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. July 3, 1980 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 July 3, CLASS I - FOMC 1980 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) The narrow monetary aggregates, M-1A and M-1B, expanded in May-June at annual rates marginally above the minimum target growth rates set by the Committee for the period. Continued weakness in May was offset by a considerable resurgence of growth in June. However, as shown in the last two columns of the table below, in the first half of the year both of these aggregates have grown at rates significantly below the lower end of the Committee's longer-run ranges for the QIV '79 to QIV '80 period. The Committee's longer-run targets imply that ATS/NOW percentage point to M-1B growth relative to M-1A; accounts would add about so far in 1980 relatively faster growth of interest-bearing transactions accounts has added close to 1½ percentage points to M-1B. May-June Minimum Target Growth Actual Actual QIV '79 to QII '80 Target QIV '79 to QIV '80 Monetary Aggregates ay June M-1A 0.7 13.7 7.2 7¼ 0.5 M-1B -1.2 16.8 7.8 8.0 1.9 4 to 6½ M-2 8.8 17.3 13.1 8.0 6.3 6 to 9 M-3 8.7 12.4 10.6 -- 6.7 6½ to 9½ -6.1 -3.8 -5.0 -- 4.5 6 to 9 Memo: Bank Credit 3½ to 6 -2(2) M-2 increased in May and accelerated sharply in June, expanding well above the Committee's minimum target rate for the two month period. With market interest rates declining and the public apparently placing a greater premium on liquidity, in the face of uncertainty about the economic outlook, MMMFs resumed their strong growth and savings deposit registered a reduced outflow in May and a significant inflow in June for the first time in almost a year. Inflows of small- denomination time deposits weakened over the two months as a large part of the sharply stronger growth in the 30-month variable-ceiling certificate was offset by the first net decline in MMCs since their introduction in mid-1978. M-3 expanded less rapidly than M-2, as banks continued to reduce their reliance on managed liabilities, partly because of continued weakness in bank loan demand. Over the first half of the year, M-2 and M-3 expanded at just above the lower bound of the Committee's longer-run ranges, but bank credit grew at a rate considerably below the Committee's targets for the year. (3) The Desk has fostered more ample availability of nonborrowed reserves to member banks since the Committee meeting in May to encourage and support growth of the monetary aggregates. Adjustment borrowing at Federal Reserve Banks was reduced to less than $100 million throughout most of June. Total reserves declined slightly, however, over the past two months, largely because required reserves were reduced by the substantial drop in recent weeks of large time deposits of member banks and by deposit shifts that reduced the average required reserve ratio for other time deposits and demand deposits.1/ 1979 Second half QI QII May June Nonborrowed reserves 7.0 3.6 8.1 41.4 17.0 Total reserves 8.9 4.4 2.0 -0.9 -1.0 Monetary base 9.6 7.6 5.4 7.7 6.9 1,501 1,891 750 275 72 Bank reserves Memo: Average level of member bank adjustment borrowing ($ millions) (4) Conditions in the money market continued to ease following the May Committee meeting, as the Desk moved toward more plentiful provision of nonborrowed reserves. Around the time of the meeting, the federal funds rate was generally about 11 percent, but subsequently funds began trading at substantially lower levels. In the two weeks ending June 25 the federal funds rate averaged around 9 percent, but most recently the funds rate has averaged 9¼ to 9½ percent. The discount rate was lowered in two steps from 13 to 11 percent over the intermeeting period in recognition of the easing in money markets. 1/ This blue book does not contain an appendix comparing reserve paths set following the May FOMC meeting and actual results. At that time the Committee indicated that an overshoot of money growth above its minimum targets should be accommodated by a commensurate increase in reserve paths. Thus, when projected reserves became stronger than the original path, as happened in the intermeeting period, the projections of reserves became the targets. For instance, the original target for total reserves for the last three weeks of the intermeeting period was $43,377 million (after adjustment for changes in the multiplier), whereas actual total reserves for the period were $43,293 million. For the first four weeks of the intermeeting period, actual reserves at $43,549 million were just about equal to the original target of $43,554 million. -4- (5) The decline in other short-term market rates that began in late March continued following the May Committee meeting, and by mid-June these rates had declined another 1½ to 2 percentage points. However, more recently private yields and Treasury bill rates have backed up substantially. Market participants reportedly have become more cautious in their expectations for further easing by the Federal Reserve, particularly as stronger growth of the monetary aggregates became evident in the published weekly figures. On balance, bill rates and private short-term rates are about ½ to 1 percentage point lower than their levels at the time of the May Committee meeting. Over the intermeeting period, the bank prime rate was lowered 4½ to 5 percentage points to 11½ and 12 percent, but it still remains far out of line with borrowing costs in the money market for prime-rated firms. (6) The rally in long-term debt markets also lost much of its force in recent weeks. Treasury bond yields had declined a further one percentage point by mid-June before backing up 30 to 40 basis points more recently. The corporate bond market, digesting a record volume of issues brought to market as yields fell, experienced a similar pattern of rate movements as market sentiment changed. With their deposit outlook stronger and other long-term rates declining, the average commitment