6/26-27/01 157

APPENDIX 1

Charts used by Mr. Kos.

3-Month Deposit Rates Page 1

March 1, 2001 - June 25, 2001 Current Deposit Rate and Rates Implied by Traded Forward Rate Agreements Percent Percent

3/1 3/15 3/29 4/12 4/26 5/10 5/24 6/7 6/21 3.50 3.75 4.00 4.25 4.50 4.75 5.00 5.25 5.50

3.50 3.75 4.00 4.25 4.50 4.75 5.00 5.25 5.50

United States

FOMC -50 bps 3/20

Inter-meeting -50 bps 4/18

FOMC -50 bps 5/15

LIBOR Fixing

3-Mo. Forward

9-Mo. Forward

3.50 3.75

4.00 4.25

4.50 4.75

5.00 5.25

5.50

3.50 3.75

4.00 4.25

4.50 4.75

5.00 5.25

5.50Euro-area ECB

-25 bps5/10

LIBOR Fixing

9-Mo. Forward

3-Mo. Forward

3/1 3/15 3/29 4/12 4/26 5/10 5/24 6/7 6/21

Japanese Government Yield Curve

0.00

0.25

0.50

0.75

1.00

1.25

1.50

0.00

0.25

0.50

0.75

1.00

1.25

1.50 Japan

05/15/01

03/1/01 06/25/01

3 mos 6 mos 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10 yr

Basis Points September 1, 2000 - June 25, 2001 Basis Points 100 100

FOMC 5/15 -50 bp

50 Germany 50 Japan

0 U.K. 0

-50 -50

-100 Canada

-100

-150 U.S.

-150

-200 -200 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1

2-Year Swap Rates minus Central Bank Policy Rates Basis Points September 1, 2000 - June 25, 2001 Basis Points

120 FOMC 5/15

120 -50 bp

80 Euro-Area

80 U.S.

40 40 Japan

0 0

Canada -40 -40

U.K -80 . -80

-120 -120 9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1

Policy Rates: US: Federal Funds Rate (O/N), Euro area: Main refinancing rate (2-week), Japan: Overnight Call Rate, U.K.: Base Rate (O/N repo), Canada: Overnight Target (midpoint of bank rate and discount rate) Source: Bloomberg

Page 2

2-Year Government Yields minus Central Bank Policy Rates

U.S. Treasury Yields Page 3

March 1, 2001 - June 25, 2001 Percent Percent

3/1 3/15 3/29 4/12 4/26 5/10 5/24 6/7 6/21

U.S. Credit Spreads over Treasuries Basis Points March 1, 2001 - June 25, 2001 Basis Points

3.75

4.00

4.25

4.50

4.75

5.00

5.25

5.50

5.75

6.00

3.75

4.00

4.25

4.50

4.75

5.00

5.25

5.50

5.75

6.00

2-Year Note

10-Year Note

30-Year Bond Fed Funds Target

60

70

80

90

100

110

120

130

140

60

70

80

90

100

110

120

130

140

10-Year Fannie Mae Benchmark

10-Year Interest Rate Swaps

10-Year A1 Industrial Corporates

FOMC -50 bps 3/20

Inter-meeting -50 bps 4/18

FOMC -50 bps 5/15

3/1 3/15 3/29 4/12 4/26 5/10 5/24 6/7 6/21

High Yield and EMBI+ Spreads over Treasuries Basis Points March 1, 2001 - June 25, 2001 Basis Points

