Accessible Material

Skip heading

December 2011 Tealbook B Tables and Charts


Monetary Policy Alternatives

Table 1: Overview of Policy Alternatives for the December 13 FOMC Statement

Selected
Elements
November
Statement
December Alternatives
A B C
Balance Sheet
MEP $400 billion;
complete by
end of June 2012
unchanged cut to $200 billion;
complete by
end of March 2012
Additional
Purchases
none $500 billion of agency MBS
by end of December 2012
OR
$40 billion of agency MBS per month;
will adjust this program
as needed to foster objectives
none
Reinvestment
Policies
payments of agency
debt and MBS into
agency MBS;
Treasuries into
Treasuries
unchanged
Forward Rate Guidance
First Option at least through
mid-2013
at least through
end of 2014
unchanged at least through
2012
Second Option none at least through end of 2014 and
projections of unemployment and
inflation rates at end of 2014
none
Future Policy Action
Approach assess
economic outlook;
monitor economic outlook and financial developments; unchanged
prepared to
employ its tools
to promote recovery
unchanged prepared to
employ its tools
as appropriate
to promote objectives


[Note: In the December 2011 FOMC Statement Alternatives, emphasis (strike-through) indicates strike-through text in the original document, and strong emphasis (bold) indicates bold red underlined text in the original document.]

December FOMC Statement--Alternative A

December FOMC Statement--Alternative B

December FOMC Statement--Alternative C


Long-Run Projections of the Balance Sheet and Monetary Base

Figure: Total Assets

Line chart, 2006 to 2020. Unit is billions of dollars. Data are monthly. There are four series, "Alt A," "Alt B," "Alt C," and "October Alt B." The series begin at about 750 and remain about constant until late 2008. They generally increase together to about 2250 in early 2009 then generally decrease together to about 1800 in early 2009. They generally increase together to about 3000 in mid-2011. Alt A generally increases to about 3400 in early 2013. It generally decreases to about 1750 in early 2018 then generally increases ending at about 2000. Alt B remains about constant until mid-2014 then generally decreases to about 1500 in mid-2017. It generally increases ending in about 2000. Alt C generally decreases to about 1500 in early 2016 then generally increases ending at about 2000. October Alt B remains about constant until early 2014 then generally decreases to about 1500 in mid-2017. It generally increases ending at about 2000.


Growth Rates for the Monetary Base

Date Alternative B Alternative A Alternative C Memo:
October
Tealbook
Percent, annual rate
Monthly
Jan-11 23.3 23.3 23.3 23.3
Feb-11 57.6 57.6 57.6 57.6
Mar-11 97.8 97.8 97.8 97.8
Apr-11 74.4 74.4 74.4 74.4
May-11 42.1 42.1 42.1 42.1
Jun-11 35.9 35.9 35.9 35.9
Jul-11 27.0 27.0 27.0 27.0
Aug-11 2.0 2.0 2.0 2.0
Sep-11 -10.6 -10.6 -10.6 -10.5
Oct-11 -4.5 -4.5 -4.5 1.5
Nov-11 -8.0 -8.0 -8.0 10.6
Dec-11 12.1 11.9 11.5 0.8
Jan-12 15.1 16.5 14.0 -8.8
Feb-12 10.3 18.8 9.2 9.8
Mar-12 4.4 19.8 3.4 16.6
Apr-12 -29.5 -12.1 -31.2 3.5
May-12 0.9 18.0 -1.4 3.3
Jun-12 15.4 31.6 13.2 3.2
Quarterly
2011 Q1 36.8 36.8 36.8 36.8
2011 Q2 69.3 69.3 69.3 69.4
2011 Q3 21.0 21.0 21.0 21.1
2011 Q4 -4.1 -4.1 -4.1 0.8
2012 Q1 9.7 13.8 8.8 2.4
2012 Q2 -5.9 10.0 -7.6 7.1
2012 Q3 4.7 21.2 -2.2 2.0
2012 Q4 5.4 20.7 -4.9 0.8
Annual - Q4 to Q4
2010 0.9 0.9 0.9 0.9
2011 33.5 33.5 33.5 35.2
2012 3.5 17.4 -1.5 3.1
2013 0.5 4.7 -10.8 -0.8
2014 -4.8 -4.5 -14.6 -6.1
2015 -11.3 -11.9 -15.8 -12.2
2016 -19.6 -20.1 -11.7 -19.9

Note: Not seasonally adjusted.


