Week ending: June 2,1971

<crr? jrff i%/ez i s* &l /njj^trj^ Week ending: June 2,1971 d eom& S/srafjy JUN jg7g Growth of the money stock has accelerated in recent months. Money has grown at a rapid 10.6 per cent annual rate over the past five months, compared with a more moderate 5.4 per cent in 1970 and a slower 3 per cent in 1969 (page 5). The demand deposit component of money has increased at a 10.9 per cent rate in the past five months, compared with 5.1 per cent in 1970 and 2.4 per cent in 1969 (page 4). Recent rapid growth of money has been fostered by the accelerated growth of reserve aggregates such as the monetary base and Federal Reserve credit (page 2). Federal Reserve credit has increased at a 15 per cent annual rate in the past five months, compared with 4.8 per cent in 1970. The monetary base, whose main source component is Federal Reserve credit, has risen at an 11.5 per cent rate in the past five months, and 6.2 per cent in 1970. The total outstanding volume of commercial paper (unsecured short-term promissory notes issued by corporations and sold to investors) averaged $31.1 billion in April, down from $39 billion in June 1970 (page 8). One component, bank-related paper reflects the Federal Reserve's placement of reserve requirements on funds obtained by member banks through their affiliates and the ability of banks to again attract funds through CD's, due to relaxation of Regulation Q ceilings and the decline of short term interest rates last fall and winter. Nonbank paper placed through dealers averaged $13 billion in April, about the same level as in June 1970, but about $1 billion below January 1971. The volume of large negotiable certificates of deposit at large commercial banks fell in April to $27.1 billion from $28 billion in March, after rising fourteen consecutive months from $11 billion in January 1970 (page 8). Secondary 90-day CD rates averaged 5.25 per cent for the week ending June 2, up about 1.4 percentage points from two months earlier. Business loans of large commercial banks, adjusted to include loans sold to their affiliates, have increased at a 3.4 per cent annual rate in the past four months, compared to a decrease at about a 10 per cent rate from August 1970 to January 1971. Business loans (unadjusted) grew at a 10 per cent trend rate from 1960 to 1969. The relatively slow growth of business loans, in view of the upturn in general economic activity, may reflect increased borrowing through longer-term debt issues. Prepared by Released: June 4,1971

COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF THE FOUR WEEKS ENDING JUNE 2. 197! FROM _ THE FOUR WEEKS ENDINGi MAR. 31, 1971 10.3 MAR. 3, 1971 FEB. 3, 1971 10.0 10.5 _ NOV 1970 SEP. 30 1970 10.6 MONETARY BASE!/ FEDERAL RESERVE CRED I T 2/ SEASONALLY ADJUSTED BY THIS BANK MONETARY BASE 90 88 86 84 82 APR. 28 80 ill I 0 COMPOUNDED ANNUAL SATES OF CHANGE, AVERAGE OF THE FOUR WEEKS ENDINi ---- JUNE 2. f,. 1971 I 1 I FROM I rvvjfvt THE FOUR WEEKS ENDING: MAR. 31 12.4 1970 SEP. 30 1970 12.0 11.9 FEDERAL RESERVE CREDIT 76 74 72 70 APR. 28 MILLIONS 68 66 1 15 29 IS 27 10 24 8 22 5 19 2 16 SO 14 28 11 25 9 23 6 20 3 17 3 17 31 H 28 12 26 0 23 JAN FEB 0 LATEST DATA PLOTTED WEEK ENDING: JUNE 2, 1971 1/ USES OF MONETARY BASE ARE MEMBER BANK RESERVES AND CURRFNCY HELD BY THE PUBL 1C AND MOciuEURFR OF^Hfe BASE^SEE THE AUGUsf ll8u l<xreview-asfethlfblm<!ts DEPCSITS* F0R A DESCRIPTION 2/ DEFINED TO INCLUDE HOLDINGS OF SECURITIES, LOANS, FLOAT AND r.e?!«cc EfQoi5 {JeNT CHANGES AND CHANGES IN REQUIREMENTS DUE CLASSES Or BANKS. "OTHER1* ASSETS, ADJUSTED TO SHIFTS IN DEPOSITS AMONG FOR PREPARED OY FEDERAL RESERVE BANK OF ST. LOUIS

