National Economic Indicators May 7, 18
Table of Contents GDP Release Date Latest Period Page Table: Real Gross Domestic Product Apr-7-18 8:31 Q1-18 Real Gross Domestic Product Apr-7-18 8:31 Q1-18 5 Decomposition of Real Gross Domestic Product Apr-7-18 8:31 Q1-18 Households Retail Sales Apr-1-18 8:3 Mar-18 7 Consumer Spending and Income Apr-3-18 8:31 Mar-18 8 Sales of Automobiles and Light Trucks May--18 8:38 Apr-18 9 Personal Saving Rate Apr-3-18 8:31 Mar-18 1 Household Net Worth Mar-8-18 1:3 Q-17 11 Existing Single-Family Home Sales Apr-3-18 1: Mar-18 1 New Single-Family Home Sales Apr--18 1: Mar-18 13 Private Single-Family Housing Starts & Permits Apr-17-18 8:3 Mar-18 1 Private Multi-Family Housing Starts & Permits Apr-17-18 8:3 Mar-18 15 Business Investment Real Investment in Nonresidential Structures Apr-7-18 8:31 Q1-18 1 Real Private Construction Put in Place May-1-18 1: Mar-18 17 Real Nonresidential Fixed Investment Apr-7-18 8:31 Q1-18 18 Real Investment in Equipment Apr-7-18 8:31 Q1-18 19 Real Investment in Intellectual Property Apr-7-18 8:31 Q1-18 Trade Balance of International Trade May-3-18 8:31 Mar-18 1 Exchange Value of the USD Apr--18 9:5 Apr-18 Manufacturing Industrial Production Apr-17-18 9:1 Mar-18 3 Capacity Utilization Rate: Manufacturing Apr-17-18 9:1 Mar-18 Indexes of Manufacturing Activity May-1-18 1:1 Apr-18 5 Indexes of Non-Manufacturing Activity May-3-18 1:1 Apr-18 Table: ISM Business Survey Indexes May-1-18 1:1 Apr-18 7 Manufacturers' New Orders May-3-18 1: Mar-18 8 Core Capital Goods May-3-18 1: Mar-18 9 Business Inventory/Sales Ratios Apr-1-18 1:1 Feb-18 3
Table of Contents (continued) Labor Market Release Date Latest Period Page Nonfarm Payroll Employment May--18 8:3 Apr-18 31, 3 Unemployment Rate Measures May--18 8:3 Apr-18 33,3 Non-Employment Index Apr-19-18 1:3 Mar-18 35 Labor Market Flows Apr-13-18 1: Feb-18 3 Labor Force Participation May--18 8:3 Apr-18 37 Aggregate Weekly Hours Index May--18 8:3 Apr-18 38 Average Hourly Earnings May--18 8:3 Apr-18 39 Employment Cost Index Apr-7-18 8:31 Q1-18 Business Labor Productivity May-3-18 8:31 Q1-18 1 Unit Labor Costs, Nonfarm Business May-3-18 8:31 Q1-18 Inflation Table: Gauges of Inflation May--18 1:57 Apr-18 3 Expenditure Price Indexes Apr-3-18 8:31 Mar-18, 5 Consumer Price Indexes Apr-11-18 8:31 Mar-18 Producer Price Indexes Apr-1-18 8:35 Mar-18 7 Commodity Price Indexes May--18 1:57 Apr-18 8 Crude Oil Prices May-7-18 7-May-18 9 TIPS Inflation Compensation Apr--18 15: -Apr-18 5 Monetary Policy & Financial Markets Federal Reserve System Assets May-3-18 1:3 -May-18 51 Monetary Policy Instruments May--18 11:59 -May-18 5 Real Federal Funds Rate Apr-3-18 8:31 Apr-18 53 FOMC Statement 5, 55 Eurodollar Futures May-7-18 7-May-18 5 SEP: Federal Funds Rate 57 Monetary Base May-3-18 1:33 5-Apr-18 58 M May-3-18 1:33 Mar-18 59 Money Market Rates May--18 11:59 -May-18 Capital Market Rates May--18 11:59 -May-18 1 Treasury Yield Curve May--18 1:3 -May-18 Risk Premium May--18 11:59 -May-18 3
Real Gross Domestic Product 17 18 Q1 Q Q3 Q Q1 CHANGE FROM PREVIOUS QUARTER AT COMPOUND ANNUAL RATE [Percent]: Gross Domestic Product 1. 3.1 3..9.3 Personal Consumption Expenditures 1.9 3.3.. 1.1 Nonresidential Fixed Investment 7..7.7.8.1 Structures 1.8 7. -7..3 1.3 Equipment. 8.8 1.8 11..7 Intellectual Property 5.7 3.7 5..8 3. Residential Fixed Investment 11.1-7.3 -.7 1.8. Exports of Goods & Services 7.3 3.5.1 7..8 Imports of Goods & Services.3 1.5 -.7 1.1. Government Consumption Expenditures & Gross Investment -. -..7 3. 1. Final Sales to Domestic Purchasers..7 1.9.5 1. LEVEL IN QUARTER AT SEASONALLY ADJUSTED ANNUAL RATE [Billions of Chained (5) Dollars]: Change in Private Inventories 1. 5.5 38.5 15. 33.1 Net Exports of Goods & Services -. -13. -597.5-53.9-5.9 Source: Bureau of Economic Analysis via Haver Analytics
