FOMC Conference Call Presentation Materials, March 25 by hxe11278

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									March 25, 2003                                              10 of 29



   Appendix 1: Materials used by Messrs. Kos and Reinhart
              March 25, 2003                                                 Exhibit 1                                                           11 of 29
                                                                     Treasury Securities Market

      Two- and Ten-year Treasury Yields
      Percent                                                                                                                                                 Percent
4.2                                                                                                                                                                      1.9
          Five-minute intervals                                                                    8:00 Deadline

4.1
                                                                                                                                                                         1.8

4.0
                                                                                                                                                                         1.7
                                     Two-year
3.9
                                    (right scale)
                                                                                     Ten-year                                                                            1.6
3.8                                                                                 (left scale)

3.7                                                                                                                                                                      1.5

                  03/13              03/14                03/17             03/18          03/19               03/20              03/21               03/24
      Note. Treasury yield shown is that of the on-the-run issue.




      Treasury Yield Curve                                                                  Ten-year TIPS Yield
                                                                      Percent                                                                                  Percent
                                                                                6                                                                                         2.2
                                                                                              Daily

                           March 24, 2003 4:00 pm                               5
                                                                                                                                                                          2.1

                                                                                4
                                March 19, 2003 4:00 pm                                                                                                                    2.0
                                                                                                                                                                     +
                                                                                3

                                                                                                                                                                          1.9
                                                                                2


                                                                                1                                                                                         1.8
      1/4     2      5          10                                       30                            Jan.                     Feb.                          Mar.
                                Maturity in Years
                                                                                                                              2003
                                                                                            + denotes today’s observation (taken at approximately 4:45 pm).


      Selected Treasury Yields

                                                                     Today                  Wednesday
                                                                    3/24/03*                 3/19/03                            Change
                                                                       (1)                     (2)                               (1)-(2)
                       Nominal                                                                                              -basis points-
                               1. Two-year                           1.66                           1.72                            -6
                               2. Five-year                          2.94                           2.97                            -3
                               3. Ten-year                           3.97                           3.98                            -1


                       Indexed                                                                                              -basis points-
                               4. Ten-year                           2.12                           2.10                            2


      * Quotes taken at approximately 4:00 pm.
        March 25, 2003                                         Exhibit 2                                          12 of 29
                                                             Equity Market

Major Stock Indexes
                                                                                                           3/13/03 9:30 am = 100
                                                                                                                                       112
    Five-minute intervals                                                                        S&P 500
                                                                                                                                       110

                                                                                                                                       108

                                                                                                                                       106
                 Wilshire 5000                                                                                 Nasdaq
                                                                                                                                       104

                                                                                                                                       102

                                                                                                                                       100

                03/13             03/14     03/17            03/18      03/19          03/20         03/21           03/24




S&P 100 Implied Volatility (VIX)
                                                                                                                             Percent
                                                                                                                                       39
    Five-minute intervals
                                                                                                                                       38

                                                                                                                                       37

                                                                                                                                       36

                                                                                                                                       35

                                                                                                                                       34

                                                                                                                                       33
                03/13             03/14     03/17            03/18      03/19          03/20         03/21           03/24




Selected Equity Market Quotes

                                                 Today                  Wednesday
                                                3/24/03*                 3/19/03                    Change
                                                   (1)                     (2)                       (1)-(2)
                Major Indexes                                                                       -percent-
                        1. Wilshire 5000        8180.39                      8258.42                  -0.9
                        2. S&P 500                  864.36                   874.02                   -1.1
                        3. Nasdaq               1370.23                      1397.08                  -1.9


                Option-Implied Volatility                                                      -percentage points-
                        4. S&P 100 (VIX)            34.96                     35.74                  -0.78


* Quotes taken at approximately 4:00 pm.
               March 25, 2003                                                  Exhibit 3                                                              13 of 29
                                                                      Monetary Policy Expectations

       Interest Rate Futures
                                                                                                                                                               Percent
1.22                                                                                                                                                                      2.6
           Five-minute intervals
1.21
                                                       Mar. 2004 Eurodollar
                                                       Futures (right scale)                                                                                              2.4
1.20

