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. 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 (FR) Class I - FOMC March 19, 1993 MONETARY POLICY ALTERNATIVES Recent Developments 1 (1) The degree of reserve pressure was left unchanged over the intermeeting period. The intended level of the federal funds rate remained at 3 percent and the allowance for adjustment and seasonal borrowing at $50 million. The federal funds rate has averaged 3.03 percent since the early February FOMC meeting, and borrowing has averaged slightly above its allowance. Short-term market interest rates were little changed over the intermeeting period. (2) period. Bond markets, however, rallied strongly over much of the Prospects for significant reductions in the federal budget deficit in coming years and the consequences for aggregate demand appeared to be the most important influence sparking the rally. De- mands for Treasury notes and bonds also were boosted by municipal defeasance activity and assessments of heightened prepayment risk on mortgage-backed securities. Toward the end of the period, however, upturns in inflation readings prompted some backup in yields, but renewed rate declines most recently have erased much of this backup. On balance, most intermediate- and long-term yields have fallen 40 to 50 basis points over the period. Rate spreads on mortgage-backed securities and fixed-rate mortgages over comparable Treasuries have widened some; nevertheless, mortgage rates reached their lowest levels in two decades. The drop in interest rates buoyed stock prices: Most major indexes rose 1 to 3 percent, although the NASDAQ index declined somewhat on net, reflecting concerns about future changes in government policy toward certain industries, including health-care firms. 1. Financial market quotations in this bluebook reflect data available through noon, March 19. (3) The dollar's foreign exchange value on a weighted-average basis declined about 1-1/4 percent on balance over the intermeeting period. During much of the period, the dollar generally rose against European currencies, amid signs of weakening activity and easier current and prospective monetary policy stances in those countries. But the dollar declined against the mark and other European currencies following the Bundesbank's cut in its discount rate on March 18 that embodied less easing than was apparently expected by market participants. On balance, the dollar fell 1/2 percent against the mark over the period. German short-term rates dropped 70 basis points, while the long-term rate moved down 40 basis points. Europe also decreased. Interest rates elsewhere in The dollar depreciated 7-1/2 percent against the yen, as market attention focused on Japan's growing trade surplus. In Japan, short-term rates and the bellwether bond yield declined about 20 basis points during the intermeeting period. (4) February. The broad monetary aggregates continued to contract in M2 dropped at a 4 percent rate. Its Ml component fell slightly last month, continuing its deceleration from the double-digit pace that prevailed over much of 1992.2 ponent of M2 again contracted rapidly. The nontransaction comOwing mainly to strong flows into institution-only money funds, the decline in M3 slowed last month, and, at a 2-1/2 percent rate, was more moderate than that in M2. The 2. In February, total reserves and the monetary base expanded at 5-1/2 and 8-1/2 percent rates, respectively. These figures incorporate revised seasonal factors and are confidential until their publication, which is scheduled for March 25. available data for the first half of March show a less rapid outflow from M2 but a stepped-up runoff of M3 compared with February. From January to mid-March, the broader aggregates, especially M2, were appreciably weaker than anticipated at the time of the last bluebook. As of mid-March, the broad aggregates were well below their target cones and only a little above the lower edges of their parallel bands. (5) Much of the recent weakness in the monetary aggregates appears to be due to temporary factors. Some weakness in M2 associated with seasonal adjustment distortions and a decline in deposit balances associated with a fall in prepayments of mortgage-backed securities was foreseen in the last bluebook. 