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FEDERAL RESERVE BANK
OF CHICAGO
FEDERAL RESERVE ECONOMIC SYMPOSIUM
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Jefferson, Iowa
October 31, 1991
AGRICULTURAL CONDITIONS
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
A-1
EXPORTS
World grain trade
U.S. agricultural exports
million metric tons
billion dollars
180
50
million metric tons
225
160
30
140
20
120
10
100
0 ._____.___ _.____.__...._____._ _.____..___.__.,___,_----J80
'83
'85
'87
'91
'89
1981
200
175
150
1980/81
82/83
84/85
86/87
88/89
90/91
fiscal year
Corn and soybean exports
Corn exports by destination
million metric tons
billion bushels
100
2.5
Other
EC
Taiwan
Japan
Mexico
Korea
USSR
2.0
75
1.5
50
1.0
25
0.5
0.0
0
1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'83
'85
'87
'89
'91
1987/88
1988/89
1989/90
1990/91
crop marketing year
A-2
FARM EARNINGS
Commodity sales
Government payments
billion dollars
100
billion dollars
18
90
■ ■ ■ ■ I
----.
80
15
12
70
50
1985
•••
9
60
'86
'87
'88
'89
'90
'91
6
1985
'86
Cash expenses
Net cash income
billion dollars
140
billion dollars
65
'89
'90
I
'91
~-----------·· ...
60
130
'88
'87
•
~
■ ■ ■ ■ I
55
120
50
110
100
1985
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
45
'86
'87
'88
'89
'90
'91
40
1985
'86
'87
'88
'89
'90
'91
A-3
THE BALANCE SHEET
Farm assets
Change in land values
billion dollars
1,200
percent
12
9
1,000
6
800
--
Real
600
1981
'83
'85
'87
'89
'91
3
0
1987
'88
'90
'89
Farm debt
Change in farm loans at banks and FCS
billion dollars
225
percent
8
~-~--Banks
200
4
175
0
150
-4
125
1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'83
'85
'87
'89
'91
-8
1988
•• • • • •
'91
••••
■
I
FCS
'89
'90
'91
A-4
FARM EXPENDITURES
Capital expenditures
Unit sales of tractors and combines
billion dollars
thousand
25
20
20
15
15
10
10
5
Farm machinery
and equipment
0
1980
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
5
0
'82
'84
'86
'88
'90
Jan.-Mar.
Apr.-June
July- Sep.
Oct.-Dec.
A-5
LIVESTOCK
Meat production
Hog inventories
lbs. per capita
110
million head
43.0
41.0
••
90
Market
39.0
37.0
5.7
70
5.5
5.3
50
1981
~----:......_~B~ro:od:_:so:w:_s_ , ~
5.1
'83
'85
'87
'91
'89
1987
'88
Cattle inventories
Livestock prices
million head
115
dollars per cwt.
85
105
95
50
45
40
r
r~
1981
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-
All cattle
'89
Sept. 1
'91
'90
75
65
55
'83
~
'85
Jan. 1
Cows
I
'87
'89
:
'91
45
35
1988
'89
'90
'91
A-6
DAIRY
Milk production
billion pounds
pounds
150
••
675
Cow numbers and milk per cow
index, 1985=100
120
--
Milk per cow
110
140
625
130
100
...
Per capita-.
120
575
••
90
110
1981
525
'83
'85
'87
'91
'89
80
1981
'83
'85
'87
'89
'91
Milk prices
dollars per cwt.
16
15
14
13
12
11
Jan.
Mar.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
May
July
Sep.
Nov.
A-7
I
WORLD GRAIN AND SOYBEAN PRODUCTION
Coarse grains
Wheat
million metric tons
850
million metric tons
600
•
•• ••
•• •••
550
•,
750
•• •••
500
650
1 ______
Foreign
_..;.________
countries
.............
