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. August 8, 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 (FR) CLASS I - FOMC August 8, 1980 MONETARY AGGREGATES AND MONEY MARKET CONDITIONS Recent developments (1) Growth of the key monetary aggregates was somewhat slower in July than in June, but nonetheless the pace of expansion of M-1B and especially M-2 exceeded the Committee's minimum targeted rates for the third quarter as a whole. M-1A still remains somewhat below its range for the QIV '79 to QIV '80 period, but M-1B is now at the lower end and M-2 near the upper end of their respective longer-run ranges. page 9.) (See charts following The gap between the growth rates of M-1A and M-1B remained wide in July, reflecting the continued strength of ATS accounts. The rapid growth of ATS balances may have been related to the surge in passbook savings generally, as well as to marketing efforts by banks to place themselves in better competitive position for the introduction of nationwide NOW accounts. The nontransactional component of M-2 maintained the advanced pace of other recent months, as money market mutual funds and overnight RPs, Small time along with savings deposits, continued to expand sharply. deposits, however, declined slightly in July. With large CDs continuing to run off, growth in M-3 once again fell well short of that in M-2. Minimum Target Growth for Monetary Aggregates July June-September M-1A 7.4 7 M-1B 10.7 8 M-2 17.0 8 M-3 11.4 Memo: Bank credit 6.4 (2) At its July meeting, the Committee again indicated that monetary expansion moderately in excess of its minimum targets should be accommodated by an increase in reserve paths. Such adjustments were made in the early part of the intermeeting period as money growth slightly exceeded the targets. After mid-July, however, as projections for both M-1B and M-2 placed them well above the Committee's targets, the reserve paths were not adjusted further to accommodate the additional demand for 1/ reserves. With the demand for reserves augmented by exceptionally high excess reserves, adjustment borrowings increased to an average of about $450 million in late July and early August from about $80 million in the first two weeks of the intermeeting period. As shown in the table below, both total and nonborrowed reserves grew only modestly in July,.despite the continued rapid growth of the monetary aggregates. Not only did large denomination time deposits continue to decline, thereby releasing reserves to support growth in other deposits, but, in addition, a substantial proportion of the growth of the monetary aggregates was in nonreservable components. The relative strength of the monetary base reflected the comparatively rapid growth of currency. Growth in Reserve Aggregates (SAAR) QII 7.8 June 19.1 July 2.7 special borrowings Total reserves 6.0 1.2 5.6 -0.5 1.1 3.2 Monetary base 5.3 6.6 8.9 Memo: ($ millions) Average level of member bank adjustment borrowing Average level of special borrowings 750 72 142 534 307 253 Nonborrowed reserves Nonborrowed reserves plus 1/ See Appendix I for the pattern of reserve targets established over the intermeeting period. (3) The federal funds market eased slightly following the July Committee meeting, with daily effective rates falling mainly in a range of 8½ to 9 percent compared to 9 to 9 to the meeting. percent in the weeks just prior However, given the somewhat less accommodative provision of nonborrowed reserves by the System against a backdrop of an unusually large demand for excess reserves, the market tightened in late July and early August, and funds traded on some days in excess of the 10 percent discount rate established on July 25. With the demand for excess reserves apparently subsiding, federal funds have traded most recently in a range of 8-3/4 to a little over 9 percent. (4) Short-term yields generally fluctuated narrowly until late July when they came under substantial upward pressure in response to the firming of the funds market and to changes in expectations prompted by incoming monetary and economic data. Short-term rates are now roughly 1/2 to 3/4 of a percentage point above their levels at the time of the last meeting and 1 to 2-1/2 percentage points above their June lows.