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 02/07/2013.

Class III FOMC – Internal (FR)

June 22, 2007

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 The Domestic Financial Economy .............................................................. Tables Commercial Bank Credit .................................................................1 Selected Financial Market Quotations .............................................2

1

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

Total

Level,1 May 2007

2005

2006

Q4 2006

Q1 2007

Apr. 2007

May 2007

10.6

9.6

4.4

8.7

11.8

7.5

8,224

Loans2 Total To businesses Commercial and industrial Commercial real estate

11.6

10.7

7.5

9.9

13.7

9.0

6,189

13.5 17.0

16.4 13.6

10.6 7.6

8.2 10.3

8.7 14.8

15.3 7.9

1,221 1,506

To households Residential real estate Revolving home equity Other Consumer Originated3 Other4

11.9 13.3 11.4 3.0 .7 8.6

7.2 1.5 9.3 5.2 6.4 10.9

5.4 1.8 6.7 .2 4.8 14.2

9.5 3.5 11.5 7.6 8.1 14.8

14.9 -3.4 21.1 9.6 1.2 20.1

.1 .0 .0 5.5 .6 23.6

1,821 455 1,366 750 1,130 891

7.5 .0 13.5

6.3 3.0 12.8

-4.8 -10.1 7.5

4.8 -1.8 10.4

6.2 -23.3 45.9

3.2 -13.6 28.1

2,036 1,150 1,069

Securities Total Treasury and agency Other5

Note. Yearly annual rates are Q4 to Q4; quarterly and monthly annual rates use corresponding average levels. Data have been adjusted to remove the effects of mark-to-market accounting rules (FIN 39 and FAS 115), the consolidation of certain variable interest entities (FIN 46), the adoption of fair value accounting (FAS 159), and the effects of sizable thrift-to-bank and bank-to-thrift structure activity in October 2006 and March 2007 respectively. Data also account for breaks caused by reclassifications. 1. Billions of dollars. Pro rata averages of weekly (Wednesday) levels. 2. Excludes interbank loans. 3. Includes an estimate of outstanding loans securitized by commercial banks. 4. Includes security loans and loans to farmers, state and local governments, and all others not elsewhere classified. Also includes lease financing receivables. 5. 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.

Delinquency Rates on Loans

Loan-Loss Provisioning

Percent, annual rate

Percent of average assets 7

1.4

Quarterly

Quarterly

Total loans and leases

Q1

6

1.2

5

1.0

4

0.8

3

0.6 Q1

2 Residential real estate

1

0.2

0 1991

1994

1997

2000

2003

0.4

0.0

2006

1991

Source. Call Report.

1994

1997

Source. Call Report.

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2000

2003

2006

III-T-1

Selected Financial Market Quotations (One-day quotes in percent except as noted) 2004

2006

Change to June 21 from selected dates (percentage points)

2007

Instrument June 28

June 29

May 8

June 21

2004 June 28

2006 June 29

2007 May 8

1.00

5.25

5.25

5.25

4.25

.00

.00

1.36 1.74

4.88 5.06

4.76 4.82

4.57 4.76

3.21 3.02

-.31 -.30

-.19 -.06

Commercial paper (A1/P1 rates)2 1-month 3-month

1.28 1.45

5.27 5.37

5.25 5.21

5.25 5.26

3.97 3.81

-.02 -.11

.00 .05

Large negotiable CDs1 3-month 6-month

1.53 1.82

5.47 5.59

5.31 5.31

5.33 5.36

3.80 3.54

-.14 -.23

.02 .05

Eurodollar deposits3 1-month 3-month

1.29 1.51

5.33 5.49

5.32 5.35

5.32 5.36

4.03 3.85

-.01 -.13

.00 .01

Bank prime rate

4.00

8.25

8.25

8.25

4.25

.00

.00

Intermediate- and long-term U.S. Treasury4 2-year 5-year 10-year

2.88 3.97 4.90

5.26 5.15 5.28

4.71 4.51 4.70

5.01 5.04 5.24

2.13 1.07 .34

-.25 -.11 -.04

.30 .53 .54

U.S. Treasury indexed notes 5-year 10-year

1.56 2.25

2.49 2.61

2.12 2.28

2.70 2.74

1.14 .49

.21 .13

.58 .46

Municipal general obligations (Bond Buyer)5

5.01

4.71

4.25

4.63

-.38

-.08

.38

Private instruments 10-year swap 10-year FNMA6 10-year AA7 10-year BBB7 10-year high yield7

5.21 5.38 5.60 6.25 8.41

5.81 5.59 6.20 6.74 8.74

5.17 4.99 5.60 6.07 7.94

5.75 5.59 6.18 6.63 8.30

.54 .21 .58 .38 -.11

-.06 .00 -.02 -.11 -.44

.58 .60 .58 .56 .36

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

6.21 4.19

6.78 5.82

6.15 5.48

6.69 5.66

.48 1.47

-.09 -.16

.54 .18

Short-term FOMC intended federal funds rate Treasury bills1 3-month 6-month

Record high

2006

Change to June 21 from selected dates (percent)

2007

Stock exchange index Dow Jones Industrial S&P 500 Composite Nasdaq Russell 2000 Wilshire 5000

Level

Date

June 29

May 8

June 21

Record high

2006 June 29

2007 May 8

13,676 1,539 5,049 855 15,569

6-4-07 6-4-07 3-10-00 6-4-07 6-4-07

11,191 1,273 2,174 714 12,846

13,309 1,508 2,572 831 15,203

13,546 1,522 2,617 840 15,376

-.95 -1.10 -48.16 -1.79 -1.24

21.04 19.59 2.35 17.57 19.70

1.78 .96 1.76 1.07 1.14

1. Secondary market. 2. Financial commercial paper. 3. Bid rates for Eurodollar deposits collected around 9:30 a.m. eastern time. 4. Derived from a smoothed Treasury yield curve estimated using off-the-run securities. 5. Most recent Thursday quote. 6. Constant-maturity yields estimated from Fannie Mae domestic noncallable coupon securities. 7. Derived from smoothed corporate yield curves estimated using Merrill Lynch bond data. _______________________________________________________________________ NOTES: June 28, 2004, is the day before the most recent policy tightening began. June 29, 2006, is the day the most recent policy tightening ended. May 8, 2007, is the day before the most recent FOMC announcement. _______________________________________________________________________

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