Factors Adding to Reserves

Transcription

1 Factors Adding to Reserves Factors Adding to Reserves on Federal Reserve's Balance Sheet (Assets) Plus Off-Balance TSLF from 6/27/07 to 3/13/13 $3,300 $3,150 $3,000 $2,850 $2,700 $2,550 Mortgage Backed Securities $2,400 $2,250 $2,100 $1,950 $1,800 $ Bn Series Break PDCF-3/16/08 TSLF-3/11/08 TAF-12/12/07 Series Break "TDWP - 8/17/07" $1,650 $1,500 $1,350 $1,200 US Treasuries $1,050 $900 $750 $600 $450 6-Feb Dec Nov-12 3-Oct Aug Jul Apr-12 7-Mar Dec-11 2-Nov Aug Jun Apr Feb Dec Oct Jul Jun Mar Feb Dec Nov Oct Aug Jul Jun Apr Mar Dec-08 5-Nov Apr Feb Nov-07 8-Aug-07 Note: Data are weekly averages for all but the Foreign Central Bank TAF which are as of the last day of the week. Source: Federal Reserve Board of Governors Statistical Release H

2 Factors Using Reserves Factors Using Reserves on Federal Reserve's Balance Sheet (Liabilities) from 6/27/2007 to 3/13/2013 $3,300 $3,150 $3,000 $2,850 $2,700 $2,550 $2,400 $2,250 $2,100 Reserve Balances $1,950 Series Break PDCF-3/16/08 TSLF-3/11/08, 950 $1,800 Billions TAF-12/12/07 Series Break "TDWP - 8/17/07" $1,650 $1,500 $1,350 $1,200 $1,050 $900 Currency in Circulation $750 $600 $450 6-Feb Dec Nov-12 3-Oct Aug Jul Apr-12 7-Mar Dec-11 2-Nov Aug Jun Apr Feb Dec Oct Jul Jun Mar Feb Dec Nov Oct Aug Jul Jun Apr Mar Dec-08 5-Nov Apr Feb Nov-07 8-Aug Jun-07 Note: Data are weekly averages for all but the Foreign Central Bank TAF which are as of the last day of the week. Source: Federal Reserve Board of Governors Statistical Release H

3 Projected Baseline Assets Source: Crunch Time: Fiscal Crises and the Role of Monetary Policy. Greenlaw, Hamilton, Hooper, and Mishkin (2013). 3

4 Projected Baseline Liabilities Source: Crunch Time: Fiscal Crises and the Role of Monetary Policy. Greenlaw, Hamilton, Hooper, and Mishkin (2013). 4

5 Everyone Is Now Looking at Jobs When will unemployment most recently at 7.7% hit 6.5%? In looking at job formation we have assumed 0.7% annual growth in the labor force and a - 0.3% annual change in the participation rate. 5

6 How Many Jobs Does the Economy Create? Assumed Quarterly % Real GDP Growth Estimated Number of Jobs Created within the Quarter Estimated Number of Quarters to Create Million Jobs Estimated Number of Jobs Created Within Quarter Estimated Number of Quarters to Create Million Jobs Estimated Number of Jobs Created Within Quarter Average Hi (95%) Interval Low (95%) Interval Estimated Number of Quarters to Create Million Jobs Assumed Quarterly % Real GDP Growth Estimated Number of Jobs Created per Month Estimated Number of Months to Create Million Jobs Estimated Number of Jobs Created per Month Estimated Number of Months to Create Million Jobs Estimated Number of Jobs Created Within Month Average Hi (95%) Interval Low (95%) Interval Estimated Number of Months to Create Million Jobs Source: Haver and Cumberland Advisors 6