--The bank prime rate moved against this trend, dropping from at a few large banks. 11-1/2 to 11 percent and to 10-3/4 These latter institutions moved back to 11 percent in early August when market rates firmed. (5) Bond yields also have risen about 1/2 to 3/4 percentage point percentage point above their June lows. since early July and are roughly 1-1/4 The rise in these yields apparently reflected, in addition to the tightening of the money markets and changing expectations, the continued heavy demands placed on capital markets by private and governmental borrowers. Public offerings of corporate bonds in July were just below the record secondquarter pace, as corporations continued to lengthen the maturity of their liabilities. Long-term offerings by State and local governments remained sizable, and net coupon offerings by the Treasury have grown with the deepening deficit. In its largest mid-quarter financing operation since 1976, the Treasury offered $8 1/4 billion of securities, raising $3 1/4 billion of new cash. (6) Bank credit is estimated to have expanded at a 6 percent rate in July, following three months of decline, as holdings of securities increased sharply and total loans stopped declining. Business loans increased marginally, and real estate loans rose moderately; however, consumer loans probably fell again. Given the strength of core deposits and limited credit expansion, banks reduced slightly further their managed liabilities. (7) Domestic chartered banks continued in July to advance funds to their foreign branches; from April to July net advances by these institutions totaled about $13 billion. About $3 billion of these funds were used by foreign branches of member banks to finance lending to nonbank U.S. residents in the last three months; the level of such loans had been virtually unchanged for some time. At the same time, the interest rate spread in favor of Eurodollar deposits narrowed, contributing to a cessation of acquisitions by U.S. residents of such claims. (8) of July. The dollar was fairly stable on exchange markets over most However, during the last week of the month, the rise in U.S. interest rates--coupled with further indications of an easing in foreign rates--sharply increased demand for the dollar. Relatively favorable U.S. trade figures for June also contributed to the dollar's strength. The dollar's rise since the July FOMC meeting amounted to 2 percent on a weighted-average basis, and by larger amounts against the mark, yen, and Swiss franc. (9) 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 QII '80 S/ over Past Monn-hs Month July '80 July '80 over over 1978- 1979- QIV '79 Apr. '80 June '80 Nonborrowed reserves 6.7 0.7 5.6 22.0 2.7 Total reserves 6.6 2.9 2.8 0.1 3.2 Monetary base 9.2 7.7 6.5 7.8 8.9 M-1A (Currency plus demand deposits) 2/ 7.4 5.0 0.4 6.5 7.4 M-lB (M-1A plus other checkable deposits) 8.2 7.6 1.8 8.1 10.7 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 6.4 15.0 17.0 11.3 9.8 6.9 11.2 11.5 13.5 12.3 4.5 -0.8 6.5 4.3 0.6 1.3 1.2 1.8 0.9 1.6 -2.2 0.9 -2.4 -4.9 0.6 -3.9 -3.0 3.2 0.3 0.9 2.2 2.4 0.6 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 Eurodollars Other borrowingsMemo Nonbank commercial paper 1/ QIV to QIV. 2/ Other than interbank and U.S. Government 3/ Includes loans sold to affiliates and branches. 4/ 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. Prospective developments (10) Shown below, and depicted in the charts on the following pages, are two alternative sets of targets for the monetary aggregates for the current June to September policy period. The lower panel of the table shows the implied growth rates of the aggregates from July to September. Also indicated is a range for the federal funds rate over the intermeeting period that it is believed would accommodate either of these growth patterns. (Detailed data for these alternatives are contained in the tables on pp. 8 and 9.) Alt. A Alt. B June to September 7 9-1/4 12 M-1A M-1B M-2 6 8-1/4 11-1/2 Implied: July to September M-1A 6-3/4 5-1/4 M-1B M-2 8-1/2 9-1/4 6-3/4 8-3/4 Intermeeting