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. November 13, 1981 Strictly Confidential (FR) Class I FOMC MONETARY POLICY ALTERNATIVES Prepared for the Federal Open Market Committee By the staff Board of Governors of the Federal Reserve System STRICTLY CONFIDENTIAL CLASS I (FR) November 13, 1981 - FOMC MONETARY POLICY ALTERNATIVES Recent developments (1) M1-B, adjusted for shifts into NOW accounts, expanded in October at a 3¾ percent annual rate--about half the pace of the Committee's September to December target. With expansion in the narrow money aggre- gate remaining weak, year-to-date growth in adjusted M1-B has been only at a 1 percent annual rate, continuing well below the lower limit of the Committee's 3 to 6 percent longer-run range. M2 growth picked up to a 9¼ percent annual rate in October,1/ putting this aggregate just at the upper end of the Committee's 6 to 9 percent longer-run range. (Recent monetary and reserves data are shown in the table on the next page). (2) Bank credit expansion slowed in October to an 8 percent annual rate, reflecting in part moderation in business loan growth. With bank credit growth weaker, large time deposits contracted in October, slowing M3 growth to a 6½ percent annual rate. expansion in M3 remains 1 Nevertheless, year-to-date percentage points above the upper end of the Committee's longer-run range for this aggregate. (3) Growth in nonborrowed reserves slowed markedly in October, largely reflecting reductions in required reserves behind deposits not included in M1 and M2, such as large time and interbank deposits. With borrowing declining markedly further, total reserves contracted at a 9 1/ The staff estimates that shifts from non-M2 assets into ASCs increased the measured rate of growth of M2 in October by about 2 percentage points, of which a little over 1 percentage point represented shifts from retail RPs and a little under 1 percentage point shifts from other non-M2 assets. On a monthly average basis, ASCs in October are estimated to have increased by nearly $22 billion. The staff estimates that about $3 billion came from non-M2 assets, such as retail RPs and market securities. Key Monetary Policy Aggregates (Seasonally adjusted annual rates of growth) QIII '81 over Oct. QI '80 Oct. '81 over QIv '80 Aug. Sept. 6.9 -4.0 3.7 1.3 1.4 11.6 6.3 9.3 8.9 8.9 13.9 8.3 9.3 9.5 9.7 M3 13.4 8.2 6.6 11.4 Bank Credit 10.1 10.6 8.6 8.9 9.2 19.3 28.5 3.4 4.3 5.3 Total Reserves 8.3 22.0 -8.9 3.5 3.7 Monetary Base 5.0 4.3 -0.4 5.1 4.6 1,339 202 1,155 324 743 214 Money and Credit Aggregates M1-B (shift adjusted) M2 M2 plus retail RP's1 / 10.9 2/ Reserves Measures- 3/ Nonborrowed Reserves- Memo: _/ 2/ 3/ (millions of dollars) Adjustment Borrowing Excess Reserves The quantity of retail RPs are staff estimates based on an August 31, 1981 universe survey and subsequent partial FRB and FHLBB samples. Growth rates for reserve measures are adjusted to remove the effects of discontinuities resulting from phased changes in reserve ratios under the Monetary Control Act. In addition, reserve data for QIV '80 have been adjusted to remove the distorting effects of the reduction in weekend reserve avoidance activities that occurred in late 1980. Nonborrowed reserves include special borrowing and other extended credit from the Federal Reserve. MEMO: FOMC Long-run Targets (percent increase) QIV '81 over QIV '80 Ml-B (shift adjusted) M2 3k to 6 6 to 9 M3 6k to 94 Bank Credit 6 to 9 percent annual rate. The monetary base was essentially unchanged as currency expansion about offset the decline in total reserves. Given the weakness in money growth and associated required reserves, adjustment borrowing generally remained below the $850 million assumed in the initial reserves path. In the current statement week borrowing is expected to average around $400 million, partly reflecting an upward adjustment in the nonborrowed reserves path to help counter the evolving weakness in M1-B and total 1/ reserves.