Greenbook/Tealbook

Prefatory Note

The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that this document may contain occasional gaps in the text. These gaps are the result of a redaction process that removed information obtained on a confidential basis. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.

1

In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing). 2 A two-step process was used. An advanced optimal character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff.

CONFIDENTIAL (FR) CLASS III - FOMC

December 18, 1998

SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS

Prepared for the Federal Open Market Committee

By the Staff Board of Governors of the Federal Reserve System

TABLE OF CONTENTS

Page THE FINANCIAL ECONOMY U.S. international trade in goods and services ............ Prices of U.S. non-oil imports and exports ..................

...... ...

1 2

Tables Trade in goods and services: a summary (Table 1) ................ Details of goods and services: levels (Table 2) . ................. Details of goods and services: dollar changes (Table 3) ............. Details of goods and services: percent changes (Table 4) ............ Commercial bank credit (percent change; seasonally adjusted annual rate) ............................. Selected financial market quotations .........................

3 4 5 6 7 8

SUPPLEMENTAL NOTES THE FINANCIAL ECONOMY U.S. International Trade in Goods and Services In October, the U.S. nominal trade deficit in goods and services was $14.2 billion, about the same as in September, and somewhat smaller than the third-quarter average. The value of exports rose strongly in October to a level that was 5 percent higher (not an annual rate) than the third quarter average. The largest increases were in machinery, agricultural products, industrial supplies, and automotive exports to Canada. Exports to various developing countries in Asia have moved up in recent months, particularly to China, Korea, Taiwan, and Malaysia. The value of imports increased in October to a level that was 3 percent above the thirdquarter average. All major trade categories posted increases, with the largest rises in capital goods, automotive products from Canada and Mexico, and oil (about half of which was the result of a higher price). Imports of steel were little changed from September at a level about 2 percent less the third-quarter average. Prices of U.S. Non-oil Imports and Exports Prices of non-oil imports edged up in October and November, marking the first time since 1995 that these prices increased two months in a row. Nonetheless, for OctoberNovember combined, non-oil import prices were down 1/2 percent (annual rate) from the third-quarter average. This was the smallest decline recorded since the fourth quarter of 1996. Excluding oil, computers, and semiconductors, prices of "core" goods imports rose 1/2 percent (annual rate). For all major trade categories except computers and non-oil industrial supplies,

prices of imports swung from declines in previous quarters to increases in October-November. Prices of imported non-oil industrial supplies declined on average, with a sharp decline in October being partly offset by a small increase in November. BLS indicated that recent shifts in the dollar (especially against the yen and European currencies) influenced price movements, particularly for finished goods. Prices of exports declined in October and then rose slightly in November (the first increase recorded since May). An increase in prices of agricultural exports (particularly grains and oilseed) more than offset small price declines in other trade categories (especially industrial supplies and semiconductors). For October-November combined, prices of exports declined 2-1/4 percent (annual rate) from the third-quarter average. Excluding agricultural products, computers, and semiconductors, prices of exported "core" goods decreased 1 percent (annual rate), the smallest rate of decline since the fourth quarter of 1997. Declines in prices of exported industrial supplies were nearly offset by increases in prices of exported automotive products and consumer goods.

B.l.a.

TABLE

1

December 17, 1998

Trade in Goods and Services: Summary (in billions of dollars, seasonally adjusted)

NIPA Real Net Exports

G & S */

(1)

the Monthly Press Release 1/------------I----------------From Balance Exports Imports I I ------- ----- I----------------------------G&S Merch. Serv. I G&S Merch. Serv. Merch. Serv. G&S

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

156.0 170.5

Years 1996

-111.3 -136.2

1997

Quarters

-108.6 -191.3 -110.2 -198.0

82.8

850.8

612.0

238.8

959.4

803.3

87.7

937.6

679.3

258.3

1047.8

877.3

86.4 90.3 88.8 85.5

904.7 936.1 951.7 957.8

654.0 677.0 689.2 697.1

250.7 259.1 262.5 260.7

1017.3

852.9 873.3 886.4 896.5

164.4 168.8

82.8 82.3 74.4

946.2 922.3 909.8

685.9 659.3 654.8

260.3

1086.2 1097.8 1093.6

908.7

177.5 180.8 180.6

76.8 76.6 78.1 79.3 81.0 79.3 80.0 81.2 81.2 81.1 81.9 82.8

64.3 63.8 65.4 66.4 68.0 66.5 66.6 68.0 68.2 67.8 68.7 69.6

12.5 12.8 12.7 12.8 13.0 12.7 13.4

20.8 20.8

83.8

13.6 13.7

21.2

86.0 86.7 87.2 86.6 87.7 88.4 88.9

70.2 70.8 72.3

72.8

13.9 14.1 14.2 14.4 14.4 14.7 14.5

(AR):