RESERVES ALL MEMBER BANKS IN THE NATION SEASONALLY ADJUSTED 32.0 3 30.5 30.0 30.0 29.5 29.0 29.0 28. 5 28.0 28.0 27.5 27.5 1 15 29 13 27 10 24 8 22 5 19 2 16 50 M 28 11 25 9 23 6 20 3 17 OCT NOV JAN FEB 3 17 31 M 23 12 26 9 23 LATEST DATA PLOTTED WEEK ENDING: JUNE 2, 1971 CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.9 RELEASE. * BREAK IN SERIES DUE TO CHANGES IN REGULATION D EFFECTIVE OCTOBER 1, 1970. BILLIONS 30.9 31.5 30.9 31.4 31.5 COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF THE FOUR WEEKS ENDING JUNE 2, 1971 FROM THE FOUR WEEKS ENDING: MAR. 31, 1971 9.8 MAR. 3, 1971 9.5 FEB. 3, 1971 1 1.6 DEC. 30, 1970 1 1.4 DEC. 2, 1970 12.6 NOV. 4, 1970 1 1.5 SEP. 30, 1970 10.9 PREPARED BY FEDERAL RESERVE BANK OF ST LOUIS

DEMAND DEPOSIT COMPONENT OF MONEY STOCK SEASONALLY ADJUSTED 169.8 168.6 170. 1 172.5 174.0 174.9 1 15 28 13 27 10 24 6 22 5 10 2 16 30 14 26 11 25 9 23 6 20 3 17 5 17 31 14 26 12 26 8 23 MAY JUN OCT NOV JAN FEB 1970 1971 LATEST DATA PLOTTED WEEK ENDINGt MAY 26, 1971 CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS1 H.6 RELEASE. TO THE AVERAGE OF FOUR WEEKS ENDING; COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING: 5/27/70 9/23/70 10/28/70 11/25/70 12/23/70 1/27/71 2/24/71 3/24/71 10/28/70 4.4 11/25/70 3.7 1. 1 12/23/70 4. 1 2.7 3.2 1/27/71 3.7 2.3 2.5 3.6 2/24/71 4.6 4. 1 4.7 6.2 6. 1 3/24/71 5.3 5.4 6.3 7.8 8.2 12.8 4/28/71 6. 1 6.6 7.5 9.0 9.5 12.9 13.1 5/26/71 6.9 7.8 8.8 10.2 10.9 13.9 14.3 14.9

MONEY STOCK SEASONALLY ADJUSTED 23C 220.4 219.2 220.8 223.3 224.9 225.7 225 220 215 210 205 1970 LATEST DATA PLOTTED WEEK END INOi MAY 26, 1971 JAN FEB APR MAY CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE. TO THE AVERAGE OF FOUR WEEKS ENDING«COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS END INGi 5/27/70 9/23/70 10/28/70 11/25/70 12/23/70 1/27/71 2/24/71 3/24/71 10/28/70 4.3 11/25/70 3.9 1.9 12/23/70 4.3 3.4 4.0 1/27/71 4.0 3.2 3.4 4.4 2/24/71 4.8 4.7 5.4 6.7 6.6 3/24/71 5.5 5.9 6.8 8. 1 8.5 12.4 4/28/71 6.2 7.0 7.8 9. 1 9.6 12.5 12.6 5/26/71 6.9 7.9 8.8 10.0 10.6 13. 1 13.4 13.7

6 \ ME DEPOSITS ALL COMMERCIAL BANKS 260 ------------1--------- r---- BILLIONS ~ APR. 24/. 9 248./ 249.9 250.6 251.1 252.2 SEASONALLY ADJUSTED --------------------------] 260 1 15 29 13 27 10 24 8 22 5 19 2 16 30 14 28 11 25 9 23 6 20 3 17 JAN FEB 19/0 LATEST DATA PLOTTED WEEK ENDING: MAY 26, 19/1 CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE. COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING: i I I I TO THE AVERAGE OF FOUR WEEKS ENDING: 5/27/70 9/23/70 10/28/70 11/25/70 12/23/70 1/27/71 2/24/71 10/28/70 28. 1 11/25/70 25.9 20. 4 12/23/70 26.6 23.8 22.7 1/27/71 27.0 25.2 25. 1 30.2 2/t4/71 27.4 26.3 26.6 30.6 30. 1 3/24/71 28.0 27.4 27.9 31.3 31.2 32.5 4/28/7' 26.3 24.9 24.8 26.8 25.7 24.4 21.4 5/26/71 25.4 23.8 23,5 25.0 23.8 22.3 19.6 L