3/1 3/15 3/29 4/12 4/26 5/10 5/24 6/7 6/21

650

700

750

800

850

900

650

700

750

800

850

900

EMBI+

Merrill Lynch High Yield

FOMC -50 bps 3/20

Inter-meeting -50 bps 4/18

FOMC -50 bps 5/15

600 600

Index 4/17 = 100 125

120

115

110

105

100

95

4/17

Index 4/17 = 100

115

110

105

100

95 4/17

Percent 34

32

30

28

26

24

22

20 4/17

U.S. Equities April 17, 2001 - June 25, 2001

S&P 500 Index

Dow Jones Industrial Average

Nasdaq Composite Index

Russell 2000 Index

FOMC -50 bps5/15

5/1 5/15 5/29 6/12

Foreign Equities April 17, 2001 - June 25, 2001

FTSE 100 Index

DAX Index CAC 40 Index

Nikkei Mexican Bolsa

FOMC -50 bps5/15

5/1 5/15 5/29 6/12

Implied Volatility on the S&P 100 Futures April 17, 2001 - June 25, 2001

VIX Index

FOMC -50 bps5/15

5/1 5/15 5/29 6/12

Page 4

Index 4/17 = 100 125

120

115

110

105

100

95

6/26

Index 4/17 = 100

115

110

105

100

95 6/26

Percent 34

32

30

28

26

24

22

20 6/26

January 1, 1999 to June 25, 2001 Page 5

Dollars per Euro Euro-Dollar Exchange Rate Dollars per Euro

1.20 1.20

1.15 1.15

1.10 1.10

1.05 1.05

1.00 1.00

0.95 0.95

0.90 0.90

0.85 0.85

0.80 0.80 Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01

Dollar minus Euro Interest Rate Differentials Basis Points Basis Points

320 320 3-Month Libor Deposit Rate Spread

240 240

2-Year Swap Spread 160 160

80 80 10-Year Swap Spread

0 0

-80 -80 Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01

Percent One-Month and Twelve-Month Euro-Dollar Implied Volatilities Percent 17 17

1-Month 16 16

15 15

14 14

13 13

12 12

11 11 12-Month10 10

9 9

8 8

7 7 Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01

Page 6

Currency Component of M1 (excludes vault cash) $ Billions Seasonally Adjusted $ Billions

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2000 2001

Total Outright Purchases and Net SOMA Expansion $ Billions $ Billions

525

535

545

555

565

575

525

535

545

555

565

575

Actuals Estimates as of May FOMC meeting (5% growth over forecast period)

Current Estimates (7% growth over forecast period)

80

70

60

50

40

30

20

10

0

Net Portfolio Expansion Purchases to Offset Redemptions 80

70

60

50

40

30

20

10

0 1996 1997 1998 1999 2000 2001 2001

May Current Forecast Forecast

6/26-27/01 158

APPENDIX 2

Charts used by Messrs. Sichel, Struckmeyer, Fuhrer, and Steindel.

STRICTLY CONFIDENTIAL (FR) CLASS II-FOMC

Material for

Staff Briefings on Productivity Developments

June 26, 2001

1995:Q1

1995:Q3

1996:Q1

1996:Q3

1997:Q1

1997:Q3

1998:Q1

1998:Q3

1999:Q1

1999:Q3

2000:Q1

2000:Q3

2001:Q1

Figure 1

Distribution of Quarterly Productivity Growth Rates 1995 – 2001:Q1,Nonfarm Business Sector

0

2

4

6

8

10

12

Num

ber

of Q

uart

ers

0

2

4

6

8

10

12

Num

ber

of Q

uart

ers

Mean = 2.468

--1 0 1 2 3 4 5 6 7 8

Productivity Growth Rate

Quarterly Growth of Nonfarm Business Sector Productivity, 1995 – 2001:Q1

-2

0

2

4

6

8

10

Perc

ent G

row

th

-2

0

2

4

6

8

10

Perc

ent G

row

th

Growth < 1.1

1.1 < Growth < 3.4

3.4 < Growth < 5.8

5.8 < Growth

Source: U.S. Bureau of Labor Statistics: Nonfarm Business Sector, Output per Hour (SAAR, percent change).