range for funds rate (11) 8 to 14 8 to 14 Alternative A is indexed to the 7 percent growth rate of M-A for June to September that the Committee established at its last meeting, while alternative B is a more restrictive specification formulated in light of the tendency for M-2 to run high relative to its long-range target. Both alternatives call for slower growth in M-1B and M-2 over the next two months than has occurred in the last two. Even so, under either alternative, expansion of these aggregates over the third quarter would exceed the 8 percent minimum growth rates targeted Alternative Levels and Growth Rates for Key Monetary Aggregates M-1A M-1B Alt. A Alt. B Alt. A Alt. B 371.3 373.6 375.7 377.8 371.3 373.6 375.4 376.9 390.9 394.4 397.4 399.9 390.9 394.4 397.1 398.9 August September 6.7 6.7 5.8 4.8 9.1 7.5 8.2 5.4 June '80 September '80 7.0 6.0 9.2 8.2 4-3/4 -4 4-3/4 -4 7 5 6 -2 9-3/4 8-3/4 4 6 1.8 9k 3 5- 1980--June July August September Growth Rates Monthly 1980 Quarterly Average 1980--QI QII QIII QIV 1979 QIV to 1980 QII 1980 QII to 1980 QIV 1979 QIV to 1980 QIV 7 7 4 7 4 6 -21 94 7 1.8 8 Alternative Levels and Growth Rates for Key Monetary Aggregates (cont'd) M-3 M-2 Alt. A Alt. B Alt. A Alt. B 1585.6 1608.1 1621.4 1632.7 1585.6 1608.1 1621.0 1631.4 1844.4 1862.0 1870.8 1880.7 1844.4 1862.0 1870.5 1879.6 1980--August September 9.9 8.4 9.6 7.7 5.7 6.4 5.5 5.8 June '80 September '80 11.9 11.6 7.9 7.6 7 71 7-3/4 7-3/4 5 5 5-3/4 5-3/4 14 14 9-3/4 91 8 7 8 7-3/4 1979 QIV to 1980 QII 1980 QII to 1980 QIV 6.4 12 6.4 11 6.9 9 6.9 8-3/4 1979 QIV to 1980 QIV 9 9 8 8 1980--June July August September Growth Rates Monthly Quarterly Average 198 0 --QI QII QIII QIV NOTE: The following annual rates of growth in bank credit for the year and for the quarters are expected under alternative A: year 1980, 5'; QI, 9-; QII, - ; QIII, 3; QIV 8 . Only minor variations in growth rates would be expected under alternative B. Chart 1 CONFIDENTIAL (FR) C:ass 2 - FOMC Actual and Targeted M-1A and M-1B M-1A Billions of dollars 400 - Longer-Run Range ****Short-Run Alternatives 395 - 6% -390 -385 3% - 380 - 375 -370 I - I 0 I I 0 N 1 F J I M I A I M I I I A J J 1979 J I S .. 360 1 D N 0 1980 M-1B - 365 Billions of dollars 420 Longer-Run Range Short-Run Alternatives - 415 -410 6 1% 405 - 4% 400 395 390 385 380 I 0 I N 1979 I D I J I I M I A I M I I A J 1980 I S I J 0 375 l N 0 CONFIDENTIAL (FRI Class I- FOMC Chart 2 Actual and Targeted M-2 and M-3 M-2 Billions of dollars - 1680 Longer-Run Range - 1660 - Short-Run Alternatives . 9% -1640 -1620 S6% -1600 -1580 -1560 - 1540 - 1520 -1500 II I D N 0 II I M F J J M A J A S 0 N D 1980 _1979 Billions of dollars M-3 91/2 -- 1480 I I I I I I I I I 1940 % Longer-Run Range -1920 - ***Short-Run Alternatives , 6/% - 1900 - 1880 -1860 -1840 .ot, -1820 -1800 l^J -1780 , -^\ - I 0 N 0 J F __I I M I A 1979 SNote: A, and 8 alternatives are indistinguishable on this scale. M - l\ I-i A J 1980 0 v IL N I 1760 1740 rD -10by the Committee in July, and the September level of M-2 would be above the upper end of that aggregate's 6 to 9 percent QIV '79 to QIV '80 growth range. The specifications of both alternatives embody an assumption that the recent rise in market interest rates will contribute to a slowing of the extraordinarily rapid growth of ATS balances and regular passbook savings that has occurred in recent months. Growth of MMMF shares is also expected to moderate further as these yields appear less attractive relative to those on other investments. The slower savings deposit and MMMF growth is expected to be partly offset by a pick-up in small time deposit expansion as MMC yields rise and as growth in the 30-month SSCs continues strong. These projections imply that the gaps between the growth rates of M-1A and M-1B, on the one hand, and M-1B and M-2, on the other, will narrow substantially from what has occurred in the past two months. (12) Under alternative A, given the demand for transactions balances implied by the staff's stronger economic projection for the current quarter, money market interest rates are likely to remain at the higher levels attained recently. Aggregate credit demands may pick