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Figure 1. Measures of Labor Market Slack

Period Unemployment gap (Percentage points) Difficulty finding jobs (Index) Ease in filling jobs (Index)
1990:Q1 -0.58 -0.54 0.01
1990:Q2 -0.57 -0.37 0.04
1990:Q3 -0.16 -0.2 0.28
1990:Q4 0.26 0.39 0.63
1991:Q1 0.78 0.66 0.95
1991:Q2 1.01 0.83 1.15
1991:Q3 1.13 0.96 1.07
1991:Q4 1.36 1.37 1.36
1992:Q1 1.69 1.44 1.32
1992:Q2 1.92 1.18 0.95
1992:Q3 1.96 1.3 1.02
1992:Q4 1.79 1.25 0.94
1993:Q1 1.62 1.02 0.84
1993:Q2 1.56 1.05 0.86
1993:Q3 1.29 0.98 0.75
1993:Q4 1.12 0.83 0.46
1994:Q1 1.16 0.55 -0.06
1994:Q2 0.79 0.34 0.13
1994:Q3 0.62 0.25 -0.2
1994:Q4 0.25 0.06 -0.21
1995:Q1 0.17 -0.18 -0.49
1995:Q2 0.4 -0.19 -0.38
1995:Q3 0.43 -0.23 -0.48
1995:Q4 0.35 -0.1 -0.51
1996:Q1 0.27 -0.13 -0.54
1996:Q2 0.29 -0.33 -0.74
1996:Q3 0.11 -0.47 -0.81
1996:Q4 0.13 -0.48 -0.72
1997:Q1 0.05 -0.81 -0.75
1997:Q2 -0.13 -0.91 -0.74
1997:Q3 -0.21 -1.06 -1.18
1997:Q4 -0.4 -1.03 -1.19
1998:Q1 -0.49 -1.39 -0.96
1998:Q2 -0.67 -1.48 -1.22
1998:Q3 -0.56 -1.51 -1.12
1998:Q4 -0.65 -1.34 -1.5
1999:Q1 -0.74 -1.65 -1.53
1999:Q2 -0.73 -1.66 -1.44
1999:Q3 -0.83 -1.72 -1.23
1999:Q4 -0.92 -1.73 -1.71
2000:Q1 -1.01 -1.94 -1.74
2000:Q2 -1.11 -1.92 -2.03
2000:Q3 -1.01 -1.99 -1.97
2000:Q4 -1.1 -1.8 -1.97
2001:Q1 -0.8 -1.57 -1.36
2001:Q2 -0.6 -1.26 -0.82
2001:Q3 -0.2 -0.89 -0.92
2001:Q4 0.5 -0.15 0.12
2002:Q1 0.7 -0.15 0.24
2002:Q2 0.8 -0.19 0.06
2002:Q3 0.7 0.01 0.24
2002:Q4 0.8 0.3 0.26
2003:Q1 0.9 0.45 0.36
2003:Q2 1.2 0.5 0.69
2003:Q3 1.1 0.66 0.4
2003:Q4 0.8 0.48 0.24
2004:Q1 0.7 0.32 0.16
2004:Q2 0.6 0.18 0
2004:Q3 0.4 0.06 -0.11
2004:Q4 0.4 0.11 -0.35
2005:Q1 0.3 -0.18 -0.25
2005:Q2 0.1 -0.22 -0.16
2005:Q3 0 -0.2 -0.27
2005:Q4 0 -0.18 -0.35
2006:Q1 -0.3 -0.56 -0.56
2006:Q2 -0.3 -0.62 -0.95
2006:Q3 -0.4 -0.5 -0.6
2006:Q4 -0.5 -0.45 -0.4
2007:Q1 -0.5 -0.68 -0.65
2007:Q2 -0.5 -0.6 -0.69
2007:Q3 -0.3 -0.56 -0.56
2007:Q4 -0.21 -0.32 -0.08
2008:Q1 -0.03 -0.21 0.09
2008:Q2 0.25 0.24 0.31
2008:Q3 0.92 0.45 0.64
2008:Q4 1.78 0.94 0.96
2009:Q1 3.15 1.33 1.73
2009:Q2 4.02 1.32 1.79
2009:Q3 4.17 1.43 1.94
2009:Q4 4.34 1.55 1.81
2010:Q1 4.05 1.42 1.84
2010:Q2 3.82 1.3 1.79
2010:Q3 3.68 1.38 1.57
2010:Q4 3.72 1.46 1.5
2011:Q1 3.07 1.34 1.16
2011:Q2 3.13 1.23 1.16
2011:Q3 3.12 1.42 1.09
2011:Q4 2.72 1.27 0.83
2012:Q1 2.22 1.06 0.79