I.
e
550
1985/86
86/87
87/88
88/89
89/90
90/91
450
I
91/92
400
1985/86
86/87
Soybeans
Rice
million metric tons
110
million metric tons
375
■ ■ I
87/88
88/89
89/90
90/91
91/92
■ I
90
•• •••
350
70
Foreign countries
I
50
30
1985/86
86/87
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
87/88
88/89
89/90
90/91
■ I
325
I
I
91/92
300
1985/86
86/87
87/88
88/89
89/90
90/91
91/92
A-8
CORN
Production and usage
Exports and domestic use
billion bushels
9
billion bushels
• ••
7
S.S
I
11nm"
s.s~sti~-4 _5
5
,.1L:
_
2.4 I'-,......__ _~ · · ,
~
1.0
3
1981 /82
83/84
85/86
87/88
89/90
1981 /82
91/92
Carryover stocks
Prices
billion bushels
5
dollars per bushel
3.00
4
2.80
I
3
2
83/84
85/86
87/88
89/90
91/92
Dec.
Feb.
Apr.
June
Aug.
2.60
2.40
1
1991/92
2.20
0
2.00
1986/87
87/88
88/89
89/90
90/91
91/92
Oct.
A-9
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
SOYBEANS
Production and usage
Exports and crush ings
billion bushels
2.4
billion bushels
1.5
2.2
1.3
2.0
1.1
1.8
0.9
1.6
0.7
1.4
0.5
1981 /82
83/84
85/86
87/88
89/90
91/92
1981 /82
83/84
85/86
87/88
89/90
91/92
*Includes the bean equivalent of soybean meal exports.
Carryover stocks
Prices
million bushels
500
dollars per bushel
6.50
400
1989/90
6.00
300
200
5.50
100
0
1986/87
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
87 /88
88/89
89/90
90/91
91 /92
5.00
Oct.
Dec.
Feb.
Apr.
June
Aug.
A-10
SUMMARY
~
Agricultural recovery had some setbacks this year
- Particularly for dairy farmers and
Midwest crop farmers
~
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
For 1992
- Tight grain supplies and more acreage
- Weather always a big unknown
- But exports likely to be key to crop prices
- Increase in red meat production
will undermine livestock prices
- Overall farm earnings and land
values - flat to up modestly
A-11
RECOVERY
~
Underway?
IJ Stalled?
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
B-1
EMPLOYMENT
Nonfarm payroll employment
Manufacturing employment
change, thousands
change.thousands
200
200
100
100
0
0
-100
-100
-200
-200
-300
Jul.
Sep.
Nov.
Jan.
Mar.
May
1990
Jul.
Sep.
-300
Jul.
1991
Sep.
Nov.
Jan.
1990
Mar.
May
Jul.
Sep.
1991
Unemployment rate
Initial unemployment claims
percent
thousands
8
540
480
7
420
6
360
5
Jul.
Sep.
1990
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Nov.
Jan.
Mar.
May
Jul.
Sep.
300
?fl/90
12/29/90
10/12/91
1991
B-2
CONSUMPTION
Personal consumption expenditures
Retail sales
change, billions of dollars
billions of dollars
45
155
30
152
15
0
149
-15
-30
Jul.
Sep.
Nov.
Jan.
Mar.
1990
May
Jul.
Sep.
146
Jul.
Sep.
1991
Nov.
Jan.
Retail sales {less autos)
millions of units, annual rate
16
121
12
120
8
119
4
118
1990
Nov.
Jan.
Jul.
Sep.
Auto sales
billions of dollars
Sep.
May
1991
122
Jul.
Mar.
1990
Mar.
May
1991
Jul.
Sep.
0
Imported autos
& light trucks
Jul.
Sep.
Nov.
1990
Jan.
Mar.
May
1991
Jul.
Sep.
B-3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
PRODUCTION
Industrial production, manufacturing
Nondetense durable goods orders (less aircraft)
percent change
percent change
1
10
5
0
0
-1
-5
-2
Jul.
