Bluebook

Prefatory Note The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that this document may contain occasional gaps in the text. These gaps are the result of a redaction process that removed information obtained on a confidential basis. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act. 1 In some cases, original copies needed to be photocopied before being scanned into electronic format. 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Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. July 6, Strictly Confidential (FR) 1979 Class I FOMC MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Prepared for the Federal Open Market Committee By the staff Board of Governors of the Federal Reserve System STRICTLY CONFIDENTIAL (FR) July 6, 1979 CLASS I - FOMC MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) M-1 growth slowed to a ¾ percent annual rate in May but picked up sharply in June, and for the two-month policy period is estimated at about a 7 percent annual rate, well above the 0 to 5 percent range selected by the FOMC. M-2 is estimated to have grown at a 9 annual rate over May and June, also above its 4 to 8 specified by the Committee. percent percent range Bank sales of money market certificates (MMCs) have strengthened considerably since the March regulatory changes eliminated the differential in ceiling rates favoring thrift institutions so long as the 6-month bill rate was 9 percent or above. In addition, outflows from other small time deposits have nearly stopped in recent weeks, and a gain was recorded in savings deposits in June for the first time since last September. As banks have captured a larger share of the MMC market, growth of such deposits at S&Ls has eroded, but flows into other small-denomination accounts at thrifts have improved recently. On balance, deposit growth at thrift institutions has accelerated in the last two months from the Comparison of FOMC Policy Ranges for May-June to Latest Staff Estimates Ranges Latest Estimates M-1 0 to 5 7.4 M-2 4 to 8 9.6 Federal funds rate (percent per annum) 9¾ to 10½ Avg. for statement week ending 10.17 May 23 10.28 30 10.23 June 6 13 10.23 10.28 20 27 10.32 10.42 July 4 unusually slow pace of April, reaching a 7 percent annual rate in June on a monthly average basis. (2) Banks have continued to account for a relatively large share of overall credit flows. a 12 Total loans and investments expanded at percent annual rate, on average, in May and June, funded mainly by demand deposits and money market certificates. about $12 Commercial banks paid down billion of outstanding large denomination time deposits in May and June, which was about offset by increases in Eurodollar takings from foreign branches and in domestic nondeposit borrowing. (3) After the May FOMC meeting, the Federal funds rate continued to be held at around 10¼ percent. By mid-June, projections for the growth rates of both M-1 and M-2 indicated that both would be above their respective short-run ranges. On June 15 a majority of the FOMC concurred in the Chairman's recommendation that the objective for the funds rate remain about 10¼ percent in view of the many indications of a weakening in economic activity and the uncertainties in the financial and economic outlook. Accordingly, the Desk has continued to aim for this funds rate level in the past three weeks. In the latest statement week, however, the funds rate averaged 10.42 percent, even while banks' excess reserves rose to $621 million, in reflection of pressures and uncertainties associated with the mid-year statement date and the July 4 holiday. (4) Reserves required against private demand deposits increased at a 10¼ percent annual rate over the May-June period, reflecting the accelerated growth of such deposits. Nonetheless, total reserves contracted at about a 2¾ percent annual rate, as reserves held against total time and savings deposits declined sharply in association with the run-offs of large time deposits over the last two months. at about a 4 The monetary base expanded percent annual rate over the May-June period, close to the pace set in the earlier months of the year and about half the growth rate of last year. Currency held by the nonbank public, which rose at a 7¼ percent annual rate, together with vault cash at nonmember banks continued to account for all of the growth of the monetary base. (5) Despite the stability of the Federal funds rate, market interest rates declined substantially following the May FOMC meeting. The pervasive declines in interest rates apparently reflected growing acceptance of the view that the economy had weakened and that interest rates had peaked. However, in the last few days interest rates have backed up somewhat. On balance, over the intermeeting period, Treasury bill rates have fallen 40 to 75 basis points, private short-term yields 20 to 50 basis points, and the prime rate was reduced 25 basis points to 11-1/2 percent. The particularly sharp decline in bill rates appears to have been associated with the Treasury's paydown of cash management bills in late June and the resumption of purchases of bills by foreign central banks. In bond markets, corporate and Treasury yields declined some 40 basis points. Despite these declines, mortgage yields have risen steadily, and the average rate on new commitments at S&Ls is now above 11 percent. (6) The dollar's exchange value has declined 3¼ percent on a weighted average basis, and somewhat more against the mark and the Swiss franc, since the last meeting of the Committee. occurred in the last half of June. All of these declines They were triggered by the surge in U.S. monetary aggregates in an environment of declining U.S. short-term interest rates at a time when money market conditions in many major -4industrial countries were firming. (7) The table on the next page shows seasonally adjusted annual rates of change, in percent, for related monetary and financial flows over various time periods. 