rate on mortgages at S&Ls declined from over 14 percent in late May to 12-3/8 percent most recently. (7) In foreign exchange markets, the dollar is down 3 percent on a weighted average basis from its level at the time of the last Committee meeting. Most of this decline occurred shortly after the May meeting, as U.S. interest rates fell further and the credit control program -5was eased. When U.S. interest rates turned steady to firmer in the following weeks, the dollar steadied and traded in generally very quiet markets. In the intermeeting period, the United States purchased $1 1/2 billion to support the dollar mainly with DM, (8) The table on the next page shows seasonally adjusted annual rates of change, in percent, for selected monetary and financial flows over various time periods. Past Three 1/ 1978- 1/ 1979- Past Months Month QII '80 June '80 June '80 over QIV '79 over Mar. '80 over May '80 17.0 Nonborrowed reserves 6.9 0.9 5.9 25.0 Total reserves 6.8 2.9 3.2 0.8 -1.0 Monetary base 9.2 7.6 6.6 5.5 6.9 M-LA (Currency plus demand deposits) 2/ 7.4 5.0 0.5 -1.2 13.7 M-1B (M-1A plus other checkable deposits) 8.2 7.6 1.9 0.4 16.8 M-2 (M-1B plus small time and savings deposits, money market mutual fund shares and overnight RP's and Eurodollars) 8.4 8.9 6.3 8.1 17.3 11.3 9.8 6.7 7.2 12.4 13.5 12.3 4.5 -4.7 -3.8 -0.1 -5.1 Concepts of Money M-3 (M-2 plus large time deposits and term RP's) Bank Credit Loans and investment of all commercial banks 3/ Managed Liabilities of Banks (Monthly average change in billions) Large time deposits 4.2 1.6 2.0 Eurodollars 0.6 2.1 -1.8 -6.1 -8.5 1,4 1.2 0.8 -2.0 -2.5 0.3 0.9 2.1 2.2 2.0 4, Other borrowingsMemo Nonbank commercial paper QIV to QIV. Other than interbank and U.S. Government. Includes loans sold to affiliates and branches. Primarily federal funds purchases and securities sold under agreements to repurchase. 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. 1/ 2/ 3/ 4/ Longer-run targets and strategy (9) At this meeting the Committee will be reconsidering its growth ranges for the monetary aggregates for 1980 and coming to a preliminary view about ranges for 1981, as is required under the Humphrey-Hawkins Act. As noted in paragraphs 1 and 2 of the preceding section, thus far this year expansion in narrow money measures has been well below the lower limit of the growth ranges for the QIV '79 to QIV '80 period established in February, while growth in broader measures has been just above the bottoms of their ranges. Partly for this reason, the staff has assumed that the practical alternatives before the Committee are retention of the present ranges or some lowering of them. In addition, announcement of a higher range may well have an adverse impact on inflationary expectations, since interest rates have declined so sharply over the past few months and since a higher range would appear inconsistent with an intention gradually to curtail money growth. (10) Given the behavior of monetary aggregates in the first half of 1980, the need for adjustment in the present longer-run ranges depends, among other things, on an assessment of factors affecting the public's demand for narrow money and the relationship between the narrow and broader money measures. M-1 growth in the second quarter of 1980 was much slower than would have been predicted by either our quarterly or monthly econometric models, given actual income growth and interest rates. This raises the question of whether there has been once again a downward shift in the level of the money demand function, perhaps as a response to the unusually high level of interest rates in the first quarter, or whether the public will find that it is short of cash relative to nominal income and will seek to rebuild balances. The staff has assumed that the public will make some effort to enlarge depleted cash balances in the second half of the year, partly because we believe that some of the decline in cash balances may have been a transitory result of the large short-term debt repayments that followed the March credit control program. If that assumption proves to be correct, the demand for money in the second half of the year should be stronger than in the first half, even with the projected weakness in nominal GNP. Thus, the considerable acceleration in growth of narrow money in the second half of the year needed to bring M-1A to the lower limit of, or even within, its present range may well be feasible. However, we would expect M-1B to grow at a still stronger pace over the year in view of the recent evidence that the public has shown a greater preference for interest-bearing transactions accounts over demand deposits than the staff earlier anticipated. We would now project M-1B to grow about 1-1/4 percentage points faster for the year than M-IA, rather than the 1/2 percentage point projected in February. (11) As noted above, growth in the broader aggregates has been running strong relative to both M-1A and M-1B. Not only have money market funds again been growing rapidly, but also the contraction in savings deposits has been reversed. Furthermore, the recent upward adjustment in ceiling rates on variable ceiling certificates has strengthened the attractiveness of these instruments. While a slowing in growth of money market fund shares from the recent exceptionally rapid pace should be expected, it still appears probable that growth in the nontransactions interest- -9bearing component of M-2 in the second half of the year will be relatively rapid. Thus, in the staff's judgment it seems likely that M-2 will tend to grow more rapidly relative to M-1A than had been assumed when the longer-run ranges were origially set in February. M-3 growth may be a bit On the other hand, weaker as modest demands for bank loans reduce banks' need to issue large CDs. (12) The table below shows, for Committee consideration, two alternative sets of longer-run ranges for 1980. current longer-run ranges. Alternative I is the But to take account of changing