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 II FOMC MONETARY POLICY ALTERNATIVES PREPARED FOR THE FEDERAL OPEN MARKET COMMITTEE BY THE STAFF OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Strictly Confidential (F.R.) Class II - FOMC September 29, 2000 MONETARY POLICY ALTERNATIVES Recent Developments (1) Financial conditions have registered mixed changes over the intermeeting period.' Most short- and intermediate-term interest rates have declined as many as 30 basis points, but most long-term yields have been about unchanged to 15 basis points higher, major equity price indexes have shed 2-1/2 to 7 percent, and the dollar has appreciated 1-1/4 percent against a broad basket of foreign currencies (chart 1). Market participants' expectations about the near-term course of interest rates have been revised down in light of the Committee's statement following its August meeting, which was read as indicating that the Federal Reserve was more confident that the growth rates of aggregate demand and supply were coming into better alignment, and subsequent data releases, which tended to support the view that the economic expansion had slowed. Judging from futures market quotes, investors have lowered their expected path for the federal funds rate over the second half of 2001 by about 1/4 percentage point and now place higher odds on the next policy action being an easing rather than a tightening. The contrary movement of a number of long-term yields seemed to owe in part to increased uncertainty associated with volatility in oil prices and to heavy corporate bond issuance. Heightened skepticism about the political will to preserve projected budget surpluses also pushed up bond yields, particularly in the 1 The effective federal funds rate averaged close to the 6-1/2 percent target over the intermeeting period. The Desk redeemed $4.9 billion of securities, mostly Treasury bills, to avoid exceeding its per-issue limits on holdings. It purchased $6.2 billion of Treasury coupon issues in the market and $669 million of Treasury bills from foreign customers. The volume of outstanding long- term RPs was unchanged at $9.9 billion. Chart 1 Financial Market Indicators Expected Federal Funds Rates Estimated from Percent Financial Futures* S-1 7.0 Selected Treasury Yields Percent Two-vyar .. 8/21/2000 '' '' 9/29/2000 I I I I I I I I I I I I I I I I I I I I Sep Nov Jan Mar May Jul Sep Nov Jan Mar 2000 2001 2002 *Estimates from federal funds and eurodollar futures rates with an allowance for term premia and other adjustments. Selected Private Long-Term Yields High Yield Nov 1999 Jan Mar May 2000 Jul Sep Selected Risk Spreads* Percent Daily Sep Percent FO M C Corporate BBB (right scale) Basis Points Daily FOMC High Yield . .. BBB Sep Nov 1999 Jan Mar May 2000 Jul Sep lndex(9/1/99) = 100 FOMC - Nov 1999 Jan Mar May 2000 Nov Jan Mar May Jul ~ Sep 1999 2000 *The spreads compare the yields on the Merrill Lynch 175 and BBB indexes with the ten-year swap rate. Selected Equity Indexes Sep Sep ... '**--. .... .5. Jul Sep Nominal Trade-Weighted Dollar lndex(9/1/99 = 100) Exchange Rates FOMC 1-" Sep Nov 1999 Jan Mar May 2000 Jul 11C Sep MFMA:JNS 2 Treasury market where some of the scarcity premiums at ten- and thirty-year maturities appeared to unwind. Meanwhile, equity prices have been depressed by a larger-than-usual number of warnings about corporate earnings and revenues. (2) The foreign exchange value of the dollar has appreciated 11/2 percent on net against a basket of major currencies over the intermeeting period; a gain of around 2 percent against the euro was offset only partially by a 1/2 percent depreciation against the Japanese yen. European interest rates changed little relative to U.S. interest rates, even though the European Central Bank firmed policy 1/4 percentage point on