1977 & 1978 Average Past Twelve Months June '79 over June '78 Past Six Months June '79 over Dec. '78 Past Three Months June '79 over Mar. '79 Past Month June '75 over May '75 Nonborrowed reserves 4.9 -1.2 -6.7 -7.9 9.4 Total reserves 6.0 -0.3 -3.9 -3.5 -1.3 Monetary base 8.7 6.7 4.5 4.7 6.0 M-l (Currency plus demand deposits 1/) 7.6 4.6 4.2 10.9 14.2 M-l+ (M-1 plus savings deposits at commercial banks, NOW accounts at banks and thrift institutions, credit union share draft accounts, and demand deposits at mutual savings banks) 7.3 1.9 0.9 7.0 11.9 M-2 (H-i plus time deposits at comr.ercial banks other than large CD's) 9.1 7.3 6.5 11.2 13.8 M-3 (M-2 plus deposits at thrift institutions) 10.5 8.3 6.9 9.0 11.6 M-4 (M-2 plus CD's) 10.3 6.4 3.4 4.3 5.5 M-5 (M-3 plus CD's) 11.1 '7.7 5.0 5.0 6.6 Concepts of Money Bank Credit Loans and investments of all commercial banks 2/ Month-end basis 11.9 12.0 13.8 13.1 14.0 Monthly average 12.1 12.4 12.0 10.6 10.9 Large CD's 1.4 -0.2 -2.0 -4.7 -5.8 Nonbank commercial paper 0.3 0.6 0.7 1.0 1.1 Short-term Market Paper (Monthly average change in billions) Other than interbank and U.S. Government. 1/ Includes loans sold to affiliates and branches. 2/ 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) long-run The Humphrey-Hawkins Act requires the Federal Reserve to report to Congress in July any revision in its growth ranges for the aggregates for the current calendar year. In addition, the Act requires as part of the July report "a statement of ... objectives and plans with respect to the ranges of growth ... of the monetary and credit aggregates for the calendar year following the year in which the report is submitted." Thus, at its July meeting the FOMC will need to reassess the ranges pre- viously set for the QIV '78 to QIV '79 policy period and establish initial ranges for the QIV '79 to QIV '80 period. (9) As background for the Committee's deliberations, it may be noted that growth rates of the key monetary aggregates in the first six months of the current policy period are within their longer-run ranges adopted in February, as shown in the table below. Bank credit, however, has grown at a rate above the upper end of its range, as credit demands on banks and banks' use of nondeposit funds have been stronger than expected. Actual Annual Rate of Growth QIV '78 to QII '79 Current Longer-run Ranges for QIV '78 to QIV '79 Period M-1 2.7 1½ to 4½ M-2 5.2 5 to 8 M-3 6.3 6 to 9 Bank Credit 11.5 7½ to 10½ (10) Shown below for Committee consideration are three alternative longer-run ranges applicable to the current QIV '78 to QIV '79 policy period.1/ Alt. A Alt. B Alt. C M-1 3½ to 6½ 3 to 6 2½ to 5½ M-2 5 to 8 5 to 8 4½ to 7½ M-3 6½ to 9½ 6 to 9 5½ to 8½ Bank Credit (11) 9 to 12 8½ to 11½ 8 to 11 The ranges for the money supply aggregates under alternative B are the same as those adopted by the Committee in February, except that the M-1 range has been revised upward to reflect a changed projection of ATS account growth (including New York state NOW accounts). At the time of the February meeting, shifts from demand deposits to ATS accounts were expected to reduce measured M-1 growth by about 3 percentage points over the year. 1 to 4 Thus, the 3 percent midpoint of the FOMC's current percent longer-run range for M-1 was consistent with a 6 percent rate of growth in M-1 adjusted for ATS effects. The retardation in measured M-1 growth caused by ATS is now expected to be about half as large as estimated in February. The midpoint of the 3 to 6 percent proposed alternative B range plus the revised, lower ATS effect also is equal to an M-1 growth adjusted for ATS effects of about 6 percent. 1/ All of the proposed ranges are 3 percentage points in width--the same as the ranges adopted in February. An argument can be made, however, that the ranges should be narrowed since the policy period now contains two quarters of known results and, therefore, the Committee should be more certain of the rate of growth in the aggregates over the entire period. On the other hand, it can be argued that the considerable uncertainties about the current money-income relationship suggest the desirability of maintaining the existing width of the ranges. (12) Alternatives A and C, respectively, represent somewhat easier and tighter policies with regard to the aggregates. Alternative A is indexed by measured M-1 growth centered around 5 percent (6-1/2 percent after adjustment for ATS effects) and alternative C by measured growth of around 4 percent (5-1/2 percent after ATS effects). These growth rates can be viewed as representing orderly movement toward rates of increase in M-1 (adjusted for ATS effects) of 7 and 5 percent respectively in 1980, with the slightly different growth rates for 1979 reflecting the relatively short period remaining this year in which to influence the growth of the aggregate. For alternatives A and B, the M-2 ranges are the same because the lower interest rates under alternative A more promptly open the ceiling rate differential on MMCs favoring thrift institutions, thereby diverting funds from commercial bank time deposits to thrift deposits. In all alternatives, growth