Accessible Material
September 2012 Tealbook B Tables and Charts†
Monetary Policy Strategies
Policy Rules and the Staff Projection
Near-Term Prescriptions of Selected Policy Rules
Constrained Policy | Unconstrained Policy | |||
---|---|---|---|---|
2012Q4 | 2013Q1 | 2012Q4 | 2013Q1 | |
Taylor (1993) rule | 1.53 | 1.30 | 1.53 | 1.30 |
Previous Tealbook | 1.55 | 1.23 | 1.55 | 1.23 |
Taylor (1999) rule | 0.13 | 0.13 | -0.76 | -0.98 |
Previous Tealbook | 0.13 | 0.13 | -0.84 | -1.21 |
Inertial Taylor (1999) rule | 0.13 | 0.13 | 0.01 | -0.14 |
Previous Tealbook Outlook | 0.13 | 0.13 | -0.01 | -0.19 |
Outcome-based rule | 0.13 | 0.13 | -0.02 | -0.23 |
Previous Tealbook Outlook | 0.13 | 0.13 | -0.02 | -0.31 |
First-difference rule | 0.13 | 0.13 | 0.03 | 0.04 |
Previous Tealbook Outlook | 0.13 | 0.13 | -0.09 | -0.21 |
Nominal income targeting rule | 0.13 | 0.13 | -0.41 | -0.86 |
Previous Tealbook Outlook | 0.13 | 0.13 | -0.52 | -1.06 |
Memo: Equilibrium and Actual Real Federal Funds Rate
Current Tealbook | Previous Tealbook | |
---|---|---|
Tealbook-consistent FRB/US $$ r^*$$ estimate | -2.39 | -2.79 |
Actual real federal funds rate | -1.67 | -1.73 |
Key Elements of the Staff Projection
Figure: GDP Gap
Line chart, by percent, 2012 to 2020. There are two series, "Current Tealbook" and "Previous Tealbook." The current Tealbook series begins at about -4.5 in 2012:Q1 and increases to end at about 0 in 2020:Q4. The previous Tealbook series begins at about -4.75 in 2012:Q1 and increases to end at about 0 in 2020:Q4.
Figure: PCE Prices ex. Food and Energy
Line chart, by four-quarter percent change, 2012 to 2020. There are two series, "Current Tealbook" and "Previous Tealbook." The current Tealbook series begins at about 1.9 in 2012:Q1 and increases to end at about 2.0 in 2020:Q4. The previous Tealbook series begins at about 1.9 n 2012:Q1 and increases to end at about 2.0 in 2020:Q4.
Note: For rules which have the lagged policy rate as a right-hand-side variable, the lines denoted "Previous Tealbook Outlook" report rule prescriptions based on the previous Tealbook's staff outlook, but jumping off from the average value for the policy rate thus far in the quarter.
Policy Rule Simulations
Figure: Nominal Federal Funds Rate
Line chart, by percent, 2012 to 2020. There are six series, "Taylor (1993) rule," "Taylor (1999) rule," "Inertial Taylor (1999) rule," "Nominal income targeting rule," "First-difference rule," and "Tealbook baseline." All six series begins at about 0 in 2012:Q1. The Taylor (1993) rule series generally increases to about 1.5 in 2012:Q4. It generally increases to end about 4.25 at 2020:Q4. The other five series remain constant following each other until increasing to end at about 4.25 for the Taylor (1999) rule and Tealbook baseline in 2020:Q4. The inertial Taylor (1999) rule and nominal income targeting rule ends at about 4.75 in 2020:Q4 and the First-difference rule at about 4 in 2020:Q4.
Figure: Real Federal Funds Rate
Line chart, by percent, 2012 to 2020. There are six series, "Taylor (1993) rule," "Taylor (1999) rule," "Inertial Taylor (1999) rule," "Nominal income targeting rule," "First-difference rule," and "Tealbook baseline." All six series begins at about -1.75 in 2012:Q1. The Taylor (1993) rule series generally increases to about 0 in 2012:Q4. It generally increases to end about 2.25 at 2020:Q4 along with the Taylor (1999) rule, the Inertial Taylor (1999) rule, and the First-difference rule. The other two series remain constant following each other until increasing to end at about 2.5 for and Tealbook baseline in 2020:Q4.
Figure: Unemployment Rate
Line chart, by percent, 2012 to 2020. There are six series, "Taylor (1993) rule," "Taylor (1999) rule," "Inertial Taylor (1999) rule," "Nominal income targeting rule," "First-difference rule," and "Tealbook baseline." All six series begins at about 8.25 in 2012:Q1. They follow each other to generally decrease to end at about 5.25 for the nominal income targeting rule in 2020:Q4. The other four series ends at about 5.5 in 2020:Q4.
Figure: PCE Inflation
Line chart, by percent, 2012 to 2020. Data are four-quarter averages. There is a horizontal line at 2. There are six series, "Taylor (1993) rule," "Taylor (1999) rule," "Inertial Taylor (1999) rule," "Nominal income targeting rule," "First-difference rule," and "Tealbook baseline." Taylor (1993) rule begins in 2012 at about 2.4 and generally decrease to about 1.4 by 2013. It then generally increases to end at about 1.99 by 2020. Taylor (1999) rule begins in 2012 at about 2.4 and generally decreases to about 1.5 by 2013. It then generally increases to about 2.1 by 2020. Inertial Taylor (1999) rule begins in 2012 at about 2.4 and generally decreases to about 1.7 by 2013. It then generally increases to about 2.4 by 2020. Nominal income targeting rule begins in 2012 at about 2.4 and generally decreases to about 1.7 by 2013. It then generally increases to about 2.1 by 2020. First-difference rule begins in 2012 at about 2.4 and generally decreases to about 1.4 by 2013. It then generally increases to end at about 1.8 by 2020. Tealbook baseline begins in 2012 at about 2.4 and generally decreases to about 1.5 by 2013. It generally increases to end at about 2.0 in 2020.
Note: The policy rule simulations in this exhibit are based on rules that respond to core inflation. This choice of rule specification was made in light of the tendency for current and near-term core inflation rates to outperform headline inflation rates as predictors of the medium-term behavior of headline inflation.
Constrained vs. Unconstrained Optimal Control Policy
Figure: Nominal Federal Funds Rate
Line chart, by percent 2012 to 2020. There are four series, "Current Tealbook: Constrained," "Previous Tealbook: Constrained," "Current Tealbook: Unconstrained," and "Tealbook baseline." Current Tealbook: Constrained begins in 2012 at about 0.1 and remains relatively constant here until 2014. It generally increases to end at about 4.1 in 2020. Previous Tealbook: Constrained generally follows the same exact path as Current Tealbook: Constrained, except it ends at about 5 in 2020. Current Tealbook: Unconstrained begins in 2012 at about 0.1 and generally decreases to about -2 by 2013. It then generally increases to end at about 4.3 by 2020. Tealbook baseline begins in 2012 at about 0.1 where it remains relatively constant until about 2013. It then generally increases to end about 4.25 by 2020.