1997 Qtr 1 2

-121.5 -131.6

3 4

-142.4 -149.0

-112.5 -198.9 -196.4 -106.1 -108.4 -197.2 -113.8 -199.4

-198. 5

-140.0

1998 Qtr 1 2

3

-245. 2 -253. 9

222.8

175.5 -257.8 183.8 -258.3

263.0

255.0

1042.1

1060.2 1071.7

917.1

913.0

173.8 175.2

Monthly Rates: 1996 Jan

6.8

-10.2

Sep

-11.0

Oct Nov Dec 1997

-8.4

Feb Mar Apr May Jun Jul Aug

Jan

Feb Mar Apr May Jun Jul

Aug Sep Oct Nov Dec 1998 Jan Feb Mar Apr May Jun Jul Aug

Sep Oct

-7.9

-9.4 -8.6 -11.5 -10.6 -7.0 7.2 -10.0

-14.8 -12.8 -15.0 -16.0

-17.2 15.7 -17.2 -16.9 -17.4 15.1 -15.5 -17.8

68.4 69.8 70.2 69.9 70.8 70.7 68.5

70.6 70.2 74.1 74.8 72.8

49.5 51.0 50.4 50.5 50.8 50.9 49.4 51.1 50.8 52.7

53.2 51.8

52.7 54.3 56.5 56.3

18.9 18.9 19.8

19.4 20.1 19.8 19.1 19.5 19.5 21.4 21.5 21.0

-17.5 16.5 -15.8 -16.5 -17.0

73.4 75.1 77.7

-15.6 -15.9 -16.9 -16.5

78.5 79.7

56.1 56.8 57.5 57.1 57.7

-8.7 -9.6 -10.2

-16.3 -16.6 -17.0

80.6

58.5

22.1

79.1 79.8

57.5 58.3

21.6 21.4

-9.9

-17.1

79.7 77.8 79.1 77.7 76.7 76.2 75.0 75.0 77.5 79.6

57.9 56.4

21.8 21.5 21.8 22.4 21.9 21.5 21.2 21.1 21.5 21.7

-10.3 -9.4 -8.4

9.0 -9.4

-8.2 -8.6 9.3 9.2

-11.6 -13.5 -14.0

-18.1

-15.6

-22.6 -20.5 -21.0 -22.7 -20.8 -20.6

14.2 -14.9 -16.7 -14.4

-14.2

-20.5

-21.3

77.8

77.8 79.1

79.1

57.2

55.3 54.7 54.8 53.8 53.9 56.0 57.9

21.4 21.7 21.7 21.6

22.0 22.0

84.5

89.2 88.7 90.0 89.6 89.4

92.6 91.7 92.3 90.4 89.9 91.7 91.8 93.8

13.2 13.0 13.3 13.2

13.3

13.8

73.1 72.4 73.3 74.0 74.3 74.7 74.1 75.3 75.0 74.5 77.7 76.7 77.3 75.3 74.9 76.6 76.8 78.6

14.6 14.7 14.6 15.0

14.8 15.1 15.0 15.1 15.1 15.1 15.0 15.3

1/ U.S. Department of Commerce, Bureau of the Census and Bureau of Economic Analysis, BOP valuation.

*/ In billions of chained (1992) dollars. Note: Details may not add to totals because of rounding.

B.l.b.