Sep.
Nov.
1990
Jan.
Mar.
May
1991
Jul.
Sep.
-10
Jul.
Sep.
Nov.
1990
Jan.
Mar.
May
1991
Nondefense capital goods orders (less aircraft}
Purchasing managers' new orders index
percent change
10
percent
70
5
60
0
50
-5
40
-10
Jul.
Sep.
Nov.
1990
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Jan.
Mar.
May
1991
Jul.
Sep.
30
Jul.
Sep.
Nov.
1990
Jan.
Mar.
May
1991
Jul.
Sep.
Jul.
Sep.
B-4
CONSTRUCTION
Existing home sales
New home sales
millions of units, annual rate
3.8
575
thousands of units, annual rate
525
3.4
475
3.0
425
2.6
Jul.
Sep.
Nov.
1990
Jan.
Mar.
May
1991
Jul.
Sep.
375
Jul.
Sep.
Nov.
1990
Jan.
Mar.
May
1991
Housing starts
Nonresidential structure investment
millions of units, annual rate
billions of 1982 dollars
1.3
160
Jul.
Sep.
140
1.1
120
0.9
0.7
• 100
Jul.
Sep.
Nov.
1990
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Jan.
Mar.
May
1991
Jul.
Sep.
80
1983
'86
'89
'92
B-5
INFLATION
Consumer prices
Consumer prices
percent change from a year ago
percent change from a year ago
7
11
6
\services
9
\.a\
1
5
\_
5
4
3
7
1988
1989
1990
1991
3
1988
1989
Producer prices
Producer prices
percent change from a year ago
percent change from a year ago
8
30
20
6
10
4
0
2
0
Finished goods less
food and energy
1988
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1989
1990
-10
1991
-20
1990
Intermediate
materials
Crude
materials
'
1988
1991
1989
1990
1991
B-6
ASSESSMENT
~
Uneven performance
m Mixed signs
m No clear momentum
~
Pluses
- Production/consumption balances
- Consistent monetary policy easing
~
Minuses
- Consumer restraint
- Commercial real estate markets
- Little fiscal stimulus
- Restrained credit conditions
B-7
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
REAL GNP
percent change, annual rate
7.5
5.0
2.5
..
I
/
--------- ---
1
1 199102
0.0
-2.5
-5.0
-4
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-2
0
2
4
6
8
number of quarters from trough
B-8
BASE FOR CONSUMER SPENDING
·
Consumer confidence
Disposable personal income
index, 1985=100
120
billions of dollars, monthly change
40
100
20
80
0
60
40
-20
Jul.
Sep.
Nov.
1990
Jan.
Mar.
May
1991
Jul.
Sep.
Jul.
Sep.
Nov.
1990
Jan.
Household debt
Savings rate
percent of disposable income
100
percent of disposable income
8
90
6
80
4
70
2
60
1982
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'85
Mar.
May
1991
Jul.
Sep.
0
'88
'91
1982
'85
'88
'91
NOTE: 9103 is July/August average.
B-9
CONSUMER SPENDING
Consumption spending
Durable goods spending
percent change from a year ago
6
percent change, annual rate
20
Services
0
-6
10
,
0
Nondurables
-12
,- .......
-----
-10
-18
-20
1991
1990
1990
1991
Auto sales
Personal consumption spending
millions of units
18
percent change, annual rate
1992
7.5
5.0
14
----------
2.5
0.0
10
-2.5
6
1982
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'84
'86
'88
'90
'92
-5.0
-4
~
0
2
4
number of quarters from trough
6
8
B-10
INVENTORIES
Manufacturing and trade
Manufacturing
inventory sales ratio
inventory sales ratio
2.0
2.0
1.8
1.8
1.6
1.6
~.~.~
1.2
Less transportation
equipment
1.4
1.4
1981
'83
'87
'85
'89
'91
1.2
1981
'83
'85
'87
Change in nonfarm business inventories
change, billions of dollars (saar)
50
billions of 1982 dollars
100
T
I
I
T
T
T
'71
'75
~
'91
'89
Retail inventories
25
.....,
50
0
0
-25
-50
-50
-75
1989
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1990
1991
-100
1963
'67
'79
'83
'87
'91
B-11
RESIDENTIAL AND NONRESIDENTIAL CONSTRUCTION
Residential investment
months
10
'
8
Housing starts
thousands of units, annual rate
650
Housing units
under
.... ._..., construction~
.
