Presentation Materials (PDF)

Pages 165 to 201 of the Transcript

Appendix 1: Materials used by Ms. Mosser

Class II FOMC - Restricted FR

Page 1

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(1)

Title: CDX Index Performance
Series: High Yield, Investment Grade, and Investment Grade Financial CDX Indices
Horizon: September 26, 2008 - April 24, 2009
Description: High yield CDX declines in April.

Source: Markit

Middle panel
(2)

Title: Commercial Bank CDS Spreads
Series: Credit Default Swap Spreads for JP Morgan Chase, Citigroup, Bank of America, and Wells Fargo
Horizon: August 1, 2008 - April 24, 2009
Description: Commercial bank CDS spreads narrow in late April.

Sept. 14: Lehman bankruptcy; Oct. 13: Euro Area Announcement; Oct. 14: Treasury, FDIC and Fed Announcement

Source: Markit

Bottom panel
(3)

Title: European Bank CDS Spreads
Series: Credit Default Swap Spreads for Barclays, RBS, HSBC, Deutsche, Societe Generale, UBS, and CSFB
Horizon: August 1, 2008 - April 24, 2009
Description: Credit default swap spreads begin to narrow.

Source: Bloomberg

Page 2

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(4) Bank Earnings and Capital Ratios

* U.K. banks report semi-annually  Return to table

Source: Bloomberg

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(5)

Title: Bank CDS Term Structures
Series: Credit Default Swap term structures for Bank of America, JP Morgan, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley
Horizon: April 24, 2009
Description: Over 6-month to 30-year terms, the Citigroup curve generally decreases from nearly 750 basis points to about 450 basis points, the JP Morgan curve generally decreases from about 200 basis points to about 150 basis points, and the other curves follow a similar pattern between these two curves.

Source: Markit

Page 3

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(6)

Title: Three-Month Euro-Dollar Implied FX Swap Spread to LIBOR
Series: Three-month Euro-Dollar implied FX swap spread to LIBOR
Horizon: August 1, 2008 - April 24, 2009
Description: Three-month Euro-Dollar implied FX swap spread to LIBOR narrows dramatically.

Source: Federal Reserve Bank of NY

Middle panel
(7)

Title: 10-Year Treasury Price Error to Board Model
Series: 10-year Treasury price error to Board model
Horizon: August 1, 2008 - April 24, 2009
Description: 10-year Treasury price error to Board model declines after the March FOMC meeting.

Mar 18: FOMC

Source: Federal Reserve Bank of NY

Bottom panel
(8)

Title: Jumbo and Conforming Mortgage Rates
Series: Conforming mortgage rate, jumbo mortgage rate, and spread
Horizon: January 1, 2008 - April 24, 2009
Description: Jumbo and conforming mortgage rates decline after the March FOMC meeting.

Nov 25: Agency Coupon and Agency-MBS Purchases; Jan 5: First Agency-MBS Purchase

Source: Bloomberg

Page 4

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(9)

Title: Treasury Yields
Series: Two-Year and Ten-Year Treasury note yields
Horizon: August 1, 2008 - April 24, 2009
Description: Treasury note yields rise after the March FOMC meeting.

Dec 1: Speech discussing Treasury purchases; Jan 28: FOMC; Mar 18: FOMC

Source: Bloomberg

Middle panel
(10)

Title: Implied Volatility in the Treasury and Swaps Market
Series: One-Month Merrill Lynch Swaption Option Volatility Estimate (SMOVE) Index, and Merrill Lynch Option Volatility Estimate (MOVE) Index
Horizon: August 1, 2008 - April 24, 2009
Description: Implied volatility in the Treasury and swaps markets decreases after the March FOMC meeting.

Source: Bloomberg

Bottom panel
(11)

Title: Planned and Executed Treasury Purchases
Series: Planned and executed Fed Treasury purchases
Horizon: As of April 28, 2009
Description: Planned and executed Treasury purchases concentrated in the 2 to 10 year sector.

