national economic indicators, january 3, 2017

National Economic Indicators

March 12, 2018

Table of ContentsGDP Release Date Latest Period Page

Table : Real Gross Domestic Product Feb-28-2018 08:30 Q4-2017 4Real Gross Domestic Product Feb-28-2018 08:30 Q4-2017 5Decomposition of Real Gross Domestic Product Feb-28-2018 08:30 Q4-2017 6

HouseholdsRetail Sales Feb-14-2018 08:30 Jan-2018 7Consumer Spending and Income Mar-01-2018 08:31 Jan-2018 8Sales of Automobiles and Light Trucks Mar-01-2018 15:36 Feb-2018 9Personal Saving Rate Mar-01-2018 08:31 Jan-2018 10Household Net Worth Mar-08-2018 12:23 Q4-2017 11Existing Single-Family Home Sales Feb-21-2018 10:00 Jan-2018 12New Single-Family Home Sales Feb-26-2018 10:00 Jan-2018 13Private Single-Family Housing Starts & Permits Feb-16-2018 08:30 Jan-2018 14Private Multi-Family Housing Starts & Permits Feb-16-2018 08:30 Jan-2018 15

Business InvestmentReal Investment in Nonresidential Structures Feb-28-2018 08:30 Q4-2017 16Real Private Construction Put in Place Mar-01-2018 10:00 Jan-2018 17Real Nonresidential Fixed Investment Feb-28-2018 08:30 Q4-2017 18Real Investment in Equipment Feb-28-2018 08:30 Q4-2017 19Real Investment in Intellectual Property Feb-28-2018 08:30 Q4-2017 20

TradeBalance of International Trade Mar-07-2018 08:31 Jan-2018 21Exchange Value of the USD Feb-27-2018 09:06 Feb-2018 22

Manufacturing Industrial Production Feb-15-2018 09:16 Jan-2018 23Capacity Utilization Rate: Manufacturing Feb-15-2018 09:16 Jan-2018 24Indexes of Manufacturing Activity Mar-01-2018 10:04 Feb-2018 25Indexes of Non-Manufacturing Activity Mar-05-2018 10:10 Feb-2018 26Table : ISM Business Survey Indexes Mar-01-2018 10:04 Feb-2018 27Manufacturers' New Orders Mar-06-2018 10:01 Jan-2018 28Core Capital Goods Mar-06-2018 10:01 Jan-2018 29Business Inventory/Sales Ratios Mar-09-2018 10:01 Jan-2018 30

Table of Contents (continued)Labor Market Release Date Latest Period Page

Nonfarm Payroll Employment Mar-09-2018 08:31 Feb-2018 31, 32Unemployment Rate Measures Mar-09-2018 08:31 Feb-2018 33,34Non-Employment Index Feb-27-2018 16:56 Jan-2018 35Labor Market Flows Feb-06-2018 10:00 Dec-2017 36Labor Force Participation Mar-09-2018 08:31 Feb-2018 37Aggregate Weekly Hours Index Mar-09-2018 08:31 Feb-2018 38Average Hourly Earnings Mar-09-2018 08:31 Feb-2018 39Employment Cost Index Jan-31-2018 08:30 Q4-2017 40Business Labor Productivity Mar-07-2018 08:31 Q4-2017 41Unit Labor Costs, Nonfarm Business Mar-07-2018 08:31 Q4-2017 42

InflationTable : Gauges of Inflation Mar-02-2018 14:40 Feb-2018 43Expenditure Price Indexes Mar-01-2018 08:31 Jan-2018 44, 45Consumer Price Indexes Feb-14-2018 08:31 Jan-2018 46Producer Price Indexes Feb-15-2018 08:35 Jan-2018 47Commodity Price Indexes Mar-02-2018 14:40 Feb-2018 48Crude Oil Prices Mar-12-2018 12-Mar-2018 49TIPS Inflation Compensation Mar-06-2018 15:57 02-Mar-2018 50