December 17,

1998

TABLE 2 DETAILS OF GOODS AND SERVICES: LEVELS (Millions of dollars, seasonally adjusted)

1998 Jun

TRADE BALANCE (G&S) - - -- - - - -- - - - - --

- - -- - - - -- - - - -- -

1998 Jul

14,213 -14,917

1998 Aug

-16,674

1998 Sep

1998 Oct

-14,369 -14,194

1997 Qtr-3

1997 Qtr-4

-27,108 -28,456 - - -- - - - -- - - -

- - -- - - -- -- - -- -

1998 Qtr-1

35,008

1998 Qtr-2

1998 Qtr-3

-43,872 -45,960

-- - - -- - - -- - -

-- - - - -- - - - - -

76,225 21,458 4,391 399 49,978

74,994 21,169 4,352 226 49,247

74,988 21,126 4,121 548 49,193

77,467 21,462 3,767 529 51,709

79,618 21,697 4,471 818 52,632

Ind Supplies (Ex Ag, Gold) Fuels (coal,petrol,etc) Chemicals Building Materials Other Ind Supplies

10,819 1,045 3,653 656 5,465

10,781 1,092 3,675 628 5,387

10,678 980 3,707 651 5,340

10,622 1,015 3,604 632 5,370

10,925 1,056 3,729 676 5,464

35,933 4,205 11,870 2,339 17,519

36,122 4,380 11,771 2,248 17,723

34,703 3,519 11,518 2,114 17,552

33,537 3,387 11,300 1,961 16,890

32,081 3,087 10,985 1,911 16,097

Capital Goods Aircraft & Parts Computers & Access Semiconductors Other Capital Goods

24,369 4,054 3,836 2,943 13,536

24,843 4,594 3,717 2,980 13,551

23,863 3,857 3,778 3,162 13,065

26,099 6,057 3,774 3,206 13,062

26,747 5,852 3,903 3,307 13,685

75,999 10,691 12,963 10,055 42,289

76,252 10,899 12,267 9,687 43,399

75,148 12,212 11,371 9,444 42,120

71,957 11,191 11,193 8,864 40,709

74,805 14,509 11,269 9,348 39,678

Automotive Products To Canada To Mexico (NSA) To Rest of World

5,601 2,829 894 1,878

4,732 2,325 679 1,728

5,601 2,997 846 1,758

5,993 3,136 1,095 1,762

5,991 3,447 1,025 1,520

18,703 9,917 2,822 5,964

19,161 10,333 3,329 5,499

19,425 10,196 3,305 5,925

18,052 9,757 3,084 5,211

16,326 8,457 2,620 5,249

Consumer Goods All Other Merchandise

6,864 2,325

6,658 2,232

6,692 2,360

6,735 2,261

6,843 2,126

19,368 7,122

19,689 7,085

19,584 7,191

20,016 7,198

20,085 6,853

90,438 15,141 4,122 472 70,703

89,911 15,057 4,172 427 70,255

91,662 15,065 4,124 764 71,709

91,836 15,030 4,009 639 72,158

93,812 15,262 4,435 675 73,439

Ind Supplies (Ex Oil, Gold) Chemicals Iron & Steel Mill Prod Building Materials Other Ind Supplies

12,181 2,403 1,500 1,452 6,825

12,245 2,474 1,561 1,464 6,745

12,432 2,367 1,693 1,551 6,821

12,212 2,275 1,545 1,499 6,893

12,214 2,450 1,565 1,512 6,687

35,289 7,445 3,639 4,249 19,957

35,574 7,383 3,579 4,311 20,301

36,123 7,522 3,742 4,411 20,447

36,836 7,380 4,421 4,369 20,666

36,889 7,116 4,799 4,515 20,459

Capital Goods Aircraft & Parts Computers & Access Semiconductors Other Capital Goods