Figure 2

Results of Multiple Breakpoint Tests for Shifts in Trend Productivity GrowthQ

uart

erly

Gro

wth

(SA

AR

)

Simple regression: Log(prod) = c + b Timet

12

10

8

6

4

Actual Productivity, qtrly growth (SAAR)

23 qtrs. min. spacing

2.4

1.4 1.2

1.5 2

0

-2

-4

-6

1972 1976 1980 1984 1988 1992 1996 2000

Cyclical controls addeda

12

10

8

6

4

1972 1976 1980 1984 1988 1992 1996 2000

2.4 1.5

1.0 1.7

1.2

Qua

rter

ly G

row

th (

SAA

R)

Qua

rter

ly G

row

th (

SAA

R)

2

0

-2

-4

-6

Including capital services per hourb

12

10

8

6

4

2

0

-2

-4

-6

1972 1976 1980 1984 1988 1992 1996 2000

1.71.6 0.7 1.5 1.7

a Cyclical regressors include the growth rate in real GDP and the civilian unemployment rate. b Capital services per hour are log-detrended interpolated values of the BLS annual series. An HP-filtered series yields nearly identical

breakpoints and estimated trend rates of growth. Note: Minimum spacing between breakpoints is 23 quarters (20% of sample). Source: U.S. Bureau of Labor Statistics: Nonfarm Business Sector, Output per Hour (quarter-to-quarter percent change, SAAR).

1.0

2.0

3.0

5.0

1/25/19956/28/199511/8/19953/21/19968/15/199612/13/19965/15/19979/24/19971/28/19986/24/199811/12/19983/24/19998/18/199912/15/19995/11/20009/27/20001/25/20016/20/200110/31/2001

Figure 3

Structural Labor Productivity Growth Greenbook Forecasts vs. Real-Time "Actual" Productivity Data

6.0 6.0

Per

cent

Gro

wth

Per

cent

Gro

wth

Overall increase in 2001 forecast: + 1.4 percentage points

9/29/1999

8/16/2000

6/21/2001

Overall decrease

in

2001 forecast:

- 1.2 percentage

points

Memo: June 2001 Greenbook Structural Labor Productivity

(Q4/Q4 pct. change) 1999: 3.1 2000: 3.2 2001: 2.5

Real-Time Actual Productivity Data (average of most recent 4 quarters available at Greenbook publication, SAAR)

Average Greenbook Forecast for final two years in forecast horizon

Greenbook Forecast for 2001

Chain-weighted data begins Feb., 1996

4.0 4.0

0.0 0.0

Greenbook Publication Date

Source: Federal Reserve Board of Governors: Greenbook, Part 1; Nonfarm Business Sector, Output per Hour. Real-time data series is actual output

per hour (seasonally adjusted, at an annual rate), and is the average of the last 4 quarters available at the Greenbook's publication.

Forecasts are taken from the Greenbook, either from tables or from references to trends in structural labor productivity growth.

1.0

2.0

3.0

5.0

Table 1

Productivity Trends, 1960-2000

1960-1966 1967-1973 1974-1995 1996-2000

Labor Productivity Growth: Nonfarm Business 3.4 2.6 1.4 2.8 Nonfinancial Corporations 2.9 1.9 1.5 3.1 Manufacturing 2.7 3.0 2.7 4.9

Multifactor Productivity Growth BLS Estimates (Nonfarm Business): 2.5 1.6 0.4 1.1 Jorgenson-Stiroh Estimates (Private 1.4 0.9 0.3 1.0 (1996-1999)

Economy):

Table 2

Comments on Trend Productivity from Reports of the Council of Economic Advisors

“…the trend rate of increase in output per man-hour in the total economy is just over 2 ½ percent per year.” 1967, p. 44.

“…the trend rate of increase in output per man-hour in the total economy—private and public—is just over 2 ½ percent a year.” 1968, p. 68.

“…the trend rate of increase in aggregate productivity—private and public—has been about 2 ½ percent per year.” 1969, p. 66.