ranges for bank credit are above the current range, because of the relatively rapid growth in such credit thus far this year. (13) The table below presents three alternative longer-run ranges for next year (the policy period from QIV '79 to QIV '80). These ranges represent a continuation into 1980 of the policies toward the B' Alt. C' Alt. A' Alt. M-1 4½ to 7½ 3½ to 6½ 2½ to 5½ M-2 6½ to 9½ 5½ to 8½ 4½ to 7½ M-3 7½ 6 to 9 4½ to 7½ 6½ to 9½ 5½ to 8½ Bank Credit to 10½ 7½ to 10½ aggregates as indexed by M-1, represented by the proposed paths for 1979, after adjustment for ATS effects. Thus, alternative B' essentially repre- sents continuation of growth in M-1 at about 6 percent: the midpoint of the alternative B' range is 5 per cent, and we have assumed that ATS effects retard M-1 growth by only about 1 percent. Of course, the projection of ATS effects into next year is highly uncertain, depending as it does on as yet unknown Congressional or further judicial responses to the recent court decision terminating ATS and similar accounts beginning 1/ January 1 of next year. Alternatives A' and C' are indexed by measured M-1 growth of 6 percent and 4 percent, respectively, or 7 and 5 percent after adjusting for assumed ATS effects. These growth rates for 1980 basically extend the A and C paths for 1979, as explained in the preceding paragraph. (14) The Federal funds rate patterns through 1980 associated with the proposed longer-run monetary ranges, given the related GNP projections, are shown in appendix I. For simplicity, these patterns assume that the growth path for the aggregates adopted for 1979 will continue into 1980. 1/ Thus, they assume that alternative B for 1979 is followed by If the court decision does become effective, measured M-1 growth in the QIV '79 to QIV '80 period could be increased by 1 to 2 percentage points, depending on how much of the funds shifted from demand deposits to ATS accounts returned to demand deposits. On the other hand, if the Congress authorizes nationwide NOW accounts, the staff estimates that measured M-1 growth in the QIV '79 to QIV '80 period could be retarded by as much as 3 to 4 percentage points rather than the 1 percentage point if ATS accounts are extended. -10- 1/ alternative B' for 1980, A by A', and C by C', Under alternative B/B'--an unchanged policy with respect to the aggregates--the Federal funds rate is expected to decline somewhat by early 1980 (to a level of around 9-1/2 percent), assuming economic activity weakens about as projected. As growth in nominal GNP accelerates in 1980, this decline is projected to be reversed in order to constrain growth in the aggregates to around the midpoints of the B' range. It should be noted that the upward pressure on interest rates re-emerges even though we have assumed a rather substantial downward shift in money demand relative to income in 1980. Prospective developments: (15) short-run Three alternative short-run specifications for the monetary aggregates and the Federal funds rate are presented below for Committee consideration. (More detailed and longer-run data are shown in the tables on pages 11 and 12.) Alt. I Alt. II Alt. III M-1 3 to 7 2½ to 6½ 2 to 6 M-2 5½ to 9½ 6½ to 10½ 5½ to 9½ Federal funds rate (Intermeeting period) 9½ to 10 9-3/4 to 10½ 10½ to 11 Ranges for July-August 1/ In practice, of course, there are nine combinations of the longer-run alternatives over the 1979 and 1980 period that can be constructed from those presented in the blue book. The paths that are shown represent the tightest and easiest alternatives with respect to the aggregates that can be constructed from those presented, as well as an unchanged alternative. -11Alternative Levels and Growth Rates for Key Monetary Aggregates M- 1 Alt. A t M-2 B Alt. A C Alt. A Alt. B Alt. C 904.1 904.1 910.5 917.0 909.9 915.2 June July August 368.8 368.8 368.8 370.2 371.9 370.1 370.0 371.6 371.3 904.1 909.5 915.2 1978 QIV 361.0 361.0 361.0 873.2 873.2 873.2 1979 QI QII QIII QIV 359.1 365.9 372.0 377.8 359.1 365.9 371.6 376.3 359.1 365.9 371.3 374.8 877.1 895.9 915.3 934.3 877.1 895.9 916.8 877.1 895.9 915.2 934.0 930.4 1979 Growth Rates Monthly: 1979 7.2 7.5 July August 7.7 7.0 Quarterly Average: 1979 QI QII QIII QIV -2.1 7.6 6.7 6.2 -2.1 7.6 6.2 5.1 -2.1 7.6 5.9 3.8 1.8 8.6 8.7 8.3 Semi-Annual: QIV '7 8 -QII '79 QII '79-QIV '79 2.7 5.2 8.5 6.5 5.2 7.7 Annual: QIV '78-QIV '79 1/ 4.7 4.2 The staff has assumed that over the longer-run policy period from QIV '78 to QIV '79 M-l growth will be reduced by about 1 percentage points by ATS. -12Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) Bank Credit M-3 Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C 1979 June July August 1551.8 1562.3 1573.0 1551.8 1562.8 1572.9 1551.8 1561.9 1570.4 1044.6 1053.6 1062.5 1044.6 1053.5 1062.0 1044.6 1053.4 1061.5 1978 QIV 1492.7 1492.7 1492.7 978.7 978.7 978.7 1979 QI QII QIII QIV 1510.3 1539.9 1573.1 1607.7 1510.3 1539.9 1572.8 1603.3 1510.3 1539.9 1570.4 1595.7 1009.8 1036.0 1063.5 1088.5 1009.8 1036.0 1062.2 1084.2 1009.8 1036.0 1061.2 1079.8 8.1 8.2 8.5 7.8 7.8 6.5 10.3 10.1 10,2 9.7 10.1 9.2 4.7 7.8 8.6 8.8 4.7 7.8 8.5 7.8 4.7 7.8 7.9 6.4 12.7 10.4 10.6 9.4 12.7 10.4 10.1 8.3 12.7 10.4 9.7 7.0 6.3 8.8 6.3 8.2 6.3 7.2 11.7 10.1 11.7 9.3 11.7 8.5 7.7 7.4 6.9 11.2 10.8 10.3 Growth Rates Monthly: 1979 July August Quarterly Average: 1979 QI QII QIII QIV Semi-Annual: QIV '78-QII '79 QII '79-QIV '79 Annual: QIV '78-QIV '79 -13- (16) Alternative II contemplates no change in the current 9-3/4 to 10-1/2 percent Federal funds rate range, nor in the Desk's