Source: Federal Reserve Bank of New York

Page 5

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(12)

Title: Daily Outright Agency-MBS Purchases
Series: Daily MBS purchases, moving averages Pre- and Post- March FOMC meeting
Horizon: January 5, 2009 - April 24, 2009
Description: Daily outright agency-MBS purchases increase after the March FOMC meeting.

Source: Federal Reserve Bank of New York

Middle panel
(13)

Title: 30-Year Primary and Secondary Mortgage Rates
Series: Fannie Mae MBS Current Coupon, Freddie Mac Fixed Conforming Mortgage Rate, and Blended Five- and Ten-Year Treasuries
Horizon: January 1, 2008 - April 24, 2009
Description: Freddie fixed conforming mortgage rate decreases and blended five- and ten-year Treasuries increase.

Nov 25: Agency-MBS Purchase Announcement; Jan 5: First MBS Purchase

Source: Bloomberg

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(14)

Title: Purchase Programs
Series: Fed MBS and Longer-term Treasury purchases, MBS and Treasury Issuance Year-to-Date, Remainder of 2009 Estimates for Fed MBS and Treasury Purchases, and Remainder of 2009 Estimates for MBS and Treasury Issuance
Horizon: As of April 24, 2009
Description: Approximate values in billions of dollars: Fed Purchases Year-to-Date: MBS 400, Treasuries 50. Issuance Year-to-Date: MBS 475, Treasuries 550. Remainder of Fed Purchases: MBS 800, Treasuries 200. Remainder of Issuance: MBS 1,300, Issuance 1,050.

Source: FRBNY estimates, U.S. Treasury

Page 6

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(15)

Title: Three-Year AAA-Rated Asset-Backed Security Spreads
Series: Three-Year AAA-Rated Prime Auto, Credit Card, FFELP Student Loan, and Equipment spreads to Libor
Horizon: August 1, 2008 - April 24, 2009
Description: Three-year AAA-rated asset-backed security spreads narrow after first Term Asset-Backed Securities Loan Facility subscription.

Sept. 14: Lehman Brothers Holdings files for bankruptcy; Nov. 25: TALF announced; Dec. 19: Preliminary FAQs Released; Mar. 19: First TALF Subscription

Source: JPMorgan Chase

Middle panel
(16)

Title: ABS Issuance
Series: Asset-backed securities issuance for Autos non-TALF, Autos TALF, Credit Cards non-TALF, and Credit Cards TALF
Horizon: Q1 2007 - April 2009
Description: ABS issuance increases in the first quarter of 2009 and going into the second quarter.

Source: JPMorgan Chase

Bottom panel
(17)

Title: Amount of CPFF Loans Outstanding
Series: Amount of Commercial Paper Funding Facility loans outstanding for commercial paper, FDIC guaranteed commercial paper, and asset-backed commercial paper
Horizon: October 27, 2008 - April 24, 2009
Description: FDIC guaranteed CP and CP decrease.

Source: Federal Reserve Bank of New York

Page 7

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(18)

Title: Balance Sheet Assets by Category
Series: Balance sheet assets categorized by Type 1: Legacy Treasuries, Type 2: Agency-MBS, Agency Debt, Agency Discount Notes, New Long-Term Treasury Purchases, Type 3: Short-Term Liquidity Facilities (TAF, Liquidity Swaps, CPFF, AMLF, MMIFF, PCF, PDCF), Type 4: Lending to Systemically Important Institutions, and Type 5: All Other
Horizon: August 1, 2008 - April 22, 2009
Description: Balance sheet assets continue to expand.

Source: Federal Reserve Bank of New York

Middle panel
(19)

Title: Distribution of Expected Policy Target Rate Among Primary Dealers Prior to April 29 FOMC Meeting
Series: Dealer expectations for policy target rate by quarter, average forecast for policy target by quarter, and market rate for policy expectation by quarter
Horizon: Q2 2009 - Q1 2011
Description: On average, primary dealer economists are forecasting a slower rate of increase in the policy target rate over the next two years than what is currently priced into Eurodollar futures.