3 In the event, prepayments plunged more rapidly than earlier projected. But not all of the shortfall of M2 from expectations is accounted for by larger-than-anticipated temporary factors. Thus, even abstracting from temporary depressants, M2 appears to be fundamentally weaker than foreseen earlier, with underlying growth from January to mid-March, while positive, quite modest. Of the 8-1/2 percent growth rate in M2 velocity that seems to be in train this quarter, no more than 1-1/2 percentage points can plausibly be attributed to these temporary factors. Evidently, some of the other persisting influences that have been boosting velocity in recent years have intensified. Relatively attractive returns on capi- tal market instruments likely have prompted households to divert more funds from deposits into bond and stock mutual fund shares, which have posted record inflows in recent months. Bank credit expansion has slowed noticeably this year, and banks also have continued to tap 3. The staff's standard seasonal adjustment procedures have attributed strong monetary growth in February in both 1991 and 1992 to evolving seasonal patterns rather than recognizing the stimulative effects of previous declines in short-term interest rates that resulted from easings of monetary policy around the year-end in 1990 and 1991. markets for subordinated debt and equity, further depressing their needs for deposit funding. Both M2 and M3 have borne the imprint of these developments, as interest rates on retail deposits have dropped further in recent weeks and as large time deposits have continued to run off. Moreover, the leveling out of short-term interest rates since last September, as the stance of monetary policy has held steady, has meant that earlier policy-induced stimulus to growth of the broader aggregates has ended. (6) Overall private debt growth appears to be expanding around or a bit faster than its pace over the last few months of 1992. Businesses have drawn heavily on credit markets, as the rally in bond prices set off another surge of corporate issuance, although the proceeds were largely used to repay business loans at banks and commercial paper, both of which have declined a little on balance so far this year. State and local governments have taken advantage of favorable market conditions by selling a hefty volume of bonds, with an enlarged proportion of the offerings earmarked to refund debt. Households seem to have increased their willingness to take on debt in recent months: Consumer installment credit rose in January for the fifth straight month and, in February, bank consumer loans adjusted for securitization rose at nearly a 9 percent annual rate. Total domestic nonfinancial debt is estimated to have grown at about a 4-1/2 percent rate from the fourth quarter through February, leaving this aggregate around the lower bound of its 1993 monitoring range. MONEY, CREDIT, AND RESERVE AGGREGATES (Seasonally adjusted annual rates of growth) QIV to Feb. Jan. Feb. M1 7.7 -.5 6.1 M2 -3.1 -4.1 -2.2 M3 -7.1 -2.4 -3.9 Money and credit aggregates 4 .2 p 5.3 3.8P 4.5 7.5 3.4 -1.6 2.0 1.0 Nonborrowed reserves 2 6.0 8.3 10.0 Total reserves 6.9 5.6 9.4 Monetary base 8.3 8.6 9.1 164 45 1260 1114 Domestic nonfinancial debt1 Federal Nonfederal Bank credit 3.2 2.9 3.3 Reserve measures Memo: (Millions of dollars) Adjustment plus seasonal borrowing Excess reserves p--preliminary estimates. 1. Debt figures for February are preliminary. 