Greenbook/Tealbook

Prefatory Note

The attached document represents the most complete and accurate version available based on original files from the FOMC Secretariat at the Board of Governors of the Federal Reserve System. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.

Content last modified 05/27/2010.

Confidential (FR)

Class III FOMC

January 23, 2004

CURRENT ECONOMIC AND FINANCIAL CONDITIONS Supplemental Notes

Prepared for the Federal Open Market Committee by the staff of the Board of Governors of the Federal Reserve System

Contents 1

The Domestic Financial Economy .............................

Tables Commercial Bank Credit .........................

1

Selected Financial Market Quotations ................

2

Commercial Bank Credit (Percent change, annual rate, except as noted; seasonally adjusted) Type of credit

Total 1. Adjusted¹ 2. Reported 3. 4. 5. 6.

Securities Adjusted¹ Reported Treasury and agency Other 2

7. 8. 9. 10. 11. 12. 13. 14.

Loans3 Total Business Real estate Home equity Other Consumer Adjusted 4 Other 5

Q2

Q3

Q4

Nov.

Dec.

Level, Dec. 2003

2003

2003

2003

2003

2003

($ billions)

5.9 5.6

11.6 11.7

4.6 2.5

-.4 .0

9.4 7.9

-4.5 -2.3

5,966 6,159

9.0 7.6 8.6 6.1

19.1 18.7 29.2 2.7

-3.6 -10.2 -15.3 -2.1

6.0 6.8 2.7 13.4

26.9 19.9 22.8 15.8

-2.9 4.5 -.9 12.4

1,633 1,826 1,101 726

4.8 -8.9 11.0 30.8 8.7 6.2 6.2 4.8

8.9 -7.0 11.6 28.1 9.6 2.0 5.3 32.5

7.7 -13.9 18.4 24.1 17.7 6.9 4.0 4.5

-2.8 -9.7 -1.8 30.9 -6.0 12.5 8.5 -11.2

2.9 -4.8 -8.4 35.2 -14.2 57.2 35.8 1.4

-5.1 -5.3 -1.4 32.9 -6.2 6.5 1.7 -29.7

4,333 877 2,216 281 1,935 634 999 607

2003

Note. Data are adjusted to remove estimated effects of consolidation related to FIN 46 and 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 are percentage changes in consecutive levels, annualized but not compounded. 1. Adjusted to remove effects of mark-to-market accounting rules (FIN 39 and FAS 115). 2. Includes private mortgage-backed securities, securities of corporations, state and local governments, foreign governments, and any trading account assets that are not Treasury or agency securities, including revaluation gains on derivative contracts. 3. Excludes interbank loans. 4. Includes an estimate of outstanding loans securitized by commercial banks. 5. Includes security loans and loans to farmers, state and local governments, and all others not elsewhere classified. Also includes lease financing receivables.

-2-

III-T-1

Selected Financial Market Quotations (One-day quotes in percent except as noted) 2002

2004

2003

Instrument

Change to Jan. 22 from selected dates (percentage points)

Dec. 31

June 24

Dec. 8

Jan. 22

2002 Dec. 31

2003 June 24

2003 Dec. 8

Short-term FOMC intended federal funds rate

1.25

1.25

1.00

1.00

-.25

-.25

.00

Treasury bills ¹ 3-month 6-month

1.20 1.21

0.81 0.82

0.91 1.01

0.86 0.94

-.34 -.27

.05 .12

-.05 -.07

Commercial paper (A1/P1 rates) 1-month 3-month

1.28 1.36

0.91 0.88

1.02 1.04

1.00

-.28

.09

-.02

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

1.34 1.31 1.32

0.96 0.93 0.92

1.10 1.10 1.17

1.03 1.05 1.10

-.31 -.26 -.22

.07 .12 .18

-.07 -.05 -.07

Eurodollar deposits 2 1-month 3-month

1.30 1.30

0.94 0.91

1.08 1.08

1.02 1.04

-.28 -.26

.08 .13

-.06 -.04

Bank prime rate

4.25

4.25

4.00

4.00

-.25

-.25

.00

Intermediate-and long-term 3 U.S. Treasury 2-year 10-year 30-year

1.60 4.09 4.96

1.14 3.46 4.53

1.93 4.44 5.27

1.64 4.12 5.00

.04 .03 .04

.50 .66 .47

-.29 -.32 -.27

U.S. Treasury 10-year indexed note

2.32

1.70

1.96

1.76

-.56

.06

-.20

Municipal revenue (Bond Buyer) 4

5.16

4.89

5.19

4.94

-.22

.05

-.25

4.22 4.49 5.06 6.45 11.45

3.67 3.84 4.13 5.16 8.95

4.65 4.75 5.08 5.78 7.97

4.38 4.41 4.77 5.40 7.55

.16 -.08 -.29 -1.05 -3.90

.71 .57 .64 .24 -1.40

-.27 -.34 -.31 -.38 -.42

5.93 4.01

5.21 3.51

6.02 3.77

5.66 3.62

-.27 -.39

.45 .11

-.36 -.15

Private instruments 10-year swap 5 10-year FNMA 10-year AA 6 10-year BBB 6 5-year high yield 6 Home mortgages (FHLMC survey rate) 7 30-year fixed 1-year adjustable

Record high

2003

2004

Stock exchange index Dow-Jones Industrial S&P 500 Composite Nasdaq (OTC) Russell 2000 Wilshire 5000 1. 2. 3. 4. 5. 6. 7.

Change to Jan. 22 from selected dates (percent)

Level

Date

June 24

Dec. 8

Jan. 22

Record high

2003 June 24

2003 Dec. 8

11,723 1,527 5,049 606 14,752

1-14-00 3-24-00 3-10-00 3-9-00 3-24-00

9,110 983 1,606 441 9,388

9,965 1,069 1,949 543 10,425

10,623 1,144 2,119 592 11,165

-9.38 -25.11 -58.03 -2.37 -24.31

16.61 16.32 31.98 34.21 18.93

6.60 6.98 8.73 8.97 7.09

Secondary market. Bid rates for eurodollar deposits collected around 9:30 a.m. Eastern time. Derived from a smoothed Treasury yield curve estimated using off-the-run securities. Most recent Thursday quote. Constant maturity yields estimated from Fannie Mae domestic noncallable coupon securities. Derived from smoothed corporate yield curves estimated using Merrill Lynch bond data. For week ending Friday previous to date shown.

NOTES: June 24, 2003, is the last day before the most recent policy easing. December 8, 2003, is the day before the most recent FOMC meeting.