Source: Dealer Policy Survey

APPENDIX: Reference Exhibits

Page 8

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(20)

Title: Commercial Bank Equity Prices
Series: Equity prices for JP Morgan Chase, Citigroup, Bank of America, Wells Fargo, and the Standard & Poor's 500 Index
Horizon: August 1, 2008 - April 24, 2009
Description: Commercial bank equity prices increase in April.

Sept. 14: Lehman Brothers Holdings files for bankruptcy

Source: Bloomberg

Middle panel
(21)

Title: European Bank Equity Prices
Series: Equity prices for Barclays, RBS, HSBC, Deutsche Bank, Societe Generale, UBS, and Credit Suisse
Horizon: August 1, 2008 - April 24, 2009
Description: RBS equity price stays relatively stable, while equity prices for Barclays, HSBC, Deutsche Bank, Societe Generale, UBS, and Credit Suisse increase.

Source: Bloomberg

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(22)

Title: Other Financial Equity Prices
Series: Equity prices for Morgan Stanley, Goldman Sachs, Prudential, MetLife, GE Capital, and the Standard & Poor's 500 Index
Horizon: August 1, 2008 - April 24, 2009
Description: Other financial equity prices increase from lows in March.

Sept. 22: Goldman and Morgan Stanley become bank holding companies

Source: Bloomberg

Page 9

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(23)

Title: Global Equities
Series: Index levels for Dow Jones EuroStoxx; Topix, Japan; Morgan Stanley EM Index; and the Standard & Poor's 500 Index
Horizon: August 1, 2008 - April 24, 2009
Description: Global equity indices increase from lows in March.

Source: Bloomberg

Middle panel
(24)

Title: Bank Capital Ratios
Series: Tier 1 and Tangible Common Equity Ratios for eight large banks and fourteen regional banks
Horizon: Q4 2008
Description: Tangible common equity ratio was higher for regional banks than for large banks

Tier 1 Ratio: 8 Large Banks: 11.4%, 14 Regional Banks: 11.2%. Tangible Common Equity Ratio: 8 Large Banks: 3.0%, 14 Regional Banks: 5.9%.

Source: Goldman Sachs

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(25)

Title: Other Financial CDS Spreads
Series: Credit Default Swap spreads for Morgan Stanley, Goldman Sachs, GE, Prudential, and MetLife
Horizon: August 1, 2008 - April 24, 2009
Description: CDS spreads narrow after March highs.

Oct. 13: Euro Area Announcement; Oct. 14: Treasury Capital Purchase Program, FDIC Debt Guarantee, and further details of Federal Reserve CPFF Program Announced

Source: Markit

Page 10

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(26)

Title: Market Rates Corresponding to Liquidity Facilities
Series: One-Month GC Treasury Repo, One-Month Agency-MBS Repo, One-Month USD LIBOR, Three-Month USD LIBOR, Three-Month Financial CP
Horizon: August 1, 2008 - April 23, 2009
Description: Market rates decline slightly.

Source: Federal Reserve Bank of New York

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(27)

Title: Three-Month Commercial Paper Rates
Series: Rates for AA-Rated Non-Financial, AA-Rated Financial, AA-Rated Asset-Backed, and A2/P2 Non-Financial commercial paper
Horizon: August 1, 2008 - April 22, 2009
Description: Commercial paper rates decline slightly.

Sept. 19: AMLF announced; Oct. 7: CPFF announced (effective Oct. 27); Oct. 21: MMIFF announced

Source: Federal Reserve Board

Bottom panel
(28)

Title: Commercial Mortgage-Backed and Leveraged Loan Prices
Series: CMBX Series 2 (2006), CMBX Series 4 (2007), LCDX
Horizon: August 1, 2008 - April 24, 2009
Description: Commercial mortgage-backed and leveraged loan prices increase.

