Week ending: January 24, 1979

t1f\ixi /vc//i z_ /7>^r>a Week ending: January 24, Growth of net time deposits, a component of M2 has slowed in recent weeks. In the twomonth period from the four weeks ending November 15 to the four weeks ending January 17, net time deposits grew at an annual rate of 3.5 percent, compared to a 10.3 percent rate in the previous two months. Large negotiable certificates of deposit (CDs), which are included in total time deposits but not in M2, continue to show strong growth, increasing at a rapid 42.1 percent rate since November 15. This increase was at about the same rate as in the previous two months. Net time deposits increased slightly despite a decline in savings deposits, due to the rapid growth of money market time deposits (MMTDs). In the twomonth period ending January 17, savings deposits fell $3.6 billion (a 9 percent rate) compared to a decline of $0.8 billion (a 2.3 percent rate) in the previous two months In contrast, MMTDs increased $9.1 billion between October 25 and December 27 (latest data available) In the previous two months, MMTDs increased $6.i billion. The pattern of growth of the various categories of time deposits has been influenced by the rise of market interest rates above Regulation Q ceilings. Interest rates on savings deposits and time deposits other than large negotiable CDs and MMTDs are subject to Regulation Q ceilings, which generally have been below market interest rates on securities. The maximum rate of interest is 5 percent on passbook savings accounts, and ranges from 5.50 to 8 percent on categories of time deposits other than largedenomination CDs and MMTDs. As growth of savings deposits and other time deposits subject to Regulation Q ceilings has slowed, banks have turned to large CDs and MMTDs as sources of deposits. The considerable growth experienced by large negotiable CDs and MMTDs occurred despite relatively high and rising interest rates (pages 6 and 7), which have increased the cost to banks of issuing them. The interest rate on large 90day CDs, for example, was 10.44 percent in the week of January 26. In the same week, the interest rate on MMTDs, which is tied to the weekly auction rate on sixmonth Treasury bills, was 9.48 percent at commercial banks. Prepared by Released January 26,

2 146 144 142 140 156 156 1 DEC. 20 _ 27 JAN. a 17 24 1 MONETARY BASE SEASONALLY ADJUSTED BY THIS BAI* ne BILLIONS 144 V' 142.2 142.2 143.7 142 144l0 143.6 140 156 156 154 154 152 150 T 152 150 128 128 126 0 126 1 1 1 1 L. =,, II 1 1 1 1 1 1 1 1 1 1 1 1 1 i 1 III! 111 XLL UL 1IJL r ti DEC 1977 4 16 JAN 1 13 FEB 1 13 MAR 9 12 APR «10 24 MAY r 21 3 19 JUN JUL 1978 LATEST DATA PLOTTED WEEK EM) I MS. JANUARY 24, UL 8 0 t 10 SO 13 2T 11 23 6 22 6 20 9 17»l 14 u AUG SEP OCT NOV DEC JAN FEB TO THE AVERAGE OF FOUR WEEKS ENDINGi MONETARY BASE COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING. ]723/78 4/26/78 6/21/78 7/26/78 8/23/78 9/27/78 10/23/78 11/22/78 6/21/78 8.5 7/26/78 9.3 11.9 8/23/78 8.3 9.4 7.9 9/27/78 8.9 10.2 9.6 7.8 10/25/78 9.5 10.9 10.8 10.0 13.7 11/22/78 9.1 10.1 9.7 8.7 10.9 9.7 12/27/78 8.9 9.6 9.1 8.3 9.7 8.6 1/24/79 9.2 10.0 9.7 9.1 10.4 9.8

RATIO 2.9 lllr,t MULTIPLIERS ADJUSTED FEDERAL RESERVE CREDIT*/ SEASONALLY ADJUSTED MULT PL IER ' V / V L379 RATIO DEC 13 2.545 20 2.540 27 2.536. 3 2.522 10 2.523 s Li1. 111 XU 1111 XI 1 17 2.506.nil jii 111 XU 1 XL.I XLL 11111 U 1 1 1 Ml 1 " 1* l?8 ' r i t COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE _ OF THE FOUR WEEKS END 1 NG JANUARY 24. 1879 FR THE FOUR wteks ENDI OM NG, v NOV. 22, 197 8 13. 5 AD. USTED FEDE *AL RES fs r OCT. 25 ERVE :red i, 197 8 11. D 1 SEP. 27. 1978 12. _ AUG. 23, 1978 13. JUL. 26, 1978 10. 3 APR. 26, 1978 11. 3 _ JA N. 25, 1978 10. 3 118 V ~ 1 16 _ 116 114 _ billions 114 112 DEC.?n y 27 122.9 112 JAN.2 124.7 1 10 0 123.5 IT 125.0 s Z4 124.9 I 10 0 L1.1 HI lniil 7 21 iii XLL LIU XLL nil in in XI 1 1.i 11 4 18 111 lllll 1 13 1 15 2 DEC JAN FEB MAR APR MAY» 17 31 M 28 JUN JUL AUG SEP OCT NOV 1977 DEC JAN FEB 1978 LATEST DATA PLOTTED WEEK ENOlNG. JANUARY 24, 1/ RATIO OF MONEY STOCK (Ml ) / MONETARY BASE. *HERE DIFFERENT RESERVE REQUIrImeKt RATlof APPLvf DATA^rI COMPUTED BY Tm1sE 5!J!* <S 3