current 10-1/4 percent objective within that range. Under those conditions, M-1 in the July-August period is expected to increase in a 2-1/2 to 6-1/2 percent annual rate range--slower than the average rate of expansion in recent months, reflecting the projected further slowdown in expansion of nominal GNP. In the third quarter M-1 is expected to expand about in line with nominal GNP and V-1, therefore, to show little net change 1/ for the second consecutive quarter. (17) As illustrated by the top panel of the chart on page 14, growth in measured M-1 at the 4-1/2 percent midpoint of its projected July-August alternative II range would leave M-1 in the upper half of its current longer-run range. The lower panel of the chart compares the projected July-August expansion with the proposed alternative B longer-run range. In that comparison, by August M-1 would be in the lower half of the longer-run range. The dotted line in the chart also shows annual growth rates needed from the actual June level to reach targeted midpoint levels by the fourth quarter of 1979 under the current longer-run range and proposed alternative B; these growth rates 2/ are 2 percent and 5-1/2 percent, respectively. 1/ 2/ See appendix II for projections of V-1 and V-2. Appendix III provides the same information for all aggregates for the current and three proposed longer-run alternatives growth ranges for the QIV '78 to QIV '79 policy period. Growth Ranges and Actual M-1 CURRENT LONGER-RUN RANGE Billions of dollars 385 Alt. I Short-Run Range - Q4 '78-04 '79 - - 380 - 375 - 370 - 365 - 360 - 355 --.- 1/2% I I i I I I i I i b I I i I I I I ALTERNATIVE B. LONGER-RUN RANGE 385 Q4 '78-Q4 '79 Att. I Short-Run Range - -380 5'V% -375 -370 - 365 -360 355 I , O N 1978 I D I E I r J I I III F M A i i M J I 1979 I I I A 1 I S f 350 I I O N D -15- (18) The staff expects M-2 to expand in a 6-1/2 to 10-1/2 per- cent annual rate range in July-August under alternative II. As shown in the upper panel of the chart on page 16, M-2 in June was at a level slightly below the midpoint of its longer-run range. Growth at the midpoint of the alternative II range would bring M-2 to about the midpoint of its current (and also proposed alternative B) longer-run growth range by August. (19) Virtually all of the expected slowing in M-2 in July- August, relative to May-June, reflects the more modest growth of M-1. Growth of the interest-bearing component of M-2 is expected to remain strong, accounted for mainly by continued sizable bank issuance of MMCs. Inflows of funds to banks through MMCs are expected to remain large, since the staff is projecting that the 6-month bill rate under alternative II will remain near or above 9 percent and thus that no significant differential will emerge in ceiling rates on these instruments favoring thrift institutions. As in other recent months, large- denomination time deposits are not expected to contribute to growth in M-2 as banks continue to supplement their demand and small denomination time deposits growth with Eurodollars and RPs. 16 Growth Ranges and Actual M-2 and M-3 M-2 Current and Alternative B. Longer-Run Range Alt. II Short-Run Range - Q4 '78-Q4 '79 Billions of dollars 950 , 8% .. 6.9% - 940 - 930 - 920 S5% 2% , -910 - 900 - 890 880 I I I I I I I I i I i I 870 860 I M-3 1640 Q4 '78-Q4 '79 Current and Alternative B. Longer-Run Range Alt' I Short-Run Range---- 99% - 1620 - 1600 - 1580 - 1560 . 6.2% 6% -1540 - 1520 -1500 0 N 1978 ~I I D I I I J F M i II £ I A I M J 1979 .~I t A I S 0 -- 1480 I N D -17(20) Deposit growth at thrifts in coming months is expected to remain near the second quarter pace, but--with banks continuing to capture an enlarged share of net MMC sales--well below the pace set in the second half of 1978 and early 1979 prior to the change in MMC regulations. As a result, as shown in the lower panel of the chart on page 16, M-3 growth is likely to stay near the low end of its longer-run range. S&Ls can be expected to continue to draw down their liquid assets and to tap nondeposit funds in substantial quantity in order to meet their mortgage commitments in the face of restrained deposit flows. (21) If the funds rate remains around 10¼ percent as contemplated under alternative II, short-term rates might back up somewhat as fewer market participants come to expect that interest rates will soon decline. If short-term rates rise, this may work to strengthen the dollar on foreign exchange markets since it will tend to improve interest rate spreads between U.S. and foreign markets. Yields in bond markets might also rise, especially in the municipal market where a relatively large slate of offerings is in prospect. In corporate bond markets, on the other hand, issuance is expected to be relatively light and the Treasury is likely to raise only $2 to $3 billion of new money in a routine mid-quarter financing. (22) Alternative III contemplated a ½ percentage point rise in the Federal funds over the next few weeks to the midpoint of a 10 II percent range. to Such an approach to policy appears most consistent with a reduction in the longer-run growth range for the aggregates, as proposed in alternative C/C'. In the present environment, a tightening of the funds rate objective would be expected to have rather significant and widespread effects. The value of the dollar would strengthen in -18foreign exchange markets more certainly than under alternative II, and domestic short-term interest rates would rise considerably. The initial reaction in bond markets would probably mirror that of short-term debt