- The lower level of borrowing--and reductions of 1 percentage point in both the discount and surcharge rates--was associated with a further easing in the federal funds rate to the 13 to 14 percent area, from around 15½ percent at the time of the October meeting. (4) In response to the easing in bank reserve positions and a further slackening in economic activity, other short-term market interest rates have declined about 2½ to 3 percentage points since the last meeting, bringing them under the earlier lows for the year (reached in late winter). The bank prime rate was lowered by 2 percentage points to 17 percent, with a few banks currently at 16½ percent. Bond yields approached record levels in October, as market participants focused on the current and prospective amount of Treasury borrowing and on disappointing consumer price data. More recently, bond yields have fallen as much as 2 percentage points in reaction to further evidence of weakness in economic activity and the reduced pressures in the money market. However, bond yields still remain about 1½ percentage points above earlier lows for the year. gage rates have eased a bit from their historic highs. Primary mort- The Treasury raised about $4 billion of new money in its recently completed three-part 1/ See Appendix I for adjustments made to reserve paths during the intermeeting period. mid-quarter refunding, bringing to nearly $18 billion the amount raised thus far in the quarter. Over the next seven weeks, the Treasury will have to raise another $18 billion. Sponsored agency financing has slowed recently from the advanced pace in the third quarter, due mainly to reduced borrowing by the FHLBs. Corporate bond offerings continued moderate in October, but the decline in bond yields has induced a sub- stantial pick-up in offerings this month. (5) Since the October meeting, the dollar has fluctuated rather widely in exchange markets. On balance, the dollar has declined only slightly on a weighted average basis, despite the considerable drop in short-term rates here relative to those abroad. Prospective Developments (6) The upper panel of the table below presents three alternative specifications for the monetary aggregates for the current quarter, while implied growth rates for the last two months of the year are shown in the second panel. Possible ranges for the intermeeting federal funds rate are indicated in the last line of the table. (More detailed data on these and other aggregates, including implied growth rates for the year 1981, may be found on the following two pages, and charts indicating the relationship of the alternative targets to the Committee's existing longer-run ranges for 1981 may be found on the next three pages.) Alt. A Alt. B Alt. C 7 6 5 11 10½ 10 Growth from September to December M1-B M2 Implied Growth from October to December 8¾ M1-B 12 M2 Federal funds rate range (7) 8 to 13 7 5¾ 11¼ 10½ 10 to 15 11 to 16 Alternative A maintains the September to December target for M1-B adopted by the Committee at its last meeting, while alternatives B and C reduce that target by one and two percentage points, respectively. All of the alternatives would imply faster M1-B growth over the two month October to December period than has occurred in any two-month period since last spring. Still, all would imply growth in M1-B over the year 1981 Alternative Levels and Growth Rates for Key Monetary Aggregates M1-B Mi-A 1981--August September October November December Alt. A Alt. B Alt. C Alt. A Alt. B 392.7 391.0 392.0 393.9 397.5 392.7 391.0 392.0 393.7 396.4 392.7 391.0 392.0 