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The Fed Challenge Rony Byas, Tina Byrne, Tashdid Hasan, Changhyon Hwang, Vincent Lo November 10, 2008
The Fed Challenge
Rony Byas, Tina Byrne, Tashdid Hasan,
Changhyon Hwang, Vincent Lo
November 10, 2008
Source : Federal Reserve Bank of New York
GDP Contracts in the Third Quarter
Consumer Confidence Plummets in October
Source : The Conference Board
Consumer Spending Continues to DecreaseMonthly and YoY % Change
Real Disposable Income
Personal Consumption Expenditures
RDI0.1%
PCE-0.4%
3rd Quarter
Source : Federal Reserve Bank of St. Louis
Shaded areas indicate US recessions
Source : Federal Reserve Bank of St. Louis
Unemployment Rate Continues to Rise
October6.5
Shaded areas indicate US recessions
Nonfarm Payroll Employment Continues to DeclineMonthly and YoY % Change
Source : Federal Reserve Bank of St. Louis
Monthly Change(Left Scale)
% Change Year Over
Year(Right Scale)
Shaded areas indicate US recessions
October-240,000
ISM Manufacturing Index Experiences a Sharp Plunge
Source : Federal Reserve Bank of St. Louis
Shaded areas indicate US recessions
October38.9
Housing Starts on a Steep DeclineMonthly Change (Thousands of Units)
Source : U.S. Census Bureau
544K
817K
Housing Prices Have Been on a Gradual DeclineCase-Shiller 10 and 20 Composite YoY %
Source : Standard and Poor’s
17.7%16.6%
U.S. Home Foreclosure Filings on the Rise Monthly Change
Source : RealtyTrac
September266,000
Housing Problems Concentrated in Key Areas of the Country
Source : First American CoreLogic
Difference Between 3-Month LIBOR Rate and 3-Month Treasury Yield
Source : Bloomberg
Credit crisis begins
Lehman Brothers files for bankruptcy
TARP passed
Commercial Paper Market in Distress
Source : The Federal Reserve Board
Risk premiums have been elevated..
.. and issuance of new commercial paper has declined.
Numerous Programs Have Been Implemented to Restore Economic Stability
Source : Credit Suisse
Inflation Starting to ModerateCore CPI and Core PCE YoY% Change
Source : Federal Reserve Bank of St. Louis
Shaded areas indicate US recessions
2.4%2.5%
Core PCE
Core CPI October
Inflation Expectations Have Been Easing10-Year TIPS Spread
Source : The Federal Reserve Board
97 bps