Figure: Real Federal Funds Rate
Line chart, by percent 2012 to 2020. There are four series, "Current Tealbook: Constrained," "Previous Tealbook: Constrained," "Current Tealbook: Unconstrained," and "Tealbook baseline." Current Tealbook: Constrained begins in 2012 at about -1.95 and generally decreases to about -2 by 2016. It then generally increases to end at about 2.9 by 2020. Previous Tealbook: Constrained generally follows the same path as Current Tealbook: Constrained. Current Tealbook: Unconstrained begins in 2012 at about -1.5 and generally decreases to about -4.5 by 2013. It then generally increases to end at about 2.5 by 2020. Tealbook baseline begins in 2012 at about -1.95 and generally increases to end at about 2.5 by 2020.
Figure: Unemployment Rate
Line chart, by percent, 2012 to 2020. There are four series, "Current Tealbook: Constrained," "Previous Tealbook: Constrained," "Current Tealbook: Unconstrained," and "Tealbook baseline." All four series begin at about 8.25 in 2012. They follow about the same path and generally decrease to end together at about 5.5 in 2020.
Figure: PCE Inflation
Line chart, by percent, 2012 to 2020. Data are four-quarter averages. There is a horizontal line at 2. There are four series, "Current Tealbook: Constrained," "Previous Tealbook: Constrained," "Current Tealbook: Unconstrained," and "Tealbook baseline." All four series begin at about 2.3 in 2012. Current Tealbook: Constrained decreases to about 1.3 in 2013. It then generally increases to end at about 2.1 in 2020. Previous Tealbook: Constrained remains constant and generally decreases to end at about 2.0 in 2020. Current Tealbook: Unconstrained decreases to about 1.3 in 2013. It then generally increases to end at about 2.0 in 2020. Tealbook baseline decreases to about 1.0 in 2013. It then generally increases to end at about 2.0 in 2020.
Optimal Control Policy: Commitment vs. Discretion
Figure: Nominal Federal Funds Rate
Line chart, by percent 2012 to 2020. There are four series, "Optimal policy: Commitment, constrained," "Optimal policy: Discretion, constrained," "Optimal policy: Discretion, constrained, (Previous Tealbook)," and "Optimal policy: Discretion, unconstrained." Optimal policy: Commitment, constrained begins in 2012 at about 0.1 and remains relatively constant here until 2014. It generally increases to end at about 4.9 in 2020. Optimal policy: Discretion, constrained generally follows the same exact path as Optimal policy: Commitment, constrained, except it ends at about 4.5 in 2020. Optimal policy: Discretion, unconstrained begins in 2012 at about 0.1 and generally decreases to about -2 by 2013. It then generally increases to end at about 4.4 by 2020. Optimal policy: Discretion, constrained, (Previous Tealbook) begins in 2012 at about 0.1 where it remains relatively constant until about 2013. It then generally increases to end about 4.5 by 2020.
Figure: Real Federal Funds Rate
Line chart, by percent 2012 to 2020. There are four series, "Optimal policy: Commitment, constrained," "Optimal policy: Discretion, constrained," "Optimal policy: Discretion, constrained, (Previous Tealbook)," and "Optimal policy: Discretion, unconstrained." Optimal policy: Commitment, constrained begins in 2012 at about -1.95 and generally decreases to about -2 by 2016. It then generally increases to end at about 2.9 by 2020. Optimal policy: Discretion, constrained generally follows the same path as Optimal policy: Commitment, constrained. Optimal policy: Discretion, unconstrained begins in 2012 at about -1.5 and generally decreases to about -4 by 2013. It then generally increases to end at about 2.5 by 2020. Optimal policy: Discretion, constrained, (Previous Tealbook) begins in 2012 at about -1.95 and generally increases to end at about 2.5 by 2020.
Figure: Unemployment Rate
Line chart, by percent, 2012 to 2020. There are four series, "Optimal policy: Commitment, constrained," "Optimal policy: Discretion, constrained," "Optimal policy: Discretion, constrained, (Previous Tealbook)," and "Optimal policy: Discretion, unconstrained." All four series begin at about 8.25 in 2012. They follow about the same path and generally decrease to end together at about 5.5 in 2020.
Figure: PCE Inflation
Line chart, by percent, 2012 to 2020. Data are four-quarter averages. There is a horizontal line at 2. There are four series, "Optimal policy: Commitment, constrained," "Optimal policy: Discretion, constrained," "Optimal policy: Discretion, constrained, (Previous Tealbook)," and "Optimal policy: Discretion, unconstrained." All four series begin at about 2.4 in 2012. Optimal policy: Commitment, constrained decreases to about 1.3 in 2013. It then generally increases to end at about 2.0 in 2020. Optimal policy: Discretion, constrained remains constant and generally decreases to end at about 2.0 in 2020. Optimal policy: Discretion, unconstrained decreases to about 1.3 in 2013. It then generally increases to end at about 2.0 in 2020. Optimal policy: Discretion, constrained, (Previous Tealbook) decreases to about 1.0 in 2013. It then generally increases to end at about 2.0 in 2020.