600
"
millions of units, annual rate
2.2
1.8
550
1.4
6
500
~
Months supply
450
4 .___ _ _...,___ _ __.___ _ __.___ _ ___, 400
1991
1988
1989
1990
1.0
0.6
1983
'86
'89
Returns by property type
Nonresidential structure investment
percent
24
billions of 1982 dollars
160
16
140
8
120
0
100
-8
1983
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
. 80
'85
'87
'89
'91
1983
'86
'89
'92
'92
B-12
INTERNATIONAL CONSIDERATIONS
Net export contribution to GNP
U.S. GNP and imports
billions of 1982 dollars, change from previous year
60
percent change from previous year
8
30
4
15
30
0
0
-30
-60
-90
1982
'84
'86
'88
'90
1982
'92
'84
'86
'88
'90
'92
GNP/GDP growth abroad
GDP growth abroad and exports
percent change from previous year
10
percent change from previous year
6
20
3
10
s
5
0
o...--,_.......,,___....._ _r-'"____"--'_______._.____._~o
-5
rts~
-10
1988
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'89
'90
'91
'92
1982
'84
'86
'88
'90
'92
B-13
GOVERNMENT SPENDING
Federal gov't purchases of goods & services
State & local gov't deficits
billions of 1982 dollars
billions of dollars
20
370
Operating and capital accounts
_.,.--.....,, Total -,,,
330
0
290
-20
--
Defense
250
-40
210
1989
1990
1991
1992
-60
1988
1989
1990
State & local gov't purchases of goods & services
Gov't purchases of goods & services
billions of 1982 dollars
500
percent change, annual rate
,,,,,,.._,,,/_._.....,_____
480
------·
7.5
5.0
,,,--- ---
2.5
0.0
460
1991
-2.5
440
-5.0
1989
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1990
1991
1992
1989
1990
1991
1992
B-14
EMPLOYMENT
Employment - Household survey
Labor force
percent change, annual rate
percent change, annual rate
4
4
2
2
0
0
-2
-2
-4
1989
1990
1991
1992
1991
1992
-4
1990
1991
1992
Unemployment rate
percent
8
7
6
5
4
1989
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1990
B-15
PRICES
Oil prices (W. Texas intermediate crude)
Capacity utilization (manufacturing)
percent
90
dollars per barrel
42
34
85
26
80
18
10
1989
1990
1991
75
1989
1990
Employment cost index (wages and salaries)
percent change from a year ago
Consumer price index
percent change, annual rate
6
8
1991
6
5
----
4
4
2
3
1988
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1989
1990
1991
0
1988
1989
1990
1991
1992
B-16
FORECAST FOR 1991 AND 1992
Percent change
40/40
Chicago
1991
Real GNP
0.4
CPI
3.3
1992
Real GNP
2.6
CPI
3.4
Average level 40
1991
Unemployment rate
6.7
1992
Unemployment rate
6.1
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
B-17
MONETARY POLICY PERSPECTIVES
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C-1
THE LEGACY OF THE 1980s
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C-2
I
THE 1980s -A REWARDING PERIOD
Real GNP
trillions of 1982 dollars
5
Industrial production
index, 1987=100
120
4
100
3
80
2
60
1
1970
'73
'76
'79
'82
'85
'88
40
'91
1970
'73
'76
'79
Payroll employment
millions
120
Consumer prices
percent change from year ago
16
100
12
80
8
60
4
40
1970
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'73
'76
'79
'82
'85
'88
'91
0
1970
'73
'76
'79
'82 . '85
'82
'85
'88
'88
'91
'91
C-3
... BUT UNEVEN PERFORMANCE
Regional employment
Auto sales
index, 198204= 100
130
millions of units
10
120
U.S.
