Fed Challenge 2008
Gross Domestic Product
GDP Rate of Change
Industrial Production Rate of Change
Labor Market
Unemployment
Real Wage
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
-1
-0.5
0
0.5
1
1.5
2
2.5
Real Wage (% Change 1 Year Ago)
Consumption
Monthly Retail Sales
United States, $mil, SA, YOY%
Consumer Confidence
Supply and Demand for Consumer Loans
Housing Market
New Housing Demand
Price to Rent Ratio
Investment
Demand for Commercial Real Estate Loans
Private Fixed Investment
Capacity Utilization
Government Spending
The Federal Government
Federal Borrowing
Net Exports
Net Exports
Net Exports
Jan Feb Mar Apr May Jun Jul Aug Sep
-4
-3
-2
-1
0
1
2
3
4
2008 Import and Export Prices
% Change Export Prices % Change Import Prices
One M
onth
% C
hange
U.S. Dollar Value
U.S. Dollar Value
U.S. Dollar Index
Inflation
Core CPI and PCE
5 Year TIPS Spread
Financial Markets
LIBOR Rates - 3 Month and Overnight
Moody’s Corporate Bond Spread
TED Spread
TED Spread
S&P 500 Composite
CBOE Volatility Rate
Recent Economic Action
Target & Effective Federal Funds Rate
Newly Created Fed Facilities Term Auction Facility Primary Dealer Credit Facility Term Securities Lending Facility Asset Backed Commercial Paper Money
Market Mutual Fund Funding Facility Commercial Paper Funding Facility Money Market Investors Funding Facility
Monetary Base
Excess Reserves in Depository Institutions
Money Multiplier
Summary
Collapse of the Housing Market
Net Exports Decline
Low Inflationary Expectations
Summary
Policy Proposal
Lower the interest rate earned on excess reserves held by banks to 0%
Lower the target Federal Funds Rate by 0.5%
Policy Proposal