Real Gross Domestic Product 5 3 1-1 - -3 - -5 - -7-8 Percent change from previous quarter at annual rate -9 7 8 9 1 11 1 13 1 15 1 17 18 19 1 Q1.3% FOMC Projection. 5.. 3.. 1.. -1. -. -3. -. -5. -. -7. -8. -9. Note: Projection is the median, central tendency, and range from the March 18 Summary of Economic Projections. Red dots indicate median projections. Projections of change in real gross domestic product (GDP) are from the fourth quarter of the previous year to the fourth quarter of the year indicated. 5 Source: Bureau of Economic Analysis via Haver Analytics & Federal Reserve Board
Decomposition of Real GDP 5..5 1-Year Annual Growth Rates 5..5. 3.5 3..5. 1.5 1..5 GDP Productivity Employment. 3.5 3..5. 1.5 1..5.. 1958 19 19 197 197 1978 198 198 199 199 1998 1 1 18 Note: Productivity is calculated as real GDP per employee, from the Household Survey. Source: Bureau of Economic Analysis and Bureau of Labor Statistics via Haver Analytics
Retail Sales 1 1 Month % Change 1 1 3 Month Annualized % Change 1 Mar % - - - - -1 Month over Month % Change Jan. Feb. Mar. Total -. -.1. x Gasoline -.3 -.1. -1 7 9 11 13 15 17-1 -1 Note: Retail sales includes food services. Source: Census Bureau via Haver Analytics 7
Consumer Spending and Income 8 1 Month % Change 8 Real Personal Consumption Expenditure March - - - Real Disposable Personal Income Month over Month % Change January February March Income.5.1. - - - Expenditures -.1 -.. -8 7 9 11 13 15 17-8 Note: Income has been adjusted to account for temporary fiscal actions in 8 and 1-13. Source: Bureau of Economic Analysis via Haver Analytics 8
Sales of Automobiles & Light Trucks Millions of Vehicles 18 Autos and Light Trucks Apr 17.15 mil. 18 1 1 1 1 1 Light Trucks 1 1 1 8 8 Autos 7 9 11 13 15 17 Source: Autodata Corporation via Haver Analytics 9
Personal Saving Rate 1 Percent of disposable personal income 1 9 9 8 8 7 7 5 5 3 Mar 3.1% 3 1 1 7 9 11 13 15 17 Note: Income has been adjusted to account for temporary events Source: Bureau of Economic Analysis via Haver Analytics 1
Household Net Worth 7 Percent of disposable personal income 7 Q 5 5 55 55 5 5 5 199 199 199 199 1998 8 1 1 1 1 18 5 Source: Z.1 Financial Accounts of the United States via Haver Analytics 11
Existing Single-Family Home Sales.5.5 5.5 5 Mar 5.5 5.5.5 3.5 3.5 3 3.5 8 1 1 1 1 18.5 Source: National Association of Realtors via Haver Analytics 1
New Single-Family Home Sales 1. Millions 1. 1. 1. 1. 1..8 199-99 Average Mar.8..... 8 1 1 1 1 18. Source: Census Bureau via Haver Analytics 13
Private Single-Family Housing Starts & Permits. Millions of Starts & Permits, Annual Rate. 1.8 1.8 1. 1. 1. 1. 1. 199-1999 Average Housing Starts 1. 1. Starts Mar 1..8.8. Permits.... 8 1 1 1 1 18. Source: Census Bureau via Haver Analytics 1
Private Multi-Family Housing Starts & Permits.7 3-Month Moving Average, Millions of Starts & Permits, Annual Rate.7...5 Mar.5. Permits..3.3 199 1999 Average Multi-Family Starts...1 Starts.1. 8 1 1 1 1 18. Source: Census Bureau via Haver Analytics 15
Real Investment in Nonresidential Structures 35 3 5 Percent change from previous quarter at annual rate 35 3 5 15 1 5-5 -1-15 - -5-3 Q1 1.3 15 1 5-5 -1-15 - -5-3 -35 7 8 9 1 11 1 13 1 15 1 17 18-35 Source: Bureau of Economic Analysis via Haver Analytics 1