8
New En I
. .
6
_,,,,,,. ,
110
• - • ,,.,
Southwest
Midwest
•
100
90
Foreign makes
4
2
1983
'85
'87
'91
'89
0
1982
NOTE: 9103 for regions is July/August average.
'83
'84
'85
'86
Industrial production
Construction spending
index, 198204=100
200
billions of dollars
200
175
Total
._.
150
_____
,
160
Defense
~
120
,
·-·--·-■--
125
Consumer goods
100
75
1983
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'85
'87
'87
'88
'89
'90
'91*
*First 9 months, annual rate.
'89
'91
.. _______ ----,'
Private
residential
, , ' Private
nonresidential
Public
80
40
1982
'83
'84
'85
'86
'87
'88
'89
'90
'91*
"First 8 months, annual rate.
C-4
... AND IMBALANCES DEVELOPED
Federal deficit (NIPA basis)
Net international investment position*
percent of GNP
billions of dollars
8
600
:\:::::
4
300
0
0
il !
-300
-4
-600
-8
1949
'61
'55
'67
'73
'79
'85
1978
'91
'80
'82
'84
'86
'88
'90
*Current cost basis.
Household debt
Corporate debt to net worth*
percent
percent of disposable income
100
100
90
80
80
70
60
60
40
1970
'74
'78
'82
'86
'90
50
1970
'74
'78
'82
'86
'90
*Historical cost basis.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C-5
THE l 980s - A DECADE OF CONSUMPTION, MUCH FINANCED BY FOREIGNERS
Domestic spending vs. output
Foreign capital inflow
gross domestic purchases as percent of GNP
percent of GNP
4
104
102
2
100
0
98
96
1970
'74
'78
'82
'86
'90
-2
1970
'74
'78
'82
'86
Domestic nonfinancial debt owed to foreigners
Net interest paid by U.S. nonfinancial firms
percent of total debt outstanding
9
billions of dollars
150
7
120
'90
90
5
60
3
30
1
1970
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'74
'78
'82
'86
'90
0
1970
'74
78
'82
'86
'90
C-6
... BUT FLOW OF FUNDS FROM ABROAD WON'T CONTINUE
Trade weighted dollar
Government bond rates
index, March 1973=100
180
percent
15
U.S.
12
140
9
6
100
3
60
1984
'85
'86
'87
'88
'89
'90
0
'91
1984
'85
'86
'87
'88
'89
Current account and capital inflow
Net interest received from foreigners
billions of dollars
200
billions of dollars
30
Foreign
capital inflow,,,,
,
100
, __
~'
0
'90
'91
20
10
0
Current account
balance
-100
-200
'70
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'75
'80
-10
'85
'90
-20
1970
'75
'80
'85
'90
C-7
THE 1980s - CHOSE CONSUMPTION OVER INVESTMENT
Personal consumption expenditures
Net private domestic investment
percent of real GNP
percent of real GNP
75
8
60
6
45
4
30
2
15
0
0
1950s
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1960s
1970S
1980S
1950s
1960s
1970s
1980s
C-8
1990/91: A PERIOD OF TRANSITION
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C-9
1990/91 - PRIVATE DEBT ADJUSTMENT UNDERWAY
Consumer installment debt
Net funds raised by nonfinancial corporations
billions of dollars, annual rate
percent of disposable income
300
20
200
18
100
0
\
-100
____ ...
16
,,
14
Net equity issues'-;
-200
1975
'79
'83
'87
'91*
12
1975
'79
'83
'87
'91
•First half, annual rate.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C-10
1990/91 - INTERNATIONAL TRADE ADJUSTMENT PROCEEDING
Real net exports and trade weighted dollar
Imports and exports of goods and services
billions of 1982 dollars
100
billions of 1982 dollars
700
index, March 1973=100
175
Trade-weighted_..