7 GDP Growth Needed to Create Enough Jobs for Unemployment to Hit 6.5% Source: Cumberland Advisors 7

8 Job Growth Needed to Hit 6.5% Unemployment Month in Which Unemployment Rate Reaches 6.5% for Assumed Monthly Job Growth -Labor Force is Assumed to Increase at.7% Annually and Participation Rate is Assumed to Decline.3% Annually % Confidence Lower Bound 95% Confidence Upper Bound Ifthe economy creates 210,000 jobs per month, unemployment will hit 6.5% between Feb 2014 and /31/2017 9/22/2017 6/14/2017 3/6/ /26/2016 8/18/2016 5/10/2016 1/31/ /23/2015 7/15/2015 4/6/ /27/2014 9/18/2014 6/10/2014 3/2/ /22/2013 8/14/2013 5/6/2013 1/26/ /18/2012 7/10/2012 4/1/2012 Source: Cumberland Advisors 8

9 U3 Through U6 U4 : U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them. U5 : U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to but have not looked for work recently. U6 : U5 + Part-time workers who want to work full-time, but cannot due to economic reasons U6 U5 U4 U Percent Source: BLS and Cumberland Advisors, Inc. 9

10 Sources of Difference Between U6 and Standard Employment Statistic % Discouraged Workers %Marginally Attached Workers %Part-Time Workers Who Want Full Time Work Percent Source: BLS and Cumberland Advisors, Inc. 10

11 The Beveridge Curve: Job Vacancy Rate vs. U-3 Unemployment Rate (Seasonally Adjusted) 3.5 Job Vacancy Rate Nov '07 Dec '07 Dec '01 '13 Dec '12 Jun '09 Jul ' U-3 Unemployment Rate Dec '01- Nov '07 Dec '07- Jun '09 Jul '09- '13 Source: Bureau of Labor Statistics, Current Population Survey and Job Openings Labor Turnover Survey, March 12,

12 Monthly Unemployment vs. Inflation 11.0 Unemployment Rate (U-3) Jul Aug Jun-09 Apr-09 Mar-09 Oct-09 Feb Dec-08 Nov-09 Apr-10 Mar-10 Dec-09 Nov-10 Feb Oct Jul-10 Jun-10 Aug-10 Dec-10Feb-11 Apr Jun-11 Jul-11 Mar-11 Aug Oct-11 Nov-11 Jun-12 Dec-11 Feb Jul Mar-12 Apr Aug-12 Oct Feb-13Dec-12 Nov-12 Nov-08 Fed Target (6.5% unemployment rate, 2.5% inflation rate) Apr-08 Inflation (CPI) Pre-Crisis During Crisis Post Crisis Post Crisis (Jul'09-present) During Crisis (Dec. '07-June '09) Oct Mar-08 Dec Feb-08 Jul Pre-Crisis Aug Jun-07 Nov-07 Feb-07 Apr-07 Mar-07 Oct-07 ('07-Nov '07) Aug-08 Jul-08 Jun-08 Source: Concept: Thomas W. Synnott, Bureau of Labor Statistics March 15,

13 Total Assets of Major Central Banks Monthly Central Bank Assets (Dollar Equivalents on Left Scale $ Billions) for US, UK,Japan, Euro Area, and Swiss National Bank from June-06 to Feb-13 $ Billions Federal Reserve Bank of England ECB Bank of Japan Swiss National Bank X Mar Estimate: $10020 bn Oct-12 Jul-12 Apr Oct-11 Jul-11 Apr Oct-10 Jul-10 Apr Oct-09 Jul-09 Apr Oct-08 Jul-08 Apr Oct-07 Jul-07 Apr Oct-06 Jul-06 Apr

14 European System of Central Banks European System of Central Banks Assets in Euros from 01/05/07 to 03/01/ Eurosystem: Other Assets (NSA, Mil.EUR) Eurosystem: Asset: General Govt Debt Denominated in Euro (NSA, Mil.EUR) Eurosystem: Asset: Securities of Euro Area Resid in Euro (NSA, Mil.EUR) Eurosystem: Asset: Oth Claim on Eur Area Cred Inst in Euro(NSA Mil.EUR) Eurosystem: Asset: Lending to Euro Area Cred Inst in Euro (NSA Mil.EUR) Eurosystem: Asset: Claims on Noneuro Residents in Euros (NSA, Mil.EUR) Eurosystem: Asset: Claims on Euro Res in Fgn Currency (NSA, Mil.EUR) Eurosystem: Asset: Claims on Noneuro Res in Fgn Currency (NSA Mil.EUR) Eurosystem: Asset: Gold and Gold Receivables (NSA, Mil.EUR) /19/2012 6/1/2012 1/13/2012 8/26/2011 4/8/ /19/2010 7/2/2010 2/12/2010 9/25/2009 5/8/ /19/2008 8/1/2008 3/14/ /26/2007 6/8/2007 1/19/2007 9/1/2006 4/14/ /25/2005 7/8/2005 2/18/ /1/2004 5/14/ /26/2003 8/8/2003 3/21/ /1/2002 6/14/2002 1/25/2002 9/7/2001 4/20/ /1/2000 7/14/2000 2/25/ /8/1999 5/21/1999 1/1/1999 Source: Oesterreichische Nationalbank. 14

