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 January 25, 2002 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 Nonfinancial Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Federal Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Sales of Existing Homes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Tables CBO’s January 2002 Baseline Unified Budget Surplus Projection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 CBO’s January 2002 Economic Forecast . . . . . . . . . . . . . . . . . . . . 2 The Market for Existing Houses . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The Domestic Financial Economy Tables Commercial Bank Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Selected Financial Market Quotations . . . . . . . . . . . . . . . . . . . . . . 5 Supplemental Notes The Domestic Nonfinancial Economy Federal Budget The CBO has released a summary of The Budget and Economic Outlook: Fiscal Years 2003-2012. Having incorporated the incoming economic information since last January, CBO’s near-term economic forecast shows a mild recession followed by a modest recovery. Real GDP is projected to increase 2.5 percent over the four quarters of 2002 and to accelerate to 4.3 percent in 2003. The level of real GDP in 2003 is substantially lower than projected a year ago. Over the period from 2004 to 2011, real GDP growth is assumed to average 3-1/4 percent per year—a touch faster than in last January’s budget outlook. Despite the lower level of real GDP over the projection period, the CBO has not altered its longer-term assumption that the unemployment rate will level out at 5.2 percent. This implies that the CBO has revised down its estimate of the rate of growth of potential GDP by about 1/4 percentage point. Sales of Existing Homes Sales of existing homes edged down 0.8 percent in December, with the decrease essentially coming all in the South. Sales have remained flat, on balance, for about three years. The number of existing homes for sale also decreased in December, leaving the months of supply roughly unchanged at about the average level that has prevailed for two years. The average price of existing homes sold rose 6.5 percent in December from a year earlier, and the median price rose 8.4 percent—both faster rates of increase than have been seen in recent months. The most recent figure for the repeat-sales price index for existing homes—which holds constant some of the compositional shifts that can affect average and median prices—is for the third quarter, when it was up 8.3 percent from a year earlier. -2- CBO’s January 2002 Baseline Unified Budget Surplus Projection (Billions of dollars, effect on surplus, fiscal years) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Surplus -21 -14 54 103 128 166 202 250 Change from January 2001 -333 -373 -343 -330 -377 -406 -433 Legislative -81 -91 -158 -186 -238 -268 Economic -148 -131 -95 -81 -75 Technical -94 -84 -62 -51 -64 293 20022011 439 1602 -460 -502 -450 -4008 -293 -317 -355 -317 -2420 -75 -76 -79 -82 -88 -929 -64 -65 -64 -65 -45 -660 CBO’s January 2002 Economic Forecast (Calendar years) 2001 2002 2003 2004-7 2008-11 ---annual average--Year-over-year percent change Real GDP 1.0 0.8 4.1 3.3 3.1 GDP price index 2.2 1.4 2.0 2.0 2.0 CPI-U 2.9 1.8 2.5 2.5 2.5 Percent, annual average Unemployment rate 4.8 6.1 5.9 5.2 5.2 3-month bill 3.4 2.2 4.5 4.9 4.9 10-year note 5.0 5.0 5.5 5.8 5.8 Treasury securities -3- -4- -5- 

Federal Reserve (2002, January 29). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_20020130_part3

@misc{wtfs_greenbook_20020130_part3,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {2002},
  month = {Jan},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_20020130_part3},
  note = {Retrieved via When the Fed Speaks corpus}
}