1.19                                                                                                                                                                      2.2
1.18
                                                                                                                                                                          2.0
1.17
                                                                                       Apr. 2003 Fed Funds
1.16                                                                                    Futures (left scale)
                                                                                                                                                                          1.8
1.15
                     03/13              03/14                 03/17           03/18           03/19             03/20              03/21              03/24




       Expected Federal Funds Rates*                                      Percent              Short-term Eurodollar Implied Volatility*                        Percent
                                                                                    4.0                                                                                    60
                                                                                                 Daily
                                                                                    3.5

                                                                                    3.0                                                                                    50

                 March 19, 2003 3:30 pm                                             2.5
                                                                                                                                                                     + 40
                                                                                    2.0

                                                March 24, 2003 3:30 pm              1.5
                                                                                                                                                                           30
                                                                                    1.0


       Mar.     July      Nov.      Mar.      July      Nov.          Mar.   July                                                                                          20
                2003                         2004                       2005                                          Feb.                        Mar.
       *Estimates from federal funds and eurodollar futures                                                                      2003
                                                                                               *Contract with approximately 3 months to expiration.



       Probability of 1.00% target as opposed to 1.25% target*                                                                                                  Percent
                                                                                                                                                                           120
           Five-minute intervals
                                                                                                                                                                           110

                                                                                                                                                                           100

                                                                                                                                                                            90

                                                                                                                                                                            80

                                                                                                                                                                            70

                                                                                                                                                                            60

                                                                                                                                                                            50

                     03/13               03/14                03/17            03/18           03/19             03/20              03/21              03/24

       *Based on May 2003 federal funds futures contract.
       + denotes today’s observation (taken at approximately 4:00 pm).
        March 25, 2003                                         Exhibit 4                                      14 of 29
                                                    Selected Credit Market Indicators

Ten-year Swap Spread
                                                                                                                  Basis Points
                                                                                                                                  47
    Five-minute intervals
                                                                                                                                  46

                                                                                                                                  45

                                                                                                                                  44

                                                                                                                                  43

                                                                                                                                  42

                                                                                                                                  41

              03/13             03/14        03/17           03/18           03/19      03/20      03/21        03/24




Stock Prices and Credit Default Swap Premia for Selected Financial Intermediaries

                                                      Stock Prices                               CDS Premia
                                              Today Wednesday                            Today Wednesday
                                             3/24/03*   3/19/03    Change               3/24/03*   3/19/03  Change
                                                (1)       (2)       (1)-(2)                (3)       (4)     (3)-(4)

                                                                        -percent-                          -basis points-
        1. Bank of America                    68.82         69.50           -1.0          31.0      31.0        0.0
        2. Citigroup                          35.72         35.46           0.7           32.0      34.0       -2.0
        3. Goldman Sachs                      70.01         70.27           -0.4          55.0      56.8       -1.8
        4. Lehman Brothers                    58.20         59.69           -2.5          50.0      54.2       -4.2
        5. Merrill Lynch                      36.30         36.74           -1.2          57.0      56.8        0.2


* Quotes taken at approximately 4:00 pm.




Swaption Implied Volatility (Ten-year Swap Rate)                                                                        Percent
                                                                                                                                  32
    Daily

                                                                                                                                  31

                                                                                                                                  30
                                                Three-months ahead
                                                                                                                                  29

                                                                                                                                  28
                                                                                                                            +
                                   One-year ahead
                                                                                                                                  27
                                                                                                                            +
                                                                                                                                  26
                                               Feb.                                         Mar.
                                                                     2003

+ denotes today’s observation (taken at approximately 4:00 pm).
          March 25, 2003                                      Exhibit 5                                         15 of 29
                                                  Other Indicators of Market Stress

Foreign Exchange Rates


                                                    Today                 Wednesday
                                                   3/24/03*                3/19/03                Change
                                                      (1)                    (2)                   (1)-(2)

                                                                                                  -percent-
                Dollar/Euro                          1.0631                 1.0559                   0.7
                Yen/Dollar                         120.8350                120.4700                  0.3
                Dollar/Pound                         1.5734                 1.5643                   0.6
                Swiss Franc/Dollar                   1.3859                 1.3943                  -0.6




* Quotes taken at approximately 4:00 pm.