Outcomes under Alternative Policies
(Percent change, annual rate, from end of preceding period except as noted)
Measure and scenario | 2012 | 2013 | 2014 | 2015 | 2016 | |
---|---|---|---|---|---|---|
H1 | H2 | |||||
Real GDP | ||||||
Extended Tealbook baseline | 1.8 | 1.5 | 2.4 | 3.2 | 3.6 | 3.0 |
Taylor (1993) | 1.8 | 1.1 | 1.8 | 2.9 | 3.7 | 3.4 |
Taylor (1999) | 1.8 | 1.5 | 2.4 | 3.2 | 3.5 | 3.0 |
Inertial Taylor (1999) | 1.8 | 1.6 | 2.7 | 3.4 | 3.7 | 3.0 |
First-difference | 1.8 | 1.4 | 2.1 | 2.9 | 3.5 | 3.1 |
Nominal income targeting | 1.8 | 1.7 | 3.0 | 3.7 | 3.9 | 3.0 |
Constrained optimal control | 1.8 | 1.8 | 3.2 | 3.9 | 4.1 | 2.9 |
Unemployment rate1 | ||||||
Extended Tealbook baseline | 8.2 | 8.3 | 8.0 | 7.6 | 6.7 | 6.2 |
Taylor (1993) | 8.2 | 8.3 | 8.4 | 8.1 | 7.3 | 6.5 |
Taylor (1999) | 8.2 | 8.3 | 8.0 | 7.6 | 6.8 | 6.2 |
Inertial Taylor (1999) | 8.2 | 8.3 | 7.9 | 7.4 | 6.4 | 5.8 |
First-difference | 8.2 | 8.3 | 8.2 | 7.9 | 7.1 | 6.5 |
Nominal income targeting | 8.2 | 8.3 | 7.8 | 7.1 | 6.0 | 5.4 |
Constrained optimal control | 8.2 | 8.2 | 7.7 | 6.9 | 5.7 | 5.1 |
Total PCE prices | ||||||
Extended Tealbook baseline | 1.6 | 1.8 | 1.4 | 1.4 | 1.5 | 1.8 |
Taylor (1993) | 1.6 | 1.6 | 1.2 | 1.2 | 1.3 | 1.6 |
Taylor (1999) | 1.6 | 1.8 | 1.4 | 1.4 | 1.6 | 1.8 |
Inertial Taylor (1999) | 1.6 | 2.1 | 1.8 | 1.8 | 2.0 | 2.2 |
First-difference | 1.6 | 1.6 | 1.1 | 1.1 | 1.3 | 1.5 |
Nominal income targeting | 1.6 | 2.2 | 1.8 | 1.8 | 2.0 | 2.2 |
Constrained optimal control | 1.6 | 2.2 | 1.8 | 1.9 | 2.0 | 2.2 |
Core PCE prices | ||||||
Extended Tealbook baseline | 2.0 | 1.4 | 1.6 | 1.6 | 1.7 | 1.8 |
Taylor (1993) | 2.0 | 1.3 | 1.5 | 1.5 | 1.5 | 1.6 |
Taylor (1999) | 2.0 | 1.5 | 1.6 | 1.7 | 1.8 | 1.9 |
Inertial Taylor (1999) | 2.0 | 1.8 | 2.0 | 2.1 | 2.2 | 2.3 |
First-difference | 2.0 | 1.2 | 1.4 | 1.4 | 1.4 | 1.5 |
Nominal income targeting | 2.0 | 1.8 | 2.0 | 2.1 | 2.1 | 2.2 |
Constrained optimal control | 2.0 | 1.9 | 2.1 | 2.1 | 2.2 | 2.3 |
Federal funds rate1 | ||||||
Extended Tealbook baseline | 0.2 | 0.1 | 0.1 | 0.6 | 2.1 | 2.9 |
Taylor (1993) | 0.2 | 1.4 | 1.1 | 1.5 | 2.3 | 3.0 |
Taylor (1999) | 0.2 | 0.1 | 0.1 | 0.7 | 2.1 | 2.9 |
Inertial Taylor (1999) | 0.2 | 0.1 | 0.2 | 0.7 | 1.7 | 2.7 |
First-difference | 0.2 | 0.1 | 0.2 | 1.1 | 2.2 | 3.1 |
Nominal income targeting | 0.2 | 0.1 | 0.1 | 0.3 | 1.3 | 2.4 |
Constrained optimal control | 0.2 | 0.1 | 0.1 | 0.1 | 0.4 | 1.9 |
1. Percent, average for the final quarter of the period. Return to table
Monetary Policy Alternatives
Table 1: Overview of Policy Alternatives for the September 13 FOMC Statement
Selected Elements |
August Statement |
September Alternatives | ||||
---|---|---|---|---|---|---|
A | B | B′ | B″ | C | ||
Economic Outlook | ||||||
Growth and employment | growth to remain moderate over coming quarters and then to pick up very gradually; unemployment rate will decline only slowly | expects that, without further policy accommodation, growth… …likely would not be… |
concerned that, without further policy accommodation, growth… …might not be… |
expects that, without further policy accommodation, growth… …likely would not be… |
growth to remain moderate over coming quarters and then to pick up gradually; unemployment rate will decline slowly | |
strong enough to generate sustained improvement in labor market conditions | ||||||
Inflation | will run at or below rate judged most consistent with dual mandate | likely would run at or below 2 percent | will run near 2 percent | |||
Balance Sheet Policies | ||||||
MEP | continue through the end of the year… as announced in June | ended | unchanged (continue MEP) |
|||
Securities Reinvestment | principal payments of agency debt and MBS into agency MBS | maintained | ||||
Directive: suspend Treasury rollovers during MEP | reinstituted | unchanged (no Treasury rollovers) |
||||
Asset Purchases | none | begin new program: [$750] billion of longer-term Treasury securities and [$500] billion of agency MBS by early 2014; combined pace of about [$75] billion/month |
begin new program: [$45] bil/month longer-term Treasury securities and [$30] bil/month agency MBS; purchase until observe substantial ongoing improvement in labor market, with inflation close to 2 percent and inflation expectations stable; program will continue at least through mid-2013 |
[$30] billion/month agency MBS, so holdings of longer-term securities will increase [$75] billion/month | unchanged (none) |
|
Balance Sheet Guidance | ||||||
Guidance | will closely monitor incoming information; | will regularly review size and composition of balance sheet; | will regularly review pace and composition of purchases in light of actual and projected progress, efficacy and costs | will closely monitor incoming information in coming months; | will closely monitor incoming information; | will regularly review size and composition of securities holdings; |
will provide additional accommodation as needed | remains prepared to make adjustments as appropriate | n.a. | if do not observe substantial ongoing improvement in labor market, will undertake additional purchases; will take account of efficacy and costs | if do not observe substantial ongoing improvement in labor market in coming months, will engage in further purchases; will take account of efficacy and costs | is prepared to adjust holdings as necessary | |
Forward Rate Guidance | ||||||
Rationale | to support stronger recovery and help ensure inflation is at rate most consistent with dual mandate… | to support continued progress toward goals… | to support more rapid improvement in labor market conditions and help ensure inflation (unchanged)… | to support the… OR to support sustainable recovery and help ensure inflation (unchanged)… |
||
Guidance | …at least through late 2014 | …for a considerable time after conclusion of asset-purchase program… at least through mid-2015 |
…for a considerable time after recovery strengthens… at least through mid-2015 |
…for a considerable time after recovery strengthens… at least as long as quantitative conditions for unemployment rate and projected inflation are met, with inflation expectations well anchored (no date) | …at least through late [2013 | 2014] OR give conditions for timing of first rate increase (no date) |
[Note: In the September 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.]