Growth Rates for M2

(Percent, seasonally adjusted annual rate)
Tealbook Forecast *
Monthly Growth Rates
Apr-11 4.3
May-11 6.9
Jun-11 11.6
Jul-11 26.6
Aug-11 30.0
Sep-11 6.0
Oct-11 3.7
Nov-11 4.8
Dec-11 5.0
Jan-12 3.3
Feb-12 3.3
Mar-12 3.3
Quarterly Growth Rates
2011 Q2 6.0
2011 Q3 19.9
2011 Q4 7.5
2012 Q1 3.8
Annual Growth Rates
2010 3.2
2011 9.9
2012 3.9
2013 3.1

* This forecast is consistent with nominal GDP and interest rates in the Tealbook forecast. Actual data through November 2011; projections thereafter.  Return to table


[Note: In the December 2011 FOMC Directive Alternatives, emphasis (strike-through) indicates strike-through text in the original document, and strong emphasis (bold) indicates bold red underlined text in the original document.]

December 2011 FOMC Directive -- Alternative A

The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to ¼ percent. The Committee directs the Desk to continue the maturity extension program it began in September to purchase, by the end of June 2012, Treasury securities with remaining maturities of approximately 6 years to 30 years with a total face value of $400 billion, and to sell Treasury securities with remaining maturities of 3 years or less with a total face value of $400 billion. [ The Committee also directs the Desk to execute purchases of agency mortgage-backed securities in order to increase the total face value of domestic securities held in the System Open Market Account to approximately $3.1 trillion by the end of December 2012. | The Committee also directs the Desk to execute purchases of agency mortgage-backed securities in order to increase the total face value of domestic securities held in the System Open Market Account by approximately $40 billion per month. ] The Committee also directs the Desk to maintain its existing policies of rolling over maturing Treasury securities into new issues and of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities in order to maintain the total face value of domestic securities at approximately $2.6 trillion. The Committee directs the Desk to engage in dollar roll transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System's balance sheet that could affect the attainment over time of the Committee's objectives of maximum employment and price stability.

December 2011 FOMC Directive -- Alternative B

The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to ¼ percent. The Committee directs the Desk to continue the maturity extension program it began in September to purchase, by the end of June 2012, Treasury securities with remaining maturities of approximately 6 years to 30 years with a total face value of $400 billion, and to sell Treasury securities with remaining maturities of 3 years or less with a total face value of $400 billion. The Committee also directs the Desk to maintain its existing policies of rolling over maturing Treasury securities into new issues and of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities in order to maintain the total face value of domestic securities at approximately $2.6 trillion. The Committee directs the Desk to engage in dollar roll transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System's balance sheet that could affect the attainment over time of the Committee's objectives of maximum employment and price stability.

December 2011 FOMC Directive -- Alternative C

The Federal Open Market Committee seeks monetary and financial conditions that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to ¼ percent. The Committee directs the Desk to continue modify the maturity extension program it began in September so as to purchase, by the end of June March 2012, Treasury securities with remaining maturities of approximately 6 years to 30 years with a total face value of $400 $200 billion, and to sell Treasury securities with remaining maturities of 3 years or less with a total face value of $400 $200 billion. The Committee also directs the Desk to maintain its existing policies of rolling over maturing Treasury securities into new issues and of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities in order to maintain the total face value of domestic securities at approximately $2.6 trillion. The Committee directs the Desk to engage in dollar roll transactions as necessary to facilitate settlement of the Federal Reserve's agency MBS transactions. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System's balance sheet that could affect the attainment over time of the Committee's objectives of maximum employment and price stability.


† Note: Data values for figures are rounded and may not sum to totals.  Return to text

Last update: February 3, 2017