relationships among M-1A and M-1B, we have assumed that an unchanged objective for the narrow money aggregates over the year 1980 would mean growth in M-1A at about a 4-1/2 percent rate from QIV '79 to QIV '80--which would be a little below the midpoint of the Committee's present range--and growth in M-1B at around 5-3/4 percent--somewhat above the midpoint of its current range. Consistent growth in M-2 appears likely to be somewhat above, and expansion of M-3 somewhat below, the midpoints of their ranges; bank credit growth is likely to be below the lower end of its present 6 to 9 percent range. Alternative II reflects a lowering of the ranges for M-1A and M-1B, as well as bank credit, but retains the present ranges for M-2 and M-3 in view of their performance thus far this year. -10- M-1A Alt. I Alt. II 3½ to 6 3 to 5½ M-1B 4 to 6½ M-2 6 to 9 6 to 9 M-3 6½ to 9½ 6½ to 9½ 6 to 9 4½ to 7½ Bank Credit (13) 3½ to 6 To assist the Committee in evaluating the proposed ranges for 1980 and in forming a preliminary view about monetary growth targets in 1981, specific alternative assumptions for money growth in 1980 and the subsequent two years, with their implications for economic activity, prices, and interest rates, are presented in the table on page 11. Strategy 1 in that table continues growth in narrow money measures at the same rate in 1981 and 1982, as in 1980-that is, at a rate of about 4½ percent for M-1A and 5-3/4 percent for M-1B. Of course, the ranges for M-1A and M-1B may have to be adjusted next year for the introduction of nationwide NOW accounts.1/ In addition, the staff's analysis suggests that, even with the same effective M-1A growth as in 1980, M-2 and M-3 may grow near the upper limits of the current year's ranges, or possibly above them, as income flows and credit demands strengthen. To provide the Committee with a basis for assessing a monetary policy that calls for 1/ The Monetary Control Act of 1980 authorizes nationwide NOW accounts effective at the beginning of 1981. Shifts out of demand deposits will lower measured M-1A growth, and shifts out of savings or other deposits will strengthen measured M-1B growth while leaving M-2 and M-3 essentially unchanged. Preliminary estimates of quantitative effects on the aggregates are contained in Appendix I. Such shifts are estimated to lower measured M-1A growth by 1 to 5 percentage points in 1981 and to raise measured M-1B growth by ½ to 2½ percentage points. However, for clarity in presentation, monetary policy assumptions in the Bluebook are based on monetary growth rates that abstract from the impact of deposit shifts because of nationwide NOW accounts. -11- Economic Implications of Alternative Long-run Policy Strategies 1980 1981 1982 Q4/Q4) Strategy 1 5.1 11.4 9.1 Strategy 2 Strategy 3 Strategy 4 5.1 4.8 5.1 11.0 9.9 10.0 7.9 6.9 8.3 -4.0 -4.0 2.5 2.1 2.2 1.1 -4.2 -4.0 1.1 1.1 0.3 2.1 9.5 9.5 8.7 8.7 6.8 6.7 Strategy 3 9.4 8.6 6.6 Strategy 4 9.5 8.7 6.0 Unemployment Rate (7., Q4 Level) Strategy 1 Strategy 2 Strategy 3 Strategy 4 8.9 8.9 9.0 8.9 8.7 8.8 9.3 9.3 8.5 9.0 10.1 9.3 10.1 10.1 13.5 10.1 13.5 14.9 16.7 11.6 12.0 14.2 14.1 9.5 0.5 0.5 1.5 0.5 6.7 6.7 6.2 5.1 Nominal GNP (% change, Real GNP (% change, Q4/Q4) Strategy 1 Strategy 2 Strategy 3 Strategy 4 Implicit GNP Deflator (7. change, Q4/Q4) Strategy 1 Strategy 2 Federal funds rate 7., Q4 Level) Strategy I Strategy Z Strategy 3 Strategy 4 M-1A Velocity (. change, Strategy Strategy Strategy Strategy Q4/4) 1 2 3 4 4.4 4.2 3.3 3.4 Note: Strategy i represents a 4-1/2% M-1A growth in each year; Strategy 2 represents 4-1/2%7 M-A growth in 1980, 47. in 1981, 3-1/2% in 1982; represents 3-1/27. M-1A growth in each year. In each of Strategy 3 these three' strategies a tax cut of $25-to $30 billion is assumed to occur in early-1981. Strategy 4 represents strategy 1 without such a tax cut. -12a gradual reduction in money growth rates, strategy 2 employs the monetary assumptions of the first strategy for 1980, but then assumes that growth in M-1A is reduced to 4 percent in 1981 and 3½ percent in 1982. Strategy 3 examines the implications of lowering growth in M-1A to 3½ percent in 1980 and maintaining that rate over the next two years. All these strategies assume a tax cut of $25 to $30 billion that takes effect in early 1981. Strategy 4 excludes a tax cut and assumes money growth as in strategy 1. (14) Strategy 1--which is consistent with the basic staff green'book projection--suggests a quite modest economic recovery beginning next year and continuing into 1982. The rate of price increase decelerates next year, and more markedly in 1982, while the unemployment rate edges down from a high of near 9 percent at the end of 1980 to 8.5 percent two years later. Policy strategies 2 and 3 imply a slower economic recovery, and a slightly improved price performance. The deceleration in price increases from these strategies becomes more evident after 1982 in view of the rather long lags between money growth and prices that characterize most econometric models, including the Board's quarterly model. Strategies 2 and 3 could, however, yield a more significant deceleration in price increases earlier if expectations of participants in labor and product markets have become more sensitized to the ultimate implications of monetary restraint. It should be emphasized that implicit in all of these projections is a large increase in the income velocity of M-A in 1981indeed, the largest annual rise since 1955 (in the case of strategies 1 through 3). This reflects our assumption that there will be continued weakness in money demand relative to historical experience. Should this assumption prove wrong, upward interest rate pressures may be stronger -13than projected, serving to reduce nominal GNP growth below projections-with some beneficial impact on prices but with probably the greatest impact in the short-run on real activity. Shorter-run targets (15) Shown below, and depicted on the charts on the following pages, are three