Monetary Policy & Financial MarketsFederal Reserve System Assets Mar-08-2018 16:31 07-Mar-2018 51Monetary Policy Instruments Mar-11-2018 11:23 09-Mar-2018 52Real Federal Funds Rate Mar-01-2018 08:31 Feb-2018 53FOMC Statement 54, 55Eurodollar Futures Mar-12-2018 12-Mar-2018 56SEP: Federal Funds Rate 57Monetary Base Mar-08-2018 16:32 28-Feb-2018 58M2 Mar-08-2018 16:32 Jan-2018 59Money Market Rates Mar-11-2018 11:23 09-Mar-2018 60Capital Market Rates Mar-11-2018 11:23 09-Mar-2018 61Treasury Yield Curve Mar-09-2018 16:34 09-Mar-2018 62Risk Premium Mar-11-2018 11:23 09-Mar-2018 63

4

Real Gross Domestic Product

Source: Bureau of Economic Analysis via Haver Analytics

2017Q4 Q1 Q2 Q3 Q4

CHANGE FROM PREVIOUS QUARTER AT COMPOUND ANNUAL RATE [Percent]:

Gross Domestic Product 1.8 1.2 3.1 3.2 2.5

Personal Consumption Expenditures 2.9 1.9 3.3 2.2 3.8

Nonresidential Fixed Investment 0.2 7.2 6.7 4.7 6.6Structures -2.2 14.8 7.0 -7.0 2.5Equipment 1.8 4.4 8.8 10.8 11.8Intellectual Property -0.4 5.7 3.7 5.2 2.4

Residential Fixed Investment 7.1 11.1 -7.3 -4.7 13.0

Exports of Goods & Services -3.8 7.3 3.5 2.1 7.1Imports of Goods & Services 8.1 4.3 1.5 -0.7 14.0

Final Sales to Domestic Purchasers 2.3 2.4 2.7 1.9 4.3

LEVEL IN QUARTER AT SEASONALLY ADJUSTED ANNUAL RATE [Billions of Chained (2005) Dollars]:

Change in Private Inventories 63.1 1.2 5.5 38.5 8.0

Net Exports of Goods & Services -631.1 -622.2 -613.6 -597.5 -652.2

2016

2.9Government Consumption Expenditures & Gross Investment

0.2 -0.6 -0.2 0.7

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Percent change from previous quarter at annual rate

Note: Projection is the median, central tendency, and range from the December 2017 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

Q42.5%

Real Gross Domestic Product

Source: Bureau of Economic Analysis via Haver Analytics & Federal Reserve Board

FOMC Projection

6

Decomposition of Real GDP

Source: Bureau of Economic Analysis and Bureau of Labor Statistics via Haver Analytics

Note: Productivity is calculated as real GDP per employee, from the Household Survey.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018

Employment

Productivity

GDP

10-Year Annual Growth Rates

-14

-10

-6

-2

2

6

10

14

-14

-10

-6

-2

2

6

10

14

2007 2009 2011 2013 2015 2017

12 Month % Change

3 Month Annualized % Change

January3.6%

7

Retail Sales

Source: Census Bureau via Haver Analytics

Note: Retail sales includes food services.

Nov. Dec. Jan.Total 0.8 0.0 -0.3x Gasoline 0.5 0.0 -0.4

Month over Month % Change

-8

-6

-4

-2

0

2

4

6

8

-8

-6

-4

-2

0

2

4

6

8

2007 2009 2011 2013 2015 2017

12 Month % Change

Real Disposable Personal Income

Real Personal Consumption Expenditure

January

8

Consumer Spending and Income


November December JanuaryIncome 0.1 0.2 0.6

Expenditures 0.5 0.2 -0.1

Month over Month % Change

Note: Income has been adjusted to account for temporary fiscal actions in 2008 and 2012-2013.

9

Sales of Automobiles & Light Trucks

Source: Autodata Corporation via Haver Analytics

4

6

8

10

12

14

16

18

20

4

6

8

10

12

14

16

18

20

2007 2009 2011 2013 2015 2017

Millions of Vehicles

Autos and Light TrucksFebruary17.07 mil.