West Texas Intermediate Crude Oil Spot Price                              West Texas Intermediate Crude Oil Futures Prices
                                                         US $                                                              US $
                                                                  40                                                              40
  Daily                                                                    Daily
                                                                  38                             Apr. 2003                        38

                                                                                                                                  36
                                                                  36
                                                                                                                                  34
                                                                  34
                                                                                                                                  32
                                                                  32                             Jun. 2003
                                                                                                                                  30

                                                              +   30                                                           +
                                                                                                                               + 28
                                                                                                 Dec. 2003
                                                                  28
                                                                                                                               + 26

                      Feb.                 Mar.                                          Feb.                 Mar.
                                 2003                                                            2003



Gold Spot Price                                                                                                            US $
                                                                                                                                  390
    Daily
                                                                                                                                  380

                                                                                                                                  370

                                                                                                                                  360

                                                                                                                                  350

                                                                                                                                  340

                                                                                                                           +      330


                                              Feb.                                        Mar.
                                                                   2003

+ denotes today’s observation (taken at approximately 4:00 pm).
March 25, 2003                                16 of 29



   Appendix 2: Material used by Ms. Johnson
March 25, 2003                             17 of 29



STRICTLY CONFIDENTIAL (FR) CLASS II-FOMC




Recent Developments in
International Financial Markets




March 24, 2003
March 25, 2003                                                                                  18 of 29
                                                Chart 1                                            03-24-03



                                   Selected Exchange Rates
                                        (Foreign currency per dollar)
                                                                                Index, March 12, 2003 = 100
                                                                                                              108
  Daily

                                 FOMC                                       Mar 12       FOMC
                                                                                                              106


                                        Canadian dollar
                                                                                                              104
                                                              Swiss franc


                                                                                                              102
                                                 Euro


                                                                                                              100
                                                                     Yen

                                             Sterling
                                                                                                              98
 Change since 3/12
  Can. dollar    0.5%
  Swiss franc    4.0%
  Euro           3.6%                                                                                         96
  Yen            3.0%
  Sterling       2.4%

                                                                                                              94
                 Jan                                    Feb                           Mar



                         Indexes of Trade-Weighted Value of the Dollar
                                                                                Index, March 12, 2003 = 100
                                                                                                              108
  Daily

                                 FOMC                                       Mar 12       FOMC
                                                                                                              106



                                                                                                              104
                                                   Major currencies


                                                                                                              102

                                                   Broad
                                                                                                              100
                                                   Other important
                                                   trading partners
                                                                                                              98


 Change since 3/12
  Major curr.     2.3%                                                                                        96
  Broad           1.1%
  OITP           -0.3%

                                                                                                              94
                 Jan                                    Feb                           Mar
  March 25, 2003                                                                                         19 of 29
                                                           Chart 2                                           03-24-03

                                         Selected Yield Curves
3-Month Eurocurrency Futures Rates                               1-Year Forward Rates Derived From Swaps
Yen                                                                  Yen
                                             Percent                                                         Percent
                                                       4                                                                4
         March 24, 2003                                                       March 24, 2003
         March 17, 2003                                3                      March 17, 2003                            3
         March 12, 2003                                                       March 12, 2003

                                                       2                                                                2

                                                       1                                                                1

                                                       0                                                                0
  J          S   D        M    J     S   D     M                            2004       2006    2008   2010      2012
      2003                    2004            2005

Euro                                                                 Euro
                                             Percent                                                         Percent
                                                       6                                                                6
         March 24, 2003
         March 17, 2003
                                                       5                                                                5
         March 12, 2003

                                                       4                                                                4

                                                       3                                                                3

                                                       2                                                                2
  J          S   D        M    J     S   D     M                            2004       2006    2008   2010      2012
      2003                    2004            2005