September FOMC Statement--Alternative A
- 1. Information received since the Federal Open Market Committee met in June August suggests that economic activity decelerated somewhat over the first half of this year has continued to expand at a moderate pace in recent months. Growth in Although employment has been slow in recent months increased somewhat, and the unemployment rate remains elevated. Household spending has been rising at a somewhat slower pace than earlier in the year continued to advance, but growth in business fixed investment has continued to advance appears to have slowed. Despite some further signs of improvement, The housing sector remains has shown some further signs of improvement, albeit from a depressed level. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline been subdued, although the prices of some key commodities have increased recently. and Longer-term inflation expectations have remained stable.
- 2. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, without further policy accommodation, economic growth to remain moderate over coming quarters and then to pick up very gradually likely would not be strong enough to generate sustained improvement in labor market conditions. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term will likely would run at or below the rate that it judges most consistent with its dual mandate its 2 percent objective.
- 3. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate close to 2 percent, the Committee expects to maintain a highly accommodative stance for monetary policy decided today to begin a new asset-purchase program. Specifically, the Committee now intends to purchase [ $750 billion ] of longer-term Treasury securities and [ $500 billion ] of agency mortgage-backed securities by early 2014, a combined pace of about [ $75 ] billion per month. These increases in its securities holdings should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. The Committee will closely monitor incoming information on regularly review the size and composition of its balance sheet in light of economic and financial developments and will provide additional accommodation as needed remains prepared to make adjustments as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.
- 4. This new asset-purchase program replaces the previously announced maturity extension program. In particular, the Committee is ending its sales of shorter-term Treasury securities and reinstituting its policy of rolling over maturing Treasury securities at auction. The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.
- 5. To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the conclusion of this asset-purchase program. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate are likely to be warranted at least through late 2014 mid-2015.
Note: If policymakers decide that it is appropriate to reduce the remuneration rate on reserve balances, the Board of Governors would issue an accompanying statement that might read:
In a related action, the Board of Governors voted today to reduce the interest rate paid on required and excess reserve balances from 25 basis points to 15 basis points effective with the reserve maintenance period that begins on September 20, 2012.
September FOMC Statement--Alternative B
- 1. Information received since the Federal Open Market Committee met in June August suggests that economic activity decelerated somewhat over the first half of this year has continued to expand at a moderate pace in recent months. Growth in Although employment has been slow in recent months increased somewhat, and the unemployment rate remains elevated. Household spending has been rising at a somewhat slower pace than earlier in the year continued to advance, but growth in business fixed investment has continued to advance appears to have slowed. Despite some further signs of improvement, The housing sector remains has shown some further signs of improvement, albeit from a depressed level. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline been subdued, although the prices of some key commodities have increased recently. and Longer-term inflation expectations have remained stable.
- 2. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, without further policy accommodation, economic growth to remain moderate over coming quarters and then to pick up very gradually likely would not be strong enough to generate sustained improvement in labor market conditions. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term will likely would run at or below the rate that it judges most consistent with its dual mandate its 2 percent objective.
- 3. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy decided today to begin a new asset-purchase program. Specifically, the Committee now intends to increase its holdings of longer-term Treasury securities at a pace of about [ $45 ] billion per month and increase its holdings of agency mortgage-backed securities at a pace of about [ $30 ] billion per month. This new asset-purchase program replaces the previously announced maturity extension program. In particular, the Committee is ending its sales of shorter-term Treasury securities and reinstituting its policy of rolling over maturing Treasury securities at auction. The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.
- 4. The Committee will continue this new asset-purchase program until it has observed substantial ongoing improvement in labor market conditions, provided that the Committee projects that inflation over the medium term will be close to its 2 percent objective and longer-term inflation expectations remain stable. Given its current assessment of the economic outlook, the Committee anticipates that this program will continue at least through mid-2013. These increases in its securities holdings should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. The Committee will regularly review the pace and composition of its securities purchases in light of actual and projected progress toward its objectives and its ongoing assessments of the efficacy and costs of the purchases.
- 5. To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the conclusion of this asset-purchase program. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and, currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate are likely to be warranted at least through late 2014 mid-2015.
September FOMC Statement--Alternative B′
- 1. Information received since the Federal Open Market Committee met in June August suggests that economic activity decelerated somewhat over the first half of this year has continued to expand at a moderate pace in recent months. Growth in Although employment has been slow in recent months increased somewhat, and the unemployment rate remains elevated. Household spending has been rising at a somewhat slower pace than earlier in the year continued to advance, but growth in business fixed investment has continued to advance appears to have slowed. Despite some further signs of improvement, The housing sector remains has shown some further signs of improvement, albeit from a depressed level. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline been subdued, although the prices of some key commodities have increased recently. and Longer-term inflation expectations have remained stable.
- 2. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects is concerned that, without further policy accommodation, economic growth to remain moderate over coming quarters and then to pick up very gradually might not be strong enough to generate sustained improvement in labor market conditions. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term will likely would run at or below the rate that it judges most consistent with its dual mandate its 2 percent objective.
- 3. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of [ $30 ] billion per month. The Committee also decided to will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee's holdings of longer-term securities by about $75 billion each month, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.
- 4. The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote in coming months. If it does not observe a stronger economic recovery and sustained substantial ongoing improvement in labor market conditions in a context of price stability, the Committee will continue its purchases of agency mortgage-backed securities and undertake additional asset purchases until such improvement is achieved. In determining the pace and composition of its asset purchases, the Committee will take appropriate account of the likely efficacy and costs of additional purchases.
- 5. To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate are likely to be warranted at least through late 2014 mid-2015.
September FOMC Statement--Alternative B″
- 1. Information received since the Federal Open Market Committee met in June August suggests that economic activity decelerated somewhat over the first half of this year has continued to expand at a moderate pace in recent months. Growth in Although employment has been slow in recent months increased somewhat, and the unemployment rate remains elevated. Household spending has been rising at a somewhat slower pace than earlier in the year continued to advance, but growth in business fixed investment has continued to advance appears to have slowed. Despite some further signs of improvement, The housing sector remains has shown some further signs of improvement, albeit from a depressed level. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline been subdued, although the prices of some key commodities have increased recently. and Longer-term inflation expectations have remained stable.
- 2. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, without further policy accommodation, economic growth to remain moderate over coming quarters and then to pick up very gradually likely would not be strong enough to generate sustained improvement in labor market conditions. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term will likely would run at or below the rate that it judges most consistent with its dual mandate its 2 percent objective.
- 3. To support a stronger economic recovery more rapid improvement in labor market conditions and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects intends to maintain a highly accommodative stance for monetary policy for a considerable time after the economic recovery strengthens. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014 this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate exceeds 6 1/2 percent, provided that inflation [ at a one- to two-year horizon is projected to be no more than a half percentage point above the Committee's 2 percent objective | is projected to be close to the Committee's 2 percent objective in the medium term ] and longer-term inflation expectations continue to be well anchored.
