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June 2010 Tealbook Book B Tables and Charts


Monetary Policy Alternatives

Table 1: Overview of Alternatives for the June 23 FOMC Statement

April Statement June Alternatives
A B C
Economic Activity
Recent
Developments
has continued
to strengthen
has continued
to strengthen gradually
has continued to strengthen
Labor
Market
is beginning to
improve;
high unemployment;
employers remain
reluctant to add to
payrolls
is improving slowly;
high unemployment;
employers remain
reluctant to add to
payrolls
is improving gradually;
high unemployment;
employers remain
reluctant to add to
payrolls
has continued to
improve
Outlook gradual return to
higher levels of
resource utilization;
recovery likely to be
moderate for a time
gradual return to higher
levels of resource
utilization; near-term
outlook has weakened
somewhat
gradual return to higher
levels of resource
utilization; recovery
likely to be moderate
for a time
sustainable recovery
under way; gradual
return to higher levels
of resource utilization
Financial Conditions
Recent
Developments
bank lending
continues to contract,
financial market
conditions remain
supportive of
economic growth
financial conditions
have become less
supportive of economic
growth on balance; bank
lending continues to
contract
financial conditions
have become less
supportive of economic
growth on balance; bank
lending has continued to
contract in recent
months
financial market
conditions have
become somewhat less
supportive of growth
on balance
Inflation
Recent
Developments
substantial slack is
restraining cost
pressures;
stable inflation
expectations
Prices of energy and other commodities have
declined somewhat in recent months; underlying
inflation has trended lower; substantial slack is
restraining cost pressures; stable inflation
expectations
underlying inflation
has trended lower;
stable inflation
expectations
Outlook likely to be subdued
for some time
likely to be quite
subdued for some time,
remaining below rates
consistent with dual
mandate
likely to be subdued
for some time
subdued rates of
inflation anticipated
Federal Funds Rate Target
Intermeeting
Period
0 to ¼ percent 0 to ¼ percent
Forward
Guidance
economic conditions
are likely to warrant
exceptionally low
levels for an extended
period
economic conditions will
warrant exceptionally
low levels
for an extended period,
until resource utilization
and inflation clearly
moving toward mandate-
consistent levels
economic conditions
are likely to warrant
exceptionally low
levels for an extended
period
economic conditions
are likely to warrant
low levels for some
time
Reinvestment of SOMA Assets
Approach allow agency debt and
MBS to roll off but
roll over maturing
Treasuries (nothing in
statement)
roll over agency MBS as
well as Treasuries;

allow agency debt to roll
off (not in statement)
allow agency debt and
MBS to roll off but roll
over maturing
Treasuries (nothing in
statement)
allow Treasuries as
well as agency debt
and MBS to roll off


Balance Sheet Projections Summary

Alternative A Baseline Alternative C
MBS Securities
Total held June 2010     $1,117 billion $1,117 billion $1,117 billion
Total held Dec. 2012 $1,076 billion $853 billion $853 billion
Agency Debt Securities
Total held June 2010 $165 billion $165 billion $165 billion
Total held Dec. 2012 $77 billion $77 billion $77 billion
Treasury Securities
Total held June 2010 $777 billion $777 billion $777 billion
Total held Dec. 2012 $777 billion $777 billion $513 billion
Total Assets
Peak month June 2010 June 2010 June 2010
Peak amount $2.34 trillion $2.34 trillion $2.34 trillion
December 2020 $1.86 trillion $1.86 trillion $1.86 trillion
Reserve Balances
Peak month February 2010 February 2010 February 2010
Peak amount $1.23 trillion $1.23 trillion $1.23 trillion