Note: The CBO unemployment gap is the civilian unemployment rate less the CBO estimate of the NAIRU. Difficulty in finding jobs equals proportion of households believing jobs are hard to get minus proportion believing jobs are plentiful, as reported in the Conference Board survey. Ease in filling jobs equals 100 minus the percentage of firms in the NFIB survey reporting that jobs are difficult to fill. Both survey measures are demeaned and rescaled by their standard deviations.

As shown in the figure, shaded bars indicate periods of recession as defined by the National Bureau of Economic Research (1990:Q3-1991:Q1, 2001:Q1-2001:Q4, and 2007:Q4-2009:Q2).

Source: U.S. Department of Labor, Bureau of Labor Statistics; Congressional Budget Office; Conference Board; National Federation of Independent Business.


Figure 2. Projections of Unemployment

Percent

Period History Survey of Professional Forecasters, median FOMC central tendency 70 percent confidence interval
2010:Q1 9.8 ND ND ND
2010:Q2 9.6 ND ND ND
2010:Q3 9.5 ND ND ND
2010:Q4 9.6 ND ND ND
2011:Q1 9.0 ND ND ND
2011:Q2 9.1 ND ND ND
2011:Q3 9.1 ND ND ND
2011:Q4 8.7 ND ND ND
2012:Q1 8.2 8.20 ND ND
2012:Q2 ND 8.10 ND 7.89 to 8.31
2012:Q3 ND 8.00 ND 7.63 to 8.36
2012:Q4 ND 7.90 7.8 to 8.0 7.37 to 8.40
2013:Q1 ND 7.90 ND 7.25 to 8.52
2013:Q2 ND 7.75 ND 7.00 to 8.49
2013:Q3 ND 7.60 ND 6.77 to 8.44
2013:Q4 ND 7.50 7.3 to 7.7 6.60 to 8.44
2014:Q1 ND 7.40 ND 6.46 to 8.46
2014:Q2 ND 7.30 ND 6.34 to 8.44
2014:Q3 ND 7.15 ND 6.17 to 8.36
2014:Q4 ND 7.00 6.7 to 7.4 6.00 to 8.25

FOMC central tendency for longer-run unemployment rate: 5.2 to 6.0

Source: U.S. Department of Labor, Bureau of Labor Statistics; Survey of Professional Forecasters, Federal Reserve Bank of Philadelphia.


Figure 3. Projections of PCE Inflation

4-quarter percent change

Period History Survey of Professional Forecasters, median FOMC central tendency 70 percent confidence interval
2010:Q1 2.38 ND ND ND
2010:Q2 1.99 ND ND ND
2010:Q3 1.48 ND ND ND
2010:Q4 1.28 ND ND ND
2011:Q1 1.78 ND ND ND
2011:Q2 2.53 ND ND ND
2011:Q3 2.87 ND ND ND
2011:Q4 2.67 ND ND ND
2012:Q1 2.30 2.30 ND ND
2012:Q2 ND 1.98 ND 1.57 to 2.39
2012:Q3 ND 1.87 ND 1.21 to 2.55
2012:Q4 ND 2.07 1.9 to 2.0 1.23 to 2.97
2013:Q1 ND 2.02 ND 1.02 to 3.09
2013:Q2 ND 2.02 ND 0.98 to 3.11
2013:Q3 ND 2.02 ND 0.93 to 3.17
2013:Q4 ND 2.02 1.6 to 2.0 0.87 to 3.24
2014:Q1 ND 2.00 ND 0.81 to 3.23
2014:Q2 ND 2.05 ND 0.82 to 3.27
2014:Q3 ND 2.12 ND 0.86 to 3.35
2014:Q4 ND 2.17 1.7 to 2.0 0.86 to 3.37