2. Includes "other extended credit" from the Federal Reserve. NOTE: Data on reserves and the monetary base reflect new seasonal factors and are confidential until their publication, which is scheduled for March 25. Monthly reserve measures, including excess reserves and borrowing, are calculated by prorating averages for two-week reserve maintenance periods that overlap months. Reserve data incorporate adjustments for discontinuities associated with changes in reserve requirements. Policy alternatives (7) Three policy alternatives are presented below for consideration by the Committee. Under alternative B, federal funds would continue to trade around 3 percent in association with the allowance for adjustment plus seasonal borrowing initially remaining at $50 million. The allowance probably will need to be revised upward over the intermeeting period when demands for seasonal credit strengthen during the spring. Under alternative A, the federal funds rate would decline to the 2-1/2 percent area. This alternative could be implemented through a 1/2 percentage point drop in the discount rate, holding the initial borrowing allowance at the same level as in alternative B, or by lowering the initial borrowing allowance to $25 million and leaving the discount rate unchanged. Alternative C, involving a rise in the federal funds rate to 3-1/2 percent, could be implemented through a boost in the initial borrowing allowance to $75 million. (8) Market participants are expecting neither tightening nor easing in the stance of monetary policy for some time. They appear to anticipate that the recent runup in inflation will subside in large part. The gains in stock prices and sustained narrow quality spreads suggest that investors now also believe that the bond market rally, together with the economy's existing forward momentum, will keep the contractionary effects of the deficit-reduction package from derailing the economic expansion. Thus, under alternative B, short-term interest rates would stay around current levels. Intermediate- and long-term rates will remain sensitive to news on the fiscal front and corresponding implications for the economy, as well as reports bearing on the inflation outlook. Bond rates could edge lower should incoming news on prices confirm the extent of moderation in inflation embodied in the staff economic forecast. The dollar would be expected to fluctuate around current levels under alternative B, but could firm somewhat if rate declines in Europe prove to be faster and larger than now expected. (9) The easing of policy under alternative A would surprise market participants and would lead to a decline in short-term rates, including the prime rate, commensurate with the 1/2 percentage point drop in the federal funds rate. In such circumstances, bankers might be more encouraged to ease lending standards and nonprice terms on business loans. Rate declines at longer maturities would be muted should market participants see the easing in the absence of weak economic data as risking a sustained resurgence of inflation. Conversely, the tightening of policy under alternative C, which also would come as a surprise to market participants, would induce a rise in short-term rates comparable to the hike in the federal funds rate. The increase in intermediate- and long-term rates would be lessened to the degree it were seen as a timely measure to hold inflation in check. To the extent that market participants saw dimmer prospects for economic activity, risk premiums incorporated in yields on private obligations would increase. The ex- change value of the dollar would move in the same direction as domestic interest rates under either alternative. (11) Monetary growth rates for the February-to-June period thought to be consistent with the three alternatives are shown in the table below. Despite both stronger nominal income expansion and lower longer-term interest rates than expected previously, in all three alternatives growth rates of M2 and M3 over this period are roughly 1 percentage point below those in the previous bluebook. These revi- sions primarily reflect the weaker-than-expected underlying monetary growth to date and the prospect that the various influences causing a rechanneling of credit flows away from depositories will remain intense, even if abating some from their extraordinary strength so far this year. Alt. A Alt. B Alt. C Growth from February to June M2 3 M3 M1 2-1/2 2 1-1/4 11 1 9-3/4 3/4 8-1/2 3/4 1/2 -1 8-1/4 1/4 -1-1/4 7-1/2 Implied growth from 1992:Q4 to June M2 M3 M1 (12) -1 9 Under alternative B, M2 is expected to resume growth over the February-to-June period. The projected 2-1/2 