Real Private Construction Put In Place 7 9$, Billions 7 57 Real Private Residential Construction 57 5 5 7 Real Private Nonresidential Construction March 7 37 37 3 3 7 7 8 1 1 1 1 18 Notes: Private nonresidential construction deflated using the price index for private fixed investment in nonresidential structures and private residential construction deflated using the private residential investment chain price index. Source: Census Bureau via Haver Analytics 17
Real Nonresidential Fixed Investment Percent change from previous quarter at annual rate 15 15 1 5 Q1.1% 1 5-5 -5-1 -1-15 -15 - - -5-5 -3 7 8 9 1 11 1 13 1 15 1 17 18-3 Source: Bureau of Economic Analysis via Haver Analytics 18
Real Investment in Equipment 35 3 5 15 1 5-5 -1-15 - -5-3 -35 Percent change from previous quarter at annual rate - 7 8 9 1 11 1 13 1 15 1 17 18 Q1.7% 35 3 5 15 1 5-5 -1-15 - -5-3 -35 - Source: Bureau of Economic Analysis via Haver Analytics 19
Real Investment in Intellectual Property 1 Percent change from previous quarter at annual rate 1 1 1 8 8 Q1 3.% - - - - - - -8 7 8 9 1 11 1 13 1 15 1 17 18-8 Source: Bureau of Economic Analysis via Haver Analytics
Balance of International Trade -1 Current $, Billions Petroleum Balance -1 - -3 - Non- Petroleum Balance Mar -9 Bil - -3 - -5-5 - - -7-7 Trade Balance -8-8 199 199 199 1998 8 1 1 1 1 18 Note: Customs Value of Trade Balance Source: Census Bureau via Haver Analytics 1
Exchange Value of the USD 135 Index, March 1973 = 1 135 15 15 115 115 15 15 95 Apr 95 85 85 75 198 198 1988 199 199 8 1 1 75 Notes: Measured as the real broad trade-weighted exchange value of the United States Dollar. Source: Board of Governors via Haver Analytics
Industrial Production 1 135 1 = 1 1 135 13 15 1 115 11 15 1 Mining Overall Mar 13 15 1 115 11 15 1 95 9 85 8 Manufacturing 95 9 85 8 75 7 8 9 1 11 1 13 1 15 1 17 18 75 Source: Board of Governors via Haver Analytics 3
Capacity Utilization Rate: Manufacturing 8 Percent 8 8 8 78 7 Mar 75.9% 78 7 7 7 7 7 7 7 8 8 7 8 9 1 11 1 13 1 15 1 17 18 Source: Board of Governors via Haver Analytics
Indexes of Manufacturing Activity 5 Diffusion Index, percent ISM (Left Axis) Apr 57.3 3 55 1 5 5 Richmond Fed Manufacturing Survey: Current Conditions Composite Index (Right Axis) -1 - -3 35 7 9 11 13 15 17 - Source: Institute for Supply Management & Richmond Fed via Haver Analytics 5
Indexes of Non-Manufacturing Activity 5 Diffusion Index, percent ISM (Left Axis) Apr 5.8 3 55 1 5 5 Richmond Fed Service Sector Index: Revenues (Right Axis) -1 - -3 35 7 9 11 13 15 17 - Source: Institute for Supply Management & Richmond Fed via Haver Analytics
ISM: Business Survey Indexes MANUFACTURING BUSINESS: NON-MANUFACTURING BUSINESS: Mar. Apr. Mar. Apr. Purchasing Managers Index 59.3 57.3 Non-Manufacturing Index 58.8 5.8 Production 1. 57. Business Activity. 59.1 New Orders 1.9 1. New Orders 59.5. Employment 57.3 5. Employment 5. 53. Supplier Deliveries. 1.1 Supplier Deliveries 58.5 5.5 Inventories 55.5 5.9 Inventories 53.5 57. Prices 78.1 79.3 Prices 1.5 1.8 Backlog of Orders 59.8. Backlog of Orders 5.5 5. New Export Orders 58.7 57.7 New Export Orders 58. 1.5 Imports 59.7 57.8 Imports 55. 5.5 DIFFUSION INDEXES: Numbers above 5 percent indicate more favorable responses towards economic activity. Source: Institute for Supply Management via Haver Analytics 7