alternative targets for the monetary aggregates over the next several months, together with suggested federal funds rate ranges for the intermeeting period. period from June to September. Growth rates shown are for the three-month (Detailed data for these alternatives are contained in the tables on pp. 14 and 15.) Alt. M-1A A 10½ M-1B M-2 Intermeeting range for funds rate (16) Alt. B Alt. C 8¼ 6 11½ 9¼ 7 10 8½ 7-3/4 7½ to 13 8½ to 14 9 to 14½ Alternatives A and B are consistent with longer-run alternative I and are indexed by M-1A growth of 4½ percent from QIV '79 to QIV '80. Alternative A assumes that such a 4½ percent growth line is reached relatively soon-by September; it therefore would also assume a slowdown in M-1A growth to 4½ percent after September. Alternative B targets a more gradual rebound in M-1A from the first half pace. It assumes an 8¼ percent M-1A growth rate for June-September which, if continued through December, will yield growth of 4½ percent over the year. Alternative C is based on a slower long-run growth of M-A of 3 percent from QIV '79 to QIV '80, which would be more consistent with longer-run Alternative Levels and Growth Rates for Key Monetary Aggregates 1980--June July August September Alt. A M-1A Alt. B Alt. 372.0 375.2 378.6 381.9 372.0 374.7 377.1 379.6 372.0 374.5 376.0 377.5 10.3 10.9 10.5 8.7 7.7 8.0 8.1 4.8 4.8 C M-1B Alt. B Alt. C 391.6 395.0 399.0 402.9 391.6 394.5 397.5 400.6 391.6 394.3 396.4 398.5 10.4 12.2 11.7 8.9 9.1 9.4 8.3 6.4 6.4 Alt. A Growth Rates Monthly 1980--July August September June '80 September '80 10.6 8.2 5.9 11.5 9.2 7.0 4-3/4 -3-3/4 10-1/4 6-1/4 4-3/4 -3-3/4 8-3/4 8 4-3/4 -3-3/4 7-1/2 5-1/4 6 -2-1/4 11-1/4 7-1/2 6 -2-1/4 9-3/4 9-1/4 6 -2-1/4 8-1/2 6-3/4 1979 QIV to 1980 QII 1980 QIl to 1980 QIV 0.5 8-1/2 0.5 8-1/2 0.5 6-1/2 1.9 9-1/2 1.9 9-1/2 1.9 7-3/4 1979 QIV to 1980 QIV 4-1/2 4-1/2- 3-1/2 5-3/4 5-3/4 4-3/4 Quarterly Average 1980--QI QII QIII QIV Alternative Levels and Growth Rates for Key Monetary Aggregates M-3 M-2 1980--June July August Sept. (cont'd) Alt. A Alt. B Alt. C Alt. 1584.0 1596.8 1610.5 1624.0 1584.0 1584.0 1594.8 1604.8 1614.7 1842.4 1852.1 1866.2 1878.4 1842.4 1851.3 1863.2 1873.9 1842.4 1850.5 1861.7 1871.3 1595.8 1606.6 1618.1 A Alt. B Alt. C Growth Rates Monthly 198 0--July August Sept. 10.3 10.1 8.9 8.1 8.6 8.2 7.5 7.4 6.3 9.1 7.8 5.8 7.7 6.9 5.3 7.3 6.2 June '80-Sept. '80 10.1 8.6 7.8 7.8 6.8 6.3 7-3/4 5-1/2 8-1/4 7-3/4 6-3/4 5-1/2 7-3/4 6 6.7 7-1/2 6.7 7.0 7-1/4 7 9.7 Quarterly Average 8-1/2 5-1/2 10-3/4 8-1/2 5-1/2 10 6-1/2 7-3/4 5-1/2 8-3/4 6-3/4 1979 QIV to 1980 QII 1980 QII to 1980 QIV 6.3 10-1/4 6.3 9-3/4 6.3 8-1/2 6.7 7.8 1979 QIV to 1980 QIV 8-1/2 8-1/4 7-1/2 7-1/2 1980--QI QII QIII QIV NOTE: 5-1/2 11-1/2 The following annual rates of growth in bank credit for the year and for the quarters are expected under alternative B; year 1980, 4-3/4; QI, 9-1/2; QII, -1/2; QIII, 2i; QIV, 7-1/2. Only minor variations in growth rates would be expected under the other alternatives. Chart 1 CCNFIENTIAL FR) C:aa ss Actual and Targeted M-1A and M-1B M-1A - FOMC Billions of dollars - - -Longer-Run Range *..*Short-Run Alternatives 400 -395 -- 390 385 380 375 370 365 I 1 0 N 0 I I F J I A M I 1979 I1 I I S A J J 0 1980 M-1B - .. 360 0 N Bilons of dollars 420 Longer-Run Range Short-Run Alternatives -415 - , 6Y% 410 -405 - .4% 400 -395 390 385 -380 I I 0 1 N 1979 I ?. J I I L F I I 1 I M I A M I I J_ _J 1980 I I I I A S I 0 I :375 I N 0 Chart 2 CONFIDENTIAL (FR) Class II- FOMC Actual and Targeted M-2 and M-3 M-2 Billions of dollars S1680 - Longer-Run Range - . Short-Run Alternatives - 1660 - 1640 - 1620 S9% * B' .0 *.* :* C . 1600 - 1580 9, -1560 -1540 - -1520 - 1500 \ O I N O J F M I I A M 1 -- ... J 1979 J A S O 1480 N O 1980 M-3 Billions of dollars -Longer-Run / Range * .* 9 1 % - Short-Run Alternatives - 7 940 1920 ,- 1900 .0e . - ooe^ 1880 1860 - 1820 -/ 1800 ^ - - 1780 - 0/ 1760 00-- 1740 0 N 0 J F M A M 1979 *Note A.B. and C altematives are indistinguisaable on this scale. J J 1980 A S O N 0 -16alternative II. Under alternative C, M-1A growth would be 6 percent from June to September, and growth would need to continue at that rate in the fourth quarter. (17) Of the three short-run alternatives, alternative B would probably have the least effect on market rates of interest over the forthcoming intermeeting period. Even under this alternative, however, there might be some further upward pressure on interest rates if the market comes to feel that monetary policy will have to begin restraining money growth or that fiscal policy will be turning more expansionary. In any event, Treasury borrowing needs appear rather substantial over the months ahead. Mortgage rates are likely to decline only a bit further, particu- larly if short rates stabilize or back up some and thrift institutions become concerned about the cost and magnitude of future deposit inflows. Looking toward the fall of the year, it appears more likely that interest rates would be under some upward pressure, as nominal GNP growth-and accompanying money and credit demands-accelerates. If, however, the public's transactions demand for money remains on the low side relative to GNP, upward interest rate pressures could be quite minimal. (18) The specifications of alternative B call for a considerable slowing in M-2 from its May-June pace. MMMF growth, while remaining large, is expected to slacken from its recent exceptionally rapid rate as previous market yield declines are reflected in returns posted by the funds. Not all of this slowdown is expected to be reflected in gains for the depository institutions, although the 30-month small saver certificate is projected to grow strongly. With domestic bank loan demands remaining weak, CD and Eurodollar borrowing will continue to decline, and there will probably be -17- further advances from U.S. banks to their foreign branches in response to relatively strong credit demands in Eurodollar markets. (19) To achieve the growth in the aggregates