August 31. Still, over most of the period, the dollar steadily gained ground on the euro, reportedly supported by capital flows favoring U.S. assets and conflicting statements from European officials regarding their attitude toward a weak euro. The slide in the euro over the intermeeting period cumulated to about 51/2 percent by September 20, but it was rolled back some on September 22 by intervention in the exchange market that day, initiated by the ECB and joined by the U.S. monetary authorities and the central banks ofJapan, the United Kingdom, and Canada. . Purchases of euros against dollars aggregated to with the U.S. share of that totaling $1.3 billion, split evenly between the Federal Reserve and the Treasury. This action was the only U.S. intervention in foreign exchange markets over the intermeeting period; 3 (3) The exchange value of the dollar also has posted widespread gains against the currencies of other important trading partners, pulling the dollar's nominal value against a basket of those currencies up about 1 percent over the intermeeting period. In general, uncertainties associated with the effects of movements in oil prices on global economic growth have appeared partly responsible for a weakening of emerging market asset prices. Asian stock prices were also hurt by heightened investor concerns about progress in business and financial restructuring. Yield spreads on emerging market debt have widened in recent weeks, reversing a narrowing early in the intermeeting period. (4) Growth of debt of the domestic nonfinancial sectors slowed to a 4-3/4 percent pace on balance in July and August, about 1-1/2 percentage points less than in the second quarter (chart 2). This slowing was more than accounted for by a downshift in private borrowing, which was only partly offset by a less rapid paydown of federal government debt. Nonetheless, both household and business borrowing appear to have remained brisk, in part reflecting continued strong expenditures on consumer durables and business capital. Improved conditions in long-term debt markets over most of the third quarter prompted corporations to rely less on borrowing in short-term funding markets and households to shift mortgage borrowing toward fixed-rate instruments. Lenders continued to become a bit more selective about higher-risk borrowers. According to the August Survey of Terms of Business Lending, spreads charged on large loans having above-average risk were snugged some between May and August. In the bond market, credit risk spreads for junk bonds have risen appreciably in recent months. Chart 2 Money and Credit Aggregates Annual Growth Rate Ratio Scale Percentage Points Ratio Scale Q3" 2.0 M2 Velocity (left scale) 8 1.9 6 M2 Opportunity Cost* (right scale) 4 1.8 2 1999 2000 Q1 2000 Q2 J A S Q3"' 1.7 1987 1989 1991 1993 1995 1997 1999 2001 * Two-quarter moving average. **Q3 data are staff estimates. p - Projected based on partial data. Debt of Domestic Nonfinancial Sectors Annual Growth Rate Total 1999 2000 Q1 2000 Q2 J A Annual Growth Rate Nonfederal 2000 01 2000 02 J A MARA:SF 4 (5) M2 growth rebounded considerably in August and September from surprisingly weak growth in June and July. This stronger expansion might in part reflect the vigor of consumer spending of late. Growth on average for the third quarter held at a pace well below that of the first half of the year. This slower growth is about in line with projections from the staffs money demand model and in part reflects the lagged effects of wider opportunity costs over the first half of 2000. M3 growth has continued to be brisk in recent months, although it was a bit slower in the third quarter than over the first half of the year. MONEY AND CREDIT AGGREGATES (Seasonally adjusted annual percentage rates of growth) Dec. 1999 to July Aug. Sep. Sep.1 M2 3.6 7.3 8.3 5.9 M3 9.4 10.3 7.8 8.3 Domestic nonfinancial debt Federal Nonfederal 4.8 -3.7 6.9 4.7 -7.3 7.6 n.a. n.a. n.a. 5.5 -7.0 8.9 Bank credit Adjusted 2 8.5 9.0 9.6 8.7 9.7 6.0 10.5 10.1 3.7 4.3 0.4 1.3 2.5 3.0 -2.8 -1.9 Money and Credit Aggregates Memo: Monetary base 3 Adjusted for sweeps 1. For nonfinancial debt and its components, December 1999 to August. 