Source: U.S. Department of Commerce, Bureau of Economic Analysis; Survey of Professional Forecasters, Federal Reserve Bank of Philadelphia.


Figure 4. Distribution of Nominal Wage Changes

Percent probability

Wage change
(approximate percent change,
March 2009 to March 2010)
Percent probability Trend
24 to 35 % less 0.608 0.000
23 to 24 % less 0.106 0.000
22 to 23 % less 0.081 0.000
21 to 22 % less 0.152 0.000
20 to 21 % less 0.107 0.000
19 to 20 % less 0.197 0.000
18 to 19 % less 0.252 0.001
17 to 18 % less 0.176 0.002
16 to 17 % less 0.236 0.005
15 to 16 % less 0.205 0.011
14 to 15 % less 0.321 0.024
13 to 14 % less 0.174 0.049
12 to 13 % less 0.353 0.099
11 to 12 % less 0.411 0.187
10 to 11 % less 0.600 0.339
9 to 10 % less 0.569 0.583
8 to 9 % less 0.757 0.955
7 to 8 % less 0.826 1.489
6 to 7 % less 1.032 2.211
5 to 6 % less 1.390 3.124
4 to 5 % less 1.490 4.201
3 to 4 % less 1.734 5.377
2 to 3 % less 2.220 6.551
1 to 2 % less 3.484 7.598
< 1 % less 5.141 8.381
Almost no change 19.658 8.649
< 1 % more 7.562 8.813
1 to 2 % more 8.917 8.811
2 to 3 % more 9.817 8.386
3 to 4 % more 7.523 7.598
4 to 5 % more 4.799 6.551
5 to 6 % more 3.328 5.377
6 to 7 % more 2.822 4.201
7 to 8 % more 1.788 3.124
8 to 9 % more 1.736 2.211
9 to 10 % more 1.426 1.489
10 to 11 % more 1.772 0.955
11 to 12 % more 0.737 0.583
12 to 13 % more 0.545 0.339
13 to 14 % more 0.532 0.187
14 to 15 % more 0.499 0.099
15 to 16 % more 0.225 0.049
16 to 17 % more 0.280 0.024
17 to 18 % more 0.209 0.011
18 to 19 % more 0.409 0.005
19 to 20 % more 0.143 0.002
20 to 21 % more 0.067 0.001
21 to 22 % more 0.222 0.000
22 to 23 % more 0.153 0.000
23 to 24 % more 0.091 0.000
24 to 25 % more 0.112 0.000
25 to 26 % more 0.187 0.000
26 to 27 % more 0.076 0.000
27 to 28 % more 0.083 0.000
28 to 29 % more 0.146 0.000
29 to 30 % more 0.043 0.000
30 to 35 % more 0.193 0.000

Source: U.S. Department of Labor, Bureau of Labor Statistics.