“In the private sector of the economy, [potential] output per man-hour is estimated to grow [from 1970 to 1975] by about 3.1 percent per year…” 1970, p.84

“The principal element in this computation [of the gross national product available] is an assumed 3­percent trend rate of increase of productivity (output per labor-hour) in the private economy.” 1971, p. 94.

Chart 1Multifactor Productivity of Nonfarm Business

-4

-3

-2

-1

0

1

2

3

4

5

Perc

ent C

hang

e

-4

-3

-2

-1

0

1

2

3

4

5

1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001

Source: Bureau of Labor Statistics.

Chart 2Nonfarm Productivity Growth: Actual and Forecast

6

5

4

3

2

1

0

Forecast

Actual

-1 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978

Chart 3Nonfinancial Corporate Profits as a Percentage of Sector Gross Product

Q1-1960 Q1-1962 Q1-1964 Q1-1966 Q1-1968 Q1-1970 Q1-1972 Q1-1974 Q1-1976 Q1-1978 Q1-1980 3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

Chart 4Real Interest Rates and the S&P Earnings/Price Ratio

-4

-2

0

2

4

6

8

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

E/P Ratio Right Scale

Real 10-Year Rate Left Scale

Real Funds Rate Left Scale

Equilibrium Real Funds Rate

Q1-1960 Q1-1962 Q1-1964 Q1-1966 Q1-1968 Q1-1970 Q1-1972 Q1-1974 Q1-1976 Q1-1978 Q1-1980

Note: Real rates are nominal rates less four quarter growth in the core PCE price index. Equilibrium real funds rate estimated by Board staff using statistical filter.

6/26-27/01 159

APPENDIX 3

Charts used by Mr. Stockton, Mr. Wilcox, and Ms. Johnson.

STRICTLY CONFIDENTIAL (FR) CLASS II-FOMC

Material for

Staff Presentation on the Economic Outlook

June 26, 2001

Chart 2

Near-term Dynamics and the Industrial Sector

Inventory-Sales Ratio*

50

45

40

35 1998 1999 2000 2001

*Industrial Production system.

Computers and Communication Equipment Billions of dollars, ratio scale

24

21

18

15 1998 1999 2000 2001

Manufacturing Industrial Production Percent change, annual rate

90

60

30

+ 0 –

30 1998 1999 2000 2001 2002

Day’s Supply

Tech Sector

May

Three-month moving averages

Orders

Shipments

May

May

Quarterly

Tech (Computers, Communications, and Semiconductors)

Day’s Supply

Non-tech Sector

May

Three-month moving averages

Orders

Shipments May

May

Inventory-Sales Ratio*

60

59

58

57

56 1998 1999 2000 2001

*Industrial Production system, excludes transportation.

Other Equipment (ex. aircraft) Billions of dollars, ratio scale

48

46

44

42

40 1998 1999 2000 2001

Manufacturing Industrial Production Percent change, annual rate

8

4

+ 0 –

4

8 1998 1999 2000 2001 2002

Quarterly

Non-tech ex. Motor Vehicles

Chart 3

Near-term Developments

Sales of Light VehiclesMillions of units, annual rate

20 75Quarterly

Domestic

Foreign 7015

65

10

60

555

0 501998 1999 2000 2001

Housing StartsMillions of units, annual rate

2Quarterly

Singles

Multis 1.5

1

0.5

01998 1999 2000 2001

Initial ClaimsThousands

600Four-week moving average

500

June 16

400

300

2001989 1992 1995 1998 2001

Production and Day’s Supply of Light VehiclesDays Millions of units, annual rate

14Quarterly

Domestic production (right scale)

Day’s supply (left scale)