up, especially in the household sector. The runoff in consumer installment debt likely will slow, while the demand for home mortgages probably will strengthen somewhat. Borrowing by the Treasury and state and local governments will remain quite large. In the business sector, although total borrowing probably will rise in coming weeks, a significant portion of the increase will reflect a rebuilding of liquidity positions. (13) To achieve the growth in the aggregates specified under alternative A, total reserves would have to expand at about a 5 annual rate from July to September. percent Assuming a level of member bank borrowing (excluding special borrowings) of about $100 million, nonborrowed -11reserves would expand at about a 6-1/4 percent annual rate. With member bank borrowings at such minimal levels, the federal funds rate would be expected to fluctuate around the current 10 percent discount rate. (14) Alternative B calls for a slower expansion in the aggregates-- with growth of M-1A below the minimum targets adopted by the Committee last month--in order to counter the tendency for M-2 growth to exceed the Committee's longer-run range. To achieve the alternative B targets, growth in total reserves at about a 5 percent annual rate would be required. With adjustment borrowings assumed to be about $200 million, nonborrowed reserves would expand at a 4-1/4 percent annual rate. At the current discount rate, these specifications suggest that the federal funds rate would move toward the 11 percent area in the intermeeting period. Interest rates would be expected to rise throughout the maturity spectrum. The bank prime rate almost certainly would be increased, and home mortgate rates, already under upward pressure from recent increases in other interest rates, probably also would rise significantly-especially in light of the greater concerns about deposit flows that would develop among lenders. The recent strength of the dollar in foreign exchange markets probably would continue, moderated by U.S. official purchases of foreign currencies to repay swap debt. (15) A simple extrapolation of the June to September target for M-1A under alternative A would yield a 4 percent growth of this aggregate for the QIV '79 to QIV '80 period. Alternative B could be viewed as consistent with M-1A growth over the longer period of 3 the lower bound of the Committee's long-run range. percent-- In either case, interest rates at year-end would be expected by the staff to be significantly higher than current levels, given our GNP projection. Even with such an increase -12in rates, M-2 growth for the QIV '79 to QIV '80 period is likely to be near or above the upper end of its 6 to 9 percent long-run growth range. -13- Directive language (16) Given below are suggested operational paragraphs for the directive consistent with the form of the directive adopted at the July meeting. The language continues to call for expansion of reserve aggregates at a pace consistent with the desired rates of monetary growth over the third quarter, provided that the weekly average federal funds rate remains within a specified range. The specifications adopted at the July meeting are shown in strike-through form. In the short run, the Committee seeks expansion of reserve aggregates consistent with growth of M-1A, M-1B, and M-2 over the third quarter of 1980 at annual rates of about [DEL: 7]____ percent, [DEL: 8]____ perpercent, respectively, provided that in the period 8] ____ cent, and [DEL: before the next regular meeting the weekly average federal funds 8-1/2 to rate remains within a range of [DEL: 14] ____ to ____ percent. 