Sterling                                                             Sterling
                                             Percent                                                         Percent
                                                       6                                                                6

                                                       5                                                                5

                                                       4                                                                4

                                                       3                                                                3

                                                       2                                                                2
  J          S   D        M    J     S   D     M                            2004       2006    2008   2010      2012
      2003                    2004            2005


Dollar                                                               Dollar
                                             Percent                                                         Percent
                                                       7                                                                7
                                                       6                                                                6
                                                       5                                                                5
                                                       4                                                                4
                                                       3                                                                3
                                                       2                                                                2
                                                       1                                                                1
  J          S   D        M    J     S   D     M                            2004       2006    2008   2010      2012
      2003                    2004            2005
 March 25, 2003                                                                                               20 of 29
                                                       Chart 3                                                  03-24-03

                                         Stock Market Indexes
                               (Ratio scale, Index, March 12, 2003 = 100, daily data)

Euro Area                                                         United Kingdom
                                                      135                                                                  135
               FOMC             Mar 12         FOMC                                     FOMC         Mar 12         FOMC
                                                      130                                                                  130

                                                      125                                                                  125
                DJ Euro Bank
                                                      120                                                                  120

                                                                                               FTSE-Bank
                               DJ Euro                115                                                                  115


                                                      110                                                                  110


                DJ Euro Tech                          105                                                                  105
                                                                     FTSE-350             FTSE-techMark

                                                      100                                                                  100

  Change since 3/12                                                  Change since 3/12
   DJ Euro       12.6%                                95              FTSE-350      12.9%                                  95
   DJ Euro Tech 16.1%                                                 FTSE-Tech      7.7%
   DJ Euro Bank 13.3%                                                 FTSE-Bank     14.0%

                                                      90                                                                   90
        Jan              Feb             Mar                               Jan                 Feb            Mar



Japan                                                             memo: United States
                                                      135                                                                  135
               FOMC             Mar 12         FOMC                                     FOMC         Mar 12         FOMC
                                                      130                                                                  130


                                                      125                                                                  125

                    TOPIX-Bank                        120                                                                  120


                                                      115                                 S&P 500                          115


                                                      110                                                                  110
                                                                                                S&P Banks
                   TOPIX
                                                      105                                                                  105
  TOPIX-EM

                                                      100                                        NASDAQ                    100

  Change since 3/12                                                  Change since 3/12
   TOPIX          6.3%                                95              S&P 500        7.3%                                  95
   TOPIX-EM       8.8%                                                NASDAQ         7.0%
   TOPIX-Bank     7.3%                                                S&P Bank      11.6%

                                                      90                                                                   90
        Jan              Feb             Mar                               Jan                 Feb            Mar
    March 25, 2003                                                                                          21 of 29
                                                        Chart 4                                               03-24-03

                                            Crude Oil Futures Prices


                                                                                                               $/barrel
                                                                                                                           40
       Daily                         FOMC                                                March 12 FOMC
                                                                                                                           38


                                                                                                                           36


                                                                                                                           34


                                                                                                                           32
                      WTI May
                                                                        Brent May
                                                                                                                           30


                                                                                                                           28


                                                                                                                           26
               Change since 3/12
               WTI May -$7.63
                                                                                                                           24
               Brent May -$6.91

                                                                                                                           22
                       Jan                                   Feb                                 Mar



                          Implied Distributions from Oil Futures Options
                                                 March 21, 2003




                                                                   May 2003 WTI




                      Dec 2003 WTI


                                                   F     F


5               10           15         20         25              30               35     40          45             50
                                                                                                               $/barrel
March 25, 2003                                  22 of 29



   Appendix 3: Materials used by Mr. Stockton
March 25, 2003                       23 of 29




                    March 25, 2003




                 NONFINANCIAL
                 DEVELOPMENTS
March 25, 2003   24 of 29
March 25, 2003   25 of 29
March 25, 2003   26 of 29
March 25, 2003   27 of 29
March 25, 2003   28 of 29
March 25, 2003   29 of 29

								
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