2. Adjusted to remove the effects of mark-to-market accounting rules, (FIN 39 and FASB 115). 3. Adjusted for discontinuities associated with changes in reserve requirements. Policy Alternatives (6) In the staff forecast, the growth rate of aggregate demand is projected to remain below that of potential GDP through 2002, but core inflation still is seen to be on a slight upward trajectory. This relatively moderate pace of demand growth reflects the lagged effects of previous monetary tightening actions, the influence of some additional firming steps assumed for late 2001 and 2002, and a falling wealth-to-income ratio stemming from a flat stock market. Restraint from these sources is only partly offset by a projected decline in the foreign exchange value of the dollar. Although the unemployment rate edges up to 4-1/2 percent by the end of 2002, the path of resource utilization is foreseen to be inconsistent with stable underlying inflation. Core PCE prices are projected to accelerate about 1/2 percentage point through 2002 from their pace over the past twelve months. The projected path of oil prices is about $2 per barrel above that in the August forecast. The higher track for energy prices boosts slightly the forecast for total PCE inflation in 2000 relative to the August Greenbook, bringing the increase to 2-1/2 percent; the rate falls back to 2 percent later in the projection as energy prices decline. (7) While the Committee may find the pickup in core inflation in the staff forecast to be worrisome, it may still favor keeping the stance of monetary policy unchanged at this meeting, as under alternative B. The uptrend to core inflation in that outlook is gradual and far from certain to come to pass. Based on incoming data, the Committee might now be even more confident that aggregate demand growth has slowed significantly, likely to below the growth of potential supply. Moreover, with the slippage in equity prices over the 7 intermeeting period, the prospects have improved that pressures on resources will not intensify and could even begin to ebb. Higher energy prices would pose a threat to longerterm price performance if they became embedded in inflation expectations or in wage demands, as workers attempt to preserve purchasing power. However, oil prices have fallen from their peaks, and, to date, longer-term inflation expectations have not shown a tendency to move higher. Moreover, the risks stemming from oil market developments are not all in one direction. In particular, higher oil prices could restrain aggregate demand beyond the effects of transferring income to foreign oil producers if they induced an erosion of consumer confidence or a substantial selloff in equities in light of the reduced economic efficiency of the existing stock of capital. Market participants, taking into account oil prices along with other incoming information since the last FOMC meeting, have marked down the expected path of the federal funds rate for the next few years. In these circumstances, the Committee may see little to be lost by waiting to obtain more information on trends in output and inflation. (8) Market prices incorporate the expectation that the target federal funds rate and the balance-of-risks sentence will be left unchanged at this meeting. Consequently, implementation of alternative B, along with the retention of the statement that the Committee regarded the balance of risks as weighted toward increased