2-Year vs 10-Year LIBOR Rate Spread with Real Fed Funds 1

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					2-Year vs 10-Year LIBOR Rate Spread with Real Fed
Funds1

                                             0                                                            5
     2yr vs 10yr Rate Spread (inverted)
                                           (50)                                                           4


                                          (100)                                                           3




                                                                                                                Real Fed Funds
                                          (150)                                                           2


                                          (200)                                                           1


                                          (250)                                                           0


                                          (300)                                                           (1)

                                                  2yr vs 10yr Rat e Spread (invert ed)   Real Fed Funds

Note:
1 Target Fed Funds deflated by year-over-year growth of PCE deflator
abcd
                                                                                                                                 0
10-Year LIBOR Rate less Year-Over-Year Growth of PCE
Deflator

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5

2.0
 Nov-88 Apr-90 Sep-91 Feb-93   Jul-94   Dec-95 M ay-97 Oct -98 M ar-00 Aug-01 Jan-03




abcd
                                                                                       1