Manufacturers New Orders Billions Current $ 55 55 Mar 5 5 5 5 1-Month Moving Average 35 35 3 7 9 11 13 15 17 3 Source: Census Bureau via Haver Analytics 8
Core Capital Goods 75 Current $, Billions 75 7 New Orders Mar 7 5 5 55 Shipments 55 5 5 5 5 7 9 11 13 15 17 Notes: Core capital goods are nondefense capital goods excluding aircraft. Source: Census Bureau via Haver Analytics 9
Business Inventory/Sales Ratio 1.7 Percent 1.7 1. Retailers 1. 1.5 1.5 1. Total Business Feb 1. 1.3 1.3 1. Manufacturers 1. 1.1 7 8 9 1 11 1 13 1 15 1 17 18 1.1 Source: Census Bureau via Haver Analytics 3
Nonfarm Payroll Employment 15 Millions of Persons April 18. mil. 15 15 15 1 1 135 135 13 13 15 15 1 7 9 11 13 15 17 1 Source: Bureau of Labor Statistics via Haver Analytics 31
Nonfarm Payroll Employment 3 Quarterly average of monthly changes, thousands of persons 3 1-1 - -3 - Q 1-1 - -3 - -5 - -7 Monthly Change Apr 1 Mar 135 Feb 3 Jan 17 Dec 175-8 7 8 9 1 11 1 13 1 15 1 17 18-5 - -7-8 Notes: White bar on the right is based on an incomplete quarter Source: Bureau of Labor Statistics via Haver Analytics 3
Unemployment Rate 11. Percent 11. 1. 1. 9. 9. 8. 8. 7. 7... 5.. Apr 3.9% FOMC Projection 5.. 3. 7 9 11 13 15 17 19 1 Notes: FOMC projection is the median, range, and central tendency for the Q levels, from the March 18 meeting. Red dots indicate median projections 3. Source: Bureau of Labor Statistics & Board of Governors via Haver Analytics 33
Measures of Labor Utilization 18 Percent 18 15 15 U: U5 + Involuntary Part-Time 1 1 9 Apr 9 U5: U3 + Discouraged + Marginally Attached U3: Official Unemployment Rate 3 199 199 1998 8 1 1 1 1 18 3 Source: Bureau of Labor Statistics via Haver Analytics 3
Non-Employment Index 1 Percent 1 13 13 1 Non-Employment Index Including People Working Part-Time for Economic Reasons 1 11 11 1 1 9 9 8 Non-Employment Index March 8 7 7 199 199 1998 8 1 1 1 1 18 Based on Measuring Resource Utilization in the Labor Market, Andreas Hornstein, Marianna Kudlyak, and Fabian Lange, Federal Reserve Bank of Richmond Economic Quarterly, First Quarter 1. 35
Labor Market Flows.5 Percent.5 Feb.. Hires Rate* 3.5 3.5 3. 3..5 Job Openings Rate**.5.. 1.5 Quits Rate* 1.5 1. 8 1 1 1 1 18 1. Note: *Percent of total employment. **Percent of total employment plus job openings. Source: JOLTS via Haver Analytics 3
Labor Force Participation 8 7 5 Percent of Population 8 7 5 3 1 59 58 Apr 3 1 59 58 57 198 195 195 19 19 198 197 197 198 198 1988 199 199 8 1 1 57 Source: Bureau of Labor Statistics via Haver Analytics 37
Aggregate Weekly Hours Index 11 Index, 7=1 11 11 18 1 1 1 1 98 9 9 9 9 7 9 11 13 15 17 Apr 11 18 1 1 1 1 98 9 9 9 9 Source: Bureau of Labor Statistics via Haver Analytics 38
Average Hourly Earnings. 3.5 3. 1 Month % Change of 3-Month Moving Average Monthly % Change Apr.1% Mar.% Feb.1% Jan.3% Dec.% Apr.%. 3.5 3..5.5.. 1.5 1.5 1. 7 9 11 13 15 17 1. Source: Bureau of Labor Statistics via Haver Analytics 39
Employment Cost Index. Year over Year % Change. 3.5 Benefits Cost 3.5 3. 3. Q1.5 Total Compensation.5.. 1.5 Wages and Salaries 1.5 1. 7 8 9 1 11 1 13 1 15 1 17 18 1. Source: Bureau of Labor Statistics via Haver Analytics
Labor Productivity, Nonfarm Business Year over Year % Change Quarterly Change at Annual Rate 5 Q1 18.7% Q 17.3% Q3 17.% Q 17 1.7% 5 3 Post-War Average (Labor Productivity) 3 1 Q1 1.3% 1-1 7 8 9 1 11 1 13 1 15 1 17 18-1 Source: Bureau of Labor Statistics via Haver Analytics 1