- 4. The threshold value for unemployment given in the previous paragraph should not be interpreted as representing the Committee's longer-term objective for maximum employment. In particular, because monetary policy actions affect the economy only with a lag, the process of removing policy accommodation must begin before the unemployment rate has returned to its longer-run normal level.
- 5. The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.
- 6. The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability. In particular, if the Committee does not observe substantial ongoing improvement in labor market conditions over coming months, it will engage in further asset purchases until such improvement is achieved. In determining the pace and composition of any new asset-purchase program, the Committee will take appropriate account of the likely efficacy and costs of additional purchases.
September FOMC Statement--Alternative C
- 1. Information received since the Federal Open Market Committee met in June August suggests that economic activity decelerated somewhat over the first half of this year has continued to expand at a moderate pace in recent months. Growth in employment has been slow in recent months, and the unemployment rate remains elevated picked up. Business fixed investment Private domestic demand has continued to advance, Household spending has been rising at a somewhat slower pace than earlier in the year. Despite some further signs of improvement, and the housing sector remains depressed has shown some further signs of improvement. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable, but prices of some key commodities recently have increased significantly.
- 2. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below near the rate that it judges most consistent with its dual mandate Committee's 2 percent objective.
- 3. To support a stronger the economic recovery and to help ensure that inflation, over
time, is at the rate most consistent with its dual mandate, the Committee expects to
maintain a highly accommodative stance for monetary policy. In particular, the
Committee decided today to keep the target range for the federal funds rate at 0 to 1/4
percent and currently anticipates that economic conditions--including low rates of
resource utilization and a subdued outlook for inflation over the medium run--are
likely to warrant exceptionally low levels for the federal funds rate at least through
late [ 2013 | 2014 ].
OR - 3′. To support a stronger sustainable economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. As rates of resource utilization rise toward levels consistent with maximum employment, the Committee eventually will need to make monetary policy less accommodative in order to ensure that the economy expands at a sustainable pace and to prevent inflation from persistently exceeding its longer-run objective. In determining the appropriate time to increase its target for the federal funds rate, the Committee will consider a range of factors, including actual and projected labor market conditions, the medium-term outlook for inflation, and the risks to the achievement of the Committee's objectives.
- 4. The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as necessary to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of maximum employment and price stability.
Long-Run Projections of the Balance Sheet and Monetary Base
Figure: Total Assets
Line chart, by billions of dollars, 2006 to 2020. Data are monthly. There are five series, "Alt A," "Alt B," "Alt B′," "Alt C," and "July Alt B." All five series begin at about 900 in 2006. They all follow the same path to generally increase to about 2500 in 2012. The Alt A series generally increases to about 4000 in 2014. It then generally decreases to end at about 2000 in 2020. The Alt B series generally increases to about 3500 in 2013. It then generally decreases to end at about 2000 in 2020. The Alt B′ series generally increases to about 3000 in 2013. It then generally decreases to end at about 2000 in 2020. The Alt C series generally decreases to about 1500 in 2018. It then generally increases to end at about 2000 in 2020. The July Alt B series generally decreases to about 1500 in 2018. It then generally increases to end at about 2000 in 2020.
Growth Rates for the Monetary Base
Date | Alternative B | Alternative B′ | Alternative A | Alternative C | July Alt B |
---|---|---|---|---|---|
Percent, annual rate | |||||
Monthly | |||||
Apr-12 | -12.2 | -12.2 | -12.2 | -12.2 | -12.2 |
May-12 | -8.7 | -8.7 | -8.7 | -8.7 | -8.7 |
Jun-12 | -5.1 | -5.1 | -5.1 | -5.1 | -4.6 |
Jul-12 | 7.7 | 7.7 | 7.7 | 7.7 | 6.2 |
Aug-12 | 18.7 | 18.7 | 19.0 | 18.7 | 12.2 |
Sep-12 | 6.0 | 6.0 | 6.4 | 5.7 | -4.3 |
Oct-12 | 8.5 | -1.1 | 7.6 | -2.0 | -11.9 |
Nov-12 | 33.4 | 16.0 | 31.4 | 12.4 | 8.8 |
Dec-12 | 32.5 | 17.3 | 30.9 | 8.7 | 1.2 |
Quarterly | |||||
2011 Q3 | 21.0 | 21.0 | 21.0 | 21.0 | 21.0 |
2011 Q4 | -5.9 | -5.9 | -5.9 | -5.9 | -5.9 |
2012 Q1 | 5.5 | 5.5 | 5.5 | 5.5 | 5.5 |
2012 Q2 | -3.9 | -3.9 | -3.9 | -3.9 | -3.9 |
2012 Q3 | 5.3 | 5.3 | 5.4 | 5.2 | 2.3 |
2012 Q4 | 17.6 | 8.6 | 16.7 | 6.4 | -1.5 |
2013 Q1 | 30.6 | 22.8 | 29.5 | 1.5 | -2.2 |
2013 Q2 | 25.3 | 25.3 | 24.3 | -8.8 | -2.4 |
Annual - Q4 to Q4 | |||||
2010 | 0.9 | 0.9 | 0.9 | 0.9 | 0.9 |
2011 | 32.9 | 32.9 | 32.9 | 32.9 | 32.9 |
2012 | 6.2 | 3.9 | 6.0 | 3.3 | 0.6 |
2013 | 32.6 | 23.6 | 32.6 | 0.0 | 0.6 |
2014 | 0.5 | -0.7 | 7.8 | -2.4 | -1.8 |
2015 | -5.1 | -3.2 | -4.9 | -7.2 | -4.4 |
2016 | -14.7 | -14.5 | -14.2 | -16.7 | -16.6 |
2017 | -16.7 | -16.7 | -16.1 | -18.2 | -18.0 |
2018 | -24.2 | -23.9 | -23.6 | -5.0 | -7.3 |
Note: Not seasonally adjusted.
