Greenbook/Tealbook

Prefatory Note The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that this document may contain occasional gaps in the text. These gaps are the result of a redaction process that removed information obtained on a confidential basis. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act. 1 In some cases, original copies needed to be photocopied before being scanned into electronic format. All scanned images were deskewed (to remove the effects of printer- and scanner-introduced tilting) and lightly cleaned (to remove dark spots caused by staple holes, hole punches, and other blemishes caused after initial printing). 2 A two-step process was used. An advanced optimal character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff. CONFIDENTIAL (FR) CLASS III FOMC March SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS Prepared for the Federal Open Market Committee By the Staff Board of Governors of the Federal Reserve System 18, 1994 TABLE OF CONTENTS Page THE DOMESTIC NONFINANCIAL ECONOMY Consumer sentiment. University of Michigan Survey Research Center: Survey of Consumer Attitudes ... THE FINANCIAL ECONOMY Tab le Selected financial market quotations . ........ SUPPLEMENTAL NOTES THE DOMESTIC NONFINANCIAL ECONOMY Consumer Sentiment The Michigan index of consumer sentiment fell slightly in early March, owing to a moderate deterioration in households assessments of current conditions that was partly offset by a small improvement Although the March in their expectations of future conditions. decline follows a similar drop in February the overall index still stands a substantial 15 points above its recent low in July 1993 Results for questions not included in the overall index were Little changed in the first part of March. The index of car buying conditions remained in a very favorable range similar to that observed in the mid-1980s, while the index of homebuying conditions edged down from the all-time high reached in February Consumers' expectations of future employment conditions were unchanged at a level that is much improved from the average reading of last summer The mean values of expected inflation climbed somewhat in early March, but the less volatile median values rose only slightly Mean expected inflation over the coming year climbed 0.6 percentage point to 4 3 percent 2.9 percent but the median value rose 0.1 percentage point to The mean value of expected inflation over the next five to ten years rose 0.4 percentage point to 5 1 percent; the median value rose just 0.1 percentage point to 3 3 percent March 18, 1994 UNIVERSITY OF MICHIGAN SURVEY RESEARCH CENTER: SURVEY OF CONSUMER ATTITUDES (Not seasonally adjusted) 1993 Jul 1993 Aug 1993 Sep 1993 Oct 1993 Nov 1993 Dec 1994 Jan 1994 Feb 1994 Mar(p) Composite of current and expected conditions 77.0 77.3 77.9 82.7 81.2 88.2 94.3 93.2 92.1 Current conditions Expected conditions 96.2 64.7 95.1 65.8 95.2 66.8 98.7 72.5 98.2 70.3 102.9 78.8 106.6 86.4 108.3 83.5 103.4 84.9 102 112 96 114 104 114 104 119 107 121 113 122 115 123 114 127 108 126 80 66 76 73 77 76 95 76 83 77 107 87 126 99 121 88 121 94 141 147 171 138 150 166 134 143 170 132 151 170 139 147 172 144 153 174 148 162 174 155 167 176 154 160 175 42 65 42 58 50 65 43 58 55 81 50 63 50 70 52 70 54 70 Expected unemployment change - next 12 months 130 129 133 137 131 115 104 115 115 Expected inflation - next 12 months Expected inflation - next 5 to 10 years 4.4 5.0 4.9 4.6 4.8 4.6 4.0 4.8 3.6 4.5 3.8 4.8 3.5 4.8 3.7 4.7 4.3 5.1 Indexes of consumer sentiment (Feb. 1966=100) Personal financial situation Now compared with 12 months ago* Expected in 12 months* Expected business conditions Next 12 months* Next 5 years* Appraisal of buying conditions Cars Large household appliances* Houses Willingness to use credit Willingness to use savings * -- Indicates the question is one of the five equally-weighted components of the index of sentiment. (p) (f) --- Preliminary Final Note: Figures on financial, business, and buying conditions are the percent reporting 'good times' (or 'better') minus the percent reporting 'bad times' (or 'worse'), plus 100. Asterisk (*) indicates the question is one of the five equally-weighted components of the index of sentiment. Expected change in unemployment is the fraction expecting unemployment to rise minus the fraction expecting unemployment to fall. SELECTED FINANCIAL MARKET QUOTATIONS (Percent except as noted) 1993 Instrument 1994 Mid-Oct lows SHORT-TERM RATES 2 Federal funds 3 Treasury bills 3-month 6-month -year Feb Change to Mar FOMC Feb 3 Mar From Mid-Oct lows [7 17 From Feb 3 1994 From FOMC Feb 4 3.07 3.07 3.07 3.22 0.15 0.15 0.15 3.01 3.09 3.23 3.13 3.27 3.52 3.23 3.38 3.69 3-47 3.79 4.08 0.46 0.70 0.85 0.34 0.52 0.56 0.24 0.41 0.39 3.13 3.23 3.16 3.25 3.16 3.25 3.60 3.82 0.47 0.59 0.44 0.57 0,44 3.08 3.22 3.23 3.11 3.25 3.41 3.13 3.26 3.43 3.51 3.75 4.00 0.43 0-53 0.77 0,40 0.50 0.59 0.38 0.49 0.57 Eurodollar deposits 1-month 3-month 3.06 3.25 3.06 3.25 3.13 3.31 3.44 3.75 0.38 0.50 0.38 0.50 0.31 0.44 Bank prime rate 6.00 6.00 6.00 6.00 0.00 0.00 0.00 4.06 5.19 5.78 4.60 5.81 6.31 4.75 5.94 6.37 5.34 6.40 6.82 ..28 .21 0 .04 0.74 0.59 0.51 0.59 0.46 0.45 5.41 5.49 5.49 6.06 0.65 0.57 0.57 6.79 7.35 7.35 7.79 .00 0.44 0 .44 6.74 4.14 6.97 4.12 6.97 4.12 7.63 4.51 0.89 0-37 0.66 0.39 0.66 0.39 Commercial -month 3-month paper 0.57 3 Large negotiable CDs 1-month 3-month 6-month 4 INTERMEDIATE- AND LONG-TERM RATES U.S. Treasury 3-year 10-year 30-year (constant maturity) 5 Municipal revenue (Bond Buyer) Corporate A utility. recently offered 6 Home mortgages FHLMC 30-yr fixed rate FHLMC '-yr adjustable rate i 1989 1994 1 ' Percentage change to Mar 17 Record high ________________ Stock exchange index Level Dow-Jones Industrial NYSE Com osite NASDAQ (OTC) Wilshire 3978.36 267 Date 1/31/94 2144.64 71 2/2/94 803.85 3/17/94 2/2/94 4804.31 Low. Jan. 3 154n 378.56 2718.59 1 One-day quotes except as noted. 2. Average for two-week reserve maintenance period closest to date shown. Last observation is average for maintenance period ending March 16. 1994. 3. Secondary market FOMC. Feb 4 3871.42 700 26 1 777.28 4685.14 Mar 17 3865.14 7 261 11 803.85 4730.58 From From record high 1989 low -2.85 -2 47 0.00 -1.53 80.22 69 55 112.34 74.01 4. Bid rates for Eurodollar deposits at 11 a.m. London time, 5. Most recent observation based on one-day Thursday quote and futures market index changes. 6. Quotes for week ending Friday previous to date shown. From FOMC. Feb 4 -0.16 -0.04 3.42 0.97 

Federal Reserve (1994, March 21). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19940322_part3

@misc{wtfs_greenbook_19940322_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1994},
  month = {Mar},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19940322_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}