markets. But in view of the evidence of the weakening in the economy, market participants would be likely to see a tightening at this time as a temporary measure. Thus, any tendency for bond yields to rise would be limited as long-term investors sought to lock in attractive long-term yields near their cyclical highs. (23) Alternative I involves a Federal funds rate to the center of a 9 percentage point decrease in the to 10 percent range. Such a move appears most consistent with the higher longer-run growth rates for the monetary aggregates associated with alternative A/A'. It would not necessarily be inconsistent with longer-run alternative B, under which interest rates are expected to begin declining later in the summer or in early fall. A modest reduction in the Federal funds rate over the near term, especially if it occurs along with new data suggesting further weakness in economic activity, is likely to be accompanied by a fairly substantial drop in market rates--as market participants come to expect even more monetary ease ahead. In this environment, the dollar would probably weaken substantially further on exchange markets, and the spread of Treasury bill rates below private rates would widen as foreign official institutions acquired Treasury securities in the wake of intervention activity. The drop in Treasury bill rates will reintroduce a full 25 basis points differential on MMC ceiling rates in favor of thrift institutions, leading to weaker M-2 growth in the short run under alternative I than under alternative II. -19Directive language (24) Given below are suggested operational paragraphs for the directive in the customary form, with alternative language related to the short-run specifications presented in the preceding section. Alternative language is also provided for placing main emphasis either on monetary aggregates or on money market conditions. The specifications adopted last month 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 the program for supporting the foreign exchange value of the dollar and to developing conditions in domestic financial markets. Early in the period before the next regular meeting, System open market operations are to be directed at maintaining the (or ATTAINING A) weekly average federal funds ra e (I) (II) (III) SLIGHTLY BELOW THE CURRENT LEVEL. at about the current level. SLIGHTLY ABOVE THE CURRENT LEVEL. Subsequently, operations shall be directed at maintaining the 9¾ to 10½] weekly average federal funds rate within the range of [DEL: ____ TO ____ percent. In deciding on the specific objective for the federal funds rate the Manager shall be guided mainly by the relationship between the latest estimates of annual rates of growth May-June]JULY-AUGUST period of M-1 and M-2 and the following in the[DEL: 8½] 4 to 0 to 5] ____TO____ percent for M-1 and[DEL: ranges of tolerance: [DEL: ____ TO ____ percent for M-2. If, with approximately equal weight -20given to M-1 and M-2, their rates of growth appear to be Monetary aggregates emphasis SIGNIFICANTLY ABOVE OR BELOW THE MIDPOINTS Money market emphasis close to or beyond the upper or lower limits of the indicated ranges, the objective for the funds rate is to be raised or lowered in an orderly fashion within its range. If the rates of growth in the aggregates appear to be above the upper limit or below the lower limit of the indicated ranges at a time when the objective for the funds rate has already been moved to the corresponding limit of its range, the Manager will promptly notify the Chairman, who will then decide whether the situation calls for supplementary instructions from the Committee. -21- Appendix I Projected Federal Funds Rates _ ____ Alt. A/A' 1979 QIII QIV 1980 QI QII QIII QIV 9-3/4 9 Alt. B/B' 10-1/8 9-5/8 9-1/2 9-1/4 9-1/4 9-1/2 9-3/4 10-1/4 10-1/2 Alt. C/C' 10-3/4 10-1/4 10-1/4 10-3/4 11-1/4 11-1/2 -22- Appendix II Implied Velocity Growth Rates Alt. A/A' Alt. B/B' Alt. C/C' V-1 (GNP/M-1) 1979 QI QII QIII QIV 11.7 0.1 -0.1 2.5 1980 QI QII QIII QIV 4.0 3.3 4.5 5.0 ( 8.7) (-1.3) (-1.3) ( 1.4) ( ( ( ( 3.0) 2.2) 3.5) 4.1) 11.7 0.1 -0.1 3.2 ( 8.7) (-1.3) (-1.3) ( 2.1) 11.7 0.1 -0.1 3.8 4.3 4.0 4.6 5.1 ( 3.3) ( 2.9) ( 3.7) (4.2) 4.5 3.8 4.6 5.0 V-2 (GNP/M-2) 1979 QI QII QIII QIV 7.7 -0.8 -2.2 0.6 7.7 -0.8 -3.1 0.8 7.7 -0.8 -2.8 0.9 1980 QI QII QIII QIV 1.9 1.4 2.5 3.2 2.8 2.6 2.8 2.4 1.9 1.9 2.8 3.5 Note: Figures in parentheses reflect V-1 without ATS. ( 8.7) (-1.3) (-1.3) ( 2.6) ( ( ( ( 3.4) 2.7) 3.6) 4.1) -23Appendix III-1 Growth Rates from June Required to Achieve Levels Implied by the Current and Alternative Longer-run Ranges for the QIV '78 to QIV '79 Period for M-1 (Per cent Annual Rate) Low End of Range Midpoint of Range High End of Range Current Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) -6.0 0.5 7.2 -1.6 2.0 5.5 Alternative B Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) 0.5 7.2 13.7 2.0 5.5 9.0 Alternative A Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) 2.8 9.3 15.9 3.1 6.7 10.2 Alternative C Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) -1.6 4.9 4.3 11.6 7.9 -24- Appendix III-2 Growth Rates from June Required to Achieve Levels Implied by the Current and Alternative Longer-run Ranges for the QIV '78 to QIV '79 Period for M-2 (Per cent Annual Rate) Low End of Range Midpoint of Range High End of Range Current and Alternative B Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) 1.3 7.8 14.3 3.4 6.9 10.4 Alternative A Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) 1.3 7.8 14.3 3.4 6.9 10.4 Alternative C Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) 