393.5 395.4 422.3 420.9 422.2 424.4 428.3 422.3 420.9 422.2 424.2 427.2 -5.2 (-7.6) 3.1 (2.7) 5.8 10.7 -5.2 (-7.6) 3.1 (2.7) 5.2 (2.3) 8.2 (10.0) Alt. C 422.3 420.9 422.2 424.0 426.2 Growth Rates Monthly 1981--September October November (3.0) December September 1981 - December 1981 6.6 -5.2 -4.0 -4.0 (-2.8) (-2.8) (7.0) (-7.6) 3.1 (2.7) 4.6 ( 1.7) 5.8 (4.3) 5.5 4.5 3.7 (3.9) 6.3 (7.8) 11.0 (11.6) 7.0 3.7 (3.9) (3.9) 5.7 ( 7.2) 8.5 (9.4) 5.1 (6.6) 6.2 (7.2) 6.0 5.0 8.7 October 1981 - December 1981 -4.0 (-2.8) 3.7 5.7 Quarterly Average 1981--QII QIII QIV 5.1 -1.5 3.2 1980 QIV - 1981 QIV 5.1 -1.5 2.7 5.1 -1.5 2.2 5.3 -0.7 3.8 5.3 -0.7 3.3 5.3 -0.7 2.9 1.1 1.0 1.9 1.8 1.7 4.5 4.5 4.5 Annual Average 1981 over 1980 MOTE: 3.1 Growth rates shown in parentheses are for the observed levels of the aggregates. Alternative Levels and Growth Rates for Key Monetary Aggregates __ _w Alt. A Alt. 1777.9 1786.5 1800.3 1820.6 1836.6 1981--September October November December (cont'd.) C Alt. A Alt. B Alt. C 1777.9 1786.5 1800.3 1819.9 1834.2 1777.9 1786.5 1800.3 1819.2 1832.0 2118.3 2131.8 2143.5 2161.3 2181.9 2118.3 2131.8 2143.5 2160.6 2179.6 2118.3 2131.8 2143.5 2159.9 2177.4 6.3 9.3 13.5 10.5 6.3 9.3 13.1 9.4 6.3 9.3 12.6 8.4 8.2 6.6 10.0 11.4 8.2 6.6 9.6 10.6 8.2 6.6 9.2 9.7 September 1981 - December 1981 11.2 10.7 10.2 9.4 9.0 8.6 October 1981 - December 1981 12.1 11.3 10.6 10.7 10.1 9.5 1981--August September October November December B Alt. Growth Rates Monthly I Quarterly Average 1981--QII QIII QIV 1980 QIV - 1981 QIV 10.6 7.1 10.1 10.6 7.1 9.8 10.6 7.1 9.6 10.6 10.2 9.0 10.6 10.2 8.9 10.6 10.2 8.7 9.3 9.3 9.2 11.0 10.9 10.9 9.7 9.7 9.6 11.5 11.5 11.5 Annual Average 1981 over 1980 Chart 1 CONFIDENTIAL (FR) Class -FOMC Actual and Targeted M1-B M1-B Billions of dollars 460 - Observed Level .... Level Adjusted for Impact of Nationwide NOW Accounts - Short-Run Alternatives 6% -- 440 -- 420 -- 410 -- 400 I O I I N 1980 D I J I I F M I A I 1 M J I J 1981 I I A S I I 0 N D CONFIDENTIAL (FR) Chart 2 Class II-FOMC Actual and Targeted M 2 Billions of dollars M2 1860 - Actual Level *... Short-Run Alternatives -1820 1800 1780 1760 -11740 -1720 -41700 1680 -41660 -41640 I I O N 1980 I D I J I I F * M a * II A I M I I J J 1981 A S I ' I O N D Chart 3 CONFIDENTIAL (FR) Class II - FOMC M 3 and Bank Credit M3 Billions of dollars 2200 21 - Actual Level * Short-Run Alternatives 2150 2100 S2050 2000 ,^^ 1950 *NOTE: 0 N 1980 D F J M A, B, and C altematives are indistinguishable on this scale A M J J A S 0 1981 BANK CREDIT Billions of dollars 7 1350 Actual Level - 1300 -11250 1 I I I 0 I N 1980 D 1 I i I J I a F M I A I M I J I J 1981 I A I S I 0 I N _ l ___ nn below the lower-end of the Committee's longer-run range. Growth in M2 for the year may be a little over the upper limit of its 6 to 9 percent annual range under any of the alternatives, but at this point growth seems unlikely to be much more than at a 9¼ percent rate.1/ (8) While the sharp decline in short-term interest rates since mid-summer should tend to stimulate growth of M1-B, the stimulative effect may in practice be offset, at least in part, by any continued downward shift in money demand relative to GNP and interest rates. Such a downward shift was quite marked over the first three quarters of the year, at least as judged from the money demand equation in the Board's quarterly model. Moreover, transactions demand for money in the latter part of the year may be relatively weak in any event if the significant contraction in economic activity now projected by the staff for the fourth quarter develops-with real GNP projected to decline at a 4¾ percent annual rate and nominal GNP to rise at no more than a 5 percent annual rate. Thus, unless the downward shift in money demand halts, or is reversed, the