percent average rate implies growth of 1-3/4 percent for the second quarter. With nominal GDP in the staff forecast decelerating to a 5-1/2 percent pace, growth in M2 velocity would slow to a 3-1/2 percent annual rate in the second quarter. Slower velocity growth partly results from the positive ef- fects on M2 of the turnaround of the temporary factors related to seasonal adjustment and prepayments of mortgage-backed securities. Their impact, which represents a diminishing drag on M2 growth in March as a whole, acts as a stimulant to growth in the subsequent months, reflecting a reversal of the effects of seasonal distortions and a resurgence in prepayments.4 On balance, these factors raise money growth per- ceptibly over the February-to-June period. Much of the pickup in M2 comes from its M1 component, which would expand at a 10 percent annual 4. Still another factor, related to depressed individual refunds and elevated individual nonwithheld tax payments, is expected to restrain M2 growth in March and May and boost it in April and June, but to have a negligible effect over the February-to-June period as a whole. Alternative Levels and Growth Rates for Key Monetary Aggregates M2 M3 M1 Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C Alt. A Alt. B Alt. C 3488.2 3476.2 3475.0 3487.5 3496.8 3511.1 3488.2 3476.2 3474.8 3485.5 3492.7 3505.0 3488.2 3476.2 3474.5 3483.6 3488.8 3498.9 4142.6 4134.5 4128.5 4137.8 4142.6 4151.9 4142.6 4134.5 4128.3 4136.2 4139.7 4147.9 4142.6 4134.5 4128.1 4134.7 4136.6 4143.6 1033.2 1032.8 1033.6 1047.7 1057.6 1071.1 1033.2 1032.8 1033.4 1046.4 1054.6 1066.3 1033.2 1032.8 1033.2 1045.1 1051.6 1061.5 -3.1 -4.1 -3.1 -4.1 -3.1 -4.1 -7.1 -2.4 -7.1 -2.4 -7.1 -2.4 7.7 -0.5 7.7 -0.5 7.7 -0.5 -0.4 4.3 3.2 4.9 -0.5 3.7 2.5 4.2 -0.6 3.1 1.8 3.5 -1.8 2.7 1.4 2.7 -1.8 2.3 1.0 2.4 -1.8 1.9 0.6 2.1 0.9 16.4 11.4 15.3 0.7 15.1 9.4 13.3 0.5 13.8 7.4 11.3 1992 Q1 Q2 Q3 Q4 1993 Q1 Q2 3.2 0.3 0.8 2.7 -1.8 2.1 3.2 0.3 0.8 2.7 -1.8 1.7 3.2 0.3 0.8 2.7 -1.8 1.2 1.9 -0.6 0.1 -0.2 -3.8 0.9 1.9 -0.6 0.1 -0.2 -3.8 0.6 1.9 -0.6 0.1 -0.2 -3.8 0.3 15.5 10.5 11.7 16.8 6.3 9.9 15.5 10.5 11.7 16.8 6.3 8.8 15.5 10.5 11.7 16.8 6.2 7.6 Sep 92 to Dec 92 Dec 92 to Mar 93 2.0 -2.5 2.0 -2.6 2.0 -2.6 -1.5 -3.7 -1.5 -3.7 -1.5 -3.7 14.7 2.7 14.7 2.7 14.7 2.6 Mar 93 to Jun 93 Feb 93 to Jun 93 4.1 3.0 3.5 2.5 2.8 2.0 2.3 1.3 1.9 1.0 1.5 0.7 14.5 11.1 12.7 9.7 10.9 8.4 14.3 Levels in billions 1993 January February March April May June Monthly Growth Rates 1993 January February March April May June Quarterly Ave. Growth Rates Q4 91 to Q4 92 Q4 Q4 Q4 Q4 92 92 92 92 to to to to Jan Feb Mar Jun 93 93 93 93 1993 Target Ranges: 1.8 1.8 1.8 0.3 0.3 0.3 14.3 14.3 -1.3 -2.2 -1.8 0.8 -1.3 -2.2 -1.8 0.5 -1.3 -2.2 -1.8 0.2 -4.7 -3.9 -3.4 -1.0 -4.7 -3.9 -3.4 -1.1 -4.7 -3.9 -3.4 -1.3 9.4 6.1 4.8 9.1 9.4 6.1 4.8 8.3 2.0 to 6.0 0.5 to 4.5 9.4 6.1 4.7 7.5 I Chart 1 ACTUAL AND TARGETED M2 Billions of Dollars 3776.2 Actual Level -- * Short-Run Alternatives -- 3726.2 -- 3676.2 -- 3626.2 3576.2 - 3526.2 e.*c -1 3476.2 -1 3426.2 D ON 1992 J F MA M J J 1993 A S ON D J 1994 3376.2 Chart 2 ACTUAL AND TARGETED M3 Billions of Dollars 4484.5 --0 Actual Level Short-Run Alternatives -1 4434.5 4.5% - 4384.5 -- 4334.5 - 4284.5 -1 4234.5 0.5% - 4184.5 -- 4134.5 * a S I O N 1992 D I J I F I M I A I I M . . . . J J 1993 I I I . . A S I I O II II | N D J 1994 4084.5 Chart 3 Billions of Dollars - Actual Level Short-Run Alternatives 0 - 10%-- 1182.8 1132.8 1082.8 * A * B * c 1032.8 I O I N 1992 I D I J I F I M II I A M J I J 1993 I A I S I O I N I D J 1994 982.8 Chart 4 DEBT Billions of Dollars 12999.8 Actual Level - * Projected Level -- 112799.8 - 12599.8 -- 12399.8 4.5% --1 12199.8 11999.8 -- 11799.8 -1 11599.8 1I O N D 1992 I 1 I1 1 111. 