Figure 5. CPI Inflation and Inflation Expectations

Percent

Period Average CPI inflation over the next 10 years (SPF) CPI, 4-quarter percent change
1979:Q4 6.90 ND
1980:Q1 ND 12.54
1980:Q2 7.85 ND
1980:Q3 ND ND
1980:Q4 8.25 ND
1981:Q1 ND 9.58
1981:Q2 7.80 ND
1981:Q3 ND ND
1981:Q4 7.05 ND
1982:Q1 ND 4.44
1982:Q2 5.70 ND
1982:Q3 ND ND
1982:Q4 5.65 ND
1983:Q1 5.30 3.23
1983:Q2 ND ND
1983:Q3 ND ND
1983:Q4 5.20 ND
1984:Q1 5.60 4.15
1984:Q2 ND ND
1984:Q3 ND ND
1984:Q4 5.20 ND
1985:Q1 4.35 3.51
1985:Q2 ND ND
1985:Q3 ND ND
1985:Q4 4.55 ND
1986:Q1 4.00 1.35
1986:Q2 ND ND
1986:Q3 ND ND
1986:Q4 4.00 ND
1987:Q1 4.20 4.41
1987:Q2 ND ND
1987:Q3 ND ND
1987:Q4 4.50 ND
1988:Q1 4.30 4.31
1988:Q2 ND ND
1988:Q3 ND ND
1988:Q4 4.35 ND
1989:Q1 4.25 4.63
1989:Q2 ND ND
1989:Q3 ND ND
1989:Q4 4.20 ND
1990:Q1 3.95 6.28
1990:Q2 4.21 ND
1990:Q3 ND ND
1990:Q4 4.15 ND
1991:Q1 4.05 2.97
1991:Q2 4.08 ND
1991:Q3 ND ND
1991:Q4 4.00 ND
1992:Q1 3.70 3.12
1992:Q2 3.90 ND
1992:Q3 3.75 ND
1992:Q4 3.60 ND
1993:Q1 3.50 2.77
1993:Q2 3.70 ND
1993:Q3 3.45 ND
1993:Q4 3.45 ND
1994:Q1 3.45 2.60
1994:Q2 3.50 ND
1994:Q3 3.50 ND
1994:Q4 3.50 ND
1995:Q1 3.30 2.63
1995:Q2 3.35 ND
1995:Q3 3.20 ND
1995:Q4 3.00 ND
1996:Q1 3.00 3.23
1996:Q2 3.00 ND
1996:Q3 3.00 ND
1996:Q4 3.00 ND
1997:Q1 3.00 1.89
1997:Q2 2.85 ND
1997:Q3 3.00 ND
1997:Q4 2.65 ND
1998:Q1 2.60 1.53
1998:Q2 2.50 ND
1998:Q3 2.50 ND
1998:Q4 2.50 ND
1999:Q1 2.30 2.62
1999:Q2 2.50 ND
1999:Q3 2.50 ND
1999:Q4 2.50 ND
2000:Q1 2.50 3.44
2000:Q2 2.50 ND
2000:Q3 2.50 ND
2000:Q4 2.50 ND
2001:Q1 2.50 1.87
2001:Q2 2.50 ND
2001:Q3 2.50 ND
2001:Q4 2.55 ND
2002:Q1 2.50 2.25
2002:Q2 2.50 ND
2002:Q3 2.50 ND
2002:Q4 2.45 ND
2003:Q1 2.50 2.00
2003:Q2 2.50 ND
2003:Q3 2.50 ND
2003:Q4 2.50 ND
2004:Q1 2.50 3.38
2004:Q2 2.50 ND
2004:Q3 2.50 ND
2004:Q4 2.50 ND
2005:Q1 2.45 3.67
2005:Q2 2.50 ND
2005:Q3 2.50 ND
2005:Q4 2.50 ND
2006:Q1 2.50 1.97
2006:Q2 2.50 ND
2006:Q3 2.50 ND
2006:Q4 2.50 ND
2007:Q1 2.35 4.03
2007:Q2 2.40 ND
2007:Q3 2.40 ND
2007:Q4 2.40 ND
2008:Q1 2.50 1.58
2008:Q2 2.50 ND
2008:Q3 2.50 ND
2008:Q4 2.50 ND
2009:Q1 2.40 1.48
2009:Q2 2.50 ND
2009:Q3 2.50 ND
2009:Q4 2.26 ND
2010:Q1 2.39 1.22
2010:Q2 2.40 ND
2010:Q3 2.30 ND
2010:Q4 2.20 ND
2011:Q1 2.30 3.34
2011:Q2 2.40 ND
2011:Q3 2.40 ND
2011:Q4 2.50 ND
2012:Q1 2.30 2.08
2012:Q2 2.48 ND

Source: U.S. Department of Labor, Bureau of Labor Statistics; Survey of Professional Forecasters, Federal Reserve Bank of Philadelphia.