Unit Labor Cost, Nonfarm Business 5 3 Year over Year % Change 5 3 1-1 Q1 1.1% 1-1 - -3 - -5 Quarterly Change at Annual Rate Q1 18.7% Q 17.1% Q3 17 1.% Q 17-1.% Alternate Series - -3 - -5-7 8 9 1 11 1 13 1 15 1 17 18 - Notes: Alternate series is derived from the Employment Cost Index. Source: Bureau of Labor Statistics via Haver Analytics
Gauges of Inflation Expenditure Price Indexes [Percent Change from Previous Month at Annual Rate]: Feb. Mar. YoY % Personal Consumption Expenditures... Core (excludes Food and Energy).5 1.8 1.9 Consumer Price Indexes [Percent Change from Previous Month at Annual Rate]: Feb. Mar. YoY % All Items 1.8 -.8. Core (excludes Food and Energy)..1.1 Producer Price Indexes [Percent Change from Previous Month at Annual Rate]: Feb. Mar. YoY % Finished Goods -3.5..9 Core (excludes Food and Energy). 3. 1.9 Core Intermediate Goods 8. 3.1 3.5 Crude Goods 39.5 -.5.3 Spot Commodity Price Index [Percent Change from Previous Month]: Mar. Apr. YoY % CRB Spot Commodity Price Index -1.5..9 Notes: Core PCE Price Index includes expenditures on food services. Source: BEA, BLS, & Commodity Research Bureau via Haver Analytics 3
Personal Consumption Expenditure Price Index 5 1 Month % Change 5 3 3 % Longer-run Target FOMC Projection 1 Mar % 1-1 -1-7 9 11 13 15 17 19 1 - Notes: FOMC projection is the median, range, and central tendency for Q/Q percent changes, from the March 18 meeting. Red dots indicate median projections. Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics
Core Personal Consumption Expenditure Price Index 5 1 Month % Change 5 3 3 1 month percentage change Mar 1.9% FOMC Projection 1 1 month percentage change -1-1 - 7 9 11 13 15 17 19 - Notes: FOMC projection is the median, range, and central tendency for Q/Q percent changes, from the March 18 meeting. Red dots indicate median projections. Core PCE Price Index excludes expenditures on gasoline and food services. Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 5
Consumer Price Indexes 1 Month % Change 5 All Items 5 3 Mar 3 1 Core CPI 1-1 -1 - February March CPI: All Items.% -.1% Core CPI.%.% -3 7 9 11 13 15 17 - -3 Source: Bureau of Labor Statistics via Haver Analytics
Producer Price Indexes 1 1 1 Month % Change March (percent) All Finished Goods.9% Core Finished Goods 1.9% 1 1 8 8 Core Finished Goods March - - - - All Finished Goods - - -8 7 8 9 1 11 1 13 1 15 1 17 18-8 Source: Bureau of Labor Statistics via Haver Analytics 7
Commodity Price Indexes 7 1 15 9 3-3 -9 1 Month % Change 1 Month % Change PPI Core Intermediate Processed Materials (Left Axis) Commodity Research Bureau Spot Commodity Price Index (Right Axis) April 5 35 5 15 5-5 -15-15 Price Indexes March April PPI Core Intermed. Goods 3.5% --- CRBS Spot Commodities 1.%.9% -1 7 8 9 1 11 1 13 1 15 1 17 18-5 -35 Source: Bureau of Labor Statistics & Commodity Research Bureau via Haver Analytics 8
Crude Oil Prices 1 Current US$/Barrel 1 1 1 1 Spot Price 1 1 1 8 7-May-18 8 Futures Price 199 199 1998 8 1 1 1 1 18 Notes: Spot and Futures Prices are for Brent Crude Oil. Source: Financial Times & New York Mercantile Exchange via Haver Analytics & Bloomberg 9
TIPS Inflation Compensation 3.5 Percent 3.5 3. 3..5 5-Year 5 Years Ahead April.5.. 1.5 1.5 1. 1. 5-Year.5.5.. -.5 9 1 11 1 13 1 15 1 17 18 -.5 Source: Federal Reserve Board /Haver Analytics 5
Federal Reserve System Assets 5, $, Billions,5, Agency Debt: $ Total: $,13 Miscellaneous: $58 3,5 3,,5, Agency Debt: $87 Total: $,85 Miscellaneous: $8 Agency MBS: $8 Agency MBS: $1,75 1,5 1, 5 Treasury Securities: $1,5 Treasury Securities: $, 9/1/1 5//18 Note: Numbers may not add up due to rounding. Source: Board of Governors via Haver Analytics 51