490 r=------------,------------,------ 1 7 MONEY STOCK PLUS TIME DEPOSITS BILLIONS - APR 468.3 467.9 470.7 473.9 476. 0 477.9 SEASONALLY ADJUSTED -------------------------490 t 15 29 15 27 10 24 8 22 5 19 2 16 50 14 28 11 25 APR MAY JUN JUL AUG SEP OCT NOV 1970 LATEST DATA PLOTTED WEEK ENDING. MAY 26, 1971 CURRENT DATA.APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE. JAN FEB 9 25 TO THE AVERAGE OF FOUR WEEKS ENDING: COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING: 5/27/70 9/23/70 10/28/70 11/25/70 12/23/70 1/27/71 2/24/71 3/24/71 '0/28/70 15.6 11/25/70 14.4 11.1 12/23/70 15.0 13.4 13.2 1/27/71 15.0 14.0 14. 1 16. 9 2/24/71 15.7 15.4 15.9 18. 4 18. 3 3/24/71 16.4 16.5 17.3 19.5 19.8 22. 6 4/28/71 16.0 15.9 16.3 17.9 17.7 18.6 172 5/26/71 15.9 15.8 16.2 17.5 17.2 17.8 16.5 13.7

i <0------------------------- CERTIFICATES OF DEPOSIT^/ COMMERCIAL PAPER 2/ OUTSTANDING VOLUME ------------------------------ 40 COMMERCIAL PAPER CERT IF1 OATES OF DEPOSIT LATEST DATA PLOTTEDi APRIL W Clf?I,iLICATES 0F DEPOSIT IN DENOMINATIONS OF 1100,000 OR MORE AT LARGE CuML.ERCIAL BANKS* MONTHLY AVERAGES OF WEDNESDAY FIGURES 2 endt-oftonth s0easonally'adjusted f0icures01n6, AVERA6 S of current and preced,w6 PER CENT 1 I 10 RATES ON CERTIFICATES OF DEPOSITS AND COMMERCIAL PAPER 2J PER CENT 1 I 10 9 6 7 6 5 -------------- \ COMMERCIAL P APER j Jir ^. r «\ CERTIFICATE S OF DEPOSIT* 9 8 7 6 5 4 3 v/ 4 3 2 0 I ii.li iilllli 1 LATEST OATA PLOTTEDi MAT U -LLililLLilL-u1lj!i I I II -LiiiiJ.i l I I I I I I I I I! I I I I -LlLliIuIll ff5!l,sslje RATE 0N 6 MONTH CERTIFICATES OF DEPOSIT OF 8100 000 OR UORF 2/ MiSe'commMC M P*P?fINSF-T?!U5Ei,^ twuw ARE 90 SECONDARY MARKET RATES. ' OFFER INSTATES*1 PAPER MONTHS MATURITY. AVERAGES OF DEALERS' DAILY 2 0

MEMBER BANK DEPOSITS SUBJECT TO RESERVE REQUIREMENTS (CREDIT PROXY ) SEASONALLY ADJUSTED 355 345 CREDIT PROXY ADJUSTED I 335 325 CREDIT PROXY 315 30 f - 235 285 I 15 20 13 27 10 24 S 22 5 10 2 18 50 14 28 1 1 25 0 23 6 20 3 IT 3 17 31 14 28 12 26 JAN FEB LATEST DATA PLOTTED WEEK ENOINGi WAY 26, 1971 CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS H.9 RELEASE. 1/ INCLUDES MEMBER BANK DEPOSITS, BANK-RELATED OM4ERCIAL PAPER, EURODOLLAR BORROWINGS OF U.S. BANKS, AND CERTAIN OTHER NOf >EPOSIT SOURCES. isn CREDIT PROXY Sl.LUO.NS CRED1T PROXY M^ustesl APR. 21 337.9 342.7 MAY 28 335. 1 339.8 5 337. 1 341.6 12 339.5 343.7 19 339.6 343.6 26 340.9 344.7 COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF THE FOUR WEEKS ENDING MAY 26, 1971 FROM THE FOUR WEEKS ENDINGt CREDIT CREDIT PROXY PROXY ADJUSTED MAR. 24 12.2 FEB. 24 13.8 6. 1 7.6 9. 1 9.7 NOV. 25 17. 1 10.6 JAN. DEC. 27 23 15.7 16.2 OCT. 28 16.7 10.2 SEP. 23 15.7 8.7