Figure 6. Revisions to Professional Forecasts of GDP Growth

Percent change, annual rate

Period History Blue Chip, March 2012 Blue Chip, March 2010
2010 3.03 ND 3.1
2011 1.73 ND 3.0
2012 2.30 2.3 3.4
2013 ND 2.6 3.2
2014 ND 3.0 2.9

Note: Blue Chip survey projections are taken from Blue Chip Economic Indicators, a publication owned by Aspen Publishers. Copyright (c) 2012 by Aspen Publishers, Inc. (www.aspenpublishers.com). All rights reserved.


Figure 7. Forecasts for 3-month Treasury Bill Rates

Percent per annum

Period History Blue Chip, March 2012 Blue Chip, March 2010
2010 0.14 ND 0.4
2011 0.05 ND 1.7
2012 0.08 0.1 3.2
2013 ND 0.2 3.9
2014 ND 1.3 4.1

Note: Blue Chip survey projections are taken from Blue Chip Economic Indicators, a publication owned by Aspen Publishers. Copyright (c) 2012 by Aspen Publishers, Inc. (www.aspenpublishers.com). All rights reserved.


Figure 8. Federal Reserve Balance Sheet Actions

Holdings of Treasury and Agency Securities*

Period Billions of dollars
9 January 2008 728.20
16 January 2008 728.26
23 January 2008 723.32
30 January 2008 718.37
6 February 2008 713.38
13 February 2008 713.37
20 February 2008 713.36
27 February 2008 713.36
5 March 2008 713.39
12 March 2008 703.44
19 March 2008 660.48
26 March 2008 612.31
2 April 2008 581.24
9 April 2008 560.11
16 April 2008 548.63
23 April 2008 548.66
30 April 2008 548.69
7 May 2008 536.71
14 May 2008 515.66
21 May 2008 502.86
28 May 2008 491.09
4 June 2008 486.94
11 June 2008 482.07
18 June 2008 478.73
25 June 2008 478.80
2 July 2008 478.87
9 July 2008 478.95
16 July 2008 479.04
23 July 2008 479.12
30 July 2008 479.21
6 August 2008 479.33
13 August 2008 479.43
20 August 2008 479.54
27 August 2008 479.64
3 September 2008 479.73
10 September 2008 479.78
17 September 2008 479.84
24 September 2008 486.58
1 October 2008 491.12
8 October 2008 490.68
15 October 2008 490.66
22 October 2008 490.62
29 October 2008 490.09
5 November 2008 489.69
12 November 2008 489.41
19 November 2008 488.93
26 November 2008 488.63
3 December 2008 487.93
10 December 2008 492.06
17 December 2008 493.76
24 December 2008 496.89
31 December 2008 495.63
7 January 2009 494.98
14 January 2009 505.31
21 January 2009 505.47
28 January 2009 510.87
4 February 2009 512.27
11 February 2009 514.40
18 February 2009 573.63
25 February 2009 581.73
4 March 2009 581.76
11 March 2009 588.05
18 March 2009 759.47
25 March 2009 761.30
1 April 2009 782.58
8 April 2009 801.35
15 April 2009 943.18
22 April 2009 967.07
29 April 2009 983.36
6 May 2009 997.90
13 May 2009 1081.59
20 May 2009 1091.43
27 May 2009 1107.45
3 June 2009 1115.77
10 June 2009 1142.48
17 June 2009 1184.40
24 June 2009 1217.04
1 July 2009 1223.74
8 July 2009 1233.78
15 July 2009 1312.15
22 July 2009 1340.87
29 July 2009 1344.56
5 August 2009 1356.28
12 August 2009 1381.86
19 August 2009 1457.41
26 August 2009 1485.13
2 September 2009 1497.43
9 September 2009 1506.17
16 September 2009 1570.02
23 September 2009 1588.43
30 September 2009 1592.70
7 October 2009 1595.29
14 October 2009 1672.83
21 October 2009 1690.20
28 October 2009 1690.23
4 November 2009 1697.87
11 November 2009 1701.77
18 November 2009 1776.62