12.1 -0.9 5.7 9.2 -25Appendix III-3 Growth Rates from June Required to Achieve Levels Implied by the Current and Alternative Longer-run Ranges for the QIV '78 to QIV '79 Period for M-3 (Per cent Annual Rate) Low End of Range Midpoint of Range High End of Range Current and Alternative B Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) 3.1 9.6 16.1 4.7 8.2 11.6 Alternative A range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) 5.3 11.8 18.3 5.9 9.3 12.8 Alternative C Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) 1.0 7.5 14.0 3.6 7.0 10.5 -26Appendix III-4 Growth Rates from June Required to Achieve Levels Implied by the Current and Alternative Longer-run Ranges for the QIV '78 to QIV '79 Period for Bank Credit (Per cent Annual Rate) Low End of Range Midpoint of Range High End of Range Current Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) -6.3 0.1 6.4 1.7 5.1 8.5 Alternative B Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) -2.0 4.3 10.6 4.0 7.4 10.7 Alternative A Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) 0.1 6.4 12.7 5.1 8.5 11.8 Alternative C Range Achieve Level by: August 1979 (in 2 months) QIV '79 (end-point of longer-run range) -4.1 2.2 6.2 9.6 Table 1 Money and Credit Aggregate Measures Bank Reserves Period Total Nonborrowed Monetary Base 1 2 3 .6 .3 .6 0.8 3.0 6.7 Money Stock Measures Total Loans and Investments 4 M-1 M - 1+ M-2 M-3 5 6 ? 8 PER CENT ANNUAL RATES OF GROWTH) M-4 M-5 M-6 M-7 9 10 11 12 ANNUALLY: 5.8 7.9 7.2 12.6 9.3 5.3 10.9 9.8 8.4 1977 8.1 7.5 9.1 1ST HALF 1978 2ND HALF 1978 QUARTERLY: 8.0 6.1 1976 1977 1978 6.7 8.3 9.1 8.0 11.3 12.4 12.7 11.7 9.3 7.1 10.1 10.4 10.2 11.' 10.5 11.5 10.2 9.9 11.6 11.4 11.1 10.3 11.8 12.0 12.0 10.0 10.4 10.0 9.8 9.9 SEMI-ANNUALLY: 2ND HALF 10.4 6.2 0.5 1ST QTR. 1979 QUARTERLY-AV: -4.4 1978 2ND QTR. 3RD QTR. 1978 4TH QTR. 1978 6.2 8.6 2.3 OTR. 1979 7.7 8.8 8.3 9.9 10.6 9.7 11.3 2ND QTR. 1978 3RD QTR. 1978 4TH QTR. 1978 1ST 6.2 4.4 2.7 6.7 2.4 -5.7 0.6 6.6 4.6 9.0 9.8 7.3 17.0 11.1 7.9 10,8 9.3 0.6 8.6 7.5 -1.6 4.2 14.1 -2.4 -5.2 7.6 9.3 8.4 14.9 11.8 10.6 5.7 13.1 -2.1 -5.0 16.6 13.7 10.1 7.6 15.3 10.3 12.7 0.4 9.7 6.2 6.5 7.8 13.5 1.7 -2.0 2.0 25.3 10.9 5.8 13.8 11.1 -5.0 -3.7 1.3 17.7 0.7 -2.9 -3.3 11.0 11.6 14.8 -5.0 8.6 5.1 -3.6 -0.1 -8.9 15.6 8.5 0.2 11.3 -1.2 13.4 -4.9 10.5 2.2 -20.6 1.3 -2.9 -30.0 8.6 -0.5 4.6 9.2 7.9 4.1 9.7 10.9 4.7 9.4 11.4 7.1 11.2 10.7 7.7 10.3 11.3 8.7 10.1 10.9 8.4 10.9 1.7 4.6 2.5 5.0 5.5 7.0 8.4 9.8 7.6 8.4 10.3 9.3 10.6 9.9 9.3 9.8 10.4 10.2 9.6 9.7 10.7 10.2 11.1 1.8 4.7 4.5 6.2 6.8 9.5 8.4 5.2 3.1 7.2 12.1 0.8 -4.5 -1.2 9.2 8.5 B.5 11.2 12.8 6.4 4.8 2.9 8.6 9.4 11.9 8.3 9.4 9.6 12.7 5.9 12.9 4.1 10.4 9.2 10.0 10.3 13.2 9.3 11.6 6.1 10.4 8.7 8.4 9.8 14.1 7.2 10.0 7.9 -8.0 -6.6 -1.0 11.2 -2.3 -1.1 2.3 3.8 14.1 5.4 3.8 4.1 -0.4 7.7 -0.5 5.6 5.7 3.5 7.0 1.3 6.9 5.8 4.0 6.9 2.6 7.2 6.1 2.6 0.7 MONTHLY: 1978--MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1979--JAN. FEB. MAR. APR. MAY 6.0 -21.0 1.8 -4.9 -4.3 8.6 10.6 5.2 13.5 8.0 5.7 7.9 4.9 3.3 1 1/ 2/ P - BASED ON DATA ADJUSTED FOR CHANGES BASED ON QUARTERLY AVERAGE DATA. PRELIMINARY IN RESERVE REQUIREMENTS. 9.5 11.2 13.3 8.7 6.7 5.6 2.9 4.8 6.2 10.5 4.9 11.2 9.6 9.0 9.7 13.9 8.5 12.7 11.2 9.0 8.1 6.3 9.2 5.2 Table 2 Money and Credit Aggregate Measures Seasonally Adjusted, Billions of Dollars Sank Reserves ank Reserves Ban IS Crdt Non- Total Loans Period Total borrowed Monetary Base and Money Stock Measures M-1 M-1+ M-2 M-3 5 6 7 8 M-4 M-5 M-6 M-7 10 11 12 Investments 4 1 2 37,013 38,923 41,271 36,960 38t354 40,403 120,372 130,640 142,381 1978--MAY JUNE 40,208 40,597 38,996 39,503 135,525 136,494 926.1 JULY 39,782 39 788 40,163 137,699 138,290 139,841 944.6 SEPT. 41,099 t 40, 28 41,2?23 OCT. 41,399 NOV. 41,274 140,777 141,450 DEC. 41,271 40,122 43,570 40,403 971.0 981.3 981.5 1979--JAN. FEB. MAR. 41,479 43,754 40,815 40,476 39,781 39,825 143,345 143,893 APR. MAY 40,647 40, 503 39,730 38,738 144,486 144,878 16 23 ?0 40,s60 40,640 40,295 40,323 39,072 38,881 38,592 37,996 144,553 144,938 145,536 144t874 145,802 371.1 368.5 145,847 368.6 146,790 .3 ANNUALLY: 1976 1977 1978 313.8 338.7 361.2 517.2 560.6 587.1 740.6 809.4 875.8 1235.6 1374.3 1500.1 803.0 883.1 972.4 1298.0 1448.0 1596.7 1436. 1 1601.8 1762.6 1483.8 1658.1 184P.0 350.7 352.5 576.1 578.6 836.7 842.6 142?.0 1433.1 922.9 929.3 1508.2 1519.8 1668.7 1680.8 1737.2 1751.1 354.4 356.7 360.7 580.1 583.6 589.5 848.6 856.5 865.6 1444.5 1458.0 1474.1 936.6 944.1 954.1 1932.5 1545.6 1562.6 1692.6 1706.4 1726.4 1764.3 1778.5 1799.1 361.2 589.9 587.7 587.1 870.2 873.7 875.8 1484.8 1493.1 1500.1 958.8 360.6 361.2 969.1 1573.4 1588.6 1596.7 1736.7 1751.1 1762.6 1811.8 1830.9 1848.0 100?.2 1011.3 1016.2 359.7 358.6 359.0 583.2 580.0 579.5 875.0 1503.7 1509.7 1517.5 975.5 1604.2 1611.8 1616.5 1772.1 1780.7 879.5 1786.7 1861.8 1874.4 1884.3 1027.9 1038.0 364.3 364.5 584.9 583.8 889.8 893.8 1530.8 15 7.0 984.8 984.4 1625.9 1627.6 1796.9 1800.8 1898.8 1907.0 364.8 584.4 583.6 583.8 583.2 892.7 591.0 589.2 589.9 589.6 903.4 788.9 875.5 981.5 MONTHLY: AUG. 142,381 143,400 936.7 950.6 962.7 876.7 972.4 978.8 978.5 WEEKLY: 1979-M8Y 9 JUNE JULY 6 40,494 13 20P 27° 40,038 40,305 39,154 38,739 39,415 38,718 4P 41,073 39,395 40,739 1I/ WEEKLY DATA M3, M5, Mb, ASFO C0 DATA P - PRELIMINARY NOTFS: 144,768 145,316 364.3 364.5 364.0 368.9 892.9 894.4 895.3 902.9 904.8 905.3 985.4 984.3 984.3 983.6 989.3 987.3 989.2 989.9 DATLY AVERAGES FOR STATEMENT WEEKS. MONTHLY DATA ARE DAILY AVERAGES. WEEKLY TOTAL LOANS AND INVESTMENTS AND THRIFT INSTITUTION DEPOSITS. A JUSTED FIR