Light Trucks

Autos

10

Personal Saving Rate


0

1

2

3

4

5

6

7

8

9

10

0

1

2

3

4

5

6

7

8

9

10

2007 2009 2011 2013 2015 2017

Percent of disposable personal income

January3.2%

Note: Income has been adjusted to account for temporary events

11

Household Net Worth

Source: Z.1 Financial Accounts of the United States via Haver Analytics

450

500

550

600

650

700

450

500

550

600

650

700

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent of disposable personal income

Q4

2.5

3

3.5

4

4.5

5

5.5

6

6.5

2.5

3

3.5

4

4.5

5

5.5

6

6.5

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

12

Existing Single-Family Home Sales

Source: National Association of Realtors via Haver Analytics

January

0.2

0.4

0.6

0.8

1.0

1.2

1.4

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Millions

1990-99 Average

13

New Single-Family Home Sales


January

14

Private Single-Family Housing Starts & Permits


0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

1990 - 1999 Average Housing Starts

Permits

Starts January

Millions of Starts & Permits, Annual Rate

15

Private Multi-Family Housing Starts & Permits


0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

1990 – 1999 Average Multi-Family Starts

Starts

Permits

January

3-Month Moving Average, Millions of Starts & Permits, Annual Rate

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

35

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

35

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


16

Q4 2.5%

Real Investment in Nonresidential Structures


17

Real Private Construction Put In Place


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.

220

270

320

370

420

470

520

570

620

670

220

270

320

370

420

470

520

570

620

670

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Real Private Residential Construction

Real Private Nonresidential Construction December

2009$, Billions

-30

-25

-20

-15

-10

-5

0

5

10

15

20

-30

-25

-20

-15

-10

-5

0

5

10

15

20

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


18

Q46.6%

Real Nonresidential Fixed Investment


-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

35

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

35

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


19

Q411.8%

Real Investment in Equipment


-8

-6

-4

-2

0

2

4

6

8

10

12

-8

-6

-4

-2

0

2

4

6

8

10

12

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


20

Q42.5%

Real Investment in Intellectual Property


21

Balance of International Trade


Note: Customs Value of Trade Balance

-80

-70

-60

-50

-40

-30

-20

-10

0

-80

-70

-60

-50

-40

-30

-20

-10

0

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Current $, Billions

PetroleumBalance

Trade Balance

Non- PetroleumBalance

January -57 Bil

75

85

95

105

115

125

135

75

85

95

105

115

125

135

1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

22

Exchange Value of the USDIndex, March 1973 = 100

Source: Board of Governors via Haver Analytics

Notes: Measured as the real broad trade-weighted exchange value of the United States Dollar.

January

23

Industrial Production


75

80

85

90

95

100

105

110

115

120

125

130

135

140

75

80

85

90

95

100

105

110

115

120

125

130

135

140

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Mining

Overall

Manufacturing

January

2012 = 100

24

Capacity Utilization Rate: Manufacturing


62

64

66

68

70

72

74

76

78

80

82

62

64

66

68

70

72

74

76

78

80

82

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Percent

January76.2%

25

Indexes of Manufacturing Activity

Source: Institute for Supply Management & Richmond Fed via Haver Analytics

-40

-30

-20

-10

0

10

20

30

40

35

40

45

50

55

60

65

2007 2009 2011 2013 2015 2017

Diffusion Index, percent

ISM (Left Axis)

Richmond Fed Manufacturing Survey: Current

Conditions Composite Index (Right Axis)

February60.8

26

Indexes of Non-Manufacturing Activity

Source: Institute for Supply Management & Richmond Fed via Haver Analytics

-40

-30

-20

-10

0

10

20

30

40

35

40

45

50

55

60

65

2007 2009 2011 2013 2015 2017

Diffusion Index, percent

ISM (Left Axis)

Richmond Fed Service Sector

Index: Revenues (Right Axis)

Feb 59.5

Jan. Feb. Jan. Feb.