13

12

11

101998 1999 2000 20011998 1999 2000 2001

Total Real PCEBillions of 1996 dollars, ratio scale

7000

6700

6400

6100

5800

5500

52001998 1999 2000 2001

Payroll Employment ChangesThousands of employees

300

Monthly

Real PCE

Real PCE ex. tax effects

Three-month moving average

Manufacturing, wholesale trade, and help supply

Private service producing ex. wholesale trade and

help supply

May

May

200

100

+0–

100

2001998 1999 2000 2001

Chart 9

Outlook for Inflation

Actual and Structural Productivity Growth Unemployment Rate

1

0 –

+

1

2

3

4

5

6 Four-quarter percent change

Structural

3

4

5

6

7

8 Percent

Actual

Short-run effective NAIRU

1990 1993 1996 1999 2002 1990 1993 1996 1999 2002

PCE Energy Prices Inflation ExpectationsFour-quarter percent change Percent

30 3.6

Michigan SRCOne-year ahead, median

20

Q1

3.2

10 June

2.8 + 0 –

2.410

FRB Philadelphia One-year ahead

20 21995 1997 1999 2001 1995 1997 1999 2001

Inflation Four-quarter percent change

1995 1996 1997 1998 1999 2000 2001 20021

1.5

2

2.5

3

Core PCE

Core CPI - current methods

Core GDP

Chart 11

Exchange Rates and Interest Rates (Weekly data)

Nominal Exchange Rates Long-Term Interest Rates Foreign currency per U.S. dollar July 2, 1999 = 100 Percent

Major currencies*

Euro

Yen

130 8

1206

110

United States

Germany 4

100

290

Japan

80 0 1999 2000 2001 1999 2000 2001

*Trade-weighted average against major currencies.

Three-Month Interest Rates Eurocurrency Futures Yield Curves Percent Percent

United States

Euro Area

8As of June 25, 2001

Dollar

Yen

Euro

6

5

6

4

4 3

2

2

1Japan

0 0 1999 2000 2001 2001 2002

Broad Stock Price Indexes High-Tech Stock Price IndexesJuly 2, 1999 = 100 July 2, 1999 = 100

S&P 500

TOPIX

DJ Euro

160

NASDAQ JASDAQ

Neuer Markt

240

140 200

120 160

100 120

80 80

60 401999 2000 2001 1999 2000 2001

Chart 12

Trade Developments

Recent Developments: Exports and Imports Change in billions of dollars, SAAR

Q4-Q1 Mar-Apr

1. Goods Exports -5.2 -21.1

2. Capital goods 1.5 -17.6

of which:

3. Computers and semi. -5.4 -8.6

4. Automotive -5.5 0.4

5. Consumer goods 3.3 0.7

6. Other -4.5 -4.6

7. Services 1.8 -0.5

8. Total Goods and Services -3.3 -21.6

9. Good Imports -29.2 -32.5

10. Oil -10.1 5.9

11. Capital goods -11.7 -33.2

of which:

12. Computers and semi. -8.6 -13.7

13. Automotive -6.1 7.7

14. Consumer goods -0.9 -14.3

15. Other -0.4 1.4

16. Services 4.7 0.1

17. Total Goods and Services -24.4 -32.4

Oil Prices Dollars per barrel

Current WTI

Jan. Greenbook WTI

120

140

160

180

200

1999 2000 2001

Canada

Goods Exports by Region Billions of dollars, SAAR

40

60

80

100

120

1999 2000 2001

Mexico

Other L.A.

100

120

140

160

180

40

60

80

100

120

1999 2000 2001 120

140

160

180

200

1999 2000 2001 *Excludes gold.

Western Europe*

0

5

10

15

20

25

30

35

1999 2000 2001 2002 95

100

105

110

115

120

Real Exchange Rate Outlook* 1999Q1 = 100

Other Asia

Japan

Broad Dollar

Major Foreign

1999 2000 2001 2002 *Import/export weighted average.

Chart 13

Foreign Outlook

Real GDP Growth

2000

Percent change, SAAR*

United States Total foreign**

2001 2002

Foreign Real GDP Growth* Percent change, Q4/Q4

7 7

Industrial countries6

5

4

Asia Latin America

6

5

4

3 3

2 2

1 1

0 0 2000 2001 2002

*U.S. export weights.