22,179 1,979 5,794 2,691 11,715

22,284 2,019 5,916 2,596 11,753

22,223 1,634 5,861 2,695 12,033

22,236 1,823 6,010 2,604 11,800

22,984 2,204 6,212 12,020

65,229 4,749 18,197 9,444 32,839

66,188 4,525 17,713 9,434 34,516

67,224 4,469 18,089 9,218 35,448

67,618 5,609 17,913 8,383 35,713

66,743 5,475 17,786 7,895 35,586

Automotive Products From Canada From Mexico (NSA) From Rest of World

11,774 3,619 2,243 5,912

10,677 3,317 1,689 5,670

12,236 3,923 2,373 5,940

12,960 4,617 2,390 5,953

13,309 5,077 2,726 5,506

35,427 12,593 6,403 16,431

35,260 12,480 6,970 15,810

36,997 13,263 6,806 16,927

36,499 12,254 7,121 17,124

35,872 11,857 6,452 17,563

Consumer Goods Foods, Feeds, and Beverages All Other Merchandise

18,174 3,590 2,806

18,267 3,436 3,346

17,981 3,353 3,485

18,014 3,330 3,406

18,162 3,343 3,429

48,959 10,133 8,242

50,519 10,062 8, 412

52,284 10,432 8,707

54,341 10,443 8,678

54,262 10,119 10,237

4,177 11.735 11.86

4,055 11.504 11.37

4,038 11.731 11.10

3,625 10.530 11.47

4,393 11.700 12.11

17,173 10.817 17.26

16,776 10.441 17.46

13,018 10.610 13.63

13,164 11.816 12.25

11,719 11.255 11.31

EXPORTS, Total (G&S) Services Agricultural Gold (BOP) Nonag Goods ex Gold

IMPORTS, Total (G&S) Services Petroleum Gold (BOP) Nonpetroleum Goods ex Gold

Memo Items, NSA: Oil Imports: Value (SITC) Volume (mbd) Price ($/bbl) Source:

2,548

U.S. Department of Commerce, monthly press release (FT-900)

237,930 239,461 236,539 65,628 65,176 65,070 14,316 15,121 14,094 862 855 1,324 157,124 158,310 156,051

230,582 227,449 65,761 63,757 13,005 12,240 1,056 1,303 150,761 150,149

265,038 267,917 271,547 274,454 273,409 43,794 44,380 43,440 45,190 45,152 17,577 17,156 13,728 13,486 12,305 741 952 1,673 1,364 1,830 203,280 206,015 211,766 214,415 214,123

B.l.c.

December 17,

1998

TABLE 3 DETAILS OF GOODS AND SERVICES: DOLLAR CHANGES (Millions of dollars, seasonally adjusted)

Amount Change from Prev. Month Jul Aug Sep Oct

-6 -43 -230 321 -54

2,479 336 -354 -18 2,516

Ind Supplies (Ex Ag, Gold) Fuels (coal,petrol,etc) Chemicals Building Materials Other Ind Supplies

-103 -113 33 24 -47

-56 36 -103 -19 30

Capital Goods Aircraft & Parts Computers & Access Semiconductors Other Capital Goods

980 -737 61 182 -486

2,236 2,200 -4 43 -3

EXPORTS, Total (G&S) Services Agricultural Gold (BOP) Nonag Goods ex Gold

-1,231 -289 -39 -172 731

Amount Change from Prev. Qtr. Qtr-4 Qtr-1 Qtr-2 Qtr-3

2,151 235 704 289 923

$ Change from Year Earlier Q3-Q3

-2,922 -106 -1,026 469 -2,258

-5,957 691 -1,090 -268 -5,290

-3,133 -2,004 -764 248 -612

-10,481 -1,871 -2,076 442 -6,975

-1,419 -861 253 -133 -172

-1,166 -132 218 154 -662

-1,456 -299 -315 -49 -793

-3,852 -1,118 -884 428 -1,422

-1,105 1,313 896 -243 -1,279

-3,190 1,021 178 -580 -1,411

2,847 3,318 76 485 -1,031

-1,194 3,818 -1,694 -707 2,611

458

-2,377 -1,460 -203 -715

1,531 -452 804 -7 1,186

254 208 -696 -368 1,110

Automotive Products To Canada To Mexico (NSA) To Rest of World

-869 -504 -215 -149

868 672 166 30

392 139 249 4

-2 311 70 -243

264

-1,374

416

-137

-439

506 -464

-24 426

-221 -714

-1,726 -1,300 -465 38

Consumer Goods All Other Merchandise

-206 -93

33 128

43 -99

109 -135

322 -37

105 106

432 7

69 346

717 -269

1,751 8 -48 337 1,454

174 -35 -115 -125 449

1,976 232 427 37 1,281

2,879 354 -420 210 2,735

3,630 586 3,428 722 5,751

2,907 810 -242 -309 2,649

-1,045 -38 -1,181 466 -292

8,371 1,712 -5,272 1,088 10,842

187 -108 132 87 76

-220 -91 -148 -53 73

549 139 163 101 146

713 142 679 -42 218

54 -264 379 146 -207

1,600 -328 1,160 266 502

-61 385 55 99 280

13 189 149 -92 -233

959 -225 -484 -10 1,678

1,036 -56 376 -216 932

394 1,140 -175 -835 265

-875 -133 -127 -488 127

1,514 726 -411 -1,549 2,748

-167 -112 566 -621

1,736 783 -163 1,117

-497 1,009 315 197

-627 -397 -670 439

445 735 48 1,132

IMPORTS, Total (G&S) Services Petroleum Gold (BOP) Nonpetroleum Goods ex Gold Ind Supplies (Ex Oil, Gold) Chemicals Iron & Steel Mill Prod Building Materials Other Ind Supplies Capital Goods Aircraft & Parts Computers & Access Semiconductors Other Capital Goods Automotive Products From Canada From Mexico (NSA) From Rest of World Consumer Goods Foods, Feeds, and Beverages All Other Merchandise