specified under alternative B, total reserves would have to expand at about an 8¼ percent annual rate from June to September. Assuming a level of member bank borrowings (excluding special borrowings) of about $50 to $100 million, nonborrowed reserves would expand at about an 8 percent.annual rate. (20) Alternative A, which is designed to hit the 4½ percent path for M-1A by September, calls for a 10 percent rate of growth of that aggregate from June to September, followed by a sharp slowing to 4½ percent in the September to December period. Reserve supplying operations to achieve this target would call for growth in both total and nonborrowed reserves at about a 10¼ percent annual rate in the next three months. It is anticipated that money market rates would decline under this alternative over the next few weeks, with the federal funds rate moving towards the 7 percent lower end of its proposed range and the 3-month bill rate moving back into the 6 to 7 percent range. Such a decline in rates would bring increased pressure on banks and thrift institutions to cut their lending rates and would very likely cause a further erosion in the exchange value of the dollar unless accompanied by drops in interest rates abroad. A significant decline in short rates is likely to lead to some sympathetic response in capital markets as well. However, the substantial volume of oncoming issues from both the private and public sectors, as well as investor concerns about inflation, would tend to limit declines in bond yields. Staff projections suggest that short-term rates would have to rise sharply by late summer or early fall to lower growth in the aggregates if the midpoints of the longer-run targets for the year are to be achieved. -18(21) Alternative C contemplates a 6 percent rate of growth in M-1A from June to September and continuation of that rate for the balance of the year in order to achieve a 3 aggregate from QIV '79 to QIV '80. at a 6¼ percent rate. percent growth in that Total reserves would have to expand Assuming member bank adjustment borrowings of about $200 million during the forthcoming intermeeting period-given the current discount rate--nonborrowed reserves would increase at a 5¼ percent rate. These reserve specifications suggest that the funds rate would increase to around the midpoint of the 9 to 14 percent range suggested for this alternative. And an even higher funds rate would be likely to emerge by the fourth quarter. The policy stance of alternative C would intensify the recent weakness in money and capital markets, and interest rates would be expected to rise throughout the maturity spectrum. These interest rate developments would probably lead to a strengthening of the dollar in foreign exchange markets. -19- Directive language (22) Given below are suggested operational paragraphs for the directive consistent with the form of recent directives, except for the one adopted in May. The language calls for expansion of reserve aggregates at a pace consistent with the desired rates of monetary growth over the third quarter of 1980, provided that the federal funds rate on a weekly average basis remains within a specified range. The range for the federal funds rate adopted at the May meeting is shown in strike-through form. In the short run, the Committee seeks expansion of reserve aggregates consistent with growth of M-1A[DEL: ,]and M-1B [DEL: M-2 ,and rates at high enough to promote achievement of the Committee's objectives for monetary growth over the year] OVER THE THIRD QUARTER OF 1980 AT ANNUAL RATES OF ____ PERCENT AND ____ PERCENT RESPECTIVELY, provided that in the period before the next regular meeting the weekly average federal ____ 14] to 8½ TO funds rate remains within a range of[DEL: ____ percent. TEE COMMITTEE BELIEVES THAT, CONSISTENT WITH THIS SHORT-RUN POLICY, M-2 SHOULD GROW AT AN ANNUAL RATE OF ABOUT ____ PERCENT OVER THE THIRD QUARTER. If it appears during the period before the next meeting that the constraint on the federal funds rate is inconsistent with the objective for the expansion of reserves, the Manager for Domestic Operations is promptly to notify the Chairman who will then decide whether the situation calls for supplementary instructions from the Committee. APPENDIX I Estimated Impact of Nationwide NOW Accounts on the Monetary Aggregates in 1981 The Depository Institutions Deregulation and Monetary Control Act of 1980 extends NOW account authority nationwide to all depository institutions except credit unions as of December 31, 1 980 .1 / In addition, it makes permanent the authority of insured commercial banks and mutual savings banks to offer ATS accounts and of federally insured credit unions to offer share drafts.2- As the public adjusts to these new circumstances, growth in M-1A will be slowed by shifts from household demand deposits to other checkable deposits (OCDs), while growth in M-1B will be enlarged by shifts of funds from savings deposits and other liquid assets to OCDs. No significant impact is expected on M-2 because it includes virtually all of the funds likely to shift to NOW or ATS accounts. Table I-1 shows the estimated distribution of household transaction deposits between demand deposits and OCDs. In the bottom line it may be seen that roughly 30 percent of the estimated $19 billion of household 1/ NOWs have been authorized for all depository institutions except credit unions in Massachusetts and New Hampshire since January 1, 1974, in the other four New England states since February 27, 1976, in New York since November 10, 1978, and in New Jersey since December 28, 1979. NOWs may be held only by individuals and nonprofit organizations. 2/ ATS were authorized nationwide at banks and thrifts on November 1, 1978 and share drafts first became available at federal credit unions on October 1, 1974. ATS may be held only by individuals, and share drafts only by credit union members. 