odds are that the proposed alternatives, particularly alternatives A and B, may involve further downward pressures on short-term interest rates. (9) Alternative A--which calls for maintaining the Committee's 7 percent growth rate target for M1-B for the last three months of the 1/ The introduction of International Banking Facilities in early December might have a temporary downward impact on M1-B to the extent that foreign IPC demand deposits are shifted to 2-day notice accounts in IBFs. Such shifts are expected to be small, however; they may have some impact on annual growth rates for the month of December, but would probably have no significant effect on growth for the year. The great bulk of the money shifted into IBFs will be from large time deposits or other interest-bearing liabilities, so that the principal impact potentially would be on M3. -9year--would entail growth in total reserves at a 7½ percent annual rate 1/ over the last two months of the year- and may involve a drop in the funds rate over the next few weeks to the 9 to 10 percent area. Under such conditions other short-term interest rates would of course also decline substantially, with the 3-month bill rate perhaps falling to around the 9 percent area. Such declines would occur against a back-drop of continued sizable Treasury cash borrowings over the balance of the year ($13 billion in the bill market and $6 billion in the coupon market) but reduced shortterm credit demands by businesses, as their financing gap narrows, largely in reflection of reduced inventory accumulation, and as credit demands are shifted to longer-term markets. (10) A further sharp decline in short-term interest rates, should it develop, would be transmitted to bond markets, leading to continuation of the recent rally. If such a decline in short rates were interpreted as reflecting a weakening in the System's resolve to combat inflation, the drop in bond yields would tend to be limited. Given the current weak economic outlook, however, high-grade corporate bond yields could drop into the 14 to 15 percent area which may well induce substantial corporate bond offerings to refund sizable short-term debts at banks and in the commercial paper market. Tax-exempt offerings, which have been better sustained than corporate offerings, are also likely to rise as previously postponed issues re-enter the market. Mortgage rates, while stickier than bond yields, could also be expected to decline as thrift deposit costs moderate and deposit flows pick up. 1/ Improvement in mortgage market Abstracting from any impact on required reserves from shifts of deposits to IBFs. -10conditions, and in thrift mortgage commitments, may lag somewhat more than usual, however, because of uncertainties about the permanence of any substantial decline in short-term market rates. M2 would tend to strengthen from shifts out of market securities into deposits and also from shifting by institutional investors to MMMFs in order to take advantage of the usual lag in money fund yields. (11) A further considerable decline in short-term interest rates might lead to a marked weakening of the dollar on exchange markets. How- ever, any tendency for the dollar to fall substantially on exchange markets could be limited in the degree that declining interest rates here and/or the tendency for foreign currencies to appreciate leads foreign authorities to ease their monetary policies, given continued weak economic performance abroad. (12) The more rapidly short-term interest rates decline over the weeks ahead, the greater the odds that rates will rebound in early 1982, given the monetary targets for next year that the Committee has tentatively set, with the degree of rebound, if any, depending in part on the underlying resilience of the