-1,097 -302 553 242

1,559 606 684 269

93 -154 541

-286 -83 138

33 -23 -78

148 13 22

1,560 -71 169

1,764 370 295

2,057 11 -29

-79 -323 1,559

5,303 -13 1,995

-413 -1.201 0.37

767 1.170 0.64

-398 -0.375 0.20

-3,757 0.168 -3.83

145 1.206 -1.38

-1,445 0.561 -0.94

-5,455 0.438 -5.96

--..-------------------------------------------

Memo Items, NSA: Oil Imports: Value (SITC) Volume (mbd) Price ($/bbl) Source:

-122 -0.231 -0.49

17 0.227 -0.27

U.S. Department of Commerce, monthly press

release (FT-900).

B.l.d.

December 17,

1998

TABLE 4 DETAILS OF GOODS AND SERVICES: PERCENT CHANGES (Percent change from previous period)

Percent Change from Prev. Month Aug Sep Jul Oct

Percent Change from Prev. Qtr. Qtr-4 Qtr-1 Qtr-2 Qtr-3

% Change from Year Earlier Q3-Q3

-1.6 1.3 -0.9 -43.2 -1.5

-0.0 -0.2 -5.3 141.9 -0.1

3.3 1.6 -8.6 -3.4 5.1

2.8 1.1 18.7 54.6 1.8

0.6 -0.7 5.6 -0.8 0.8

-1.2 -0.2 -6.8 54.8 -1.4

-2.5 1.1 -7.7 -20.2 -3.4

-1.4 -3.0 -5.9 23.5 -0.4

-4.4 -2.9

Ind Supplies (Ex Ag, Gold) Fuels (coal,petrol,etc) Chemicals Building Materials Other Ind Supplies

-0.3 4.5 0.6

-0.5 3.7 -2.8

-1.4

-1.0 -10.3 0.9 3.8 -0.9

0.6

2.9 4.0 3.5 6.8 1.7

0.5 4.2 -0.8 -3.9 1.2

-3.9 -19.7 2.1 -5.9 -1.0

-3.4 -3.8 1.9 -7.3 -3.8

-4.3 -8.8 -2.8 2.5 -4.7

-10.7 26.6 7.4 -18.3 -8.1

Capital Goods Aircraft & Parts Computers & Access Semiconductors Other Capital Goods