15 European System - Liabilities European System of Central Banks Liabilities in Euros from 01/05/07 to 03/01/13 Eurosystem: Capital and Reserves (NSA, Mil.EUR) Eurosystem: Revaluation Accounts (NSA, Mil.EUR) Eurosystem: Other Liabilities (NSA, Mil.EUR) Eurosystem: Liab: Counterpart of SDRs Allocated by IMF (NSA, Mil.EUR) Eurosystem: Liab to Noneuro Area Resid in Fgn Currency (NSA, Mil.EUR) Eurosystem: Liab to Euro Area Residents in Fgn Currency (NSA, Mil.EUR) Eurosystem: Liab to Non-euro Area Residents in Euro (NSA, Mil.EUR) Eurosystem: Liab to Other Euro Area Residents in Euro (NSA, Mil.EUR) Eurosystem: Liab: Debt Certificates Issued (NSA, Mil.EUR) Eurosystem: Other Liab to Euro Area Credit Inst in Euro (NSA, Mil.EUR) Eurosystem: Liab to Euro Area Credit Institutions in Euro(NSA, Mil.EUR) 0 11/2/2012 6/22/2012 2/10/2012 9/30/2011 5/20/2011 1/7/2011 8/27/2010 4/16/ /4/2009 7/24/2009 3/13/ /31/2008 6/20/2008 2/8/2008 9/28/2007 5/18/2007 1/5/2007 8/25/2006 4/14/ /2/2005 7/22/2005 3/11/ /29/2004 6/18/2004 2/6/2004 9/26/2003 5/16/2003 1/3/2003 8/23/2002 4/12/ /30/2001 7/20/2001 3/9/ /27/2000 6/16/2000 2/4/2000 9/24/1999 5/14/1999 1/1/1999 Eurosystem: Liab: Banknotes in Circulation (NSA, Mil.EUR) Source: Oesterreichische Nationalbank. 15

16 Bank of England Assets Bank of England Assets in Pounds Sterling from 01/03/07 to 03/06/ UK: BoE Consol St: Short-term Open Mkt Operations {RPWB66A} (NSA, Mil.Pounds) UK: BoE Consolidated Statement: Total Other Assets {RPWB74A} (NSA, Mil.Pounds) UK: BoE Cons St: Other Sec Acq Via Mkt Transactns {RPWB73A} (NSA, Mil.Pounds) UK: BoE Consol St: Advances to the Central Govt {RPWB72A} -- DISC(NSA,Mil.Pounds) UK: BoE Consol St: Longer-term Reverse Repo {RPWB69A} (NSA, Mil.Pounds) Source: Bank of England. 16

17 Bank of England Liabilities Bank of England Liabilities in Pounds Sterling from 01/03/07 to 03/06/ UK: BoE Consolidated St: Foreign Currency Securities {RPWB59A} (NSA, Mil.Pounds) UK: BoE Consolidated Statement: Other Liabilities {RPWB63A} (NSA, Mil.Pounds) UK: BoE Consolidated Statement: Cash Ratio Deposits {RPWB62A} (NSA, Mil.Pounds) UK: BoE Cons St: Open Mkt Operatns: Fine-tuning Repo {RPWB58A} (NSA, Mil.Pounds) UK: BoE Consol St: Standing Facility Deposits {RPWB57A} --DISC (NSA, Mil.Pounds) UK: BoE Consol St: Reserve Balance Liabilities {RPWB56A} (NSA, Mil.Pounds) UK: BoE Consolidated St: Notes in Circulation {RPWB55A} (NSA, Mil.Pounds) 0 1/3/2007 4/3/2007 7/3/ /3/2007 1/3/2008 4/3/2008 7/3/ /3/2008 1/3/2009 4/3/2009 7/3/ /3/2009 1/3/2010 4/3/2010 7/3/ /3/2010 1/3/2011 4/3/2011 7/3/ /3/2011 1/3/2012 4/3/2012 7/3/ /3/2012 1/3/2013 Source: Bank of England. 17