25 November 2009 1783.73
2 December 2009 1783.78
9 December 2009 1787.01
16 December 2009 1835.48
23 December 2009 1846.89
30 December 2009 1844.72
6 January 2010 1845.21
13 January 2010 1906.02
20 January 2010 1909.72
27 January 2010 1910.02
3 February 2010 1911.60
10 February 2010 1918.41
17 February 2010 1967.70
24 February 2010 1975.64
3 March 2010 1970.89
10 March 2010 1974.77
17 March 2010 2010.56
24 March 2010 2017.96
31 March 2010 2014.39
7 April 2010 2014.43
14 April 2010 2047.49
21 April 2010 2047.55
28 April 2010 2042.04
5 May 2010 2042.28
12 May 2010 2043.26
19 May 2010 2063.90
26 May 2010 2057.16
2 June 2010 2057.24
9 June 2010 2057.32
16 June 2010 2070.75
23 June 2010 2071.24
30 June 2010 2059.88
7 July 2010 2060.05
14 July 2010 2067.68
21 July 2010 2060.98
28 July 2010 2053.88
4 August 2010 2054.13
11 August 2010 2055.85
18 August 2010 2049.78
25 August 2010 2044.17
1 September 2010 2045.95
8 September 2010 2049.56
15 September 2010 2041.40
22 September 2010 2051.09
29 September 2010 2044.31
6 October 2010 2051.72
13 October 2010 2051.88
20 October 2010 2048.62
27 October 2010 2038.57
3 November 2010 2042.73
10 November 2010 2053.76
17 November 2010 2060.89
24 November 2010 2087.22
1 December 2010 2088.28
8 December 2010 2120.44
15 December 2010 2124.28
22 December 2010 2163.10
29 December 2010 2155.70
5 January 2011 2170.59
12 January 2011 2200.53
19 January 2011 2205.62
26 January 2011 2224.15
2 February 2011 2247.87
9 February 2011 2276.79
16 February 2011 2293.15
23 February 2011 2315.75
2 March 2011 2328.44
9 March 2011 2358.25
16 March 2011 2364.48
23 March 2011 2381.58
30 March 2011 2403.10
6 April 2011 2427.86
13 April 2011 2442.74
20 April 2011 2464.18
27 April 2011 2466.67
4 May 2011 2494.00
11 May 2011 2518.35
18 May 2011 2539.50
25 May 2011 2556.28
1 June 2011 2569.19
8 June 2011 2591.61
15 June 2011 2608.81
22 June 2011 2634.65
29 June 2011 2642.62
6 July 2011 2648.44
13 July 2011 2654.34
20 July 2011 2652.31
27 July 2011 2647.88
3 August 2011 2650.64
10 August 2011 2654.46
17 August 2011 2650.86
24 August 2011 2650.56
31 August 2011 2646.83
7 September 2011 2650.32
14 September 2011 2653.68
21 September 2011 2650.61
28 September 2011 2643.81
5 October 2011 2650.94
12 October 2011 2647.92
19 October 2011 2640.00
26 October 2011 2634.94
2 November 2011 2611.12
9 November 2011 2625.04
16 November 2011 2625.32
23 November 2011 2612.31
30 November 2011 2605.00
7 December 2011 2608.00
14 December 2011 2637.46
21 December 2011 2640.67
28 December 2011 2613.38
4 January 2012 2605.17
11 January 2012 2593.52
18 January 2012 2600.44
25 January 2012 2598.65
1 February 2012 2599.97
8 February 2012 2598.22
15 February 2012 2616.38
22 February 2012 2610.44
29 February 2012 2603.21
7 March 2012 2599.88
14 March 2012 2613.46
21 March 2012 2613.74
28 March 2012 2598.18
4 April 2012 2602.64
11 April 2012 2614.36
18 April 2012 2622.70
25 April 2012 2610.13
2 May 2012 2610.02
9 May 2012 2608.34
16 May 2012 2609.19
23 May 2012 2615.06

As shown in the figure, shaded bars indicate the first and second rounds of asset purchases, from January 5, 2009 to March 31, 2010, and from November 12, 2010 to June 30, 2011, respectively.