inflationary pressures, should have little effect on financial markets. The Committee might well see the revised outlook for oil prices, coming at a time when it was already concerned about potential price pressures from the unusually low unemployment rate, as reinforcing a judgment that the 8 balance of risks is weighted toward higher inflation. However, the Committee may now believe that growth of aggregate demand is not likely to exceed that of potential output, that current levels of resource utilization are sustainable, and that oil prices probably will not leave a lasting imprint on inflation. If so, it could consider issuing a statement that indicated balanced risks to achieving its goals for price stability and sustainable economic growth. In this case, bond and equity markets would likely rally, as investors marked up the odds on an easing trend in monetary policy over coming months, and the value of the dollar on foreign exchange markets would probably edge lower. (9) The FOMC instead might choose the 25 basis point increase in the federal funds rate of alternative C. Core inflation has risen and may already be above rates that Committee members find acceptable over the long run. Moreover, although underlying trends in aggregate demand apparently have slowed, the current and projected levels of resource utilization may imply, based on historical experience, a likelihood that core inflation will continue to increase, as in the staff forecast. Furthermore, the Committee may see upside risks to inflation even relative to that forecast. While the staff has trimmed the amount of fiscal restraint in the outlook, recent news might be read as suggesting a distinct possibility of even greater erosion in federal budget surpluses. In addition, if oil prices do not fall as in the staff forecast and futures market quotes, short-term inflation expectations may deteriorate further, which, absent monetary policy firming, would reduce the real federal funds rate. In simulations of staff econometric models, such as that shown in the international section of Part I of the Greenbook, holding the nominal funds rate along the 9 baseline path in the face of an upward shock to oil prices sets in motion a process of everrising core inflation relative to the baseline outcome as lower real interest rates boost output relative to potential. (10) The market reaction to implementation of alternative C would likely be sharp. With investors expecting no change in the stance of monetary policy at this meeting and apparently anticipating that the next move will be toward easing, short-term interest rates would probably jump by at least the 25 basis point increase in the federal funds rate. Especially if the announcement indicated that the Committee continued to see the balance of risks as weighted toward higher inflation, capital markets could sell off significantly, as market participants adjusted prices to incorporate expectations of a higher path for shortterm interest rates. Any decline in inflation expectations would probably offset only part of the effect on nominal bond yields of the higher real rates brought about by the tightening. The value of the dollar on foreign exchange markets would firm against most currencies. An announcement of balanced risks would likely be seen by market participants as a signal that the Committee believed that this phase of policy tightening had been completed. In this case, the response to a 25 basis point tightening at this meeting would be muted. (11) Under the interest rate assumptions of the Greenbook, the average growth of domestic nonfinancial sector debt over the next several quarters is forecast to be a bit below the 5-1/2 percent rate of the first three quarters of 2000. In the household sector, the rate of borrowing is projected to remain fairly