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 Reserve Targets and Related Reserve Measures for 5-Week Period Ending August 13 ($ millions, not seasonally adjusted) Targets for 5-week Average Total Nonborrowed Reserves reserves 1/ (1) As of: July 11 Projections for 5-week Average Total Excess Required Reserves Reserves Borrowings Reserves (2) (4) (3) (5) (3)-(2) 41,602 41,527 41,602 41,384 218 75 July 18 41,535 2 / 41,460 2/ 41,535 41,273 262 75 July 25 41,505 41,430 41,538 41,335 203 108 Aug. 1 41,455 41,380 41,512 41,240 272 132 Aug. 8 41,480 41,405 41,640 41,196 444 235 Includes special borrowings. In line with the decision of the FOMC, the targets as of July 18 reflected projections of reserves needed to accommodate greater expansion in deposits and money. This greater expansion was believed achievable with fewer re- serves than were specified in the targets set on July 11 because of multi- plier shifts. The reserve targets set on July 18 were retained in subsequent weeks, except for adjustments to reflect multiplier shifts. TABLE 1 SELECTED INTEREST RATES (Percent) STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC 10-yr 30-yr Long-term Corp.-Aaa Hunicipal Utility Bond Recently New Offered Buyer Issue (9) (10) (11) (12) 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 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 12.18 15.93 12.28 14.17 10.73 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 10.31 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 11.25 11.57 11.35 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 12491 14.49 15.64 11.94 13.16 13.79 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 10.96 12.91 11.64 11.00 8.63 7.59 7.63 16.33 14.26 12.71 14.61 12.88 12.35 12.64 11.30 11.07r 8.10 12.66 Short-term Federal funds CDs Comm. Secondary Paper Treasury Bills 3-mo Auction Market Market 1-yr 1 6-mo 3-mo 3-mo Bank Prime Rate U.S. Govt. Constant Maturity Yields 3-yr (1) (2) (3) (4) (5) (6) (7) 1979--High Low 15.61 9.93 12.60 8.85 11.89 8.64 14.53 9.84 14.26 9.66 15.75 11.50 11.68 8.76 1980--High Low 19.39 8.68 15.61 6.49 14.39 7.18 12.65 8.87 15.70 6.66 18.04 8.17 17.60 7.97 20.00 11.00 1979--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 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 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 Apr. May June 17.61 10.98 9.47 13.20 8.58 7.07 11.97 8.66 7.54 July (8) (13) Home Mortgages Secondary Market Pia CNM FNMA Cor ry Auc. ISec. (14) 9.03 8.06 9.27 10.25 10.24 11.60 11.41 8.13 12.19 7.71 6.89 6.49 7.12 8.17 6.94 6.66 7.11 8.65 8.88 8.54 8.17 8.36 11.48 10.74 9.68 8.99 9.08 8.00 8.10 7.47 7.18 7.49 8.41 4 11 18 25 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 9.54 9.64 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 2 9 16 23 30 9.41 9.26 8.98 8.68 8.98 7.82 8.02 8.02 7.90 8.19 7.84 7.82 7.98 7.89 8.18 8.10 8.11 8.11 7.91 8.28 8.59 8.65 8.72 8.55 8.61 8.30 8.37 8.41 8.37 8.42 12.00 11.79 11.50 11.50 11.07r 9.17 9.07 9.23 9.16 9.46 10.06 10.11 10.21 10.17 10.41 10.02 10.11 10.22 10.16 10.38 11.50 11.48 11.54 11.65 11.92 11.18 11.26 11.33 11.44 12.00 7.88 7.95 8.03 8.19 8.59 12.18 12.23 12.18 12.18 12.25 6 13 20 27 9.60 8.65 8.62 8.87 9.33 9.01 11.00 9.92 10.74 10.73 12.01p 12 .10p 8.61 n.a. Daily--July 31 Aug. 7 9.93 8.86 8.62 8.38 8.63 8.55 8.90 9.16 8.65 8.76 l1.OOr 11.00 9.95 9.86 10.76 10.71 10.80 10.68 1980--June July Aug. - (15) 12.42 12.28 12.53 12.78 13.58 (16) 11.60 11.52 10.89 10.79 10.73 11.42 11.42 11.61 11.66 11.71 12.34 NOTE: Wpekly data for columns 1, 2, 3, and 5 through 10 are statement week averages of daily data: Weekly data in column 4 are average rates set in the auction of 6-month bills 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 week 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. 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. The FNMA auction yield is the average yield in a bi-weekly auction for short-term forward commitments for government underwritten mortgages; beginning July 7, 1980, figures exclude graduated payment 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. TABLE 2 1 NET CHANGES IN SYSTEM HOLDINGS OF SECURITIES(Millions of dollars, not seasonally adjusted) Tre y Treasury Coupons Net Purchases 3/ Treasu rt Over 10 Total 1,510 1,048 758 1,526 523 1,070 642 553 1,063 454 6,202 5,187 4,660 7,962 5,035 -468 863 4,361 870 6,243 337 472 517 1,184 603 465 42 640 - 309 310 2,302 81 51 1,351 3,284 3,025 2,833 4,188 3,456 III 5,363 395 1,289 IV 4,164 118 1,101 I -2,945 II 3,249 110 1980--Feb. Mar. -1,803 1,370 292 -355 Apr. 2,321 109 373 May June 606 322 July -3,214 1980--Qtr. 5 - 10 Within -1-year II 1979--Qtr. - 5 Federal Agencies Net Purchases 4/ Change 2/ 1975 1976 1977 1978 