3/ Because ceiling interest rates on NOWs are likely to be below those on other savings deposits, it may seem implausible that a substantial amount of savings-type balances would shift to NOWs. However, in New Englandwhere the ceiling rates on savings deposits exceed those on NOWs (at commercial banks these two ceiling rates were equal until July 1979)-more than one-fifth of existing NOWs have no draft activity, suggesting that the funds in such accounts were diverted from savings or other liquid assets. Shifts are also likely to occur to meet the generally higher minimum balances requirements associated with NOWs compared to demand deposits. Overall, staff estimates indicate that roughly one-third of NOW balances were diverted from other than demand deposit accounts. -21Table I-1 ESTMATED DISTRIBUTION OF HOUSEHOLD TRANSACTION BALANCES FIRST QUARTER 1980 (Quarterly averages, billions of dollars except as noted) 8 states with NOW authority 42 states without NOW authority All States 13.5 85.7 99.2 8.1 8.6 16.7 Estimated amount shifted from demand deposits 2/ 5.6 5.9 11.5 Estimated amount shifted from other liquid assets 2/ 2.5 2.7 5.2 21.6 94.3 115.9 19.1 91.6 110.7 Household deposit items (1) Demand deposits (2) Other checkable deposits (OCD)(3) (4) (1) + (2) (5) Total in M-IB, (6) Total "transaction" balances (1) (7) (2) (8) (3) + (3) (5), in percent 37.5 9.1 14.4 . (6), in percet 29.3 6.4 10.4 11 NOWs, ATS, share drafts and demand deposits at mutual savings banks. 2/ An estimated two-thirds of NOW, ATS,and CUSDs were converted from demand deposits and one-third were diverted from other liquid assets. -22- transaction balances in the 8 northeastern states where NOW accounts already exists have shifted to OCDs, while about 6-1/2 percent of the $92 billion of household transaction accounts in the rest of the nation have so shifted. It is the $86 billion of personal transaction deposits still held in demand deposits in the 42 states not currently having NOWs that are likely to be most affected by the new legislation. Some inferences about the amount of demand deposits in the 42 states likely to be converted to NOWs may be drawn from the earlier experience with NOW and ATS accounts. (Table I-2.) In Massachusetts and New Hampshire, less than 10 percent of household demand deposits are estimated to have shifted to NOWs by the end of the first year during which all institutions in those states could offer these instruments; about half of such shifts had occurred during the previous 1-1/2 years when only state-chartered MSBs could offer NOWs. The slow transition in these states reflected the novelty of the NOW concept as well as the uncertainty about their future status. In 1976, when NOWs were first authorized in the four other New England states, the growing awareness and acceptance of NOWs resulted in much faster adjustment, and about 20 percent of household demand deposits shifted in the first year. Similarly, in New York, about 20 percent of household demand deposits shifted to NOWs the first year. during Finally, the ATS experience in the rest of the nation indicates a rather slow transition, reminiscent of the experience in the original two NOW states. After the first year, only about 5 percent of consumer demand deposits had shifted to ATS accounts. As in the original two NOW states, the slow response to ATS likely reflected in part -23- Table I-2 ESTIMATED PERCENT OF HOUSEHOLD DEMAND DEPOSITS SHIFTED TO NOW-ATS ONE YEAR AFTER AUTHORIZATION States where authorized Type of account authorized Date of authorization Percent of demand deposits shifted to new accounts after 1 year Massachusetts and New Hampshire Connecticut, Maine Rhode Island, and Vermont New York Rest of nation 1 I/ Includes New Jersey. NOWS January 1974 NOWs March 1976 NOWs and ATS ATS 9-1/2 20 November 1978 November 1978 5-1/4 -24- uncertainty about the future status of the new accounts.1/ In addition, the sluggish growth of ATS may reflect the absence so far of strong interinstitutional competition for interest-bearing transaction accounts, since S&Ls have generally not been authorized to offer ATS accounts. The varied NOW and ATS experience suggests a fairly wide range for the possible proportion of demand deposits shifting to NOWs in 1981. Projections of consumer demand deposits indicate that, in the absence of nationwide NOWs, household demand deposits in the 42 states would have grown to an estimated $93-1/2 billion by the end of 1981.2/ ment is relatively fast, a diversion to NOWs of 20 percent, If the adjustor $18-3/4 billion, of these household demand deposits may occur during 1981. On the other hand, if it is relatively slow the shifts may be only about 5 percent, or $4½ billion. These figures translate into reduction of M-A growth of from 1 to 5 percentage points in 1981 (see Table I-3). Roughly one-third of existing NOW deposits are estimated to have been diverted from assets other than demand deposits. Thus, adding a $2-1/4 billion shift from savings and other liquid assets to the low estimate of $4-1/2 billion from demand deposits produces a $6-3/4 total growth in NOWs during 1981. Similarly, adding $9-1/2 billion to the high estimate of $18-3/4 billion from demand deposits yields $28-1/4 billion in total NOW growth. These figures imply an estimated boost to M-1B growth ranging from 1/2 to 2-1/2 percentage points during 1981. 1/ ATS accounts at commercial banks grew to over $6 billion during the first half year they were offered. Then, in April 1979 a court ruling set aside regulations authorizing ATS accounts, and placed their ultimate status in doubt until the Monetary Control Act was passed; during the 10 month interim, ATS grew by only around $2 billion. 