CHANGES 1N RESERVE REQUIREMENTS. DATA SHOWN IN MILLIONS OF DOLLARS. ARE 17, DATA ARE NOT AVAILARLE FOR Table 3 COMPONENTS OF MONEY STOCK AND RELATED MEASURES I Period Currnc mand DCeposits 2 3 I II_ 1 AN ANNUALLY: I Mutual Savings Bank & S&L Shares-V 7 8 Time and Savings Deposits nd Total Total Total Other Than CD's Savings Oth Savings I Other 5 4 6 CD's Credit Union Shares-/ Savigs Bonds/ Other Private Short Term U.S.Gov't Short-term Securities Assets 1 u1/ 9 10 11 12 (Per cent annual rates of growth) 2/ 1976 1977 1978 9.5 9.3 10.0 4.6 7.4 6.1 8.1 11.4 12.4 15.0 11.2 9.4 25.0 11.1 2.2 7.5 11.4 15.6 -23.3 12.8 32.8 15.4 14.0 10.2 17.8 19.5 15.0 6.9 6.6 5.4 7.1 12.6 8.9 12.1 13.5 46.7 2ND HALF 1977 10.0 7.3 11.7 9.8 6.4 12.9 25.6 13.6 20.1 6.5 2249 12.5 1ST HALF 1978 2ND HALF 1978 9.3 10.2 7.6 4.5 12.2 12.0 7.6 10.7 2.9 1.5 11.7 18.4 42.6 19.0 8.5 11.5 17.0 12.0 6.3 4.3 12.5 4.9 50.9 33.9 11.4 11.6 11.9 8.9 12.1 7.7 4.7 4.5 -5.3 12.5 18.5 18.1 25.5 8.3 36.6 8.3 12.1 10.7 14.0 13.5 7.7 5.7 4.6 4.0 11.0 9.3 6.2 34.0 13.7 69.3 5.4 4.6 -9.5 15.5 9.9 9.5 1.5 0.0 20.2 57.7 11.5 11.3 12.3 7.9 11.0 10.2 3.8 2.9 0.2 11.4 17.9 18.2 33.5 12.2 25.0 7.8 10.9 11.8 15.9 13.7 10.1 6.2 4.6 4.0 9.0 2.5 7.3 38.4 21.0 44.4 8.4 4.5 -9.6 15.6 29.9 9.6 0.8 1.5 23.0 67.4 13.4 9.6 11.0 10.9 12.5 8.5 21.7 5.3 8.7 10.1 9.8 13.8 12.2 10.0 9.4 3.5 6.0 3.8 -3.2 6.5 10.2 -0.5 -8.5 -7.0 11.0 15.5 20.7 19.9 13.9 18.5 23.7 11.2 40.3 7.0 18.0 -5.5 12.3 1.4 92.1 15.1 7.2 10.1 11.1 11.2 13.5 12.5 9.8 9.5 12.2 14.5 11.9 11.8 16.3 9.2 4.6 9.1 6.1 4.6 6.1 3.0 4.5 4.5 3.0 4.5 14.8 2.9 -17.5 5.9 39.9 -11.4 -14.4 45.3 30.5 31.5 22.2 6.7 11.7 41.3 75.0 81.1 9.0 8.6 -1.4 1.6 6.5 5.6 -11.8 -12.0 -4.9 12.8 20.0 13.2 48.4 19.1 -36.4 9.7 9.6 8.9 -4.5 -6.8 16.0 1.5 -1.5 0.0 28.1 13.7 17.7 61.9 52.2 51.3 2/ SEMI-ANNUALLY: QUARTERLY: 2ND QTR. 3RD QTR. 4TH QTR. 1978 1978 1978 7.9 11.7 9.7 11.9 8.5 -2.7 1ST QTR. 1979 7.8 -6.4 QUARTERLY-AV 2ND QTR. 3RD QTR. 4TH QTR. 1978 1978 1978 8.0 9.6 10.6 1ST QTR. 1979 9.1 -6.2 9.2 6.5 9.1 9.0 16.6 7.6 10.0 11.2 10.3 5.6 5.5 7.4 12.3 -0.9 -5.9 -1.4 9.7 7.3 1.7 MONTHLY: 1978--MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. 1979--JAN. FEB. MAR. 8.6 8.6 6.1 APR. 9.7 21.3 2.1 11.8 0.0 20.2 -48.5 5.5 6.8 0.0 12.1 MAY 52.9 6.0 -1.4 -1.4 8.7 -7.2 19.9 -55.6 9 4.5 0.0 29.2 50.6 I TH AR -10.0 -8.3 -0.9 BA E MATE PREVIOUS MONTH REPORTED DATA. 2/ BASED ON QUARTERLY AVERAGE DATA. P - PRELIMINARY. ONHL A A LEVELS DEIVED BY AVERAGN D CURRENT MONH AND END OF Table 4 COMPONENTS OF MONEY STOCK AND RELATED MEASURES eSving urrency Currency Demand Deposits Period Period Total Time and Savings Deposits Csan s Other Than CD's Othr I Saving s Total______________ s Mutual Credit s Bank Union Savings & S&L Shares Bonds Ss .. 1 Shares ShortTerm U.S NonDeposit Funds S Sac ! Other Private Shortterm Asset 9 10 11 12 13 11.4 11.7 15.4 Govt Total Gov't Demand Deposits Doits A a a 4 0 a 80.8 88.6 97.5 233.0 250.1 263.7 489.2 544.4 611.2 426.7 470.7 514.6 202.1 219.7 223.0 224.7 251.0 291.5 62.4 73.7 96.6 456.1 518.3 571.2 38.9 46.6 53.1 71.9 76.6 80.6 66.2 77.2 85.3 47.7 85.3 51.0 62.0 79.7 92.0 92.5 258.8 260.0 572.2 576.8 486.0 490.1 222.8 223.5 263.2 266.6 86.2 86.7 535.5 540.0 49.8 50.4 78.6 78.9 81.9 82.1 68. 5 70.3 66.2 66.5 13.4 JULY AUG. SEPT. 93.2 93.9 95.2 261.2 262.8 265.5 582.1 587.4 593.5 494.1 499.8 504.9 222.9 224.1 226.0 271.2 275.7 278.9 88.0 87.6 88.5 545.0 553.1 556.3 50.9 51.4 52.1 79.3 79.5 79.8 80.9 B1.3 84.0 71.6 72.0 72.7 67.5 69.7 70.8 14.7 16.8 16.7 OCT. 95.8 96.6 9T, 5 265.3 264.0 263. T 597.7 608.5 611.2 509.1 513.1 514.6 225.9 224.3 223.0 283.2 288.8 291.5 88.6 95.4 96.6 562.1 566.7 571.2 52.5 52.7 53.1 80.1 80.3 90.6 83.2 82.2 85.3 75.2 79.9 85.3 74.7 20.1 21.0 15.4 98.2 98.9 99.4 261.5 259.7 259.5 615.8 620.2 619.5 515.3 518.1 520.5 220.8 218.6 217.7 294.6 299.5 302.8 100.5 102.1 99.0 575.8 580.4 584.7 52.9 52.6 53.3 80.7 80.6 80.6 87.3 88.3 89.7 93.6 q7.6 81.7 100.2 100.7 264.1 263.8 620.6 619.9 525.6 529.4 217.7 216.4 307.9 313.0 95.0 90.6 587,4 589.3 53.6 53.8 80.6 80.6 90.5 92.7 2 9 16 23 30 100.4 100.4 130.6 100.8 101.3 263.8 264.4 263.7 263.7 262.7 621.1 620.6 620.0 619.8 619.6 527.5 527.9 528.5 529.9 531.3 216.9 216.6 216.3 216.3 216.2 310.7 311.3 312.2 313.7 315.1 93.6 92.7 91.5 89.8 88.2 6 13 20P P 27 101.4 101.2 101.4 101.9 269.6 267.3 267.5 266.7 618.2 618.9 620.3 621.3 532.3, 534.4 535.9 536.8 217.0 217.7 218.0 218.0 315.4 316.7 317.9 318,7 85.9 64.4 84.4 84.5 8 ANNUALLY: 1976 1977 1978 MONTHLY: 1978--MAY JUNE NOV. DEC. 1979--JAN. FrB. MAR. APR. MAY 89.6 56.3 101.9 106.2 73.5 79. 7 84.0 86.8 8.3 14.7 10.2 9.4 90.1 8.1 91.2 9.3 89.6 7.5 9.0 8.4 9.8 11.1 'EEKLY: 1979-M4Y JUNE 1/ 2/ 3/ 4/ P - 88.4 89.5 90.9 95.9 97.1 95.2 95.6 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 ARKET 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 DEMAND DEPOSITS AT COMMERCIAL BANKS AND FEDERAL RESERVE BANKS AND TREASURY NOTE BALANCES. PRELIMINARY 9. 15.0 16.4 12.1 TABLE 5 SELECTED INTEREST RATES (percent) 1978--High Low 10.25 6.58 Short-Term Tre Bills TreasuryssueMarket Auction 3-mo 1-yr 6-mo (4) (2) (3) 9.62 9.58 9.30 6.42 6.16 6.55 1979--High Low 10.59 9.93 9.69 8.85 9.68 8.64 9.63 8.87 10.46 9.46 1978--June 7.60 6.73 7.53 7.20 7.66 Federal Funds (1) CDs New Comm. Paper 90-119 Day (6) 10.52 6.68 NYC 90-day (5) 10.65 6.65 iBn Prie STRICTLY CONFIDENTIAL (FR) CLASS II U.S. Govt. Constant Maturity Yields (7) 11.57 7.75 (8) (9) 9.59 7.40 9.22 7.72 (10) 9.00 8.01 10.57 9.66 11.75 11.50 9.60 8.77 9.34 8.73 9.30 8.79 7.59 8.63 8.30 Long-Term Corp.