brisk, although it ebbs gradually, in line with a slowing pace of residential investment and moderating growth of expenditures on consumer 10 durables. With profit growth tailing off, business borrowing stays relatively rapid to finance strong merger activity and robust capital spending. As debt-service burdens rise in the household and business sectors, terms and conditions available to weaker borrowers are likely to firm a bit further. Despite the projected relaxation of fiscal discipline, federal debt remains on a downward trajectory over the projection period. (12) M2 growth is projected to move lower in coming months, to an average of around 5-3/4 percent through next March, from its unusually elevated rates of the past couple of months. Nonetheless, the expansion of this aggregate runs at a higher rate than on average over the third quarter, as the influence of past monetary tightenings begins to wane. M3 growth from September to March is projected to drop back to about a 6-3/4 percent annual. For 2000 as a whole, M2 and M3 are forecast to expand 6 and 9 percent, respectively, compared with the 6-3/4 percent increase projected for nominal GDP. Directive and Balance-of-Risks Language (13) Presented below for the members' consideration is draft wording for (1) the directive and (2) the balance-of-risks sentence to be included in the press release issued after the meeting. (1) Directive Wording The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee in the immediate future seeks conditions in reserve markets consistent with maintaining/INCREASING/DECREASING the federal funds rate at/TO an average of around ___ [DEL: 6-1/2] percent. (2) Balance-of-Risks Sentence Against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the Committee believes that the risks are [balanced with respect to prospects for both goals] [weighted mainly toward conditions that may generate heightened inflation pressures] [weighted mainly toward conditions that may generate economic weakness] in the foreseeable future. Alternative Growth Rates for Key Monetary and Credit Aggregates M2 Alt. B Monthly Growth Rates Sep-2000 Oct-2000 Nov-2000 Dec-2000 Jan-2001 Feb-2001 Mar-2001 M3 Alt. C 8.3 6.2 5.6 5.5 5.6 5.6 5.7 M3 10.8 8.0 8.4 7.4 6.7 5.9 5.0 Greenbook Forecast* 10.8 8.0 8.4 7.1 6.4 10.8 8.0 8.4 7.4 6.7 8.3 6.8 8.3 6.8 1999 Q4 Sep-2000 9.2 1998 Q4 1999 Q4 7.7 8.9 1999 Q4 2000 Q4 1999 Q4 Aug-2000 Debt Alt. C 7.8 6.9 6.5 6.6 6.5 6.9 7.1 Quarterly Averages 2000 Q1 2000 Q2 2000 Q3 2000 Q4 2001 Q1 Growth Rate From To Dec-1999 Sep-2000 Sep-2000 Mar-2001 Alt. B M2 5.7 *This forecast is consistent with nominal GDP and interest rates in the Greenbook forecast. 9.4 SELECTED INTEREST RATES (percent) 99 -- High -- Low 00 -- High -- Low Monthly Sep 99 Oct 99 Nov 99 Dec 99 Jan Feb Mar Apr May Jun Jul Aug Weekly Jul Aug Aug Aug Aug Sep Sep Sep Sep Sep Daily Sep Sep Sep 00 00 00 00 00 00 00 00 Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep 18 19 20 21 22 25 26 27 28 29 28 4 11 18 25 1 8 15 22 29 5.59 4.42 5.54 4.32 5.82 4.46 5.96 4.49 6.16 4.86 6.33 4.76 6.23 4.59 6.33 4.56 6.41 4.67 6.46 5.12 4.03 3.61 4.33 3.76 8.44 7.24 6.23 5.17 8.15 6.74 6.64 5.56 6.75 5.05 6.31 5.41 6.46 5.67 6.33 6.03 6.80 5.93 6.58 5.54 6.89 6.04 6.76 5.90 6.77 5.73 6.73 5.69 4.09 3.63 4.39 3.96 9.02 8.22 6.35 5.71 8.64 7.88 7.37 6.56 4.81 5.00 5.22 5.35 5.09 5.19 5.43 5.68 5.24 5.41 5.54 5.83 5.50 6.13 6.00 6.05 5.28 5.28 5.37 5.97 5.66 5.86 5.86 6.10 5.80 6.03 5.97 6.19 5.92 6.11 6.03 6.28 6.07 6.26 6.15 6.35 3.89 3.85 3.87 3.99 4.05 4.12 4.10 4.25 8.20 8.38 8.15 8.19 5.92 6.12 6.10 6.18 7.82 7.85 7.74 7.91 6.20 6.27 6.36 6.53 5.47 5.72 5.86 5.82 5.96 5.85 6.13 6.27 5.75 5.99 6.11 6.07 6.38 6.23 6.27 6.35 6.10 6.21 6.21 6.12 6.25 6.17 6.07 6.18 5.95 6.01 6.14 6.28 6.71 6.73 6.67 6.61 5.59 5.76 5.93 6.02 6.40 6.53 6.49 6.47 6.44 