H1

H2

Latin America Nominal Exchange Rates Stripped Brady Bond Yield Spreads over Foreign currency per U.S. dollar July 2, 1999 = 100 U.S. Treasuries Percentage points

Weekly

Argentina

Mexico

Brazil

140

Argentina

Mexico

Brazil

20Weekly

130 16

120 12

110 8

100 4

90 01999 2000 2001 1999 2000 2001

Industrial Production Real GDP Growth July 1997 = 100, SA Percent change, SAAR*

Argentina

Mexico Brazil

120

2000 2001 2002 H1 H2

115

110

1. Latin America** 4.8 0.4 2.9 4.1105

of which:100

2. Mexico 5.2 0.1 3.1 4.4

95 3. Brazil 4.2 1.2 2.0 2.9

4. Argentina -2.0 1.0 1.6 1.990

851997 1998 1999 2000 2001 *Years are Q4/Q4; half years are Q2/Q4 or Q4/Q2.

**U.S. export weights.

*Years are Q4/Q4; half years are Q2/Q4 or Q4/Q2. **U.S. export weights.

Chart 14

Asia

Nominal Exchange Rates Foreign currency per U.S. dollar July 2, 1999 = 100

Weekly

China

Korea

Thailand

125

120

115

110

105

100

95 Taiwan

90 1999 2000 2001

Offshore-Dollar Bond Yield Spreads over U.S. Treasuries Percentage points

8

6

4

2

0 1999 2000 2001

Daily Philippines

Thailand

Korea

Worldwide Semiconductor Shipments versus Asian Semiconductor Producer IP Billions of dollars

20

18

16

14

12

10

8 1995 1996 1997 1998 1999

Worldwide Semiconductor

Shipments

Asian Semiconductor Producer IP*

June 1996 = 100 150

140

130

120

110

100

90 2000 2001

*SA, 3-month moving average of Korean, Malaysian, Philippine, Singaporean, and Taiwanese IP weighted by shares of total U.S. exports.

Share of High-Tech Goods* Percent

in IP in Total Exports**

1. Korea 12 31

2. Taiwan 18 31

3. Singapore 47 55

4. Malaysia 20 57

5. Philippines 11 57

Real GDP Growth Percent change, SAAR*

2000 2001 2002 H1 H2

1. Developing Asia** 6.1 0.7 3.0 4.7 of which:

2. China 7.4 7.0 7.5 7.6 3. Korea 5.2 1.6 2.5 4.2 4. Taiwan 4.1 -1.4 1.0 3.8 5. Singapore 11.0 -5.8 4.0 5.7 6. Hong Kong 6.6 1.2 1.7 4.0

*Includes semiconductors, computers and components, and *Years are Q4/Q4; half years are Q2/Q4 or Q4/Q2. telecommunications equipment and parts. Data for some **U.S. export weights.

countries include other electronic and electrical devices.

**Data are 1998-2000 average. Data for Singapore are for 2000 only.

Chart 15

Industrial Countries

Industrial Production Business ConfidenceJuly 1999 = 100, SA 1999Q3 = 100 Diffusion index

Euro Area

Canada

Japan

110 110 10

108 5

100

106 0

104 90 -5

102 -10

80

100 -15

98 70 -20 1999 2000 2001 1999 2000 2001

Employment Consumer ConfidenceJuly 1999 = 100 Diffusion index 1999Q3 = 100

Canada

Japan

Euro Area

104 2 110

0 105

102

-2 100

100

-4 95

98 -6 90 1999 2000 2001 1999 2000 2001

Real GDP Growth Real Domestic Demand Growth Percent change, SAAR* Percent change, SAAR*