1.9 13.3 -3.1 1.3 0.1

-3.9 -16.0 1.6 6.1 -3.6

9.4 57.0 -0.1 1.4 -0.0

2.5 -3.4 3.4 3.2 4.8

0.3 1.9 -5.4 -3.7 2.6

-1.4 12.0 -7.3 2.5 -2.9

-4.2 -8.4 -1.6 6.1 -3.3

4.0 29.6 0.7 5.5 2.5

-1.6 35.7 -13.1 -7.0 -6.2

-15.5 -17.8 -24.0 -8.0

18.3 28.9 24.5 1.7

7.0 4.6 29.5 0.2

-0.0 9.9 -6.4 -13.8

2.4 4.2 17.9 -7.8

1.4 -1.3 -0.7 7.7

-7.1 -4.3 -6.7 -12.1

9.6 -13.3 -15.1 0.7

-12.7 -14.7 -7.2

3.0 -4.0

0.5 5.7

0.6 -4.2

1.6 -6.0

1.7 -0.5

-0.5 1.5

2.2 0.1

0.3 4.8

3.7 -3.8

0.6 -0.6 1.2 -9.5 0.6

1.9 0.1 -1.2 78.9 2.1

0.2 -0.2 -2.8 -16.4 0.6

2.2 1.5 10.6 5.7 1.8

1.1 0.8 -2.4 28.4 1.3

1.4 1.3 -20-0 75.8 2.8

i.1 1.8 -1.8 -18.5 1.3

0.4 -0.1 -8.8 34.2 0.1

3.2 3.9 -30.0 146.8 5.3

0.5 3.0 4.1 0.8 1.2

1.5 -4.4 8.4 5.9 1.1

-1.8 -3.9 -8.8 -3.4 1.1

0.0 7.7 1.3 0.9 -3.0

0.8 -0.8 -1.7 1.5 1.7

1.5 1,9 4.6 2.3 0.7

2.0 -1.9 18.1 -1.0 1.1

0.5 2.0 2.1 -3.5 0.3

-0.3 -19.1 -0.9 3.8 2.4

0.1 11.6 2.5 -3.4 -1.9

3.4 20.9 3.4

1.6 -1.2 2.1 -2.3 2.7

0.6 25.5 -1.0 -9.1 0.7

-1.3

1.9

1.5 -4.7 -2.7 -0.1 5.1

-9.3 -8.4 -24.7 -4.1

14.6 18.3 40.5 4.7

5.9 17.7 0.7 0.2

2.7 10.0 14.1 -7.5

-0.5 0.9 8.8 -3.8

4.9 6.3 -2.3 7.1

1.3 -7.6 4.6 1.2

1.7 -3.2 -9.4 2.6

0.5 -4.3 19.3

-1.6 -2.4 4.1

0.2 -0.7 -2.2

0.8 0.4 0.6

3.2 -0.7 2.1

3.5 3.7

3.5

3.9 0.1 -0.3

-0.1 -3.1 18.0

10.8 -0.1 24.2

-2.9 -2.0 4.2

-0.4 2.0 -2.3

10.2 -10.2 3.3

21.2 11.1 5.5

-2.3 -3.5 1.1

-22.4 1.6 -21.9

1.1 11.4 -10.1

-11.0 -4.7 -7.7

31.8 4.1 -34.5

EXPORTS, Total (G&S) Services Agricultural Gold (BOP) Nonag Goods ex Gold

Automotive Products To Canada To Mexico (NSA) To Rest of World Consumer Goods All Other Merchandise

IMPORTS, Total (G&S) Services Petroleum Gold (BO)P Nonpetroleum Goods ex Gold Ind Supplies (Ex Oil, Gold) Chemicals Iron & Steel Mill Prod Building Materials Other Ind Supplies Capital Goods Aircraft & Parts Computers & Access Semiconductors Other Capital Goods Automotive Products From Canada From Mexico (NSA) From Rest of World Consumer Goods Foods, Feeds, and Beverages All Other Merchandise Memo Items, NSA: Oil Imports: value (SITC) Volume (mbd) Price ($/bbl) Source:

-4.4

-2.9

-2.1

U.S. Department of Commerce, monthly press release

(FT-900).

14.5

51.3 -4.4

-12.0

4.5 -4.4 31.9 6.3 2.5

-2.4

-0.7 -5.8 -0.4

2.3 15.3 -2.3 -16.4 8.4 1.3 -5.8

0.8 6.9

Commercial Bank Credit (Percent change; seasonally adjusted annual rate) 1998 Type of credit

1. Bank credit: Reported Adjusted 1

2.

3.

Securities: Reported Adjusted 1

4.

5.

U.S. government

6.

Other 2

7.

Loans 3

1997

02

Q3

Sep

Level, Oct

Nov

Nov 1998 (billions of $)

9.0

5.4

9.2

15.5

25.2

9.5

4,527.7

8.6

6.0

8.1

10.2

18.1

15.3

4,398.0

10.3

0.5

12.3

20.7

42.0

9.3

1,225.7

8.5

2.3

8.2

-0.1

15.1

32.8

1,096.1

6.2

-3.4

0.6

-6.5

11.3

22.5

788.0

20.8

9.2

37.6

75.2

99.5

-13.8

437.7

8.6

7.2

8.0

13.6

19.1

9.5

3,301.9

8.

Business

8.8

7.0

12.7

15.3

28.4

11.1

950.7

9.

Real estate

9.2

6.3

1.9

1.1

5.2

19.4

1,307.1

15.5

-0.8

-2.5

4.9

-7.4

17.3

98.3

8.7

6.9

2.2

0.9

6.2

19.8

1,208.9

-1.5

1.7

-5.4

7.7

-1.4

5.0

501.4

4.1

9.1

3.8

6.8

-0.2

5.7

745.4

20.9

16.1

30.6

47.7

56.6

-12.3

542.7

10.

Home equity

11.

Other

12.

Consumer: Reported Adjusted 4

13. 14.