YIELDS ON SELECTED SECURITIES PER 9.0 CENT AVERAGES OF DAILY RATES ENDED FRIDAY PER CENT ------- 9.0 8,5 8.5 8.0 PRIME COMMERCIAL LOAN RATE CORPORATE AAA BOhDS 8.0 7,5 7.5 r m 7,Q 7.0 6.5 S4UNICI PAL 6.5 6,0 V / DISCOUNT RATE 6.0 5,5 5.5 5,0 5.0 4,5 THREE-MONTH TREASURY BILL MARKET YIELD 4.5 4,0 4.0 3,5 3.5 5,0 3.0 0 r 15 29 12 26 10 24 7 21 4 18 2 10 SO 13 27 It 25 6 22 5 19 5 19 2 16 50!4 28 11 25 AUG SEP NOV DEC FEB MAR 1970 LATEST PATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK ENDING. JUNE 4, 1971 0 1971 CORPORATE Aaa BONOS 3-MONTH TREASURY BILLS 3-5 YEAR GOVER7ASENT SECUR1T1ES LONG-TERM GOVERNMENT SECURITIES MUNICIPAL BONDS S* APR, 2 7.22 3,6! 4.85 5.64 5. 15 9 7.23 3.78 5.08 5.66 5.21 16 7.24 3.96 5.37 5.73 5.32 23 7.24 3.81 5.59 5.82 5. 48 30 7.31 3.93 5.77 5.81 5.69 MAY 7 7.43 3.84 5.92 5.92 5.85 1 4 7.48 3.96 5.98 5.96 5.96 21 7.57 4.36 6.20 6.04 5.96 28 7.66 4.38 5.97 5.90 5.86 JUNE 4 * 7.69 4.30 5.92 5.81 N. A. 1 1 18 25 * AVERAGES OF RATES AVAILABLE. BUYER'S AVERAGE INOEX OF 20 MUNICIPAL BONDS, THURSDAY DATA. SaAr Nv I AVA I LABCt

PER CENT SELECTED SHORT-TERM INTEREST RATES AVERAGES OF DAILY RATES ENDED FRIDAY PER CENT COMMERCIAL PAPER 4-TO-0 MONTH ------ FEDERAL FUNDS RATE 5 17 1.5 29 12 2fl )0 2«7 21 4 lg 2 19 30 15 2711 APR MAY JUN JUL AUG SEP OCT NOV DEC 1970 latest data plotted are averages of rates available S 19 5 lfi 2 16 50 14 28 FEB MAR MAY JUN FOR THE WEEK ENDING* JUNE 4, 1971 1971 PRIME COMMERCIAL PAPER 4-6 MONTH FEDERAL FUNDS PR ITS BANKERS* ACCEPTANCES 90 DAY CD'S sag APR. 2 4.23 9 4.28 16 4.58 23 4.70 30 4.80 MAY 7 5.00 14 5.00 21 5.15 28 5.25 JUNE 4» 5.38 1 1 18 25 4.20 4.13 4.23 4.23 4.18 4.65 4.48 4.73 4.78 4.79 4.00 4.13 4.38 4.45 4.60 4.83 4.88 4.95 5.00 5.00 3.87 3.94 4. 13 4.46 4.72 4.82 4.83 4.91 5.12 5.25 D tj EARLIER. CURRENT DATA APPEAR IN THE BOARD Of GOVERNORS' H.U RELEASE.

BORROWINGS AND EXCESS RESERVES ALL MEMBER BANKS IN THE NATION billions OF dollars billions of dollars BORROWINGS EXCESS RESERVES -0.4 NET FREE RESERVES -0.6-1.2 I 15 28 13 27 10 24 8 22 5 18 2 16 SO 14 28 11 25 8 23 6 20 3 17 5 17 31 14 28 12 26 8 23 MAY JUN OCT NOV JAN FEB APR MAY LATEST DATA PLOTTED WEEK ENDING* JUNE 2, 1971 1971 EXCESS RESERVES MILLIONS BORROWINGS FREE RESERVES APR. 7 277 197 80 M 208 150 58 21 81 84-3 28 48 176-128 MAY 5 365 174 191 < 12 242 98 144 19 115 308-193 26 175 269-94 JUNE 2 291 645-354 9 16 23 30