Greenbook/Tealbook

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 some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. 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 optical 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. Content last modified 6/05/2009. CONFIDENTIAL (FR) SUPPLEMENT CURRENT ECONOMIC-AND FINANCIAL CONDITIONS Prepared for the Federal Open Market Committee By the Staff Board of Governors of the Federal Reserve System June 24, 1966 SUPPLEMENTAL NOTES The Domestic Financial Situation Nonfarm real estate foreclosures, which have been rising for some time but generally at a slackening pace, declined contraseasonally in the first quarter, according to the FHLBB series. The foreclosure rate, at 4.8 per thousand mortgaged structures, was no higher than a year earlier, largely as a result of the smallest year-over-year increase in foreclosures since 1960. NONFARM MORTGAGE FORECLOSURES Number First quarter (in thousands) Per cent Rate per increase over year thousand mortgaged earlier structures 1966 28,765 3.2 4.8 1965 27,859 9.9 4.8 1964 25,338 7.8 4.6 1963 23,505 12.3 4.4 1962 20,926 23.9 4.1 1961 16,891 50.2 3.4 1960 11,245 1.8 2.4 -2- The majority of this week's huge volume of new corporate debt issues was well received by investors as the new corporate bond yield series, adjusted to Aaa basis, declined 12 basis points. four major issues, three were single day sell-outs. Of the But the largest offering, apparently priced in anticipation of a further decline in yields, is reportedly less than 25 per cent sold at the end of the first day. - 3 International Developments VFCR reports for May show an $85 million net increase in the participating banks' claims on foreigners that are covered by the program. The regular statistical reports on B-2 and B-3 forms from all banks also show a roughly equivalent net outflow. Outstanding term loans and other over-one-year claims rose a little in May, by $15 million, while short-term bank-reported claims increased $79 million. Since March, monthly alternations between net inflows and net outflows have occurred. For the four months February through May, cumulated inflows were only about $60 million on the VFCR reports and less than $20 million on the B-2 and B-3 reports. These very moderate net reflows, during a period in which the net borrowed reserve position of the banking system has deepened, contrast sharply with cumulated net reflows during the 10 months April 1965 through January 1966 of $450 million under the VFCR program and of $790 million in total bank-reported claims on foreigners. As there was a large net reflow in the month of January (as well as a smaller reflow in February before the outflow in March) the total first-quarter bank-reported reflow, which is entered in the balance-ofpayments accounts, still exceeded $250 million (or $1 billion annual rate). It is of course possible that another large reflow is occurring this month (June), but the experience of the last few months does suggest that the period of maximum effectiveness of the VFCR program may be over. This would not be surprising in view of the fact that banks were below their current VFCR ceilings by $790 million at the end of May. -4Weekly indicators of the payments deficit, often a poor guide to the complete monthly figures, have shown a surplus in the period June 2-15. able.) (Data for the week ended June 22 are not yet avail- If the month of June were to show a surplus or a very small deficit on the liquidity basis, the seasonally adjusted deficit for the second quarter to be published at mid-August would be much smaller than the first-quarter deficit ($2-1/4 billion annual rate). As noted in the Green Book, the second-quarter deficit is being held down by large shifts of foreign official and international institution funds during April and May into technically nonliquid types of assets. The following data for May may be added to Table I - T-3: 260 2,330 -2,070 Trade Balance Exports Imports Liquidity Balance, N.S.A. (revised) - 70 Official Settlements Bal., N.S.A. (revised)-268 Memo items Monetary reserves decrease (-) Gold purchases or sales (-) - 11 - 86 Corrections Page III - 5: "outlook for bonds." Line 16, "outlook for banks" should read Page III - 7: issue:" should read: Table, middle column, "Highest quoted new 3-months 6-months 5.40 5.50 Page A - 2: The "June" 1966 net flov of $455 million for all associations should have been the "May" 1966 net flow. 

Federal Reserve (1966, June 27). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19660628_part1

@misc{wtfs_greenbook_19660628_part1,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1966},
  month = {Jun},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19660628_part1},
  note = {Retrieved via When the Fed Speaks corpus}
}