Growth Rates for M2
(Percent, seasonally adjusted annual rate)
Tealbook Forecast * | |
---|---|
Monthly Growth Rates | |
Jan-12 | 16.4 |
Feb-12 | 3.7 |
Mar-12 | 4.2 |
Apr-12 | 5.8 |
May-12 | 4.3 |
Jun-12 | 5.7 |
Jul-12 | 9.2 |
Aug-12 | 3.7 |
Sep-12 | 4.2 |
Oct-12 | 3.9 |
Nov-12 | 4.0 |
Dec-12 | 4.0 |
Quarterly Growth Rates | |
2012 Q1 | 8.7 |
2012 Q2 | 4.9 |
2012 Q3 | 6.2 |
2012 Q4 | 4.0 |
2013 Q1 | 2.1 |
2013 Q2 | 2.5 |
2013 Q3 | 3.6 |
2013 Q4 | 3.9 |
2014 Q1 | 3.3 |
2014 Q2 | 2.7 |
2014 Q3 | -0.4 |
2014 Q4 | -2.2 |
Annual Growth Rates | |
2012 | 6.1 |
2013 | 3.1 |
2014 | 0.8 |
* This forecast is consistent with nominal GDP and interest rates in the Tealbook forecast. Actual data through August 27, 2012; projections thereafter. Return to table
[Note: In the September 2012 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.]
September 2012 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 1/4 percent. The Committee directs the Desk to continue the maturity extension program it announced in June to purchase Treasury securities with remaining maturities of 6 years to 30 years with a total face value of about $267 billion by the end of December 2012, and to sell or redeem Treasury securities with remaining maturities of approximately 3 years or less with a total face value of about $267 billion. For the duration of this program, begin a new asset-purchase program. This program replaces the previously announced maturity extension program. Specifically, the Desk is directed to purchase $750 billion of longer-term Treasury securities and $500 billion of agency mortgage-backed securities by early 2014, a combined pace of about $75 billion per month. The Committee directs the Desk to suspend its current is also directed to reinstitute the policy of rolling over maturing Treasury securities into new issues. The Committee directs the Desk to maintain its existing policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities. These actions should maintain increase the total face value of domestic securities at to approximately $2.6 $3.9 trillion. The Committee directs the Desk to engage in dollar roll and coupon swap 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.
September 2012 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 1/4 percent. The Committee directs the Desk to continue the maturity extension program it announced in June to purchase Treasury securities with remaining maturities of 6 years to 30 years with a total face value of about $267 billion by the end of December 2012, and to sell or redeem Treasury securities with remaining maturities of approximately 3 years or less with a total face value of about $267 billion. For the duration of this program, begin a new asset-purchase program. This program replaces the previously announced maturity extension program. Specifically, the Desk is directed to purchase longer-term Treasury securities at a pace of about $45 billion per month and to purchase agency mortgage-backed securities at a pace of about $30 billion per month. The Committee directs the Desk to suspend its current is also directed to reinstitute the policy of rolling over maturing Treasury securities into new issues. The Committee directs the Desk to maintain its existing policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities. These actions should maintain the total face value of domestic securities at approximately $2.6 trillion. The Committee directs the Desk to engage in dollar roll and coupon swap 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.
September 2012 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 1/4 percent. The Committee directs the Desk to continue the maturity extension program it announced in June to purchase Treasury securities with remaining maturities of 6 years to 30 years with a total face value of about $267 billion by the end of December 2012, and to sell or redeem Treasury securities with remaining maturities of approximately 3 years or less with a total face value of about $267 billion. For the duration of this program, the Committee directs the Desk to suspend its current policy of rolling over maturing Treasury securities into new issues. The Committee directs the Desk to maintain its existing policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities. The Desk is also directed to begin purchasing agency mortgage-backed securities at a pace of about $30 billion per month. These actions should maintain the total face value of domestic securities at approximately $2.6 trillion. The Committee directs the Desk to engage in dollar roll and coupon swap 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.
September 2012 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 1/4 percent. The Committee directs the Desk to continue the maturity extension program it announced in June to purchase Treasury securities with remaining maturities of 6 years to 30 years with a total face value of about $267 billion by the end of December 2012, and to sell or redeem Treasury securities with remaining maturities of approximately 3 years or less with a total face value of about $267 billion. For the duration of this program, the Committee directs the Desk to suspend its current policy of rolling over maturing Treasury securities into new issues. The Committee directs the Desk to maintain its existing policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities. These actions should 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.
September 2012 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 1/4 percent. The Committee directs the Desk to continue the maturity extension program it announced in June to purchase Treasury securities with remaining maturities of 6 years to 30 years with a total face value of about $267 billion by the end of December 2012, and to sell or redeem Treasury securities with remaining maturities of approximately 3 years or less with a total face value of about $267 billion. For the duration of this program, the Committee directs the Desk to suspend its current policy of rolling over maturing Treasury securities into new issues. The Committee directs the Desk to maintain its existing policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in the System Open Market Account in agency mortgage-backed securities. These actions should 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.
Explanatory Notes
A. Policy Rules Used in "Monetary Policy Strategies"
The table below gives the expressions for the selected policy rules used in "Monetary Policy Strategies." In the table, $$ R_t$$ denotes the nominal federal funds rate for quarter $$ t$$, while the right-hand-side variables include the staff's projection of trailing four-quarter core PCE inflation for the current quarter and three quarters ahead ($$ \pi_t$$ and $$ \pi_{t+3|t}$$), the output gap estimate for the current period as well as its one-quarter-ahead forecast ($$ gap_t$$ and $$ gap_{t+1|t}$$), and the forecast of the three-quarter-ahead annual change in the output gap ($$ \Delta^4gap_{t+3|t}$$). The value of policymakers' long-run inflation objective, denoted $$ \pi^*$$, is 2 percent. The nominal income targeting rule responds to the nominal income gap, which is defined as the difference between nominal income $$ yn_t$$ (100 times the log of the level of nominal GDP) and a target value $$ yn^*_t$$ (100 times the log of potential nominal GDP). Target nominal GDP in 2007:Q4 is set equal to potential real GDP in that quarter multiplied by the GDP deflator in that quarter; subsequently, target nominal GDP grows 2 percentage points per year faster than potential GDP.