1 I I I 1 1 J F M A M J J 1993 A S O N D J 1994 11399.8 -10- rate from February to June.5 Outflows to bond funds from money market mutual funds and nontransactions retail deposits are seen as moderating over time if bond yields stabilize around current reduced levels and as portfolio adjustments become more complete. The pickup in M2 would still be limited by further downward adjustments of deposit rates. By June, growth in M2 from its fourth-quarter base would be only 1/2 percent at an annual rate. (13) Even though M3 is seen as expanding at a 1 percent rate over the February-to-June period, it still would be well below its fourth-quarter base in June. The resumption in M3 expansion would partly reflect some anticipated pickup in bank credit. In the months ahead, banks may become a little more willing to extend business credit--including loans to smaller firms--and, given their more comfortable capital positions, to retain, rather than securitize and sell, assets. Improved balance sheet structures also imply less need for banks to rely on capital markets to raise funds, an important substitute for M3 funding recently. Even though some businesses are expected to acquire additional financing from banks, others are likely to continue to rely on bond markets, in some cases paying down bank loans and shortterm paper. Overall business borrowing is expected to strengthen with increases in capital spending and moderation in equity financing. Household borrowing will be bolstered by improving housing activity--as suggested by the stronger level of mortgage applications recently--and further advances in outlays for consumer durables. Nonfederal debt is expected to grow at about a 4 percent pace from February to June, up a little from growth in recent months. Federal debt expansion, while 5. With currency growing at a 9-1/2 percent rate from February to June and total reserves at 8 percent, the monetary base is projected to rise at a 9-1/4 percent rate. -11- gyrating from month to month, will remain brisk over the second quarter to finance large deficits.6 Total debt of domestic nonfinancial sectors is projected to grow at a 5-1/2 percent annual rate from February to June. Such growth would place this aggregate in June 5-1/4 percent at an annual rate above its fourth-quarter base and about 3/4 percentage point above the lower bound of its monitoring range. (14) Under alternative A, M2 would strengthen to a 3 percent rate over the February-to-June period. This speed-up in M2 growth, coming mainly from its M1 component, would owe to smaller opportunity costs, as deposit rate adjustments lag behind the decline in market rates. Although M2 in June would still be below the lower bound of its annual growth cone, it would be on a trajectory to reach the vicinity of the lower bound by year-end, partly because spending would begin to strengthen later in the year in response to the policy easing. M3 would grow at a 1-1/4 percent pace over February to June under alternative A, but would remain below its fourth-quarter base even by June. Under alternative C, M2 would expand at a 2 percent rate over the February-toJune period, as wider opportunity costs would discourage inflows to more liquid deposits, especially M1 balances. M2 likely would not move above the level of its fourth-quarter base until June, and with slower spending growth later in the year, this aggregate probably would increase only marginally over the year as a whole. M3 would expand at only a 3/4 percent rate from February to June. 6. Absent Congressional action to raise the $4.145 trillion debt ceiling, the staff forecasts that the Treasury could run out of cash in early April. However, the staff anticipates that the Congress will raise, at least temporarily, the debt ceiling before that time, in accordance with the Treasury's recent request. -12- Directive language (15) Presented below is draft wording for the operational paragraph that includes the usual options and updating. are shown for the sentence on the growth of M2 and M3. Two versions The first would return to the specification of numerical growth rate expectations, as was the Committee's practice prior to the February meeting; the other would retain the approach at the February meeting of not stating explicit monetary growth expectations but rather relying on a qualitative characterization. OPERATIONAL PARAGRAPH In the implementation of policy for the immediate future, the Committee seeks to DECREASE SOMEWHAT/maintain/ INCREASE SOMEWHAT the existing degree of pressure