* Includes only securities held in the System Open Market Account.  Return to text

Source: Board of Governors of the Federal Reserve System.


Treasury Holdings by Maturity

Billions of dollars

Years to maturity September 2011 (Before MEP) June 2012 (Projected)
0 to 3 548.57 170
3 to 6 495.64 561
6 to 30 618.90 934

Source: Board of Governors of the Federal Reserve System.


Figure 9. Estimated Effect of Balance Sheet Operations on the 10-year Treasury Term Premium

Period Basis points
2008:Q3 0.00
2008:Q4 (Announcement of first round of of asset purchases) -51.64
2009:Q1 -52.26
2009:Q2 -52.20
2009:Q3 -50.78
2009:Q4 -48.48
2010:Q1 -45.92
2010:Q2 -43.00
2010:Q3 -40.19
2010:Q4 (Announcement of second round of of asset purchases) -58.52
2011:Q1 -56.23
2011:Q2 -52.94
2011:Q3 (Announcement of maturity extension program) -70.45
2011:Q4 -67.04
2012:Q1 -63.69
2012:Q2 -59.60
2012:Q3 -55.30
2012:Q4 -50.82
2013:Q1 -46.51
2013:Q2 -42.45
2013:Q3 -38.73
2013:Q4 -35.27
2014:Q1 -32.09
2014:Q2 -29.22
2014:Q3 -26.71
2014:Q4 -24.44
2015:Q1 -22.41
2015:Q2 -20.69
2015:Q3 -19.08
2015:Q4 -17.63
2016:Q1 -16.34
2016:Q2 -15.28
2016:Q3 -14.31
2016:Q4 -13.29
2017:Q1 -12.27
2017:Q2 -11.33
2017:Q3 -10.42
2017:Q4 -9.52
2018:Q1 -8.65
2018:Q2 -7.82
2018:Q3 -7.07
2018:Q4 -6.34
2019:Q1 -5.63
2019:Q2 -4.95
2019:Q3 -4.32
2019:Q4 -3.83
2020:Q1 -3.36
2020:Q2 -2.92
2020:Q3 -2.52
2020:Q4 -2.15

Source: Canlin Li and Min Wei, "Term Structure Modelling with Supply Factors and the Federal Reserve's Large-Scale Asset Purchase Programs," Finance and Economics Discussion Series (Washington: Board of Governors of the Federal Reserve System) and Federal Reserve Board staff calculations.


Figure 10. Taylor Rule, Balanced-Approach Rule, and Optimal Control

Federal Funds Rate

Percent

Period History Taylor rule Balanced-approach rule Optimal control
2011:Q1 0.16 ND ND ND
2011:Q2 0.09 ND ND ND
2011:Q3 0.08 ND ND ND
2011:Q4 0.07 ND ND ND
2012:Q1 0.13 0.13 0.13 0.13
2012:Q2 ND 1.13 0.13 0.14
2012:Q3 ND 1.09 0.13 0.13
2012:Q4 ND 1.02 0.13 0.11
2013:Q1 ND 0.94 0.13 0.10
2013:Q2 ND 0.93 0.13 0.09
2013:Q3 ND 0.88 0.13 0.09
2013:Q4 ND 0.86 0.13 0.10
2014:Q1 ND 0.92 0.13 0.11
2014:Q2 ND 0.98 0.13 0.12
2014:Q3 ND 1.05 0.13 0.13
2014:Q4 ND 1.14 0.29 0.15
2015:Q1 ND 1.26 0.55 0.17
2015:Q2 ND 1.45 0.92 0.19
2015:Q3 ND 1.65 1.29 0.24
2015:Q4 ND 1.86 1.65 0.37
2016:Q1 ND 2.08 1.98 0.63
2016:Q2 ND 2.28 2.27 0.99
2016:Q3 ND 2.47 2.52 1.40
2016:Q4 ND 2.66 2.73 1.84
2017:Q1 ND 2.84 2.92 2.29
2017:Q2 ND 3.01 3.09 2.73
2017:Q3 ND 3.18 3.25 3.13
2017:Q4 ND 3.34 3.39 3.48
2018:Q1 ND 3.50 3.53 3.78