-Aaa Utility New Recently Issue Offered (11) (12) 9.30 8.61 9.54 8.48 Municipal Bond Buyer (13) 6.67 5.58 9.87 9.42 9.94 9.40 9.09 - FOMC Home Mortgages rimary I econdary Cnv FNMA I Auc. (15) (14) Market GINMA Sec. (16) 10.38 8.98 10.60 9.13 9.68 8.43 6.58 6.08 11.10 10.38 10.88 10.42 10,05 9.51 9.07 6.22 9.70 9.91 9.05 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 8.97 9.04 July Aug. Sept. 7.81 8.04 8.45 7.01 7.08 7.85 7.79 7.73 8.01 7.47 7.36 7.95 8.00 7.86 8.34 7.85 7.83 8.39 9.00 9.01 9.41 8.54 8.33 8.41 Oct. 8.96 9.76 10.03 7.99 8.64 9.08 8.45 9.20 9.44 8.49 9.20 9.40 9.12 10.15 10.44 8.98 10.14 10.37 9.94 10.94 11.55 8.62 9.04 9.33 8.64 8,80 9.03 8.69 8.75 8.90 9.17 9.27 9.28 9.13 9.27 9.41 6.13 6.19 6.51 9.86 10,11 10.35 10.03 10.30 10.50 9.25 9.39 9.38 1979--Jan. Feb. Mar. 10.07 10.06 10.09 9.35 9.32 9.48 9.54 9.39 9.38 9,50 9.35 9.46 10.20 9.81 9.86 10.25 9.95 9.90 11.75 11.75 11.75 9.50 9.29 9,38 9.14 9.11 9.15 8.98 9.03 9.08 9.54 9.53 9.62 9.51 9.56 9.62 6.47 6.31 6.33 10.39 10.41 10.43 10.70 10.54 10.43 9.67 9.67 9.70 Apr. May June 10.01 10.24 10.29 9.46 9.61 9.06 9.28 9.27 8.81 9.50 9,53r 9.06 9.76 9.85 9,95 9.76 11.75 11.75 11.65 9.43 9.42 8.95 9.21 9.23 8.86 9.12 9.21 8.91 9.70 9.83 9.50p 9.74 9.84 9 53 . p 6.29 6.25 6.13p 10.50 10.69 11.04 10.59 10.84 10.77 9.78 9.89 9.75 2 9 16 23 30 10.22 10.25 10.25 10.17 10.28 9.48 9.65 9.58 9.69 9.54 9.76 9.92 9.98 9.99 9.95 11:75 11.75 11.75 11.75 11.75 9.54 9.54 9.34 9.34 9.28 9.30 9.26 9,08 9.23 9.11 9.19 9.01 9.06 10.60 10.68 10.73 10.75 10.90 10.82 9.45 9.27 6.27 6.30 6.30 6.21 6,16 6 13 20 27 10,23 10.23 10.28 10.32 10.42 9.48 9.06 8,98 8.85 8.96 9,92 9.86 9.67 9.68 11.75 11.75 11.68 11.50 9.06 8.90 8.94 8.82 8.98 8.89 8.87 8.93 11.03 11.05 11.10 10.79 8.99 8.81 8.78 8.82 6.09 6.11 6.18 6.12 11.10 10.74 9.66 11.50 8.77p 8.73 p 8.79 p 6.08 n.a. 10.54 10.30p 8.90 9.19 9.65 9.66 11.50 11.50 8.77 8.80p 8.73 8 .75p 8.80 8.80p Nov. Dec. 1979--May June July 4 11 18 25 Daily--June 28 July 5 8.60 8.73 9.80 9.58 - 9.85 9.80 9.57 9.51 9.43 - 9.42p 10,88 10.80 S - 9.84 10.05 10.03 9.98 9.51 9.83 9.76 9.72 9.70 9.58 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 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 quotas for Friday and Thursday, respectively, following the end of the statement week. Column 14 is an average of contract interest rates on commitments for conventional first mortgages with 80 percent 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 FNMA 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 auction yield is the average yield in bi-weekly auction for short-term forward commitments for Government underwritten mortgages. GNMA yields are average net yields to investors on mortgage-backed securities for immediate delivery, assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying the coupon rate 50 basis points below the current FHA/VA ceiling. STRICTLY CONFIDENTIAL CLASS II - FOMC TABLE 6 1/ NET CHANGES IN SYSTEM HOLDINGS OF SECURITIESnot seasonally adjusted) (millions of dollars, TaTreasury Treasury within Bills Net I Change 2/ Period 1972 1973 1974 1975 1976 1977 1978 1978--Qtr. II Qtr. 111 Qtr. IV Coupons Net Purchases 3/ I - 5 5 - 10 Over 10 Total within With I Federal Agencies Net Purchases 4/ I - 5 5 - 10 Over 10 Total Net Change OutrightNet Hold ings Toal 5/ (FR) RP's 6/ -490 7,232 1,280 -468 863 4,361 870 87 207 320 337 472 517 1,184 789 579 797 3,284 3,025 2,833 4,188 539 500 434 1,510 1,048 758 1,526 167 129 196 1,070 642 553 1,063 1,582 1,415 1,747 6,202 5,187 4,660 7,962 46 120 439 191 105 --47 592 400 1,665 824 469 792 45 253 244 659 460 203 428 104 168 101 318 138 114 213 24 1,059 864 3,082 1,613 891 1,433 127 1,631 9,273 6,303 7,267 6,227 10,035 8,724 -1,358 -46 -154 1,272 3,607 -2,892 -1,774 5,444 3,152 -5,072 288 340 212 1,156 774 1,135 468 349 250 334 235 247 2,246 1,697 1,844 46 -92 - 127 -81 -- 104 --- 24 -- 301 -173 -- 7,930 4,632 -3,283 1,224 266 -2,130 93 -- 700 682 -170 110 -229 258 -2 -- -399 371 -882-1 -1,795 680 2,542 -5,745 2,135 4,290 - 1979--Qtr. I Qtr. II -3,750 465 48 42 426 640 134 - 1979--Jan. Feb. Mar. -4,258 -628 1,136 -48 -- -426 -- 134 -- 93 -- -700 -- -150 -20 -- -229 --- --- --- -379 -20 -- -4,647 52 3,713- Apr. May June 1,021 -451 -105 -42 640 -- --- ---- 640 42 --110 --258 --2 --- --371 -1, 5 7 9 -491 275 -944 -2,353 5,840 2 9 16 23 30 --131 -120 --- --- ---- ---- ----- ------ ------ ------ ----- ------ ----- --161 -120 --10 -3,991 -1,109 810 -673 4,162 6 13 20 27 -748 -342 101 --42 -- ----- ----- -- --- --42 -- --110 -- --258 -- -2 -- --371 -- -748 -33 755 101 -5,513 1,230 1,830, 5,723- 4 113 218 237 96 142 693 - -- - -- -- 806 -4,853 40.6 16.3 28.2 12.3 11.9 68.8 1.4 4.1 1.5 .8 7.8 117.1 -2.3 1979--May June July - 11 18 25 LEVEL--July 4 (in billions) end-of-pe d to 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, o and redemptions (-) of Agency and Treasury coupon issues. Includes changes in both RP's (+) and matched sale-purchase transactions (-). The Treasury sold $2,600 million of special certificates to the Federal Reserve on March 31 and redeemed the last of them on April 4. $640 million of 2-year notes were exchanged for a like amount of cash management bills on April 3. On April 9 the bills were exchanged for new 2-year notes. This includes $75 million of matched purchase-sale agreements. 

Federal Reserve (1979, July 10). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19790711

@misc{wtfs_bluebook_19790711,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1979},
  month = {Jul},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19790711},
  note = {Retrieved via When the Fed Speaks corpus}
}