economy. Alternatives B and C, which involve reducing the Committee's fourth quarter target for M1-B set at the last meeting, would tend to limit downward pressures on interest rates between now and year-end and possibly work toward a smoother transition to targets for 1982. Because it is so late in 1981, the impact on annual growth of the aggregates this year from adoption of either of these alternatives rather than continuing with alternative A would be relatively small, as may be noted from the detailed tables on pp. 6 and 7. -11(13) Alternative B would require expansion in total reserves at a 6 percent annual rate over the last two months of the year, while growth in reserves under alternative C would be at a 4½ percent annual rate. The staff believes short-term rate declines under alternative B could carry the funds rate into the 10 to 12 percent range. The aggre- gates specifications of alternative C are likely to be associated with a funds rate in a 12 to 14 percent range, implying the that the funds rate could drop below the current discount rate. (14) Declines in market interest rates, both short- and long-term, generally would be more modest under alternatives B and C than under alternative A, and potential downward pressure on the dollar in exchange markets would be reduced. Under B, Treasury bill rates would still likely reach levels which, if sustained, would make thrift institutions generally profitable. Under alternative C, that might also develop, but it would be less certain as the weight of Treasury financings and possible market disappointment about the likely course of the funds rate (and hence of dealer financing costs) would work to hold bill and other short-term rates up. Thus, under C an easing in mortgage market conditions would be relatively more delayed, both because of institutional uncertainty about positive earnings and because long-term market rates may remain higher than otherwise. (15) The possibility of the funds rate dropping significantly below the current 13 percent discount rate introduces complications in the design of reserve paths, particularly for alternatives A and B. complications arise if reserve paths do not involve sufficient The levels of borrowing at the discount window to permit weakness in demands for money (and for required reserves) to be cushioned by commensurate declines in borrowings. The funds rate could then be subject to sharp downward -12pressures as the reserves provided led to sizable excess reserves. An initial borrowing level around the $400 million expected in the current statement week would provide some borrowing cushion. Frictional levels of borrowing that would provide virtually no cushion appear to be in the $50 to $150 million range. The nonborrowed reserve path for alternative C, the alternative involving the least expansion in reserves, might be initially constructed on the basis of $400 million in borrowing. The more reserve expansion of alternatives A and B logically should be based on lower levels of borrowing, but whether set at frictional levels or higher, we would expect the demand for reserves soon to fall well short of supply. In such cases, to avoid an undue build-up in excess reserves, adjustments in the nonborrowed reserve path might need to be considered in conjunction with discount rate strategy. -13Directive language Given below is a suggested operational paragraph for the (16) directive. The specifications adopted at the meeting on October 5-6 are shown in strike-through form. In the short run the Committee seeks behavior of reserve aggregates consistent with growth of M1-B from September to December at an annual rate of [DEL: 7] ____ percent after allowance for the impact of flows into NOW accounts and with growth in M2 at an annual rate around [DEL: 10]____ percent [DEL: or higher, slightly behavior be will M2 of the particularly changes, the all the that recognizing affected-by-recent-regulatory-and-legislative of availability the to response public's savers certificate]. The Chairman may call for Committee consultation if it appears to the Manager for Domestic Operations that pursuit of the monetary objectives and related reserve paths during the period before the next meeting is likely to be associated 17] to 12 with a federal funds rate persistently outside a range of [DEL: ____ TO ____ percent. Appendix I RESERVES TARGETS AND RELATED MEASURES INTERMEETING PERIOD (millions of dollars; not seasonally adjusted) Targets for 3-week Average October 14 to October 28 Nonborrowed Total Reserves Reserves Total Reserves Projection of 3-week Average October 14 to October 28 Excess Required Reserves Reserves Adjustment Borrowing (4) (5) (6) 40,997 40,772 255 850 40,147 40,003-' 40,018- 40,997 40,812 40,799 40,772 40,628 40,537 225 184 262 850 779 781 40,013 40,754 40,512 241 740 (1) (2) Oct. 6 (FOMC Meeting) 40,997 40,147 9 16 23 Actual 3-week Average 40,997 40,88340,86840,754 (3) As of Targets for 3-week Average November 4 to November 18 Oct. 30 Nov. 6 13 Actual 3-week Average 40,817 / 40,855/ 4 0 , 7 54 7/ n.a.- 39,967 3 40,061- 39,921 / 7/ n.a. -n.a. Projection of 3-week Average November 4 to 18 _November 40,673 40,661 40,600 7/ - 40,448 40,411 40,358 40,358 706 600 679 225 249 242 n.a. 7/ n.a.- 7/ 1/ Total and nonborrowed reserves paths adjusted downward by $130 million on October 16 due to multiplier changes but revised to downward by $114 million on October 20 to reflect a revision in reported required reserves. 2/ Total and nonborrowed reserves paths adjusted downward by $15 million due to multiplier changes. 3/ Total and nonborrowed reserves paths adjusted downward by $487 million due to multiplier changes. 4/ Total and nonborrowed reserves paths adjusted upward by $38 million due to multiplier changes. 5/ Nonborrowed reserves path adjusted upward by $56 million because of weakness in total reserves. Total and nonborrowed reserves paths adjusted downward by $101 million due to 6/ multiplier changes. Nonborrowed path also adjusted to avoid a sharp change in bank reserve positions just prior to the Committee meeting. 7/ Not available at time Bluebook was prepared. Table 1 Selected Interest Rates Percent November 16, Short-Term rd 3-month 1-year t 2 ; 1 3 1 Long-Term 6-month Cs secondary market 3-month 4 5 Treasury bills market auction Federal funds 1981 1 comm. paper 3-month j.i bank prime rate a 7 U.S. government conatant maturity yields 3 yr 3-year 10-year I 30-year 8 I 1 10 offered munlcpal Bond Buyer corporate Aae utility new recently Issue 11 I home mortgages secondary market p a FNMA GNMA conv. suction security 1 1t I IS 1980--Righ Low 19.83 8.68 16.73 6.49 14.39 7.18 15.70 6.66 20.50 8.17 19.74 7.97 21.50 11.00 14.29 8.61 13.36 9.51 12.91 9.54 14.51 10.53 15.03 10.79 10.56 7.11 16.35 12.18 15.93 12.28 14.17 10.73 1981--Righ Low 20.06 13.48 16.72 11.55 15.05 11.83 15.85 11.51 18.70 13.43 18.04 12.87 20.64 17,00 16.54 12.55 15.65 12.27 15.03 11.81 17.62 14.05 17.72 13.98 13.21 9.49 18.63 14.80 19.23 14.84 17.46 13.18 1980-Oct. Nov. Dec. 12.81 15.85 18.90 11.61 13.73 15.49 11.30 12.66 13.23 11.57 13.61 14.77 12.94 15.68 18.65 12.52 15.18 18.07 13.79 16.06 20.35 12.01 13.31 13.65 11.73 12.68 12.84 11.59 12.37 12.40 13.18 13.85 14.51 13.13 13.91 14.38 9.11 9.56 10.11 13.79 14.21 14.79 14.95 15.53 15.21 12.91 13.55 13.62 1981--Jan. Feb. Mar. 19.08 15.93 14,70 15.02 14.79 13.36 12.62 12.99 12.28 13.88 14.13 12.98 17.19 16.14 14.43 16.58 15.49 13.94 20.16 19.43 18.05 13.01 13.65 13.51 12.57 13.19 13.12 12.14 12.80 12.69 14.12 14.90 14.71 14.17 14.58 14.41 9.66 10.10 