Source: Barclays, JPMorgan Chase

Page 11

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(29)

Title: Mortgage Refinance Applications
Series: Mortgage Application Index and Mortgage Refinance Application Index
Horizon: January 4, 1990 - April 24, 2009
Description: Mortgage applications and refinance applications increase.

Source: Bloomberg

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(30)

Title: Mortgage and Agency Yields and Spreads
Series: Fannie Mae Current Coupon Rate and Freddie Mac 30-Year Fixed Conforming Mortgage Rate
Horizon: January 5, 1990 - April 24, 2009
Description: Fannie CC and Freddie conforming mortgage rates decline.

Source: Bloomberg

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(31)

Title: Dollar Roll Purchases and Sales
Series: Dollar Roll Purchases and Dollar Roll Sales
Horizon: March 2, 2009 - April 22, 2009
Description: Dollar roll purchases and sales decrease from March levels.

Source: Federal Reserve Bank of New York

Page 12

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(32)

Title: Consumer ABS Investors Using TALF Financing
Series: March and April TALF financing from Asset Management, Fund-of-Funds, Hedge Fund, Insurance, Other, Pension Fund, Private Equity, REIT, and Third Party Conduit
Horizon: March 2009 - April 2009
Description: Investors using TALF financing dominated by hedge funds and pension funds in March and hedge funds in April.

Source: Federal Reserve Bank of New York

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(33)

Title: Spread between Fannie Current Coupon and Blended 10-and 5-Year Treasury Yields
Series: Blended Spread, and NBER Recessions
Horizon: January 1988 - March 2009
Description: Spread between Fannie CC and blended Treasury yields spread narrows in March.

Shaded bars indicate periods of business recession as defined by the NBER: July 1990-March 1991, March 2001-November 2001, and December 2007-present (March 2009).

Source: Bloomberg

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(34)

Title: 6-Month and 6-Month Forward Swaption Implied Volatility
Series: 6-Month, 6-Month Forward 10-Year Swaption Implied Volatility, 6-Month, 10-Year Swaption Implied Volatility
Horizon: August 1, 2008 - April 24, 2009
Description: Implied volatility decreases after the March FOMC meeting.

Source: Barclays Capital

Appendix 2: Materials used by Messrs. Carpenter and Burke

Exhibit 1
Balance Sheet Assumptions

This exhibit provides a graphical description of the assumptions underlying the balance sheet projections. There are three groups of line charts: the first is "Federal Reserve liquidity and credit facilities," the second is "Securities," and the third is "Federal Reserve liabilities." Units are billions of dollars.

Top panels
Federal Reserve liquidity and credit facilities

Nine panels.