6.61 6.53 6.40 6.81 6.48 6.34 6.23 6.58 6.68 6.50 6.26 6.69 6.30 6.18 6.06 6.66 6.52 6.26 5.99 6.44 6.10 6.05 5.83 6.63 6.23 6.05 5.85 6.15 5.93 5.85 5.72 4.06 4.05 3.86 3.67 3.94 3.98 3.86 3.73 4.36 4.28 4.15 3.98 4.14 4.08 4.02 3.99 8.33 8.29 8.37 8.40 8.90 8.48 8.35 8.26 8.21 8.33 8.24 8.15 8.52 8.29 8.15 8.03 6.61 6.72 6.72 6.80 7.07 7.24 7.28 7.29 6.19 6.23 6.26 6.27 6.29 6.31 6.20 6.12 6.16 6.20 6.29 6.35 6.32 6.35 6.36 6.37 6.29 6.21 6.22 6.27 6.04 6.08 6.16 6.20 6.19 6.23 6.20 6.15 6.09 6.09 6.66 6.66 6.61 6.61 6.60 6.59 6.59 6.59 6.58 6.63 6.47 6.49 6.47 6.47 6.47 6.48 6.47 6.48 6.48 6.50 6.31 6.23 6.19 6.28 6.23 6.20 6.11 6.10 6.08 6.04 6.16 6.09 6.04 6.11 6.04 6.02 5.95 5.95 5.95 5.90 6.04 5.98 5.85 5.80 5.75 5.76 5.73 5.78 5.88 5.82 5.80 5.75 5.72 5.71 5.69 5.71 5.70 5.79 5.94 5.89 3.81 3.72 3.70 3.74 3.74 3.76 3.72 3.69 3.68 3.65 4.00 3.98 3.98 4.01 3.99 3.98 3.97 3.97 3.98 3.97 8.29 8.27 8.24 8.25 8.25 8.27 8.25 8.35 8.44 8.13 8.12 8.04 7.96 7.99 7.96 7.94 7.88 7.90 7.88 7.29 7.28 7.28 7.21 7.37 7.27 7.33 7.26 7.27 7.21 6.09 6.14 6.14 6.14 6.17 6.16 6.16 6.16 6.16 6.18 6.20 6.25 6.23 6.19 6.20 6.20 6.20 6.22 6.23 6.23 6.24 6.25 6.24 6.28 6.30 6.28 6.12 6.13 6.11 6.07 6.09 6.10 6.09 6.08 6.09 6.08 6.08 6.10 6.08 6.59 6.59 6.59 6.58 6.57 6.58 6.58 6.57 6.58 6.58 6.59 6.71 6.70 6.47 6.48 6.50 6.48 6.48 6.47 6.49 6.49 6.48 6.49 6.49 6.52 6.09 6.11 6.07 6.04 6.05 6.11 6.11 6.09 6.11 6.07 6.00 6.02 5.98 5.94 5.96 5.93 5.93 5.93 5.98 5.96 5.93 5.94 5.90 5.89 5.90 5.85 5.74 5.79 5.84 5.88 5.86 5.91 5.88 5.85 5.84 5.81 5.83 5.82 5.80 5.73 5.81 5.90 5.96 5.92 5.97 5.93 5.92 5.90 5.86 5.90 5.89 5.88 3.67 3.67 3.69 3.69 3.67 3.67 3.69 3.68 3.69 3.68 3.62 3.62 3.62 3.95 3.97 3.99 3.99 3.99 3.98 3.98 3.97 3.98 3.97 3.97 3.97 3.96 8.32 8.37 8.44 8.49 8.43 8.46 8.43 8.40 8.37 8.33 8.37 8.32 00 00 00 00 00 00 00 00 00 00 13 00 14 00 15 00 00 00 00 00 00 00 00 00 00 00 October 2, 2000 6.47 6.50 6.55 6.44 6.40 6.50 6.53 6.48 6.54 6.50 6.50 6.59 6.68 P --. -- NOTE: Weekly data for columns 1 through 13 are week-ending averages. Columns 2 through 4 are on a coupon equivalent basis. As of September 1997, data in column 6 are interpolated from data on certain commercial paper trades settled by the Depository Trust Company; prior to that, they reflect an average of offering rates placed by several leading dealers. Column 14 is the Bond Buyer revenue index, which is a 1-day quote for Thursday. 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 is the average initial contract rate on new commitments for 1-year, adjustable-rate mortgages (ARMs) at major institutional lenders offering both FRMs and ARMs with the same number of discount points. MFMA:JWR p - preliminary data Strictly Confidential (FR)- Money and Debt Aggregates Class October Seasonally adjusted Money stock measures Domestic nonfinancial debt nontransactions components Period M1 M2 1 2 IIFOMC 2, 2000 In M2 In M3 only 3 4 . M3 5 government' 6 o t he r other' total' 7 8 Annual arowth rates(%): Annually (Q4 to Q4) 1997 1998 1999 -1.2 2.2 1.8 5.7 8.5 6.2 8.4 10.8 7.7 19.9 18.3 11.8 8.9 10.9 7.7 0.8 -1.1 -2.5 7.0 9.6 9.6 5.4 6.9 6.8 Quarterly(average) 1999-Q4 2000-Q1 Q2 Q3 pe 4.8 0.0 -1.3 -2% 5.2 6.1 6.3 4} 5.3 8.0 8.6 6% 25.2 23.2 12.2 18 10.5 10.8 8.0 8% -4.4 -4.8 -7.5 9.3 8.4 9.7 6.3 5.6 6.2 Monthly 1999-Sep. Oct. Nov. Dec. -2.8 5.7 8.9 14.5 5.2 4.5 5.4 7.4 7.7 4.1 4.2 5.2 6.1 25.7 42.4 45.9 5.4 10.1 15.4 18.1 -3.8 -5.9 -8.1 0.4 10.8 9.1 8.3 9.0 7.6 5.9 4.8 7.2 -4.3 -15.4 6.4 5.1 -10.9 -1.7 1.3 -3.4 -6 6.2 3.1 9.4 10.6 -0.5 3.8 3.6 7.3 8 9.5 8.9 10.4 12.2 2.7 5.4 4.3 10.6 13 13.8 3.9 23.5 4.4 14.1 16.5 23.5 17.5 7 8.4 3.3 13.4 8.8 3.6 7.4 9.4 10.3 8 -4.8 -12.4 2.8 -5.4 -18.1 -8.4 -3.7 7.8 8.2 9.0 9.9 11.0 9.0 6.9 5.2 3.9 7.7 6.7 5.1 5.5 4.8 1115.1 1105.0 1103.4 1104.6 1101.5 4770.8 4768.8 4783.8 4798.2 4827.5 3655.7 3663.9 