10.16 14.90 15.13 15.40 14.87 15.24 15.74 13.55 14.13 14.18 Apr. Nay June 15.72 18.52 19.10 13.69 16.30 14.73 12.79 14.29 13.22 13.43 15,33 13.95 15.08 18.27 16.90 14.56 17.56 16.32 17.15 19.61 20.03 14.09 15.08 14.29 13.68 14.10 13.47 13.20 13.60 12.96 15.68 15.81 14.76 15.48 15.48 14.81 10.62 10.79 10.67 15.58 16.40 16.70 16.54 16.94 16.17 14.59 15.31 15.02 July Aug. Sept. 19.04 17.82 15.87 14.95 15.51 14.70 13.91 14.70 14.53 14.40 15.55 15.06 17.76 17.96 16.84 17.00 17.23 16.09 20.39 20.50 20.08 15.15 16.00 16.22 14.28 13.59 16.30 14.94 14.17 -- 15.32 14.67 17.21 15.73 16.82 17.33 11.14 12.26 12.92 16.83 17.29 18.16 16.65 17.63 18.99 15.76 16.67 17.06 Oct. 1981--Sept. Oct. Nov. 15.08 13.54 13.62 14.01 15.39 14.85 18.45 15.50 15.15 14.68 16.94 17.24 12.83 18.45 18.13 16.54 2 9 19 23 30 16.89 16.50 16.09 15,33 15.00 15.57 15.55 14.52 14.32 14.23 14.98 15.05 14.41 14.07 14.48 15.65 15.80 14.66 14.13 14.93 17.77 17.78 16.98 16.17 16.19 16.97 16.97 16.29 15.44 15.46 20.50 20.50 20.36 19.86 19.50 16.41 16.54 16.15 15.82 16.34 15.37 15.53 15.15 14.98 14.65 14.85 14.51 14.30 17.55 17.62 16.87 16.79 15.65 15.03 - 17.50 17.52 16.92 17.18 17.72 13.10 13.21 12.79 12.57 12.93 17.79 18.22 18.27 18.36 18.28 18.37 -18.74 19.23 17.26 17.41 17.05 11.33 17.46 7 14 21 28 15.46 14.93 15.32 14.87 14.25 13.44 13.43 13.29 14.11 13.44 13.55 13.60 14.22 13.50 13.80 13.62 16.04 15.21 15.16 15.30 15.44 14.67 14.65 14.74 19.29 18.71 18.00 18.00 15.94 15.29 15.37 15.61 15.31 14.74 16.94 14.86 15.04 15.45 14.39 14.61 15.01 -- 16.96 17.21 17.38 17.16 12.73 12.53 12.99 12.99 18.63 18.53 18.39 18.44 -17.74 -18.51 16.72 16.24 16.24 16.95 4 11 18 25 14.79 14.01 12.70 11.55 12.74 11.83 12.72 11.51 14.67 13.43 14.21 13.05 17.86 17.29 14.58 13.65 14.61 14.35 17.20 13.73 13.76 16.88 15.77p 12.44 11.43 18.37 a.a. -16.82 15.93 14.97 13.79 13.56 2 13.1 p 11.68 10.60 10.78 12.00 11.11 11.09 13.68 12.58 12.49 13.40 12.46 12.27 17.50 17.00 17.00 13.88 12.85 12.93p 13.94 13.19 13.19p 13,5 13.21 13.26p Daily-4ov. 6 12 13 -- NOTE: 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 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 bl-weekly auction for short-term forward commitments for government underwritten mortgages; 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. FR 1367 (7/81) Table 2 Net Changes in System Holdings of Securities 1 November 16, 1981 Millions of dollars, not seasonally adjusted Treasury billschang2 net5 Period 3 within 1-year Treasury coupons net purchases 10 over 10 over 5-10 1-5 tota total 1976 1977 1978 1979 1980 863 4,361 870 6,243 -3,052 472 517 1,184 603 912 3,025 2,833 4,188 3,456 2,138 1,048 758 1,526 523 703 642 553 1,063 454 811 5,187 4,660 7,962 5,035 4,564 1980--Qtr. -3,298 -58 137 100 541 236 320 1981--Qtr. -2,514 2,135 2,912 -23 115 122 469 607 164 64 89 182 1981--May June Net change total 1,225 1,379 308 -1,116 122 N t total 891 1,433 127 454 668 6,227 10,035 8,724 10,290 2,035 3,607 -2,892 -1,774 -2,597 2,462 1,234 100 -2,157 -1 -1,381 1,107 -23 836 976 -2,555 2,944 3,855 -1,694 -1,352 425 790 179 -2,166 1,502 2,200 1,379 275 1,768 -843 -500 -1,131 -209 790 204 July Aug. Sept. Oct. 19e1--Sept. 4 Federal agencies net purchases veto 110 over 10 510 1-5 within ovyear w 5 607 2 9 16 23 30 -604 -627 250 1,160 -204 -604 -627 217 1,160 -204 2,692 282 -1,716 474 -206 Oct. 7 14 21 28 -169 -414 131 -454 -169 -429 131 -454 -7,855 8,095 5,064 -7,234 Nov. 4 11 18 25 -211 116 1,142p -211 116 LEVEL--Nov. 11 48.5 14.8 34.9 11.5 16.2 77.4 0.6 8.6 134.6 -2.3 5 In addition to the net purchases of securities, also reflects changes in System holdings of bankers' I Change from end-of-period to end-of-period. acceptances, direct Treasury borrowing from the System and redemptions (-) of agency and Trea2 Outright transactions in market and with foreign accounts, and redemptions (-) in bill auctions. sury coupon issues. 