Rule | Specification |
---|---|
Taylor (1993) rule | $$ R_t = 2.25+\pi_t+0.5(\pi_t-\pi^*)+0.5gap_t$$ |
Taylor (1999) rule | $$ R_t = 2.25+\pi_t+0.5(\pi_t-\pi^*)+gap_t$$ |
Inertial Taylor (1999) rule | $$ R_t = 0.85R_{t-1}+0.15\left(2.25+\pi_t+0.5(\pi_t-\pi^*)+gap_t\right)$$ |
Outcome-based rule | $$ R_t = 1.2R_{t-1}-0.39R_{t-2}+0.19[0.79+1.73\pi_t+3.66gap_t-2.72gap_{t-1}]$$ |
First-difference rule | $$ R_t = R_{t-1}+0.5(\pi_{t+3|t}-\pi^*)+0.5\Delta^4gap_{t+3|t}$$ |
Nominal income targeting rule | $$ R_t = 0.75R_{t-1}+0.25(2.25+\pi^*+yn_t-yn^*_t)$$ |
D. Long-Run Projections of the Balance Sheet and Monetary Base
10-Year Treasury Term Premium Effect
Date | Alternative B | Alternative B′ | Alternative A | Alternative C | July Alternative B |
---|---|---|---|---|---|
Basis Points Quarterly Averages |
|||||
2012 Q4 | -102 | -93 | -111 | -64 | -66 |
2013 Q1 | -99 | -89 | -108 | -60 | -63 |
2013 Q2 | -95 | -86 | -104 | -56 | -59 |
2013 Q3 | -91 | -81 | -100 | -52 | -55 |
2013 Q4 | -86 | -76 | -96 | -48 | -51 |
2014 Q1 | -81 | -71 | -90 | -44 | -47 |
2014 Q2 | -75 | -66 | -85 | -40 | -43 |
2014 Q3 | -70 | -61 | -79 | -37 | -40 |
2014 Q4 | -64 | -57 | -73 | -33 | -36 |
2015 Q1 | -59 | -52 | -67 | -30 | -33 |
2015 Q2 | -54 | -48 | -62 | -27 | -29 |
2015 Q3 | -50 | -43 | -57 | -24 | -26 |
2015 Q4 | -45 | -39 | -52 | -22 | -24 |
2016 Q1 | -41 | -35 | -47 | -19 | -21 |
2016 Q2 | -37 | -32 | -42 | -17 | -19 |
2016 Q3 | -33 | -29 | -38 | -15 | -17 |
2016 Q4 | -30 | -25 | -34 | -13 | -15 |
2017 Q1 | -26 | -23 | -30 | -12 | -13 |
2017 Q2 | -23 | -20 | -27 | -10 | -11 |
2017 Q3 | -20 | -17 | -24 | -9 | -10 |
2017 Q4 | -18 | -15 | -21 | -8 | -9 |
2018 Q1 | -16 | -13 | -18 | -7 | -8 |
2018 Q2 | -14 | -12 | -16 | -6 | -7 |
2018 Q3 | -12 | -10 | -14 | -6 | -7 |
2018 Q4 | -10 | -9 | -12 | -5 | -6 |
2019 Q1 | -9 | -8 | -11 | -5 | -6 |
2019 Q2 | -8 | -7 | -9 | -5 | -6 |
2019 Q3 | -7 | -6 | -8 | -5 | -5 |
2019 Q4 | -6 | -6 | -7 | -5 | -5 |
2020 Q1 | -6 | -5 | -6 | -4 | -5 |
2020 Q2 | -5 | -5 | -6 | -4 | -4 |
2020 Q3 | -5 | -5 | -5 | -4 | -4 |
2020 Q4 | -4 | -4 | -5 | -3 | -4 |
Federal Reserve Balance Sheet: End-of-Year Projections: Alternative B
Billions of dollars
Jul 31, 2012 | 2012 | 2014 | 2016 | 2018 | 2020 | |
---|---|---|---|---|---|---|
Total assets | 2,849 | 3,030 | 3,878 | 3,101 | 2,009 | 1,977 |
Selected assets | ||||||
Liquidity programs for financial firms | 31 | 25 | 0 | 0 | 0 | 0 |
Primary, secondary, and seasonal credit | 0 | 0 | 0 | 0 | 0 | 0 |
Central bank liquidity swaps | 31 | 25 | 0 | 0 | 0 | 0 |
Term Asset-Backed Securities Loan Facility (TALF) | 5 | 2 | 0 | 0 | 0 | 0 |
Net portfolio holdings of Maiden Lane LLC, Maiden Lane II LLC, and Maiden Lane III LLC | 9 | 1 | 0 | 0 | 0 | 0 |
Securities held outright | 2,589 | 2,753 | 3,600 | 2,876 | 1,831 | 1,834 |
U.S. Treasury securities | 1,645 | 1,777 | 2,237 | 1,917 | 1,367 | 1,834 |
Agency debt securities | 91 | 77 | 39 | 16 | 2 | 0 |
Agency mortgage-backed securities | 853 | 899 | 1,324 | 943 | 461 | 0 |
Net portfolio holdings of TALF LLC | 1 | 1 | 1 | 0 | 0 | 0 |
Total other assets | 214 | 248 | 277 | 225 | 178 | 142 |
Total liabilities | 2,795 | 2,969 | 3,797 | 2,993 | 1,866 | 1,788 |
Selected liabilities | ||||||
Federal Reserve notes in circulation | 1,072 | 1,104 | 1,245 | 1,379 | 1,516 | 1,662 |
Reverse repurchase agreements | 70 | 70 | 70 | 70 | 70 | 70 |
Deposits with Federal Reserve Banks | 1,637 | 1,778 | 2,454 | 1,519 | 257 | 34 |
Reserve balances held by depository institutions | 1,523 | 1,729 | 2,405 | 1,510 | 248 | 25 |
U.S. Treasury, General Account | 90 | 44 | 44 | 5 | 5 | 5 |
Other Deposits | 23 | 4 | 4 | 4 | 4 | 4 |
Interest of Federal Reserve Notes due to U.S. Treasury | 4 | 0 | 0 | 0 | 0 | 0 |
Total capital | 55 | 62 | 82 | 108 | 143 | 189 |
Source: Federal Reserve H.4.1 statistical releases and staff calculations.
Note: Components may not sum to totals due to rounding.
Federal Reserve Balance Sheet: End-of-Year Projections: Alternative B′
Billions of dollars
Jul 31, 2012 | 2012 | 2014 | 2016 | 2018 | 2020 | |
---|---|---|---|---|---|---|
Total assets | 2,849 | 2,911 | 3,503 | 2,858 | 1,863 | 1,972 |
Selected assets | ||||||
Liquidity programs for financial firms | 31 | 25 | 0 | 0 | 0 | 0 |
Primary, secondary, and seasonal credit | 0 | 0 | 0 | 0 | 0 | 0 |
Central bank liquidity swaps | 31 | 25 | 0 | 0 | 0 | 0 |
Term Asset-Backed Securities Loan Facility (TALF) | 5 | 2 | 0 | 0 | 0 | 0 |
Net portfolio holdings of Maiden Lane LLC, Maiden Lane II LLC, and Maiden Lane III LLC | 9 | 1 | 0 | 0 | 0 | 0 |
Securities held outright | 2,589 | 2,632 | 3,236 | 2,641 | 1,689 | 1,832 |
U.S. Treasury securities | 1,645 | 1,656 | 1,973 | 1,753 | 1,261 | 1,832 |
Agency debt securities | 91 | 77 | 39 | 16 | 2 | 0 |
Agency mortgage-backed securities | 853 | 899 | 1,225 | 871 | 426 | 0 |
Net portfolio holdings of TALF LLC | 1 | 1 | 1 | 0 | 0 | 0 |
Total other assets | 214 | 250 | 265 | 217 | 174 | 140 |
Total liabilities | 2,795 | 2,849 | 3,421 | 2,750 | 1,720 | 1,782 |
Selected liabilities | ||||||
Federal Reserve notes in circulation | 1,072 | 1,104 | 1,245 | 1,379 | 1,516 | 1,662 |
Reverse repurchase agreements | 70 | 70 | 70 | 70 | 70 | 70 |
Deposits with Federal Reserve Banks | 1,637 | 1,663 | 2,086 | 1,283 | 116 | 34 |
Reserve balances held by depository institutions | 1,523 | 1,614 | 2,038 | 1,273 | 107 | 25 |
U.S. Treasury, General Account | 90 | 44 | 44 | 5 | 5 | 5 |
Other Deposits | 23 | 4 | 4 | 4 | 4 | 4 |
Interest of Federal Reserve Notes due to U.S. Treasury | 4 | 0 | 0 | 0 | 0 | 0 |
Total capital | 55 | 62 | 82 | 108 | 143 | 189 |
Source: Federal Reserve H.4.1 statistical releases and staff calculations.