4 MONEY STOCK PLUS NET TIME DEPOSITS (M2) 380 p1 1 BILLIONS 871.8 871.1 873.8 870.3 871.9 SEASONALLY ADJUS ItD ILL IONS OF DOLLARS m 880 1 13 1 13 29 12 26 10 24 7 21 3 19 2 16 30 13 27 11 23 a 22 6 20 3 17 31 14 28 SEP OCT LATEST DATA PLOTTED WEEK EM) I NO. JANUARY 17r CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE. MONEY STOCK PLUS NET TIME DEPOSITS (M2) COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING. 1/18/78 4/19/78 6/14/78 7/19/78 8/16/78 9/20/78 10/18/78 11/15/78 TO THE AVERAGE OF FOUR WEEKS ENDING. 6/14/78 7/19/78 8/16/78 9/20/78 10/18/78 11/15/78 12/20/78 1/17/79 7.9 7.6 8.0 8.6 8.8.2 8.5 9.0 9.7 9.8 8.9 8.0 7.3 8.2 9.5 9.8 8.5 7.4 6.6 1 1.3 11.1 9.2 7.7 6.6 11.4 8.8 7. I G.O 6.8 5.3 4.3 2.9 2.3 PREPARED BY FEDERAL RESERVE BAI* OF ST. LOUIS

370 1 1 BILLIONS DEC. 360.9 361.2 362.4 360.9 MONEY STOCK (Ml ) >ta5unally ADJUSTED 370 DEC JAN FEB I 15 tb IZ Zfl 10 «4 7 zi 5 10 MAR APR MAY JUN JUL 1978 LATEST DATA PLOTTED WEEK END INO. JANUARY 17, CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE. SEP OCT 1 L i 1. 3 17 51 14 tl THE M(*EY STOCK CONSISTS OF DEMAND DEPOSITS PLUS CURRENCY AND COIN HELD BY THE NONBANK PUBLIC. MONEY STOCK (Ml TO THE AVERAGE OF FOUR WEEKS ENDlNGt COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDINGi 1/18/78 4/19/78 6/14/78 7/19/78 8/16/78 9/20/78 10/18/78 11/15/78 6/14/78 9.0 7/19/78 7.9 9.6 8/16/78 8.0 9.3 5.7 9/20/78 8.4 9.7 7.6 9.9 10/18/78 8.7 10.0 8.5 10.4 11.4 7.3 7.7 5.7 6.3 5.6 2. 4 6.3 6.3 4.3 4.5 3.6 0.9 3.6 1/17/79 6.0 5.9 4.0 4.1 3.3 l.l 2.0 0.0 V 11/15/78 * 12/20/78 5

6 PERCENT YIELDS ON SELECTED SECURITIES AVERAGES OF DAILY RATES ENDED FRIDAY PERCENT I 12.5 10.0 CORPORATE Aaa BONDS.PAN RATE 90 DAY CD'S: COMMERCIAL PAPER MUNICIPAL BONDS** 2 16 30 13 27 10 24 10 24 7 21 3 19 2 16 30 M 28 II 23 8 22 15 29 1Z 26 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB 1977 1978 LATEST DATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK END ING t JANUARY 26, 90 DAY CD'S NQBK PRIME COMMERCIAL PAPER 46 MONTH PRIME BANKERS' ACCEPTANCES CORPORATE Aaa BONDS MUNICIPAL BONDS ** 10.66 10.28 10.52 9.04 6.29 8 10.64 10.32 10.38 9.06 10.53 10.36 10.37 9. 12 6.45 22 10.68 10.50 10.78 9.24 6.67 29 10.96 10.61 10.73 9.27 6.61 JAN. 5 10.88 10.55 10.65 9.26 6.58 10.71 10. 40. 10.41 9.26 6.50 19 10. 49 10. 36 10. 29 9.28 26 * 10.44 10.19 10. 17 9.27 N.A. FEB. 2 9 16 23 **^RONn^BUYFR'S^AVERAGE INDEX OF 20 MUNICIPAL BONDS. THURSDAY DATA. SEVENDAY AVERAGES OF SECONDARY MARKET RATES FOfc THE WEEK END ING WEDNESDAY TWO DAYS PARI EARLIER IFR THAN DATES SHOWN. CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS H.9 IRELEASE. N.A. NOT AVAILABLE PREPARED BY FEDERAL RESERVE BAI* OF ST. LOUIS