/'\dollar
150
600
125
500
-100
400
-200 ....................................._.__..................................._.._._.........................__.__................_._........_....__.__............ 75
1983
'85
'89
'91
'87
300
1983
'85
'87
Average U.S. productivity growth
Merchandise trade balance
percent, annual rate
4
Nonfarm
billions of dollars, annual rate
100
business sector
3
'
JI
Manufacturing
_____ ;
'89
'91
Excluding imported
;.,. - , petroleum products
'
0
/
2
-100
1
0
1950s
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1960s
1970s
1980s
-200
1975
'79
'83
'87
'91*
•First half, annual rate.
C-11
1990/91 - BUDGET DEFICIT ADJUSTMENT, A STEP IN THE RIGHT DIRECTION
October 1990 budget deficit package:
Deficit reduced almost $500 billion over 5 years
r&
Outlays cut about $325 billion
m
Revenues increased about $160 billion
The October 1990 deficit reduction package
billions of dollars
180
135
Outlay
reductions
90
Budget process revamped
112
Spending caps vs. deficit targets
m
Pay as you go process
w
Mini sequesters
45
0
Revenue
increases
1991
'92
'93
'94
fiscal year
The deficit outlook
,
billions of dollars
500
Deficit outlook better with package, but
400
Still large this year and next
300
II!
Weak economy
188
Deposit insurance costs
111
Gulf war
'95
With package
200
100
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
0
1989
1990
'91 *
'92*
'93*
fiscal year
'94*
'95*
•sased on CBO estimates.
C-12
KEY TO SUCCESSFUL TRANSITION:
--
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C-13
1990/91 - SOME MONETARY POLICY CONSIDERATIONS
Growth and inflation
Oil prices*
percent change from year ago
dollars per barrel
40
8
6
30
4
20
2
10
0
-2
1986
'88
'87
'89
'90
'91
0
1986
'87
'88
'89
'90
'91
•west Texas intermediate crude.
Total debt and bank credit
M2 relative to 1990 and 1991 ranges
percent change from year ago
trillions of dollars
16
3.6
12
~
...,,
3.4
4-t~
8
\,;~-,~,.rt....... . . . _
3.3
Commercial
bank credit
4
0
3.5
Total domestic
nonfinancial debt
, ,,
6.5%
1986
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'87
'88
3.2
'89
'90
'91
3.1
0
D F A
1989
J
1990
A O D F A
J
A O D
1991
C-14
1990/91 - MONETARY POLICY RESPONSE
Required reserves of depository institutions
billions of dollars
75
All three monetary policy tools used:
rl! Reserve requirements cut
50
m1 Discount rate reduced
m1 Open market operations eased
25
0
1987
'88
'89
'90
'91*
*Average of first 9 months.
Discount rate
Interest rates
percent
8
percent
10
7
8
6
6
5
4
1989
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1990
1991
4
1989
1990
1991
C-15
UNTIL RECENTLY, REAL GNP ABOVE POTENTIAL
Real GNP: actual vs. trend
trillions of 1982 dollars
5
4
1969-90
trend
3
+
Average trend growth
percent, annual rate
4
2
3
1947-90
trend
..
2
1
1
0
1947-90 1947-68 1969-90
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
0
1947
'51
'55
'59
'63
'67
'71
'75
'79
'83
'87
'91
C-16
AFTER 1990/91 TRANSITION, MOVE TO GROWTH WITH PRICE STABILITY
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Real GNP and CPI less food and energy
percent change, annual rate
15
10
Inflation
5
0
-5
1970
'79
'73
'76
*1991 first half growth from year ago.
'82
'85
'88
'91*
C-17