• Primary credit facility and secondary credit facility (PCF/SCF) is depicted to decline from the December 2008 level of nearly $100 billion to the current level of just under $50 billion, and then to zero at the end of 2011.
• Term auction facility (TAF) credit is depicted to decline from the December 2008 value of approximately $450 billion to the current level of just under $400 billion, and then to zero at the end of 2011.
• Temporary foreign central bank liquidity swaps (Swap lines) are depicted to decline from the December 2008 value of nearly $600 billion to the current level of just under $300 billion, and then to zero by the end of 2010.
• Credit through the Commercial Paper Funding Facility (CPFF) is depicted to decline from the December 2008 level of nearly $350 billion to the current level of just over $200 billion, and then to zero at the end of 2010.
• Loans extended through the first wave of the Term Asset-Backed Securities Loan Facility (TALF v1.0) are depicted with two possible trajectories. Under the scenarios labeled "Baseline" and "Alternative A," loans from the TALF climb from zero to $100 billion at the end of 2009, remain at that level until the early 2012, and then decline to zero by the end of 2012. Under the scenario labeled "Alternative TALF," the loans extended rise to $200 billion at the end of 2009, remain at that level until early 2012, and then decline to zero at the end of 2012.
• For loans extended through subsequent waves of the TALF (TALF 2.0/3.0), credit outstanding rises from zero to $400 billion at the end of 2010 under scenarios labeled "Baseline" and "Alternative A," remains at that level until early 2011, and falls to zero at the end of 2012. Under the scenario labeled "Alternative TALF," these loans rise to $800 billion by the end of 2010, remain at that level until early 2013, and then fall to zero at the end of 2015.
• Credit extended to AIG is depicted to rise from the December 2008 level of $40 billion to its current level of around $45 billion. It remains at the current level until the end of 2009 and then declines fairly steadily to zero by the end of 2014.
• Credit extended through the Asset-Backed Commercial Paper Liquidity Facility (AMLF) and the Primary Dealer Credit Facility (PDCF) are shown in the same chart. The AMLF is depicted to decline from its December 2008 level of over $20 billion to a very low level in the middle of 2009 and then to gradually decline to zero at the end of 2010. The PDCF is depicted to decline sharply from its December 2008 level of nearly $40 billion to $10 billion by the middle of 2009, to remain at that level until the end of 2009, and then to decline steadily to zero by the end of 2010.
• The portfolio holdings of Maiden Lane LLC, Maiden Lane II LLC, and Maiden Lane III LLC are depicted in one graph titled "Maiden Lanes." Maiden Lane is depicted to rise from the December 2008 level of over $25 billion to just under $30 billion at the end of 2009 and then to decline to zero by the end of 2015. The decline is not perfectly linear; Maiden Lane declines to $10 billion at the end of 2011 but does not reach zero for another four years. Maiden Lane II is depicted to decline fairly steadily from around $20 billion to reach zero at the end of 2012. Maiden Lane III is depicted to decline from just over $25 billion to zero at the end of 2011.

Middle panels
Securities

Three panels.

• The first chart presents projections for "Temporary Holdings of Longer-term Treasuries" under two scenarios. Under the baseline, holdings of these securities rise from zero at the end of 2008 to $300 billion by the end of the third quarter of 2009, remain roughly at that level until the end of 2010, and then gradually decline over the forecast period. Under scenarios labeled "Alternative A" and "Alternative TALF," the holdings of Treasuries rise from zero at the end of 2008 to $750 billion at the end of 2009, remain roughly at that level until the end of 2010, and then begin to decline over the remainder of the forecast period.
• Holdings of agency debt are depicted to rise from around $25 billion in December of 2008 to $200 billion by the end of 2009, remain at that level until the end of 2011, and then gradually decline over the remainder of the projection period.
• Holdings of mortgage-backed securities (MBS) are projected to rise steeply from zero in December of 2008 to $1250 billion by the end of 2009 and then immediately begin a steady decline to $600 billion over the remainder of the projection period.

Bottom panels
Federal Reserve liabilities

Two panels.

• The first chart depicts a steady upward trend for "Federal Reserve Notes" from just over $800 billion to almost $1300 billion at the end of the projection period.
• The second graph plots the Treasury General Account (TGA) and the Supplementary Financing Program (SFP). The TGA is depicted to decline from around $100 billion in December of 2008 to around $25 billion early in 2009. The TGA returns to the $100 billion level in mid-2009 and declines to $5 billion at the end of 2009, remaining at that level through the end of the projection period. The SFP is depicted to decline from its December 2008 level of over $250 billion to zero by the end of 2009.

Exhibit 2
Balance Sheet Projections, Baseline

Top panel
Federal Reserve Assets

A line chart presents eight categories of assets: Treasuries, Agency debt, MBS, Repurchase agreements, Swaps, TALF, Other liquidity facilities, and Other assets. Each is depicted by a different color and the chart stacks the colors to so that the share of the total that each asset represents is depicted. The date range for all projections is from 2006 to 2016. Total assets increase from their 2006 level of approximately $800 billion to peak immediately prior to the end of 2009 at a level just under $3500 billion, and then decline fairly steadily until the end of 2015. At that point, total assets again begin to rise, but only very gradually from approximately $1300 billion to $1400 billion by the end of the projection period.