on reserve positions. In the context of the Committee's long-run objectives for price stability and sustainable economic growth, and giving careful consideration to economic, financial, and monetary developments, slightly (SOMEWHAT) greater reserve restraint (WOULD/MIGHT), or slightly (SOMEWHAT) lesser reserve restraint would (MIGHT) be acceptable in the intermeeting period. The contemplated reserve conditions are expected to be consistent with GROWTH OF [DEL: little change in]M2 and M3 AT ANNUAL RATES OF ABOUT ____ AND ____PERCENT RESPECTIVELY over the period from [DEL: January to March] FEBRUARY TO JUNE. -13- Alternative Monetary Growth Sentence The contemplated reserve conditions are expected to be consistent with a resumption of moderate growth in the broader monetary aggregates over the second quarter. March 19,1993 SELECTED INTEREST RATES (percent) Short-Term federal funds 1_ Treasury bills secondary market S3-month 6-monh I 1-year 2 3 4 CDs secondary comm. market paper 3-month 1-month 5 6 money market mutual fund 7 bank prime loan 8 U.S. government constant maturity yields 3-year 10-year 30-year 9 10 11 Long-Term corporate conventional home mortgages A-utility municipal secondary primary recently Bond market market offered Buyer fixed-rate fixed-rate ARM 12 13 14 15 I 16 92 -- High -- Low 4.20 2.86 4.05 2.69 4.22 2.82 4.51 2.91 4.32 3.07 5.02 3.17 4.51 2.74 6.50 6.00 6.32 4.24 7.65 6.30 8.07 7.29 8.99 8.06 6.87 6.12 9.22 7.86 9.03 7.84 6.22 4.97 93 -- High -- Low Monthly Mar 92 3.24 2.91 3.09 2.92 3.26 3.03 3.43 3.17 3.28 3.09 3.39 3.12 2.92 2.66 6.00 6.00 5.06 4.32 6.73 5.89 7.46 6.74 8.28 7.47 6.44 5.69 8.30 7.61 8.14 7.44 5.36 4.78 4.04 3.75 3.63 3.66 3.21 3.13 2.91 2.86 3.13 3.22 4.18 3.87 3.75 3.77 3.28 3.21 2.96 3.04 3.34 3.36 4.40 4.09 3.99 3.98 3.45 3.33 3.06 3.17 3.52 3.55 4.25 4.00 3.82 3.86 3.37 3.31 3.13 3.26 3.58 3.48 4.28 4.02 3.87 3.91 3.43 3.38 3.25 3.22 3.25 3.71 3.73 3.66 3.52 3.45 3.25 3.07 2.91 2.79 2.83 2.82 6.50 6.50 6.50 6.50 6.02 6.00 6.00 6.00 6.00 6.00 6.18 5.93 5.81 5.60 4.91 4.72 4.42 4.64 5.14 5.21 7.54 7.48 7.39 7.26 6.84 6.59 6.42 6.59 6.87 6.77 7.97 7.96 7.89 7.84 7.60 7.39 7.34 7.53 7.61 7.44 8.91 8.82 8.70 8.62 8.38 8.16 8.11 8.40 8.51 8.27 6.86 6.80 6.72 6.66 6.32 6.31 6.40 6.59 6.56 6.43 9.17 8.98 8.85 8.66 8.25 8.04 7.98 8.25 8.48 8.34 8.94 8.85 8.67 8.51 8.13 7.98 7.92 8.09 8.31 8.22 6.11 6.15 6.00 5.87 5.51 5.27 5.11 5.06 5.26 5.45 Apr 92 May Jun Jul Aug 92 92 92 92 Oct Nov Dec 92 92 92 3.98 3.73 3.82 3.76 3.25 3.30 3.22 3.10 3.09 2.92 Jan Feb Weekly Dec Dec Dec Dec Dec 93 93 3.02 3.03 3.00 2.93 3.14 3.07 3.35 3.25 3.19 3.12 3.21 3.14 2.83 2.72 6.00 6.00 4.93 4.58 6.60 6.26 7.34 7.09 8.13 7.80 6.40 6.12 8.16 7.78 8.02 7.68 5.23 4.98 2 9 16 23 30 92 92 92 92 92 3.37 2.94 2.93 2.94 2.86 3.30 3.26 3.23 3.18 3.17 3.47 3.37 3.39 3.33 3.33 3.66 3.55 3.63 3.52 3.47 3.75 3.60 3.50 3.36 3.34 3.46 3.88 3.78 3.65 3.60 2.77 2.79 2.80 2.83 2.86 6.00 6.00 6.00 6.00 6.00 5.38 5.22 5.26 5.17 5.13 6.94 6.80 6.80 6.71 6.70 7.58 7.48 7.44 7.39 7.38 8.35 8.27 8.24 8.18 8.21 6.48 6.42 6.45 6.41 6.40 8.41 8.35 8.34 8.28 8.30 8.34 8.23 8.19 8.13 8.14 5.52 5.47 5.44 5.38 5.36 Jan Jan Jan Jan 6 13 20 27 93 93 93 93 3.03 2.98 3.10 2.94 3.09 3.05 2.98 2.95 3.26 3.19 3.12 3.08 3.43 3.42 3.33 3.28 3.28 3.24 3.17 3.15 3.39 3.26 3.17 3.15 2.92 2.83 2.77 2.77 6.00 6.00 6.00 6.00 5.05 5.06 4.93 4.84 6.64 6.73 6.61 6.53 7.35 7.46 7.35 7.27 8.28 8.13 8.05 7.95 6.44 6.41 6.40 6.36 8.27 8.10 8.11 8.01 8.07 8.04 8.00 7.86 5.28 5.25 5.20 5.06 Feb Feb Feb Feb 3 10 17 24 93 93 93 93 3.15 2.92 3.06 2.91 2.92 2.92 2.92 2.93 3.09 3.09 3.08 3.03 3.25 3.30 3.29 3.17 3.14 3.13 3.12 3.09 3.15 3.15 3.17 3.12 2.74 2.73 2.71 2.69 6.00 6.00 6.00 6.00 4.73 4.68 4.65 4.41 6.42 6.38 6.34 6.07 7.23 7.20 7.13 6.94 7.88 7.85 7.73 7.63 6.29 6.22 6.06 5.89 7.88 7.88 7.71 7.66 7.80 7.75 7.65 7.53 5.06 5.04 4.95 4.85 Mar Mar Mar 3 93 10 93 17 93 3.24 3.02 3.04 2.95 2.98 2.98 3.04 3.08 3.09 3.17 3.23 3.25 3.11 3.12 3.12 3.12 3.14 3.17 2.71 2.67 2.66 6.00 6.00 6.00 4.32 4.38 4.52 5.97 5.89 6.06 6.85 6.74 6.85 7.47 7.62 -- 5.69 5.83 5.90 7.69 7.68 7.61 7.44 7.47 7.57 4.79 4.78 4.82 Daily Mar Mar 12 