2/ This figure assumes 6 percent growth in consumer transaction deposits in 1980 and 1981 and is consistent with the growth in OCDs implied by Alternative B and Strategy 1 in this Bluebook, i.e., a 6 percent growth in consumer transactions deposits is consistent with a 4-1/2 percent growth in M-1A. -25- Table I-3 ESTIMATED IMPACT OF THE AUTHORIZATION OF NATIONWIDE NOWS ON GROWTH OF M-1A AND M-1B IN 1981 (in percent) Reduction in Boost in M-1A M-1B Memo: Growth in NOWs outside the Northeast during 1981 1/2 $6-3/4 billion Low estimate High estimate Midpoint estimate 3 2-1/2 $28-1/4 billion 1-1/2 $17-1/2 billion -26- The width of these ranges reflects the high degree of uncertainty regarding the speed of adjustment to nationwide NOWs in light of the diversity of experience with NOW and ATS accounts. Several factors argue for expecting a rate of growth in the vicinity of the lower bound: (1) At year end 1979, one-third of commercial banks, holding an estimated 70 percent of household demand deposits, already offered NOW Since NOW and ATS accounts are close subor ATS accounts. stitutes from the viewpoints of both offering institutions and depositors, the nationwide NOW authority does not seem to be the sort of innovation that should cause massive shifts of funds. (2) Thrift competition is not as intense in most parts of the country as in the states currently permitting NOW accounts, and therefore banks in the 42 states may be less aggressive in merchandising NOWs than were institutions in New England. (3) Money market mutual funds-which are still growing in public acceptance--may divert some of the more interest-sensitive funds from NOWs. On the other hand, there are bases for arguing for a relatively fast rate of conversion: (1) Recent high market interest rates have heightened consumer awareness of the value of interest-bearing transaction deposits, Moreover, from the thus increasing the marketability of NOWs. point of view of depository institutions, relatively high market interest rates during 1981 might increase incentives to market NOW accounts more aggressively in an effort to retain or attract funds. (2) The Monetary Control Act has removed uncertainty regarding the future status of interest-bearing household transaction accounts-which could well stimulate faster growth of ATS over the remainder of 1980, as well as in 1981, especially if banks attempt to late take an early lead in the competition for OCDs. (3) While NOW and ATS accounts are functionally equivalent, the simplicity of the NOW account concept likely may make it easier to market than ATS. -27- (4) NOWs afford most S&Ls nationwide their first opportunity to compete in the household transaction deposit market, and there are reports that these institutions are preparing to market NOWs aggressively. As a preliminary working assumption, the staff believes that the midpoints of the ranges are the most likely estimates for the NOW account effects in 1981, namely a 3 percentage point reduction in M-1A growth and a 1½ percentage point boost in M-1B growth. The staff believes that the ultimate shift to NOW/ATS accounts will be quite large; indeed, after more than six years of NOW accounts at all depository institutions in Massachusetts and New Hampshire, roughly two-thirds of household demand deposits are estimated to have shifted. STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JULY 3, 1980 1980 TABLE 1 SELECTED INTEREST RATES (Percent) [ Short-term • - . . . Treasury Bills Federal funds Market t 3-lmo 1-yr (3) I Auction 6-mo (4) C. CDs C ;omm. Secondary Paper Market 3-mo I' 3-mo (6) (5) I , Bank Prime Rate U.S. Govt. Constant Maturity Yields -i 3-yr 10-yr 30-yr Long-term Corp.-Aaa MuniUtility cipal lew I ssue 11) Recently Bond Offered Buyer Home Mortgages Secondary Market _ Pr FNMA Cony. Auc. NMA Sec. (1) (2) (7) (8) (9) (10) (12) (13) (14) (15) (16) 1979--High Low 15.61 9.93 12.60 8.85 11.89 8.64 12.65 8.87 14.53 9.84 14.26 9.66 15.75 11.50 11.68 8.76 10.87 8.79 10.42 8.82 11.50 9.40 11.45 9.39 7.38 6.08 12.90 10.38 13.29 10.42 11.77 9.51 1980--High Low 19.39 8.99 15.61 6.49 14.39 7.18 15.70 6.66 18.04 8.17 17.60 7.97 20.00 12.00 14.29 8.61 13.33 9.51 12.73 9.54 14.22 10.53 14.12 10.79 9.44 7.11 16.35 12.35 15.93 12.28 14.17 10.73 1979--June 10.29 9.06 8.81 9.06 9.95 9.76 11.65 8.95 8.91 8.92 9.50 9.50 6.13 11.04 10.77 9.75 July Aug. Sept. 10.47 10.94 11.43 9.24 9.52 10.26 8.87 9.16 9.89 9.19 9.45 10.13 10.11 10.71 11.89 9.87 10.43 11.63 11.54 11.91 12.90 8.94 9.14 9.69 8.95 9.03 9.33 8.93 8.98 9.17 9.58 9.48 9.93 9.53 9.49 9.87 6.13 6.20 6.52 11.09 11.09 11.30 10.66 10.67 11.09 9.77 9.90 Oct. Nov. Dec. 13.77 13.18 13.78 11.70 11.79 12.04 11.23 11.22 10.92 11.34 11.86 11.85 13.66 13.90 13.43 13.23 13.57 13.24 14.39 15.55 15.30 10.95 11.18 10.71 10.30 10.65 10.39 9.85 10.30 10.12 10.97 11.42 11.25 10.91 11.36 11.33 7.08 7.30 7.22 11.64 12.83 12.90 12.52 12.75 12.49 11.57 1980--Jan. Feb. Mar. 13.82 14.13 17.19 12.00 12.86 15.20 10.96 12.46 14.03 11.85 12.72 15.10 13.39 14.30 17.57 13.04 13.78 16.81 15.25 15.63 18.31 10.88 12.84 14.05 10.80 12.41 12.75 10.60 12.13 12.34 11.73 13.57 14.00 11.77 13.35 13.90 7.35 8.16 9.17 12.88 13.03 15.28 12.91 14.49 15.64 11.94 13.16 13.79 Apr. May June 17.61 10.98 9.47 13.20 8.58 7.07 11.97 8.66 7.54 13.62 9.15 7.22 16.14 9.79 8.49 15.78 9.49 8.27 19.77 16.57 12.63 12.02 9.44 8.92 11.47 10.18 9.78 11.40 10.36 9.81 12.90 11.53 97 10. p 12.91 11.64 10.99p 8.63 7.59 7.63 16 33 14.26 12.71 14 61 12.88 12 35 12.64 11.30 11.04 7 14 21 28 12.96 10.85 10.71 9.46 9.67 8.52 8.58 7.67 9.32 8.75 8.68 7.96 9.60 8.78 8.92 7.75 11.30 9.81 9.72 8.60 11.07 9.41 9.43 8.22 18.39 17.50 16.64 14.79 9.85 9.45 9.44 9.03 10.15 10.21 10.30 10.00 10.39 10.35 11.38 11.43 11.50 11.52 11.55 11.65 11.60 11.55 7.11 7.44 7.72 7.73 14.68 14.15 13.38 13.20 4 11 18 25 10.74 9.68 8.99 9.08 7.71 6.89 6.49 7.12 8.10 7.47 7.18 8.88 8.54 8.17 8.36 8.85 8.28 7.97 8.08 14.07 13.14 12.36 12.04 9.31 8.96 8.61 8.78 10.21 9.82 9.51 9.63 10.32 9.87 7.49 8.17 6.94 6.66 7.11 11.45 10.91 10.53 10.90 11.28 10.85 10.79 11.08 7.67 7.53 7.55 7.76 13.06 12.85 12.58 12.35 9.41 7.82 7.84 8.10 8.59 8.30 12.00 9.17 10.06 11.51p ll.17p 7.88 In. a. 9.05 9.50p 7.56 7.81 7.70 7.73 --- 8.37 8.73 7.95 8.34 12.00 12.00 9.04 8 .99p 1980--ay June July 2 9 16 23 30 Dally--June 26 July 3 9.87 9.99p 10.49 10.19 9.54 9.64 10.02 13.16 12.59 10.31 