.0 591.2 591.5 592.0 595.3 504.2 505.1 505.0 506.3 224.5 224.5 224.0 223.7 279.8 280.7 281.0 282.6 87.0 86.4 87.0 89.0 73.7 76.1 78.3 78.9 16.4 19.9 22.8 96.5 96.4 264.5 265.7 598.9 602.4 507.1 508.4 223.0 222.8 284.1 285.6 91.8 93.9 81.9 18.6 20.1 OCT. P 219.6 WEEKLY: NOV. 1/ 2/ 3/ 4/ P - 4 11 18 25 IP 8P ESTIMATED MONTHLY AVERAGE LEVELS DERIVED BY AVERAGING END OF CURRENT MONTH AND END OF PREVIOUS MONTH REPORTED DATA. INCLUDES PRIVATE DOMESTIC NONFINANCIAL INVESTORS' HOLDINGS OF COMMERCIAL PAPER, BANKERS ACCEPTANCES, SECURITY RP'S AND MONEY MARKET MUTUAL FUND SHARES. BORROWINGS BY BANKS FROM OTHER THAN COMMERCIAL BANKS IN THE FORM OF FEDERAL FUNDS PURCHASED, SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE, AND OTHER LIABILITIES FOR BORROWED MONEY, PLUS GROSS LIABILITIES TO OWN FOREIGN BRANCHES (EURODOLLAR BORROWINGS), LOANS SOLD TO AFFILIATES, LOAN RPS, AND OTHER MINOR ITEMS. INCLUDES TREASURY DEPOSITS AT MEMBER BANKS AND FEDERAL RESERVE BANKS. PRELIMINARY 20.8 

Federal Reserve (1978, November 20). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19781121

@misc{wtfs_bluebook_19781121,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1978},
  month = {Nov},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19781121},
  note = {Retrieved via When the Fed Speaks corpus}
}