Bottom panel
Federal Reserve Liabilities and Capital

A stacked line chart presents six categories: Federal Reserve notes, Reverse repurchase agreements, Deposits (other than reserve balances), Reserve balances, Other liabilities, and Capital. Total liabilities and capital follow the same path as total assets.

Exhibit 3
Growth of monetary base

Exhibit 4
Balance Sheet Projections, Alternative A

Top panel
Federal Reserve Assets

A stacked line chart shows the same asset categories as in Exhibit 2. Qualitatively, the charts are similar. Total assets peak at a higher level, just under $4000 billion.

Bottom panel
Federal Reserve Liabilities and Capital

A stacked line chart shows the same liability and capital categories as in Exhibit 2. Qualitatively, the charts are similar.

Exhibit 5
Balance Sheet Projections, Alternative TALF

Top panel
Federal Reserve Assets

A stacked line chart shows the same asset categories as in Exhibit 2. Qualitatively, the charts are similar. Total assets peak at just over $4000 billion, and TALF assets represent a noticeably larger portion of total assets in years 2010 through 2015 than under either of the other alternatives.

Bottom panel
Federal Reserve Liabilities and Capital

A stacked line chart shows the same liability and capital categories as in Exhibit 2. Qualitatively, the charts are similar.

Appendix 3: Materials used by Messrs. Stockton and Sheets

Material for Recent Economic Indicators
April 28, 2009

CLASS II FOMC - Restricted (FR)

Exhibit 1
Some Recent Indicators for the U.S. Economy

Top-left panel
Real PCE Goods Ex. Motor Vehicles

Note. Values for February and March are staff estimates.

Top-right panel
Single-Family Housing Starts

Middle-left panel
Light Motor Vehicle Production

Middle-right panel
Manufacturing IP Ex. Motor Vehicles

Note. Three-month percent changes. As shown in the figure, approximate values for February and March 2009 are -18.5 and -17.0, respectively.

Bottom-left panel
Nondefense Capital Goods Ex. Aircraft

Bottom-right panel
Initial Claims for Unemployment Insurance

Note. Four-week moving average. A shaded bar indicates a period of business recession as defined by the National Bureau of Economic Research (NBER): March 2001-November 2001. Another shaded bar indicates the NBER Peak in December 2007.

Exhibit 2
Signs of Bottoming Out?

Top-left panel
Equity Prices

The March 17-18, 2009 FOMC meeting is indicated with a vertical line.

Top-right panel
Commodity Price Developments

* Peak oil price  Return to table

Advanced Foreign Economies

Middle-left panel
Industrial Production

Middle-right panel
Purchasing Managers Indexes*

* Total economy PMIs; Manufacturing PMI for Canada.  Return to text

Emerging Market Economies

Bottom-left panel
Purchasing Managers Indexes*

* Manufacturing sector.  Return to text

Bottom-center panel
Exports

Bottom-right panel
Industrial Production

Appendix 4: Materials used by Mr. Madigan

Material for Briefing on FOMC Participants' Economic Projections
Brian Madigan
April 28, 2009
Corrected

Class I FOMC - Restricted Controlled (FR)

Exhibit 2.
Risks and Uncertainty in Economic Projections

Top-left panel
Uncertainty about GDP Growth

Top-right panel
Risks to GDP Growth

Bottom-left panel
Uncertainty about PCE Inflation

Bottom-right panel
Risks to PCE Inflation

Appendix 5: Materials used by Mr. Stockton

Class II FOMC - RESTRICTED (FR)

Gross Domestic Product

Appendix 6: Materials used by Mr. Madigan

Material for Briefing on Monetary Policy Alternatives
Brian Madigan
April 29, 2009

Class I FOMC - Restricted Controlled (FR)

March FOMC Statement

Information received since the Federal Open Market Committee met in January indicates that the economy continues to contract. Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. Weaker sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. U.S. exports have slumped as a number of major trading partners have also fallen into recession. Although the near-term economic outlook is weak, the Committee anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth.