Purchasing Managers Index 59.1 60.8 Non-Manufacturing Index 59.9 59.5

Production 64.5 62.0 Business Activity 59.8 62.8

New Orders 65.4 64.2 New Orders 62.7 64.8

Employment 54.2 59.7 Employment 61.6 55.0

Supplier Deliveries 59.1 61.1 Supplier Deliveries 55.5 55.5

Inventories 52.3 56.7 Inventories 49.0 53.5

Prices 72.7 74.2 Prices 61.9 61.0

Backlog of Orders 56.2 59.8 Backlog of Orders 50.5 56.0

New Export Orders 59.8 62.8 New Export Orders 58.0 59.5

Imports 58.4 60.5 Imports 54.0 50.0

MANUFACTURING BUSINESS: NON-MANUFACTURING BUSINESS:

27DIFFUSION INDEXES: Numbers above 50 percent indicate more favorable responses towards economic activity.

ISM: Business Survey Indexes

Source: Institute for Supply Management via Haver Analytics

300

350

400

450

500

550

600

300

350

400

450

500

550

600

2007 2009 2011 2013 2015 2017

Jan

28

Manufacturers’ New Orders


45

50

55

60

65

70

75

45

50

55

60

65

70

75

2007 2009 2011 2013 2015 2017

New Orders

Shipments

Jan

29

Core Capital Goods

Notes: Core capital goods are nondefense capital goods excluding aircraft.


30

Business Inventory/Sales Ratio


1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.1

1.2

1.3

1.4

1.5

1.6

1.7

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Percent

Total Business

Retailers

Manufacturers

Jan

31

Nonfarm Payroll Employment

Source: Bureau of Labor Statistics via Haver Analytics

120

125

130

135

140

145

150

120

125

130

135

140

145

150

2007 2009 2011 2013 2015 2017

Millions of Persons

February148.17 mil.

32

Nonfarm Payroll Employment


-800

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

400

-800

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

400

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Quarterly average of monthly changes, thousands of persons

Q1

Feb 313Jan 239Dec 175Nov 216Oct 271

Monthly Change

Notes: White bar on the right is based on an incomplete quarter

33

Unemployment Rate

Source: Bureau of Labor Statistics & Board of Governors via Haver Analytics

Notes: FOMC projection is the median, range, and central tendency for the Q4 levels, from the December 2017 meeting. Red dots indicate median projections

3.5

4.5

5.5

6.5

7.5

8.5

9.5

10.5

3.5

4.5

5.5

6.5

7.5

8.5

9.5

10.5

2007 2009 2011 2013 2015 2017 2019

Percent

Feb 4.1%

FOMC Projection

34

Measures of Labor Utilization


3

6

9

12

15

18

3

6

9

12

15

18

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent

U3: Official Unemployment Rate

U6: U5 + Involuntary Part-Time

U5: U3 + Discouraged + Marginally Attached

Feb

6

7

8

9

10

11

12

13

14

6

7

8

9

10

11

12

13

14

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Non-Employment Index Including People Working Part-Time for Economic Reasons

Non-Employment Index

Percent

January

35

Non-Employment Index

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 2014.

36

Labor Market Flows

Source: JOLTS via Haver Analytics

Note: *Percent of total employment. **Percent of total employment plus job openings.

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent

Hires Rate*

Job Openings Rate**

Quits Rate*

December

37

Labor Force Participation


57

58

59

60

61

62

63

64

65

66

67

68

57

58

59

60

61

62

63

64

65

66

67

68

1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

Feb

Percent of Population

38

Aggregate Weekly Hours Index


90

92

94

96

98

100

102

104

106

108

110

90

92

94

96

98

100

102

104

106

108

110

2007 2009 2011 2013 2015 2017

Feb

Index, 2007=100

39

Average Hourly Earnings


1.0

1.5

2.0

2.5

3.0

3.5

4.0

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2007 2009 2011 2013 2015 2017