ft SELECTED INTEREST RATES AVERAGES OF DAILY RATES ENDED FRIDAY 35 YEAR TREASURY SECURITIES FEDERAL FUNDS RATE DISCOUNT RATE THREEMONTH TREASURY BILL MARKET YIELD 2 16 30 14 26 11 23 B 22 6 20 JAN FEB APR MAY OCT NOV JAN FEB 1978 LATEST OATA PLOTTED ARE AVERAGES OF RATES AVAILABLE FOR THE WEEK ENDINGi JANUARY 26, FEDERAL FUNDS 3MONTH TREASURY BILL 6MONTH TREASURY BILL XXX 1YEAR TREASURY BILL 35 YEAR TREASURY SECURITIES LONGTERM TREASURY SECUR1T1ES DEC. 1 9.85 8.98 9.33 9.29 9.01 8.71 8 9.87 8.93 9.22 9.32 9.02 8.75 15 9.79 8.93 9.26 9.28 9. 12 8.80 22 9.75 9.28 9.52 9.61 9.41 8.94 29 10.25 9.25 9.58 9.65 9.48 8.94 JAN. 5 10.59 9.34 9.55 9.61 9.46 8.96 12 9.97 9.30 9.44 9.61 9.46 8.97 19 10.05 9.44 9.53 9.61 9.43 8.97 26 x FEB. 2 9 16 23 10.05 9.35 9. 48 9.52 9.33 8.93 X AVERAGES OF RATES AVAILABLE. XX SEVENOAY AVERAGES FOR WEEK ENDING WEDNESDAY TWO DAYS EARLIER THAN DATE SHOWN. CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS* H.9 RELEASE. xam NEW ISSUE RATE RATES ON LONGTERM TREASURY SECURITIES ARE COMPUTED BY THE FEDERAL RESERVE BANK OF ST. LOUIS. TREASURY BILL YIELDS ON DISCOUNT BASIS. 7

8 NET TIME DEPOSITS ALL COMMERCIAL BANKS SEASONALLY ADJUSTED 320 JCV 515 310 505 510.8 510.5 510.8 51 1.0 515 310 303 300 300 193 195 190 190 185 185 160 160 173 175 170 170 165 163 160 160 7 Zl 4 I8 I IS I IS 29 12 26 I0 24 7 21 3 I9 2 I6 SO IS 27 II 23 8 22 6 20 3 IT SI I4 28 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB 1977 1978 LATEST DATA PLOTTED WEEK END I NO. JANUARY 17, CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS' H.6 RELEASE. * NET TIME DEPOSITS ARE DEFINED AS. SAVINGS DEPOSITS, TIME DEPOSITS OPEN ACCOUNT PLUS TIME CERTIFICATES OF DEPOSIT OTHER THAN NEGOTIABLE TIME CERTIFICATES OF DEPOSIT ISSUED IN DENOMINATIONS OF I00.000 OR MORE BY LARGE WEEKLY REPORTING COMMERCIAL BANKS. TO THE AVERAGE OF FOUR WEEKS ENDING. NET TIME DEPOSITS COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING. 1/18/78 1/19/78 6/14/78 7/19/78 8/16/78 9/20/78 10/18/78 11/15/78 6/11/78 7.2 7/19/78 7.1 7.8 8/16/78 8.0 8.8 10.0 9/20/78 8.6 9.6 10.9 12.2 10/18/78 8.8 9.7 10.8 1 1.7 11.6 1 1/15/78 8.9 9.8 10.7 1 1.3 1 1. 1 10.3 12/20/78 8.6 9.2 9.8 10. 1 9.7 8.7 7.8 1/17/79 8.0 8.3 8.5 8.5 7.9 6.6 5.1 3.5 PREPARED BY FEDERAL RESERVE BAh* OF ST. LOUIS