11.25 11.35 11.03 11.26 11.78 11.12 11.52 12.42 10.89 12.28 10.79 10.73 11.27 9.91 9.98p Weekly data for columns 1, 2, 3, and 5 through 10 are statement week averages of daily data. Weekly data In column 4 are average tates set in the auctimi that will be issued on the Thursday following the end of the statement week. For column 11, the weekly date is the mid-point of the calendar wt of 6-month bills Column 14 it over which data are averaged. Columns 12 and 13 are 1-day quotes for Friday and Thursday, respectively, following the end of the statement week. mortgages with 80 percent loan-to-value ratios made by a sample of Insured savings and average of contract interest rates on commitments for conventional firbt NOTE: loan associations on the Friday following the end of the statement week. The FNMA auction yield is the average yield in a hi-weekly auction for short-term forGNMA yields are average net yields to investors on mortgage-backed securities for Jmmediate delivery, ward commitments for government underwritten mortgages. assuming prepayment in 12 years on pools of 30-year FIIA/VA mortgages carrying the coupon rate 50 basis points below the current FIlA/VA ceiling. STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JULY 3, 1980 TABLE 2 1/ NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES(Millions of dollars, not seasonally adjusted) Federal Agencies Net Purchases 4/ Treasury Coupons Net Pu irchases 3/ Treasury Bills Net Change 2/ Wilthin -468 863 4,361 870 6.243 1 -5 5 - 10 Over 10 Total 337 472 517 1,184 603 3,284 3,025 2,833 4,188 3,456 1,510 1,048 758 1,526 1,070 523 454 6,202 5,187 4,660 7,962 5,035 -3,750 465 5,363 4,164 48 42 395 118 426 640 1.289 1,101 134 93 81 310 51 700 682 2,302 1,351 1980--Qtr. I -2,945 292 355 107 81 836 1980--Jan. Feb. Mar. -2,512 -1,803 1,370 Apr. May June 2,321 606 322 1975 1976 1977 1978 1979 1979--Qtr. I II III IV 1980--May I year 292 109 1551/ -15311 553 1,063 355 107 81 836 373 405 7381/ 62 133 164 64 216 129 607 909 878 1 year 1 - 5 5 - 10 Outright Over 10 Total Holdings Total 5/ 1,613 891 1,433 127 454 7,267 6,227 10,035 8.724 10,290 -882Z/ 08 -1,795 8,129 / 4,839-- 217 398 -- -2,114 --- - -- -- 29 -S 24 -- --- 155 21 28 27410/ -274- 4 - 2,201 668 -- 3,594 1,515 1,198 -1,012 4,655 -1,271 267 138 51 94 -3,421 -280 -- 121 465 2 9 75 -- -- LEVEL--July 2 (in billions) 50.4 July 443 46 -548 3,150 -2,802 5,597 1,027 27410/ 00 13.9 32.6 164 13 6 129 14.1 -- 878 74.3 2.2 _ 4.7 978 1 3 0.7 680 2,542 -2,019 -3,801 166 900 -705 11 18 25 1,272 3,607 -2,892 -1,774 -2,597 362 -2,512 -1,803 -------- 7 14 June 309 642 Within Net Change 8.9 222 -3,545 75 3,162 133.5 -1.6 1/ Change from end-of-period to end-of-period. 2/ 3/ 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 redemption, maturity bhifts, rollovers of maturing coupon issues, and direct Treasury borrowing from the System. Outright transactions in market and with foreign accounts only. Excludes redemptions and maturity shifts. In addition to net purchases of securities, also reflects changes in System holdings of bankers' acceptances, direct Treasury borrowings from the System and redemptions (-) of agency and Treasury coupon issues. Includes changes In both RPs (+) and matched sale-purchase transactions (-). The Treasury sold $2,600 million of special certificates to the Federal Reserve on March 31, 1979 and redeemed the last of them on April 4, 1979. $640 million of 2-year notes were exchanged for a like amount of cash management bills on April 3, 1979. On April 9, 1979, the bills were exchanged for new 2-year notes. On October 1, 1979, $668 million of maturing 2- and 4-year notes were exchanged for a like amount of short-tem bills, because the note auctions weie delayed. On October 9 and 10, the bills were exchanged for new 2- laid 4-year notes, respectively. Maturing 2-year notes were exchanged on June 2 for special 2-day bills. At their maturity the bills were exchanged tor new 2-year notes. 4/ 5/ 6/ 7/ 8/ 9/ 10/ TABLE 3 SECURITY DEALER POSITIONS AND BANK POSITIONS (Billions of dollars) U.S. Govt. Security Dealer Positions Bills STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC JULY 1, 1980 Iember Underwriting Syndicate Positions Coupon Corporate Hunicipal Issues Bonds Bonds Bank Reserve Poitlions Exces** Borrowing at FRB** Reserves Total 1979--High Low .8,091 138 902 -2,569 726 -122 1980--lligh Low 8,838 1,972 *2,216 -1,482 -228p 1979--June 60 0p Seasonal 2,960 628 3,4 39 p 177 318 5 p p 6,930 -277 221 1,418 192 July Aug. Sept. 3,161 996 2,392 -658 -179 -1,608 211 222 191 1,171 1,085 1,340 182 179 174 Oct. Nov. Dec. 2,289 4.427 5,760 -1,576 -514 -1,901 264 244 3 98p 2,023 1,911 1,473p 155 140 81p 1980--Jan. Feb. Mar. 4,380 2,937 2,964 -944 -212 -659 350p 19 9 p 258 p 1,24 0 p 1 ,65 4 p 2, 8 2 4 p 74p p 151p Apr. May June 7,838 4,008 *3,724 167 -1,372 *1,429 27 8 p 180p n.a. 1980--May NOTE: 910 1,941 1,242 301p 2 4 56 , p 1,0l8p n.a. 29 1,3 p 1, 2 1lp 8 39 p 1,123p 7 14 21 28 4,742 3,937 3.393 4,041 t1,327 42 p 2 53 p 5 p June 4 11 18 25 4,599 4,788 *3,489 *3,376 1,506 *2,216 *1,170 *902 468 90 164 192 459 401 396 318 July 2 *2,045p 255p 348p *938p Government security dealer trading positions are on a commitment basis. 95 157p 63p n.a. 155p 4 7 p 41 p 29p lip 15p lip 8p 5p 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 nearterm. Underwriting syndicate positions consist of Issues still In syndicate, excluding trading positions. Weekly data are daily averages for statement weeks, except for corporate and municipal issues in syndicatewhich are Friday figures. * Strictly confidential. ** MHnthly averages for excess reserves and borrowings are weighted averages of statement week figures. 

Federal Reserve (1980, July 8). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19800709

@misc{wtfs_bluebook_19800709,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1980},
  month = {Jul},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19800709},
  note = {Retrieved via When the Fed Speaks corpus}
}