3 Outright transactions in market and with foreign accounts, and short-term notes acquired in ex6 includes changes in RPs (+), matched sale-purchase transactions (-), and matched purchase-sale change for maturing bills. Excludes redemptions, maturity shifts, rollovers of maturing coupon transactions (+). issues, and direct Treasury borrowing from the System. 4 Outright transactions in market and with foreign accounts only. Excludes redemptions and maturity qhifts STRICTLY CONFIDENTIAL (FR) CLASS II-FOMC Table 3 Security Dealer Positions and Bank Positions November 16, 1981 Millions of dollars cash I futures and forwards j b ll s iHb ] I coupone - -n I s tilb ] Member bank reserve positions Underwriting syndicate positions corporate municipal bonds bonds b I U.S. government securities dealer positions Period coupons excess reserves I Sadjustment an I borrowing at FRB O Extended seasonal rduchs special) total total 299 0 881 19 3,298 12 174 5 816 0 3,438 215 139 0 508 -95 2,597 529 309 99 444 2,912 766 -1,685 -2,663 -2,751 14 17 6 206 521 468 1,244 1,963 1,571 66 97 116 * 3 1,310 2,059 1,690 -11,976 -12,203 -11,561 -2,884 -2,798 -3,251 B 8 46 310 276 248 1,204 1,135 789 120 148 196 22 21 15 1,395 1,303 1,000 3,149 2,745 3,278 -7,277 -6,486 -9,934 -3,050 -2,822 -2,925 15 2 42 127 175 249 1,168 1,154 1,139 162 269 291 8 5 7 1,338 2,228 2,037 2,950 4,324 5,611 3,314 2,242 1,614 -8,340 -10,071 -9,830 -3,012 -2,972 -2,856 5 6 8 250 202 324 1,429 1,M05 933 247 235 222 3 80 301 1,679 1,420 1,456 Oct. 4,781** 1,629** 152p 438p 1,181p Sept. 2 9 16 23 30 4,453 6,859 7,008 5,944 2,689 2,366 1,539 965 2,005 1,742 246 217 205 230 231 191 236 287 325 387 1,448 1,585 1,349 1,446 1,448 Oct. 7 14 21 28 5,640 5,577 4,247** 4,056** 1,280 2,133 1,071** 1,889** -8,110 -3,438 -8,919 -3,953 -8,419"*-3,789"* -8,001**-3,351** 0 139 0 0 5 12 19 26 5,108** 5,908** 2,494** 3,713** -10,242**-3,884*-8,530**-4,427** 7 0 1980--High Low 8,838 1,972 2,263 -1,482 1981--High Low 15,668 1,273 4,633 965 -12,865 -5,930 1980--Oct. Nov. Dec. 2,447 3,047 4,287 143 149 20 -1,556 -7,068 -9,812 1981--Jan. Feb. Mar. 9,985 13,317 13,579 1,584 1,812 3,415 Apr. May June 8,518 1,676 5,547 July Aug. Sept. Nov. -4,4274* -2,514 -8,575**-3,655** -11,278 -11,135 -10,140 -9,657 -8,070 -3,067 -2,514 -2,703 -3,019 -3,116 29 214p 0 8 0 25 4 251 353 312 181 473 0 1 p 59 1 p 1,011 1,132 857 891 830 * * 122 267 198 259p 577 529 656 576p 156 158 155 147p 413 423 444 464p 1,146 1,110 1,255 1,137p 234p 26 7 p 651p 720p 13 4 p 130p 452p 11 5 p 1,23 7 p 965p .5. Weekly data are daily averages for statement weeks, except for corporate and municipal issues in NOTE: Government securities dealer cash positions consist of securities already delivered, commitsyndicate, which are Friday figures. Monthly averages for excess reserves and borrowing are weighted ments to buy (sell) securities on an outright basis for immediate delivery (5 business days or less), and averages of statement week figures. Monthly data for dealer futures and forwards are end-of-month certain "when-issued" securities for delayed delivery (more than 5 business days). Futures and forward figures for 1980. positions include all other commitments involving delayed delivery; futures contracts are arranged on organized exchanges. Underwriting syndicate positions consists of issues in syndicate, excluding trading positions. ** Strictly confidential 

Federal Reserve (1981, November 16). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19811117

@misc{wtfs_bluebook_19811117,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1981},
  month = {Nov},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19811117},
  note = {Retrieved via When the Fed Speaks corpus}
}