DEMAND DEPOSIT COMPONENT OF MONEY STOCK SEASONALLY ADJUSTED 263.7 263.9 262.7 264.3 261.4 262.8 DEC JAN FEB I I I 1.JLL 1 19 29 12 26 10 24 7 21 JUN JUL 1978 LATEST DATA PLOTTED WEEK ENDING. JAWARY 17, CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS* H.6 RELEASE. till DEMAND DEPOSIT COMPONENT OF MONEY STOCK TO THE AVERAGE OF FOUR WEEKS ENDING. COMPOUNDED ANNUAL RATES OF CHANGE, AVERAGE OF FOUR WEEKS ENDING. 1/18/78 4/19/78 6/14/78 7/19/78 8/16/78 9/20/78 10/18/78 11/15/78 6/14/78 8.8 7/19/78 7.5 9.6 8/16/78 7.6 9.3 5.0 9/20/78 8.0 9.4 6.7 9.2 10/18/78 8.3 9.7 7.7 9.9 10.6 11/13/78 6.4 6.8 4.1 4.6 3.6 0.2 12/20/78 5. 1 4.9 2.3 2.3 1.0 2.2 7.7 1/17/79 4.5 4.2 1.7 1.6 0.5 2.2 6.0 3.9 PREPARED BY FEDERAL RESERVE BAf* OF ST. LOUIS 9

10 CURRENCY COMPONENT OF MONEY STOCK SEASONALLY ADJUSTED BILLIONS of dollars lara billions DEC. 13 87.2 97.2 96. 1 4 IS 1 13 15 29 IS 28 10 *4 T t 3 19 * 16 30 13 77 II *3 8 22 6 20 3 17 31 14 23 DEC JAN FEB JUN JUL SEP OCT LATEST OATA PLOTTED WEEK ENDING. JANUARY 17r CURRENT DATA APPEAR IN THE BOARD OF GOVERNORS* M.6 RELEASE. CURRENCY TO THE AVERAGE OF FOUR WEEKS ENDING. COMPOUNDED ANNUAL RATES OF CHANGE AVERAGE OF FOUR WEEKS ENDING. 1/18/78 4/19/78 6/14/78 7/19/78 8/16/78 9/20/78 10/18/78 11/15/78 8/14/78 10.0 7/19/78 9.4 10.0 8/16/78 9. 1 9.4 7. 1 9/20/78 9.8 10.4 9.5 1 1.0 10/18/78 10.0 10.6 10.0 11.2 13.0 11/13/78 9.9 10.3 9.7 10.5 l 1.6 10.0 12/20/78 9.9 10.3 9.8 10.4 1 1.2 10.1 9.4 1/17/79 10.0 10.4 10.0 10.6 11.2 10.3 10.0 10.6

BORROWINGS FROM FEDERAL RESERVE BANKS ALL MEMBER BANKS IN THE NATION billions of dollars billions of dollars 1312 MILklQNS DEC. 20 7 21 4 1. 1 13 1 13 29 12 26 10 ZA 7 21 5 19 2 16 30 13 27 11 25 8 22 6 20 3 17 31 M 28 1977 LATEST DATA PLOTTED WEEK ENDING: JANUARY 24, 144 r, COMPOUNDED ANNUAL RATES 142 OF CHANGE. AVERAGE OF _ THE FOUR WEEKS ENDING 140 DECEMBER 27, 1978 FROM THE FOUR WEEKS ENDINGi ' Loot. 25, 1978 4.7 ah SEP. 27, 1978 7.9 AUG. 30, 19/8 7.7 156 JUL. 26, 1978 7.7 _ JUN. 28, 1978 6.8 134 MAR. 29, 1978 DEC. 28, 1977 11.9 13.3 BUSINESS LOANS ( COMMERCIAL AND INDUSTRIAL ) WEEKLY REPORTING LARGE COMMERCIAL BANKS SEASONALLY ADJUSTED NO NEW DATA AVAILABLE 144 142 140 138 136 134 132 130 128 126 NOV. 22 MILLIONS 139,735 139,776 124 122 120 1 I I I I I II I IJ 1 1 HI I 2 16 30 14 26 11 23 22 6 22 5 19 3 17 91 14 26 12 26 9 23 6 20 4 18 1 13 29 13 27 10 24 DEC JAN JUN JUL 118 LATEST DATA PLOTTED WEEK ENDING> DECEMBER 27. 1978 11

12 CERTIFICATES OF DEPOSIT LARGE COMMERCIAL BANKS WEDNESDAY FIGURES NOT SEASONALLY ADJUSTED 10Z 100 98 BZ 80 ra 76 74 7Z DEC JAN FEB LATEST DATA PLOTTED WEEK END IMOi JANUARY 17, 1879 CURRENT DATA AIT EAR IN THE BOARD OF GOVERNORS H.6 RELEASE. WEEKLY REPORTING (