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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 01/29/2016. Class III FOMC - Internal (FR) January 22, 2010 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 .............................................................. Exhibits Selected Financial Market Quotations .............................................1 Commercial Bank Credit .................................................................2 i 1 -1Selected Financial Market Quotations (One-day quotes in percent except as noted) 2008 2009 Change to Jan. 21 from selected dates (percentage points) 2010 Instrument Sept. 12 Nov. 3 Dec. 15 Jan. 21 2008 Sept. 12 2009 Nov. 3 2009 Dec. 15 2.00 .13 .13 .13 -1.87 .00 .00 1.46 1.80 .06 .17 .05 .17 .06 .14 -1.40 -1.66 .00 -.03 .01 -.03 Commercial paper (A1/P1 rates)2 1-month 3-month 2.39 2.75 .16 .18 .13 .20 .11 .16 -2.28 -2.59 -.05 -.02 -.02 -.04 Large negotiable CDs1 3-month 6-month 2.79 3.09 .22 .32 .22 .31 .19 .28 -2.60 -2.81 -.03 -.04 -.03 -.03 Eurodollar deposits3 1-month 3-month 2.60 3.00 .30 .45 .32 .45 .30 .40 -2.30 -2.60 .00 -.05 -.02 -.05 Bank prime rate 5.00 3.25 3.25 3.25 -1.75 .00 .00 Intermediate- and long-term U.S. Treasury4 2-year 5-year 10-year 2.24 2.97 3.93 .93 2.37 3.73 .87 2.33 3.79 .85 2.37 3.78 -1.39 -.60 -.15 -.08 .00 .05 -.02 .04 -.01 U.S. Treasury indexed notes5 5-year 10-year 1.33 1.77 .70 1.48 .50 1.42 .36 1.35 -.97 -.42 -.34 -.13 -.14 -.07 Municipal general obligations (Bond Buyer)6 4.54 4.39 4.19 4.30 -.24 -.09 .11 4.26 4.36 6.62 7.22 10.66 3.62 4.06 5.12 6.25 9.48 3.74 4.08 5.04 6.09 9.29 3.74 4.10 4.95 5.67 8.62 -.52 -.26 -1.67 -1.55 -2.04 .12 .04 -.17 -.58 -.86 .00 .02 -.09 -.42 -.67 5.78 5.03 4.98 4.47 4.94 4.34 4.99 4.32 -.79 -.71 .01 -.15 .05 -.02 Short-term FOMC intended federal funds rate Treasury bills1 3-month 6-month Private instruments 10-year swap 10-year FNMA 7 10-year AA 8 10-year BBB 8 10-year high yield 8 Home mortgages (FHLMC survey rate) 30-year fixed 1-year adjustable Record high 2009 2010 Stock exchange index Change to Jan. 21 from selected dates (percent) Level Dow Jones Industrial S&P 500 Composite Nasdaq Russell 2000 D.J. Total Stock Index Date Nov. 3 Dec. 15 Jan. 21 Record high 2009 Nov. 3 2009 Dec. 15 14,165 1,565 5,049 856 15,807 10-9-07 10-9-07 3-10-00 7-13-07 10-9-07 9,772 1,045 2,057 571 10,729 10,452 1,108 2,201 606 11,385 10,390 1,116 2,266 628 11,540 -26.65 -28.67 -55.12 -26.57 -26.99 6.32 6.80 10.13 10.12 7.56 -.59 .77 2.94 3.64 1.36 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. Derived from a smoothed Treasury yield curve estimated using all outstanding securities and adjusted for the carry effect. 6. Most recent Thursday quote. 7. Constant-maturity yields estimated from Fannie Mae domestic noncallable coupon securities. 8. Derived from smoothed corporate yield curves estimated using Merrill Lynch bond data. _______________________________________________________________________ NOTES: September 12, 2008, is the last business day before Lehman Brothers Holdings filed for bankruptcy. November 3, 2009, is the day before the November 2009 FOMC monetary policy announcement. December 15, 2009, is the day before the most recent FOMC monetary policy announcement. _______________________________________________________________________ -2- Commercial Bank Credit (Percent change, annual rate, except as noted; seasonally adjusted) Type of credit Total Level1 Dec. 2009 2007 2008 2009 Q3 2009 Oct. 2009 Nov. 2009 Dec. 2009 9.9 4.9 -6.5 -7.1 -10.9 -4.6 -3.2 9,088 10.6 9.5 4.4 5.0 -9.6 -7.6 -12.3 -9.5 -14.1 -13.0 -5.6 -7.3 -9.5 -9.3 6,732 5,985 19.2 9.4 16.3 6.1 -17.0 -4.3 -19.8 -5.6 -26.6 -9.4 -16.6 -8.7 -20.2 -9.0 1,343 1,648 5.3 5.6 5.3 6.8 6.5 18.5 -3.2 13.0 -8.0 7.1 5.7 .4 -5.3 .5 -7.4 -2.2 -3.6 -22.8 -7.8 -4.5 -9.1 -3.7 -4.6 -33.4 -11.1 -5.3 -13.4 -2.0 -3.9 -22.8 -.7 -5.9 1.4 -6.2 -9.0 8.2 -.8 -5.8 1.2 -13.7 -5.2 -11.8 2,161 602 1,559 833 1,225 747 7.7 -6.2 29.4 6.8 16.3 -4.2 3.8 8.0 -2.0 9.5 18.1 -2.5 -1.4 -.7 -2.4 -1.8 2.1 -7.6 15.5 33.6 -11.9 2,356 1,439 918 Loans2 Total Core To businesses Commercial and industrial Commercial real estate To households Residential real estate Revolving home equity Closed-end mortgages Consumer Memo: Originated3 Other Securities Total Treasury and agency Other4 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 (FAS 115) and the initial consolidation of certain variable interest entities (FIN 46) and off-balance sheet vehicles (FAS 166 and 167). Data also account for the effects of nonbank structure activity of $5 billion or more. 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 that retained recourse or servicing rights. 4. Includes private mortgage-backed securities; securities of corporations, state and local governments, and foreign governments; and any trading account securities that are not Treasury or agency securities. Source: Federal Reserve Board.
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