Other5

Note. Adjusted for breaks caused by reclassifications. Monthly levels are pro rata averages of weekly (Wednesday) levels. Quarterly levels (not shown) are simple averages of monthly levels. Annual levels (not shown) are levels for the fourth quarter. Growth rates shown are percentage changes in consecutive levels, annualized but not compounded. 1. Adjusted to remove effects of mark-to-market accounting rules (FIN 39 and FASB 115). 2. Includes securities of corporations, state and local governments, and foreign governments and any trading account assets that are not U.S. government securities. 3. Excludes interbank loans. 4. Includes an estimate of outstanding loans securitized by commercial banks. 5. Includes security loans, loans to farmers, state and local governments, and all others not elsewhere classified. Also includes lease financing receivables.

III-T-1

Selected Financial Market Quotations (One-day quotes in percent except as noted) 1997 Instrument Dec.31

Change to Dec. 17 from selected dates (percentage points)

1998 Oct. 14

FOMC* IFOMC* Nov. 17 Dec. 17

Dec. 31

Oct. 14

Nov. 17

Short-term

Federal funds FOMC intended rate Realized rate

5.50 5.44

5.25 5.40

5.00 5.08

4.75 4.80

-.75 -.64

-.50 -.60

-.25 -.28

Treasury bills 2 3-month 6-month 1-year

5.22 5.23 5.22

3.93 4.06 4.01

4.41 4.42 4.34

4.35 4.37 4.25

-.87 -.86 -.97

.42 .31 .24

-.06 -.05 -.09

Commercial paper 1-month 3-month

5.65 5.57

5.26 5.11

5.13 5.09

5.24 5.01

-.41 -.56

-.02 -.10

.11 -.08

Large negotiable CDs 2 1-month 3-month 6-month

5.65 5.72 5.74

5.34 5.30 5.09

5.19 5.31 5.12

5.52 5.14 4.99

-.13 -.58 -.75

.18 -.16 -.10

.33 -. 17 -.13

Eurodollar deposits 3 1-month 3-month

5.63 5.72

5.25 5.25

5.19 5.31

5.44 5.13

-.19 -.59

.19 -.12

.25 -.18

Bank prime rate

8.50

8.25

8.00

7.75

-.75

-.50

-.25

Intermediate-and long-term U.S. Treasury (constant maturity) 2-year 10-year 30-year

5.66 5.75 5.93

4.08 4.58 5.00

4.56 4.85 5.28

4.42 4.58 5.01

-1.24 -1.17 -.92

.34 .00 .01

-. 14 -.27 -.27

U.S. Treasury 10-year indexed note

3.70

3.72

3.80

3.78

.08

.06

-.02

Municipal revenue (Bond Buyer) 4

5.40

5.17

5.28

5.21

-.19

.04

-.07

Corporate bonds, Moody's seasoned Baa

7.28

7.23

7.37

7.20

-.08

-.03

-. 17

High-yield corporate

9.06

11.20

10.62

10.46

1.40

-.74

-.16

Home mortgages (FHLMC survey rate) 6 30-year fixed 1-year adjustable

6.99 5.53

6.49 5.36

6.93 5.56

6.69 5.53

-.30 .00

.20 .17

-.24 -.03

Record high Stock exchange index Dow-Jones Industrial S&P 500 Composite NASDAQ (OTC) Russell 2000 Wilshire 5000

Change to Dec. 17 from selected dates (percent)

1998

Level

Date

Oct. 14

FOMC* Nov. 17

Dec. 17

9,374.27 1,192.33 2,050.42 491.41 11,106.10

11-23-98 11-27-98 12-9-98 4-21-98 7-17-98

7,968.78 1,005.53 1,540.97 324.98 9,060.47

9,011.25 1,135.87 1,861.68 390.42 10,383.89

8,875.82 1,179.98 2,043.88 393.78 10,731.68

1. Average for two-week reserve maintenance period ending on or before date shown. Most recent observation is average for current maintenance period to date. 2. Secondary market. 3. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. 4. Most recent Thursday quote. 5. Merrill Lynch Master II high-yield bond index composite. 6. For week ending Friday previous to date shown. * Data are as of the close on November 16, 1998.

Record high -5.32 -1.04 -.32 -19.87 -3.37

Oct. 14

FOMC* Nov. 17

11.38 17.35 32.64 21.17 18.45

-1.50 3.88 9.79 .86 3.35