93 17 93 Mar 18 93 2.93 3.58 3.03 2.97 2.98 2.95 3.09 3.09 3.04 3.26 3.23 3.17 3.12 3.12 3.11 3.17 3.17 3.16 6.00 6.00 6.00 4.56 4.44 4.35 6.11 6.02 5.93 6.86 6.86 6.80 Sep 92 NOTE: Weekly data for columns 1 through 11 are statement week averages. Data in column 7 are taken from Donoghue's Money Fund Report. Columns 12,13 and 14 are 1-day quotes for Friday, Thursday or Friday, respectively, following the end of the statement week. Column 13 is the Bond Buyer revenue index. Column 14 is the FNMA purchase yield, plus loan servicing fee, on 30-day mandatory delivery commitments. Column 15 is the average contract rate on new commitments for fixed-rate mortgages (FRMs) with 80 percent loan-to-value ratios at major institutional lenders. Column 16 isthe average initial contract rate on new commitments for -year, adjustablerate mortgages (ARMs) at major Institutional lenders offering both FRMs and ARMs with the same number of discount points. Strictly Confidential (FR)Clas II FOMC Money and Credit Aggregate Measures Seasonally adjusted MAR. Money stock measures and liquid assets Period Mt 1 ANN. GROWTH RATES (%) : ANNUALLY 1Q4 TO Q4) 1990 1991 1992 M2 2 in M2 3 in M3 only 4 Bank credit M3 L Domestic nonfinancial debt total loans and inveatment' U.S. government' 8 5 6 7 1993 other' total' 9 10 o 4.3 8.0 14.3 4.0 2.8 1.8 3.9 1.1 -2.6 -6.5 -6.2 -6.6 1.8 1.1 0.3 1.9 0.3 1.4 5.6 3.5 3.8 10.3 11.0 10.7 5.9 2.2 3.0 6.9 4.3 4.9 QUARTERLY AVERAGE 1992-1st QTR. 1992-2nd QTR. 1992-3rd QTR. 1992-4th QTR. 15.5 10.6 11.6 16.8 3.2 0.3 0.8 2.7 -1.1 -3.4 -3.2 -2.8 -4.1 -4.9 -3.6 -14.3 1.9 -0.6 0.1 -0.2 1.3 1.3 1.1 2.0 3.9 3.3 3.5 4.2 10.0 14.4 10.7 6.0 2.3 2.8 2.9 3.8 4.2 5.7 4.9 4.4 MONTHLY 1992-FEB. MAR. APR. MAY JUNE JULY AUG. SEP. OCT. NOV. DEC. 19.4 11.5 7.8 14.0 0.5 13.5 15.2 18.0 19.1 15.7 8.8 5.8 0.0 -1.0 0.9 -1.9 0.6 3.0 2.7 3.9 2.3 -0.3 0.9 -4.2 -4.3 -4.0 -2.8 -4.4 -1.6 -3.3 -2.2 -3.2 -4.0 0.2 -7.0 -6.7 -1.5 -7.1 -4.6 1.7 -6.3 -24.4 -13.8 -18.7 4.8 -1.2 -2.0 0.5 -2.8 -0.3 2.8 1.2 -0.9 -0.4 -3.3 5.0 2.7 -0.2 0.4 0.9 -0.5 3.1 2.7 1.3 3.1 -0.9 4.0 3.1 5.2 0.5 3.1 1.7 6.5 6.2 3.4 3.0 2.5 8.3 17.1 15.0 13.0 14.6 9.9 9.5 5.0 -1.1 10.5 16.3 4.6 2.8 2.7 2.4 2.4 2.8 3.3 3.9 4.2 4.0 2.7 5.5 6.4 5.8 5.0 5.5 4.6 4.9 4.2 2.8 5.7 6.2 7.7 -0.5 -3.1 -4.1 -7.6 -5.7 -27.8 7.3 -7.1 -2.4 -2.4 -1.6 1.9 2.9 3.3 3.2 1005.9 1019.1 1026.6 3491.5 3498.1 3497.3 2485.6 2479.0 2470.7 688.3 680.4 669.8 4179.8 4178.5 4167.1 5042.1 5055.0 5051.3 2926.9 2934.1 2940.1 3001.4 3027.6 3068.8 8650.8 8679.9 8699.4 11652.2 11707.6 11768.2 1033.2 1032.8 3488.2 2455.0 2443.3 654.3 2936.2 2940.9 3076.3 8723.5 658.3 4142.6 4134.4 5041.1 11799.7 3476.2 1034.5 1030.0 1031.2 1034.6 3479.5 3475.2 3475.0 3477.5 2445.0 2445.2 2443.8 2442.9 659.0 651.9 665.7 654.7 4138.5 4127.2 4140.7 4132.2 1036.1 1032.5 3476.9 3475.0 2440.8 2442.5 660.9 652.1 4137.8 4127.0 1993-JAN. FEB. p LEVELS ($BILLIONS) : MONTHLY 1992-OCT. NOV. DEC. 1993-JAN. FEB. p WEEKLY 1993-FEB. MAR. 1. 2. nontransactions components 22, 1 p 8 p Adjusted for breaks caused by reclassifications. Debt data are on a monthly average basis, derived by averaging end-of-month levels of adjacent months, and have been adjusted to remove discontiruities. p-preliminary pe-preliminary estimate Strictly Confidential (FR)ClassII FOMC Components of Money Stock and Related Measures seasonally adjusted unless otherwise noted Period Currency Demand deposits Other checkable deposits Overnight RPs and Eurodollars NSA' Savings deposits' 1 2 3 4 5 Small denomination time deposits' MAR. Money market mutual funds Institugeneral lions purpose only and broker/ Large denomination time deposits' Term RPs NSA' Term Eurodollars NSA' Savings bonds Shortterm Treasury securities 9 10 11 12 13 Commercial paper' 22, 1993 Bankers acceptances dealer' LEVELS (SBILLIONS) : ANNUALLY 14TH QTR.) 1990 1991 1992 7 8 14 15 245.4 265.8 290.0 277.7 287.0 338.8 293.1 329.6 380.2 78.8 73.4 74.7 919.8 1028.8 1178.9 1171.6 1081.0 883.0 348.2 362.9 344.1 131.5 175.6 207.5 496.8 432.3 361.9 93.6 74.7 80.5 68.0 60.7 47.0 125.2 137.0 154.5 329.9 319.4 330.0 356.2 336.3 369.5 33.7 24.4 20.4 MONTHLY 1992-FEB. MAR. 270.8 271.9 303.3 308.0 344.3 