Note: Components may not sum to totals due to rounding.
Federal Reserve Balance Sheet: End-of-Year Projections: Alternative A
Billions of dollars
Jul 31, 2012 | 2012 | 2014 | 2016 | 2018 | 2020 | |
---|---|---|---|---|---|---|
Total assets | 2,849 | 3,020 | 4,143 | 3,338 | 2,188 | 1,973 |
Selected assets | ||||||
Liquidity programs for financial firms | 31 | 25 | 0 | 0 | 0 | 0 |
Primary, secondary, and seasonal credit | 0 | 0 | 0 | 0 | 0 | 0 |
Central bank liquidity swaps | 31 | 25 | 0 | 0 | 0 | 0 |
Term Asset-Backed Securities Loan Facility (TALF) | 5 | 2 | 0 | 0 | 0 | 0 |
Net portfolio holdings of Maiden Lane LLC, Maiden Lane II LLC, and Maiden Lane III LLC | 9 | 1 | 0 | 0 | 0 | 0 |
Securities held outright | 2,589 | 2,743 | 3,849 | 3,101 | 2,001 | 1,825 |
U.S. Treasury securities | 1,645 | 1,771 | 2,387 | 2,067 | 1,500 | 1,825 |
Agency debt securities | 91 | 77 | 39 | 16 | 2 | 0 |
Agency mortgage-backed securities | 853 | 895 | 1,424 | 1,018 | 498 | 0 |
Net portfolio holdings of TALF LLC | 1 | 1 | 1 | 0 | 0 | 0 |
Total other assets | 214 | 248 | 292 | 237 | 187 | 148 |
Total liabilities | 2,795 | 2,958 | 4,061 | 3,230 | 2,045 | 1,784 |
Selected liabilities | ||||||
Federal Reserve notes in circulation | 1,072 | 1,104 | 1,245 | 1,379 | 1,516 | 1,662 |
Reverse repurchase agreements | 70 | 70 | 70 | 70 | 70 | 70 |
Deposits with Federal Reserve Banks | 1,637 | 1,768 | 2,714 | 1,753 | 437 | 34 |
Reserve balances held by depository institutions | 1,523 | 1,719 | 2,666 | 1,743 | 427 | 25 |
U.S. Treasury, General Account | 90 | 44 | 44 | 5 | 5 | 5 |
Other Deposits | 23 | 4 | 4 | 4 | 4 | 4 |
Interest of Federal Reserve Notes due to U.S. Treasury | 4 | 0 | 0 | 0 | -6 | -3 |
Total capital | 55 | 62 | 82 | 108 | 143 | 189 |
Source: Federal Reserve H.4.1 statistical releases and staff calculations.
Note: Components may not sum to totals due to rounding.
Federal Reserve Balance Sheet: End-of-Year Projections: Alternative C
Billions of dollars
Jul 31, 2012 | 2012 | 2014 | 2016 | 2018 | 2020 | |
---|---|---|---|---|---|---|
Total assets | 2,849 | 2,869 | 2,744 | 2,136 | 1,774 | 1,966 |
Selected assets | ||||||
Liquidity programs for financial firms | 31 | 25 | 0 | 0 | 0 | 0 |
Primary, secondary, and seasonal credit | 0 | 0 | 0 | 0 | 0 | 0 |
Central bank liquidity swaps | 31 | 25 | 0 | 0 | 0 | 0 |
Term Asset-Backed Securities Loan Facility (TALF) | 5 | 2 | 0 | 0 | 0 | 0 |
Net portfolio holdings of Maiden Lane LLC, Maiden Lane II LLC, and Maiden Lane III LLC | 9 | 1 | 0 | 0 | 0 | 0 |
Securities held outright | 2,589 | 2,600 | 2,530 | 1,962 | 1,633 | 1,846 |
U.S. Treasury securities | 1,645 | 1,656 | 1,655 | 1,436 | 1,451 | 1,846 |
Agency debt securities | 91 | 77 | 39 | 16 | 2 | 0 |
Agency mortgage-backed securities | 853 | 868 | 836 | 510 | 179 | 0 |
Net portfolio holdings of TALF LLC | 1 | 1 | 1 | 0 | 0 | 0 |
Total other assets | 214 | 239 | 212 | 174 | 142 | 120 |
Total liabilities | 2,795 | 2,807 | 2,662 | 2,028 | 1,631 | 1,777 |
Selected liabilities | ||||||
Federal Reserve notes in circulation | 1,072 | 1,104 | 1,245 | 1,379 | 1,516 | 1,662 |
Reverse repurchase agreements | 70 | 70 | 70 | 70 | 70 | 70 |
Deposits with Federal Reserve Banks | 1,637 | 1,620 | 1,334 | 568 | 34 | 34 |
Reserve balances held by depository institutions | 1,523 | 1,571 | 1,325 | 559 | 25 | 25 |
U.S. Treasury, General Account | 90 | 44 | 5 | 5 | 5 | 5 |
Other Deposits | 23 | 4 | 4 | 4 | 4 | 4 |
Interest of Federal Reserve Notes due to U.S. Treasury | 4 | 0 | 0 | 0 | 0 | 0 |
Total capital | 55 | 62 | 82 | 108 | 143 | 189 |
Source: Federal Reserve H.4.1 statistical releases and staff calculations.
Note: Components may not sum to totals due to rounding.
† Note: Data values for figures are rounded and may not sum to totals. Return to text
Last update: January 5, 2018