1979 STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC 292,/ / 3559, 1,516- 155 - 1 53 V 405 7382 -- -9 -274 / --121 274 --465 / -- 682 Over 10 Total Net Change Outright ol g T al 5/ - 5 5 - 10 191 105 --47 131 824 469 792 45 317 460 203 428 104 5 11 258 2 -- 371 -1,795 191 288 3 -- 482 8,129 - - 4,839 1 year - -- - 138 114 213 24 -- 1,613 891 1,433 127 454 Net RPs 6/ 1,272 3,607 -2,892 -1,774 -2,597 7,267 6,227 10,035 8,724 10,290 7 / 2,542 -2,019 / -3,801 - -- -- - -- -2,114 362 217 398 29 24 668 6,307 2,373 -836 - -- - --- -- -1,803 2,201 900 -705 107 81 836 359 410 2,395 -107 -81 - 62 64 607 217 398 29 24 668 3,594 -1,012 133 164 216 129 909 878 -- -- - --- --- 1,515 1,198 4,655 -1,271 - -- - -- - -- -- -- -3,216 -1,307 ---164 --129 --878 ----- -- -- --- ----- 51 94 -978 -3,421 -280 222 -3,545 ---- ---- --- --- -- -- ---- ---- 75 --532 -530 - 1980--June 4 11 18 25 51 96 -100 July 2 9 16 23 75 .. -530 -530 .. - -- ---- 30 -1,366 - -- -- -- -- -- - - - - Aug. 6 -789 -- -- -- -- -- -- -- -- -- 3,162 -2,660 3,908 2,152 -1,366 -4,476 -789 -9,456 130.3 -12.1 13 20 27 13.1 33.4 LEVEL--Aug. 6 47,1 (in billions) 1/ Change from end-of-period to end-of-period. 2/ Outright transactions in market and with foreign 3/ Outright transactions in market and with foreign shifts, rollovers of maturing coupon issues, and 4/ Outright transactions in market and with foreign 5/ In addition to the net purchases of securities, 6/ 7/ 8/ 13.6 14.1 74.3 2.2 4.7 1.3 0.7 8.9 accounts, and redemptions (-) in bill auctions. accounts, and short-term notes acquired in exchange for maturing bills. Excludes redemption, maturity direct Treasury borrowing from the System. Excludes redemptions and maturity shifts. accounts only. 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 (-). On April 9, 1979, the bills were exchanged for $640 million of 2-year notes were exchanged for a like amount of cash management bills on April 3, 1979. 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-term bills, because the note auctions were dr.l40.nd (C nrtnhP.- Q And whnatnd t-hp hillF wprp ex for new 2- and 4-vear notes. reRnpectvelv TABLE 3 SECURITY DEALER POSITIONS AND BANK POSITIONS (Millions of dollars) U.S. Govt. Security Dealer Positions I Underwriting Syndicate Positions unicipal Bonds STRICTLY CONFIDENTIAL (FR) CLASS II - FOMC Member Bank Reserve Positions Excess** Borrowing at FRB** Reserves Total Seasonal Bll Coupon Issues Corporate Bonds 1979--High Low 8,091 138 902 -2,569 283 0 726 -122 2,960 628 1980--High Low 8,838 1,972 2,216 -1,482 299 0 1,080p -228 p 3,439 1979--July Aug. Sept. 3,161 996 2,392 -658 -179 -1,608 66 32 142 211 222 191 1,171 1,085 1,340 182 179 174 2,289 4,427 5,760 -1,576 -514 -1,901 75 17 34 264 244 398 2,023 1,911 1,473 155 140 81 1980--Jan. Feb. Mar. 4,380 2,937 2,964 -944 -212 -659 42 3 37 251 211 204 1,241 1,655 2,823 74 97 151 Apr. May June July 7,838 4,008 3,724 *4,581 167 1,372 1,429 *634 48 69 112 154 2,456p 1,p018 379 p 15 6p 63p lip 34 8 p 215p 332p 354p 629p 1988--June 4 11 18 25 4,599 4,788 3,489 3,376 1,506 2,216 1,170 902 15 0 299 132 26 1p 181p 214p 36 7p 4 68 p 90p 164p 202p July 2 9 16 23 30 2,321 3,103 3,691 *5,853 *5,630 858 843 213 *63 *1,404 70 288 98 160 188 271p 506p 3 40 p -1 6 p 564p Aug. *5,332 * 6 13 20 27 849 90p 21 5 I 207 93 p 39 5 p p 401p 39 6 p 318 p 459 177 Sp 6 p 1p l3p lip 8p 2 5p 5 p 5 p 7 p 7p 1,080p NOTE: Government security dealer trading positions are on a commitment basis. Trading positions, which exclude Treasury securities financed by repurchase agreements maturing in 16 days or more, are indicators of dealer holdings available for sale over the 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 syndicate, which are Friday figures. * Strictly confidential. ** Monthly averages for excess reserves and borrowings are weighted averages of statement week figures. 

Federal Reserve (1980, August 11). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19800812

@misc{wtfs_bluebook_19800812,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1980},
  month = {Aug},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19800812},
  note = {Retrieved via When the Fed Speaks corpus}
}