Feb 2.7%

12 Month % Change of 3-Month Moving Average

Feb 0.1%Jan 0.3%Dec 0.4%Nov 0.3%Oct -0.2%

Monthly % Change

Employment Cost Index

40Source: Bureau of Labor Statistics via Haver Analytics

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Year over Year % Change

Benefits Cost

Wages and Salaries

Total Compensation

Q4

-1

0

1

2

3

4

5

6

-1

0

1

2

3

4

5

6

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


Post-War Average(Labor Productivity)

41

Quarterly Change at Annual Rate

Labor Productivity, Nonfarm Business


Q4 17 0.0%Q3 17 2.6%Q2 17 1.7%Q1 17 0.2%

Q41.1%

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


Alternate Series

Q4 1.7%

42

Quarterly Change at Annual Rate

Unit Labor Cost, Nonfarm Business

Notes: Alternate series is derived from the Employment Cost Index.


Q4 17 2.5%Q3 17 1.0%Q2 17 -1.2%Q1 17 4.8%

Expenditure Price Indexes [Percent Change from Previous Month at Annual Rate]:

Dec. Jan. YoY %Personal Consumption Expenditures 1.8 4.5 1.7

Core (excludes Food and Energy) 2.0 3.3 1.5

Consumer Price Indexes [Percent Change from Previous Month at Annual Rate]:

Dec. Jan. YoY %All Items 2.4 6.7 2.1

Core (excludes Food and Energy) 2.9 4.3 1.8

Producer Price Indexes [Percent Change from Previous Month at Annual Rate]:

Dec. Jan. YoY %Finished Goods -0.6 8.7 3.2

Core (excludes Food and Energy) 0.6 1.2 2.0Core Intermediate Goods 5.0 3.7 3.8

Crude Goods 24.7 11.5 2.6

Spot Commodity Price Index Jan. Feb. YoY %

CRB Spot Commodity Price Index 2.5 0.0 2.5

[Percent Change from Previous Month]:

43

Gauges of Inflation

Source: BEA, BLS, & Commodity Research Bureau via Haver Analytics

Notes: Core PCE Price Index includes expenditures on food services.

44

Personal Consumption Expenditure Price Index

Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics

Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the December 2017 meeting. Red dots indicate median projections.

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

2007 2009 2011 2013 2015 2017 2019

12 Month % Change

2% Longer-run TargetFOMC Projection

January1.7%

45

Core Personal Consumption Expenditure Price Index


Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the December 2017 meeting. Red dots indicate median projections. Core PCE Price Index excludes expenditures on gasoline and food services.

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

2007 2009 2011 2013 2015 2017 2019

12 Month % Change

12 month percentage change

FOMC ProjectionJanuary

1.5%

6 month percentage change

-3

-2

-1

0

1

2

3

4

5

6

-3

-2

-1

0

1

2

3

4

5

6

2007 2009 2011 2013 2015 2017

Core CPI

All Items

12 Month % Change

January

46

Consumer Price Indexes


December JanuaryCPI: All Items 0.2% 0.5%Core CPI 0.2% 0.3%

47

Producer Price Indexes


-8

-6

-4

-2

0

2

4

6

8

10

12

-8

-6

-4

-2

0

2

4

6

8

10

12

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

All Finished Goods

Core Finished Goods

January

12 Month % Change

All Finished Goods 3.2%Core Finished Goods 2.0%

January (percent)

48

Commodity Price Indexes

Source: Bureau of Labor Statistics & Commodity Research Bureau via Haver Analytics

-35

-25

-15

-5

5

15

25

35

45

-21

-15

-9

-3

3

9

15

21

27

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Commodity Research Bureau Spot Commodity

Price Index(Right Axis)

PPI Core Intermediate

Processed Materials(Left Axis)

12 Month % Change 12 Month % Change

February

Price Indexes January FebruaryPPI Core Intermed. Goods 3.8% ---CRBS Spot Commodities 2.3% 2.5%

0

20

40

60

80

100

120

140

160

0

20

40

60

80

100

120

140

160

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Futures Price

Current US$/Barrel

Spot Price

12-Mar-18

49

Crude Oil Prices

Source: Financial Times & New York Mercantile Exchange via Haver Analytics & Bloomberg

Notes: Spot and Futures Prices are for Brent Crude Oil.