347.5 77.9 74.7 1080.7 1094.3 1021.5 1004.0 362.3 358.0 192.0 192.2 413.6 407.4 72.6 74.3 56.1 58.0 140.2 141.3 320.0 325.1 327.3 336.7 22.5 22.2 APR. MAY JUNE 273.6 275.1 276.6 310.8 314.7 312.3 349.0 354.7 355.9 72.8 69.4 72.3 1107.5 1119.6 1126.0 986.1 969.6 955.7 354.5 354.9 353.5 195.9 202.2 206.3 402.1 395.9 389.3 74.1 76.4 76.4 54.9 52.8 51.8 142.4 143.5 144.6 325.9 329.4 330.1 341.0 336.4 348.1 21.8 22.0 22.0 JULY AUG. SEP. 279.5 282.4 286.3 317.5 322.5 329.0 358.6 362.8 366.7 72.7 76.2 73.8 1134.5 1145.7 1158.9 941.5 926.9 912.7 350.4 348.9 343.9 212.5 220.9 220.7 382.5 378.1 373.7 75.1 75.7 77.5 51.0 51.4 49.4 145.8 147.4 149.3 324.9 323.1 321.3 351.2 355.0 362.7 21.7 21.1 20.7 OCT. NOV. DEC. 288.0 289.8 292.3 336.0 339.5 340.9 373.7 381.6 385.2 75.0 75.1 73.9 1170.5 1180.3 1186.0 896.6 881.9 870.5 346.3 343.7 342.3 210.9 209.2 202.3 367.0 361.3 357.5 79.5 81.3 80.6 48.0 47.2 45.9 151.9 154.7 156.8 321.9 329.3 338.8 368.0 372.2 368.2 20.5 20.3 20.4 294.8 296.9 342.0 341.9 388.5 386.1 72.8 73.2 1184.4 1182.5 861.4 855.2 340.0 334.2 197.7 201.9 350.7 347.3 79.8 82.4 43.9 46.0 158.9 350.6 368.7 20.3 1993-JAN. FEB. p 1. 2. 3. 4. 5. 6 Net of money market mutual fund holdings of these items. Includes money market deposit accounts. Includes retail repurchase agreements. All IRA and Keogh accounts at commercial banks and thrift institutions are subtracted from small time deposits. Excludes IRA and Keogh accounts. Net of large denomination time deposits held by money market mutual funds and thrift institutions. p-preliminary March 19, 1993 Treasury bills Period 1990 Net purchases Redemptions (-) Nt change Treasurycoupons Net purchases 3 urchasesRedemptions 1-5 5-10 over 10 ) 1 17,448 20,038 13,086 13,048 19,038 11,486 425 3,043 1.096 50 6,583 13,118 -100 1,280 2,818 1,160 4,356 7,664 5,858 800 900 1,165 178 2,950 550 650 2,433 400 ---04 2,160 4,356 7,664 5,858 1992 ---Q1 ---Q2 ---Q3 ---04 -1,000 4,415 867 8,805 -2,600 4,415 867 8,805 2,452 2,193 3,900 4,572 505 505 1,425 4,110 306 4,110 306 200 1,993 271 595 4,072 1,064 3,669 271 595 4,072 1,064 3,669 400 3,500 200 4,172 200 1991 1992 1991 ---Q1 ---Q2 --Q3 1992 March April May June July August September October November December 1993 January February Weekly December 16 23 30 January 6 13 20 27 February 3 10 17 24 March 3 10 17 Memo: LEVEL (bil. $) 6 March 17 STRICTLY CONFIDENTIAL (FR) CLASS II-FOMC NET CHANGES IN SYSTEM HOLDINGS OF SECURITES 1 Millions of dollars, not seasonally adjusted 3,136 Net Change Federal agendes redemptions -) Net change outright holdings total 4 Net RPs 375 2,333 375 11,282 19,365 13,240 27,726 30,219 11,128 -1,614 -13,215 880 375 4,150 1,450 1,815 3,867 5,310 5,698 9,419 7,299 -16,864 992 152 14,106 597 945 1,276 655 731 947 2,452 3,730 5,927 7,256 -233 7,896 6,617 15,939 -14,636 1,137 14,195 -13,912 1,425 1,930 -49 4,149 3,796 -85 812 5,890 4,272 7,820 3,848 248 345 -1,203 1,996 -914 5,371 9,739 -19,267 2,425 2,929 -103 -85 -6,128 4,788 3,051 1,353 11,480 -7,487 11,371 -16,595 10,941 -10,279 6,232 -9,727 6,075 -228 3,576 -5,137 -1,152 200 3,530 597 195 750 595 5,332 200 6,756 300 1,176 100 3,136 --- -37 --- -- .--- -65 -38 --- - - -50 --- --- -- -35 -60 --- --- --- 150.2 1. Change from end-of-period to end-of-period. 2. Outright transactions in market and with foreign accounts. 3. Outright transactions in market and with foreign accounts, and short-term notes acquired in exchange for maturing bills. Excludes maturity shifts and rollovers of maturing issues. 34.3 70.8 19.6 28.1 308.6 -6.4 4. Reflects net change in redemptions (-) of Tre asury and agency securities. 5. Includes change in RPs (+), matched sale-pu rchase transactions (-), and matched purchase sale transactions (+). 6. The levels of agency issues were as follows: March 17 within 1 year 1.9 1-5 2.4 5-10 0.7 over 10 0.1 total 5.1 

Federal Reserve (1993, March 22). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_19930323

@misc{wtfs_bluebook_19930323,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {1993},
  month = {Mar},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_19930323},
  note = {Retrieved via When the Fed Speaks corpus}
}