Figure 11. Illustrative Economic Outlook under Alternative Policies

Unemployment Rate

Percent

Period History Taylor rule Balanced-approach rule Optimal control
2011:Q1 8.99 ND ND ND
2011:Q2 9.07 ND ND ND
2011:Q3 9.06 ND ND ND
2011:Q4 8.70 ND ND ND
2012:Q1 8.25 8.25 8.25 8.25
2012:Q2 ND 8.10 8.10 8.10
2012:Q3 ND 8.03 8.00 7.98
2012:Q4 ND 7.99 7.90 7.84
2013:Q1 ND 7.96 7.81 7.70
2013:Q2 ND 7.94 7.71 7.54
2013:Q3 ND 7.91 7.62 7.38
2013:Q4 ND 7.88 7.52 7.22
2014:Q1 ND 7.84 7.42 7.06
2014:Q2 ND 7.80 7.33 6.91
2014:Q3 ND 7.74 7.23 6.75
2014:Q4 ND 7.68 7.14 6.60
2015:Q1 ND 7.60 7.04 6.45
2015:Q2 ND 7.47 6.90 6.26
2015:Q3 ND 7.32 6.75 6.06
2015:Q4 ND 7.16 6.60 5.87
2016:Q1 ND 7.00 6.47 5.70
2016:Q2 ND 6.85 6.35 5.55
2016:Q3 ND 6.71 6.24 5.44
2016:Q4 ND 6.57 6.15 5.35
2017:Q1 ND 6.45 6.07 5.29
2017:Q2 ND 6.32 6.00 5.25
2017:Q3 ND 6.21 5.93 5.23
2017:Q4 ND 6.10 5.87 5.23
2018:Q1 ND 6.00 5.81 5.25

PCE Inflation

4-quarter percent change

Period History Taylor rule Balanced-approach rule Optimal control
2011:Q1 1.78 ND ND ND
2011:Q2 2.53 ND ND ND
2011:Q3 2.87 ND ND ND
2011:Q4 2.67 ND ND ND
2012:Q1 2.10 2.10 2.10 2.10
2012:Q2 ND 2.00 2.05 2.14
2012:Q3 ND 1.93 2.01 2.16
2012:Q4 ND 1.85 1.96 2.19
2013:Q1 ND 1.77 1.93 2.24
2013:Q2 ND 1.75 1.89 2.20
2013:Q3 ND 1.69 1.85 2.18
2013:Q4 ND 1.65 1.82 2.16
2014:Q1 ND 1.67 1.85 2.19
2014:Q2 ND 1.67 1.86 2.20
2014:Q3 ND 1.68 1.87 2.21
2014:Q4 ND 1.69 1.88 2.22
2015:Q1 ND 1.71 1.91 2.24
2015:Q2 ND 1.74 1.94 2.26
2015:Q3 ND 1.76 1.96 2.26
2015:Q4 ND 1.77 1.97 2.27
2016:Q1 ND 1.79 1.98 2.27
2016:Q2 ND 1.81 1.99 2.27
2016:Q3 ND 1.83 2.00 2.27
2016:Q4 ND 1.85 2.00 2.27
2017:Q1 ND 1.87 2.00 2.26
2017:Q2 ND 1.90 2.00 2.25
2017:Q3 ND 1.92 2.00 2.24
2017:Q4 ND 1.95 2.00 2.22
2018:Q1 ND 1.98 2.01 2.20
Last update: August 2, 2013