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

5-Year5 Years Ahead

5-Year

Percent

March 2

50

TIPS Inflation Compensation

Source: Federal Reserve Board /Haver Analytics

51

Federal Reserve System Assets


Note: Numbers may not add up due to rounding.

Treasury Securities:$1,652

Treasury Securities:$2,424

Agency MBS: $844

Agency MBS: $1,760

Agency Debt:$87

Agency Debt:$4

Miscellaneous: $282

Miscellaneous: $254

Total: $2,865

Total: $4,442

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

9/12/2012 3/7/2018

$, Billions

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Federal Funds Target Rate

Primary Credit Rate

Federal Funds Rate Target Range

Interest Rate Paid on Reserves

Percent

March 9

52

Monetary Policy Instruments


-3

-2

-1

0

1

2

3

4

-3

-2

-1

0

1

2

3

4

2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent

February

53

Real Federal Funds Rate


Note: The Real Federal Funds Rate is the difference between the effect Fed Funds rate and the lagged year-over-yearchange in the core PCE price index.

54

FOMC Statement

Information received since the Federal Open Market Committee met in December indicates that the labor market has continued tostrengthen and that economic activity has been rising at a solid rate. Gains in employment, household spending, and business fixed investment have been solid, and the unemployment rate has stayed low. On a 12-month basis, both overall inflation and inflation for items other than food and energy have continued to run below 2 percent. Market-based measures of inflation compensation have increased in recent months but 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 and labor market conditions will remain strong. Inflation on a 12-month basis is expected to move up this year and to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

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 1-1/4 to 1-1/2 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

Source: Board of Governors

January 31, 2018

55

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 2 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 Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Jerome H. Powell; Randal K. Quarles; and John C. Williams

Source: Board of Governors January 31, 2018

January 31, 2018

March 12, 2018

0

0.5

1

1.5

2

2.5

3

3.5

4

0

0.5

1

1.5

2

2.5

3

3.5

4

2017 2018 2019 2020 2021 2022 2023 2024

Percent

56

Eurodollar Futures

Source: CME Group via Bloomberg

57

Summary of Economic Projections: Federal Funds Rate

Source: Board of Governors

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 December 2017 meeting.

0

1

2

3

4

5

0

1

2

3

4

5

2017 2018 2019 Longer run

Percent

2020

0

500

1000

1500

2000

2500

3000

3500

4000

4500

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Current $, Billions

February 28

58

Monetary Base


0

1

2

3

4

5

6

7

8

9

10

11

0

1

2

3

4

5

6

7

8

9

10

11

2005 2007 2009 2011 2013 2015 2017

12 Month % Change

January

59

M2


-0.25

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

-0.25

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

IOER

Federal Funds Rate

Primary Credit Rate

3-Month LIBOR

3-Month T-Bill

Fed Reverse Repo Rateon Treasuries

Percent

March 9

60

Money Market Rates

Source: Board of Governors & Financial Times via Haver Analytics & Bloomberg

0

1

2

3

4

5

6

7

8

9

10

0

1

2

3

4

5

6

7

8

9

10

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Corporate BBBBond Rate

Corporate AAABond Rate

30-YearConventional

Mortgage Rate

10-Year TreasuryBond Rate

Percent

March 9

61

Capital Market Rates

Source: BofA Merrill Lynch & Board of Governors via Haver Analytics

62

Treasury Yield Curve


1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

1.25

1.50

1.75

2.00

2.25

2.50

2.75

3.00

6 M 2 Yrs 3 Yrs 5 Yrs 7 Yrs 10 Yrs

January 29, 2018 March 09, 2018

Percent

Time to Maturity

0

1

2

3

4

5

6

7

8

0

1

2

3

4

5

6

7

8

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

10 Year Rolling Average Risk Premium

Percent

March 9

63

Risk Premium

Source: BofA Merrill Lynch & Board of Governors via Haver Analytics

Note: Risk Premium is defined as the difference in yields between BofA Merrill Lynch BBB and 10-year Treasury.

national economic indicators, january 3, 2017

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