18 Swiss National Bank Assets Swiss National Bank Assets in Swiss Francs from 01/31/07 to 01/31/ Reserve position in the IF Other assets Loan to stabilisation fund CHF securities Claims against domestic correspondents Domestic Money Market claims Balances from swap transactions against CHF Claims from USD repo transactions Claims from CHF repo transactions Monetary assistance loans International payent instruments Foreign currency investents Gold holdings and clais from gold transactions

19 Swiss National Bank Liabilities Swiss National Bank Liabilities in Swiss Francs from 01/31/07 to 01/31/13 Provisions and equity capital Other liabilities Counterpart of special drawing rights allocated by the IF Foreign currency liabilities Other tie liabilities SNB debt certificates Liabilities from CHF repo transactions Other sight liabilities Sight deposits of foreign banks and institutions Liabilities towards the Confederation Sight deposits of domestic banks Banknotes in circulation

20 Bank of Japan Assets 180, , Bank of Japan Assets from 7/ 97 to 2/13 Japan removes QE2 with Bills Purchased 140, , Y e n 100, , , , , Jul-97 Nov-97 Mar-98 Jul-98 Nov-98 Mar-99 Jul-99 Nov-99 Mar-00 Jul-00 Nov-00 Mar-01 Jul-01 Nov-01 Mar-02 Jul-02 Nov-02 Mar-03 Jul-03 Nov-03 Mar-04 Jul-04 Nov-04 Mar-05 Jul-05 Nov-05 Mar-06 Jul-06 Nov-06 Mar-07 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Gold (Bil.Yen) Receivables Under Resale Agreements (Bil.Yen) Bills Purchased (Bil.Yen) Government Securities in Custody (Bil.Yen) Commercial Bills Discounted (Bil.Yen) Commercial Paper (EOP, Bil.Yen) Corporate Bonds (EOP, Bil.Yen) Pecuniary Trusts [Stocks Held as Trust Property] (Bil.Yen) Index-Linked Exch-Traded Funds Held as Trust Prop(Bil.Yen) Real Estate Invt Trusts (Bil.Yen) Cash (Bil.Yen) Japanese Government Securities (Bil.Yen) Asset-Backed Securities (Bil.Yen) Loans Excluding Those to the Deposit Insurance Corp(Bil.Yen) Loans to Deposit Insurance Corporation (Bil.Yen) Foreign Currency Assets (Bil.Yen) Deposits with Agents (Bil.Yen) Cash Collat in Exchange for Govt Securities Borrowed(Bil.Yen) Other (Bil.Yen) Total Assets (Bil.Yen) Source: Bank of Japan. 20

21 Bank of Japan Liabilities 180, , Bank of Japan Liabilities from 7/ 97 to 2/13 Japan removes QE2 with Current Deposits Removed 140, , Y e n 100, , , , , Banknotes (Bil.Yen) Current deposits (Bil.Yen) Other deposits (Bil.Yen) Payables Under Repurchase Agreements (Bil.Yen) Bills Sold (Bil.Yen) Other (Bil.Yen) Provisions (Bil.Yen) Deposits of the Govt(Bil.Yen) Capital (Bil.Yen) Legal & Special Reserves (Bil.Yen) Govt Securities Borrowed (Bil.Yen) Total Liabilities & Capital Accounts (Bil.Yen) Source: Bank of Japan. 21

22 Disclosure All material presented is compiled from sources believed to be reliable. However, accuracy cannot be guaranteed. Past performance is no guarantee of future results. 22