Federal Reserve Balance Sheet: End-of-Year Projections -- Baseline Scenario

May 31, 2010 End-of-Year
2010 2012 2014 2016 2018 2020
$ Billions
Total assets 2,340 2,202 1,846 1,386 1,497 1,661 1,856
Selected assets:
Liquidity programs for financial firms 7 15 0 0 0 0 0
Primary, secondary, and seasonal credit 0 0 0 0 0 0 0
Central bank liquidity swaps 7 15 0 0 0 0 0
Lending through other credit facilities 44 44 12 1 0 0 0
Term Asset-Backed Securities Loan Facility (TALF) 44 44 12 1 0 0 0
Support for specific institutions 119 81 40 14 4 0 0
Credit extended to AIG 52 28 9 0 0 0 0
Net portfolio holdings of Maiden Lane LLC,
Maiden Lane II LLC, and Maiden Lane III LLC
68 53 31 14 4 0 0
Securities held outright 2,057 1,960 1,707 1,294 1,422 1,593 1,791
U.S. Treasury securities 777 777 777 777 1,254 1,593 1,791
Agency debt securities 167 147 77 34 10 0 0
Agency mortgage-backed securities 1,114 1,035 853 484 158 0 0
Special drawing rights certificate account 5 5 7 7 7 7 7
Net portfolio holdings of TALF LLC 0 1 1 1 0 0 0
Total other assets 112 102 86 76 72 69 66
Total liabilities 2,284 2,143 1,768 1,283 1,361 1,481 1,617
Selected liabilities:
Federal Reserve notes in circulation 902 918 1,008 1,137 1,252 1,373 1,509
Reverse repurchase agreements 59 59 59 59 59 59 59
Deposits with Federal Reserve Banks 1,305 1,147 686 73 35 35 35
Reserve balances of depository institutions 1,083 939 476 25 25 25 25
U.S. Treasury, general account 20 5 5 5 5 5 5
U.S. Treasury, supplementary financing account 200 200 200 38 0 0 0
Total capital 56 59 78 103 136 180 239

Source. Federal Reserve H.4.1 statistical release and staff calculations.


Growth Rates for the Monetary Base

Date Baseline Alternative A Alternative C
Percent, annual rate
Monthly
Jan-10 -17.8 -17.8 -17.8
Feb-10 72.2 72.2 72.2
Mar-10 -19.7 -19.7 -19.7
Apr-10 -37.7 -37.7 -37.7
May-10 -2.1 -2.1 -2.1
Jun-10 -18.0 -18.0 -17.8
Jul-10 -10.0 -7.2 -9.8
Aug-10 4.2 10.6 -4.6
Sep-10 -20.9 -12.5 -31.0
Oct-10 -16.2 -6.2 -18.7
Nov-10 1.4 11.2 -1.4
Dec-10 -8.8 0.3 -12.5
Quarterly
Q1 2010 14.0 14.0 14.0
Q2 2010 -11.8 -11.8 -11.8
Q3 2010 -8.9 -5.7 -11.8
Q4 2010 -10.2 -1.2 -15.2
Annual - Q4 to Q4
2009 41.5 41.5 41.5
2010 -4.3 -1.3 -6.2
2011 -10.8 -4.5 -14.7
2012 -10.1 -6.7 -19.7
2013 -20.0 -18.3 -13.0

Note. Not seasonally adjusted.


Growth Rates for M2

(Percent, seasonally adjusted annual rate)
Tealbook Forecast *
Monthly Growth Rates
Jan-10 -8.2
Feb-10 7.8
Mar-10 -4.1
Apr-10 -4.5
May-10 11.3
Jun-10 5.7
Jul-10 3.0
Aug-10 2.2
Sep-10 2.1
Oct-10 1.8
Nov-10 1.9
Dec-10 2.1
Quarterly Growth Rates
2010 Q1 -0.2
2010 Q2 1.6
2010 Q3 4.2
2010 Q4 2.0
Annual Growth Rates
2009 5.1
2010 1.9
2011 3.4

* This forecast is consistent with nominal GDP and interest rates in the Tealbook forecast. Actual data through May 2010; projections thereafter.  Return to table

Last update: January 29, 2016