3680.4 3693.5 3726.0 1903.8 1926.1 1952.6 1990.9 2019.9 6674.6 6694.9 6736.4 6789.1 6847.3 3600.2 3546.0 3521.2 3510.2 14119.3 14249.1 14356.1 14438.8 17719.6 17795.1 17877.4 17948.9 2000-Jan. Feb. Mar. Apr. May June July Aug. Sep. pe Levels (Sbillions): Monthly 2000-Apr. May June July Aug. Weekly 2000-Aug. Sep. 7 1088.9 4816.2 3727.3 2011.9 6828.1 14 1090.8 4812.2 3721.4 2023.6 6835.8 21 28 1105.5 1113.1 4832.5 4838.8 3727.0 3725.6 2024.0 2017.9 6856.5 6856.7 4 1106.8 4846.4 3739.7 2023.6 6870.0 llp 1089.3 4850.8 3761.5 2023.7 6874.5 18p 1091.5 4869.2 3777.6 2038.7 6907.9 1. Debt data are on a monthly average basis, derived by averaging end-of-month levels of adjacent months, and have been adjusted to remove discontinuities. p pe preliminary preliminaryestimate Strictly Confidential Changes in System Holdings of Securities (Millions of dollars, not seasonally adjusted) Class II FOMC September 29, 2000 Net 2 Purchases 9,147 3,550 Redemptions (-) 2,000 Oill 01V QIV 2000 Jan Feb Mar Apr May Jun Jul Aug 2000 Jul 5 198 -198 7,263 -4,969 198 779 2,297 -198 1,515 -2,297 4,188 -4,188 4,902 3,438 -3,077 -2,907 2,079 -2,079 Net Purchases <1 5,549 6,297 11,895 1-5 20,080 12,901 19,731 5-10 3,449 2,294 4,303 Over 10 5,897 4,884 9,428 3,978 2,341 2,414 8,751 1,272 2,594 447 3,152 1,075 17,749 17,697 5,094 4,528 581 2,182 9,535 5,073 9,478 900 2,039 3,319 1,298 930 1,399 1,679 3,207 7,398 160 809 1,069 164 1,875 1,284 2,770 Jul 19 2,259 2,508 (-) 1,996 2,676 1,429 Net Change 32,979 23,699 43,928 (-) holdings 4 40,586 24,902 43,771 1,956 -1,692 -1,385 3,517 1,385 Aug 2 Aug 9 Aug 16 Aug 23 1,398 -- Aug 30 Sep 6 3,376 -3,318 62 69 Sep 13 Sep 20 Sep 27 3,709 2000 Sep 28 189 - 256 17 -3,670 109 1,081 1,427 716 200.9 2,385 1,109 70.4 132.0 53.5 1. Change from end-of-period to end-of-period. 2. Outright purchases less outright sales (in market and with foreign accounts). 3. Outright purchases less outright sales (in market and with foreign accounts). Includes short-term notes acquired in exchange for maturing bills. Excludes maturity shifts and rollovers of maturing issues. -6,055 -12,915 -29,095 528 1,151 500 727 599 4,167 -18,970 -24,490 -385 1,221 -2,926 -814 139 -5,043 4,604 -3,635 1,175 1,519 -3,827 -250 -663 -2,079 5,100 738 -5,545 -2,759 24 -36 -26 6,162 -6,577 5,076 -4,713 31 -4,683 -1,852 6,138 905 -1,622 759 71.2 2,009 22 -1,994 20 -2,017 -2,034 15 -6,541 5,102 499 1,441 -132 887 3,013 389 -4,380 -51 -49 89 636 3,250 46 -4,445 7,109 -5,523 -4,753 1,504 -1,151 -2,681 -1,637 3,792 -1,901 2,021 -408 -980 2,947 2,213 -2,568 48 4. 5. 6. 7. -2,103 1,642 -25 1,361 3,590 -715 -456 650 2,088 -23 -34 463 8,347 -10,060 -9,605 1,484 867 -647 -1,652 3,843 -184 55 -271 ---271 3,700 3,700 5,330 2,030 1,161 15 1,176 327.1 528.0 -9.1 9.9 0.8 55 3,959 2,035 -8,174 -9,709 170 468 448 2,496 -7,242 Change 2,496 -6,779 10,382 -1,886 104 1,372 898 837 Net Term 7 2,978 2,419 500 693 661 Long- 6 553 -184 - Sep 29 669 93 ShortTerm -2,126 1,453 30,474 1,284 601 Net RPs 1,487 29,921 330 489 930 1,521 Jul26 Memo: LEVEL (bil. $) Sen 29 740 1,723 890 706 Redemptions 738 Jul 12 Intermeeting Period Aug 22-Sep 29 Net change total outright 3 Net Change 9,147 1,550 1999 OQI 2000 QI QII Federal Agency Redemptions Treasury Coupons Treasury Bills Includes redemptions (-) of Treasury and agency securities. RPs outstanding less matched sale-purchases. Original maturity of 15 days or less. Original maturity of 16 to 90 days. MRA:DHS 

Federal Reserve (2000, October 2). Bluebook. Bluebooks, Federal Reserve. https://whenthefedspeaks.com/doc/bluebook_20001003

@misc{wtfs_bluebook_20001003,
  author = {Federal Reserve},
  title = {Bluebook},
  year = {2000},
  month = {Oct},
  howpublished = {Bluebooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/bluebook_20001003},
  note = {Retrieved via When the Fed Speaks corpus}
}