In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.

In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve's balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months. The Federal Reserve has launched the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses and anticipates that the range of eligible collateral for this facility is likely to be expanded to include other financial assets. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of evolving financial and economic developments.

[Note: In the April FOMC Statement Alternatives, emphasis (italics or strike-through) indicates highlighted or strike-through text respectively in the original document, and strong emphasis (bold) indicates bold red underlined text in the original document.]

April FOMC Statement -- Alternative A

1. Information received since the Federal Open Market Committee met in March indicates that the economy continues to contract, though the pace of contraction appears to be slowing somewhat. Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. [begin strike text] Job losses, lower housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. [end strike text] Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, the Committee anticipates that economic activity will continue to contract in the near term and that the subsequent recovery could be sluggish.
2. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that are most consistent with sustainable economic growth and price stability in the longer term.
3. In these circumstances, the Committee has decided to provide additional monetary stimulus by stepping up its purchases of longer-term securities. To improve conditions in private credit markets, the Federal Reserve has recently begun purchasing longer-term Treasury securities, and the Committee now intends to acquire up to $750 billion of these securities by year-end. The Committee continues to anticipate that the Federal Reserve will purchase up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt over the course of this year. The Committee is prepared to make further adjustments to the timing and overall amounts of these purchases of Treasury, agency, and mortgage-backed securities as appropriate in view of the evolving economic outlook and conditions in financial markets. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The Federal Reserve is facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of financial and economic developments.

April FOMC Statement -- Alternative B

1. Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be slowing somewhat. Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. [begin strike text] Job losses, lower housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. [end strike text] Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time. Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth.
2. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.
3. In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee stands ready to adjust the timing and overall amounts of its purchases of securities as appropriate in view of the evolving economic outlook and conditions in financial markets. The Federal Reserve is facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of financial and economic developments.

April FOMC Statement -- Alternative B'

1. Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be slowing somewhat. Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. [begin strike text] Job losses, lower housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. [end strike text] Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time. Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth.
2. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.
3. In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. As of the end of March, the Federal Reserve had completed purchases of about $310 billion of this $1.75 trillion total, bringing its portfolio of Treasury and agency securities to $780 billion. The Committee expects its purchases to average about $160 billion per month through year-end, equivalent to an average growth rate for this portfolio of around 20 percent per month over the last nine months of the year. The Committee stands ready to adjust the timing and overall amounts of its purchases of securities as appropriate in view of the evolving economic outlook and conditions in financial markets. The Federal Reserve is facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of financial and economic developments.

April FOMC Statement -- Alternative B''

1. The Federal Open Market Committee decided today to continue to increase the Federal Reserve's holdings of longer-term Treasury securities, agency debt, and agency MBS in a manner consistent with our previous announcements. The Committee expects the combined holdings of these securities to increase from current levels at an average rate of about 18 to 20 percent per month over the near term. The Committee stands ready to adjust the timing and overall amounts of its purchases of these securities as appropriate in view of the evolving economic outlook and conditions in financial markets.
2. Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be slowing somewhat. Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. [begin strike text] Job losses, lower housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. [end strike text] Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time. Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth.
3. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.
4. In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to ¼ percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The Federal Reserve is also facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of financial and economic developments.

April FOMC Statement -- Alternative B'''

1. The Federal Open Market Committee decided today to continue to increase the Federal Reserve's holdings of longer-term Treasury securities, agency debt, and agency MBS in a manner consistent with our previous announcements. The Committee expects the combined holdings of these securities to increase from current levels by about $160 billion per month over the near term. The Committee stands ready to adjust the timing and overall amounts of its purchases of these securities as appropriate in view of the evolving economic outlook and conditions in financial markets.
2. Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be slowing somewhat. Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. [begin strike text] Job losses, lower housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. [end strike text] Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time. Nonetheless, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth.
3. In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.
4. In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to ¼ percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The Federal Reserve is also facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of financial and economic developments.

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