Monetary Policy Instruments 7..5. 5.5 5..5. 3.5 3. Percent 7..5. 5.5 5..5. 3.5 3..5. 1.5 1..5 May Federal Funds Target Rate Primary Credit Rate Interest Rate Paid on Reserves Federal Funds Rate Target Range. 5 7 8 9 1 11 1 13 1 15 1 17 18.5. 1.5 1..5. Source: Board of Governors via Haver Analytics 5
Real Federal Funds Rate Percent 3 3 1 1-1 April -1 - - -3 8 1 1 1 1 18-3 Note: The Real Federal Funds Rate is the difference between the effect Fed Funds rate and the lagged year-over-year change in the core PCE price index. Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 53
FOMC Statement May, 18 Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Recent data suggest that growth of household spending moderated from its strong fourth-quarter pace, while business fixed investment continued to grow strongly. On a 1-month basis, both overall inflation and inflation for items other than food and energy have moved close to percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong. Inflation on a 1-month basis is expected to run near the Committee's symmetric percent objective over the medium term. Risks to the economic outlook appear roughly balanced. In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1-1/ to 1-3/ percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to percent inflation. Source: Board of Governors 5
Continued In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data. Voting for the FOMC monetary policy action were Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles; and John C. Williams. May, 18 Source: Board of Governors 55
Eurodollar Futures Percent 3.5 May, 18 3.5 3 3.5 May 7, 18.5 1.5 1.5 1 1.5.5 17 18 19 1 3 Source: CME Group via Bloomberg 5
Summary of Economic Projections: Federal Funds Rate 5 Percent 5 3 3 1 1 18 19 Longer run Note: Each dot in the chart represents the value of an FOMC participant s judgment of the midpoint of the appropriate target range (or the appropriate target level) for the federal funds rate at the end of the calendar year. Projections made for the March 18 meeting. Source: Board of Governors 57
Monetary Base 5 Current $, Billions 5 April 5 35 35 3 3 5 5 15 15 1 1 5 5 9 1 11 1 13 1 15 1 17 18 Source: Board of Governors via Haver Analytics 58
M 11 1 9 8 7 5 1 Month % Change 11 1 9 8 7 5 3 1 5 7 9 11 13 15 17 March 3 1 Source: Board of Governors via Haver Analytics 59
Money Market Rates.75 Percent.75.5.5. 1.75 1.5 May.5.5. 1.75 1.5 1.5 1..75 Primary Credit Rate 1.5 1..75.5.5. IOER 3-Month T-Bill 3-Month LIBOR Federal Funds Rate Fed Reverse Repo Rate on Treasuries -.5 9 1 11 1 13 1 15 1 17 18.5.5. -.5 Source: Board of Governors & Financial Times via Haver Analytics & Bloomberg
Capital Market Rates 1 9 8 7 Percent 1 9 8 7 5 Corporate BBB Bond Rate 3-Year Conventional Mortgage Rate May 5 3 3 1 Corporate AAA Bond Rate 1-Year Treasury Bond Rate 1 9 1 11 1 13 1 15 1 17 18 Source: BofA Merrill Lynch & Board of Governors via Haver Analytics 1
Treasury Yield Curve 3. Percent 3.5.75 March 19, 18 May, 18 3..5.5. 1.75.75.5.5. 1.75 1.5 1.5 1.5 1.5 M Yrs 3 Yrs 5 Yrs 7 Yrs 1 Yrs Time to Maturity Source: Board of Governors via Haver Analytics
Risk Premium 8 Percent 8 7 7 5 5 1 Year Rolling Average Risk Premium 3 May 3 1 1 9 1 11 1 13 1 15 1 17 18 Note: Risk Premium is defined as the difference in yields between BofA Merrill Lynch BBB and 1-year Treasury. Source: BofA Merrill Lynch & Board of Governors via Haver Analytics 3