2000 2001 2002H1 H2

2000 2001 2002 H1 H2

Euro Area

Canada

Japan

Euro Area

Canada

Japan

1. Indust. countries** 3.1 1.4 1.8 2.7 1. Japan 2.5 -0.6 -1.4 0.9 of which:

2. Euro Area 2.3 0.8 2.0 2.5 2. Japan 2.5 -1.0 -1.3 1.0

3. Euro Area 2.9 1.8 1.9 2.6 3. United Kingdom 2.9 2.7 2.8 2.7

4. United Kingdom 2.6 1.6 2.4 2.6 4. Canada 2.7 1.4 2.8 3.0 5. Canada 3.5 1.9 2.4 3.1

*Years are Q4/Q4; half years are Q2/Q4 or Q4/Q2. *Years are Q4/Q4; half years are Q2/Q4 or Q4/Q2. **U.S. export weights.

Chart 16

External Sector

Determinants of Core Exports Percent change, Q4/Q4

Core export growth Contr. of for. GDP growth Contr. of rel. prices Ind. output gap growth

16

12

8

4

0

-4 2000 2001 2002

Real Export Growth Percent change, Q4/Q4

Determinants of Core Imports Percent change, Q4/Q4

20Core import growth Contr. of GDP growth Contr. of rel. prices 16

12

8

4

0 2000 2001 2002

Contribution to U.S. GDP Growth Percentage points

Exports Imports

3

2

1

0

-1

-2

-3 2000 2001 2002

1999 2000 2001 2002

Growth of real exports Growth of real imports 1. G & S 4.3 6.7 -0.9 5.1 1. G & S 12.0 11.3 0.5 7.3

Percentage point contribution Percentage point contribution 2. Services 0.1 0.8 0.3 1.6 2. Services 0.4 2.0 0.7 0.8 3. Goods 4.2 5.9 -1.2 3.5 3. Goods 11.6 9.3 -0.2 6.5

of which: of which: 4. Core* 2.3 3.6 -0.1 1.3 4. Core* 9.5 6.9 0.4 4.5

*Excludes computers and semiconductors.

Current Account Percent Billions of dollars

2002

Level

Percent of GDP

00

-200-2

-400-4

-600-6 1990 1992 1994 1996 1998 2000 2002

Real Import Growth Percent change, Q4/Q4

1999 2000 2001 2002

*Excludes computers, semiconductors, and oil.

Capital Flows Billions of dollars, AR

2000 2001Q1

Official capital, net 36 17Japanof which: 19 -11

Private capital, net 407 295 of which: For. purch. of U.S. sec. 433 591

Treasuriesof which: -53 2 U.S. purch. of for. sec. -125 -114 For. D.I. in U.S. 288 168 U.S. D.I. abroad -152 -144

Chart 17

ECONOMIC PRO JECTIONS FOR 2001

FOMC

Nominal GDP

February 2001

Range Central

Tendency

Staff

-------------Percen tage chang e, Q4 to Q4-----------­

3¼ to 5

(3¾ to 5¼)

3½ to 4¼

(4 to 5)

3.6

(3.8)

Real GDP

February 2001

1 to 2

(2 to 2¾)

1¼ to 2

(2 to 2½)

1.4

(1.8)

PCE Prices

February 2001

2 to 3

(1¾ to 2½)

2 to 2½

(1¾ to 2¼)

2.0

(1.8)

--------------Average leve l, Q4, percen t--------------­

Une mplo yme nt rate

February 2001

4¾ to 5

(4½ to 5)

4¾ to 5

(About 4½)

5.2

(5.2)

Central tendencies calculated by dropping high and low three from ranges.

ECONOMIC PRO JECTIONS FOR 2002

FOMC

Range Central Staff

Tendency

-------------Percen tage chang e, Q4 to Q4-----------­

Nominal GDP 4½ to 6 5¼ to 5½ 5.3

Real GDP 3 to 3½ 3 to 3¼ 3.5

PCE Prices 1½ to 3 2 to 2½ 1.7

--------------Average leve l, Q4, percen t--------------­

Une mplo yme nt rate 4½ to 5½ 4¾ to 5¼ 5.6