FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES If you look at the Greenbook , you 'll notice that the financial obligation ratio rose quite substantially in the past six months . FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES Given that inventory -- sales ratios continue to run at historically low levels , though , inventories should continue to be a source of growth going forward . FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES We came through two good quarters , the second and third quarters , with very low inflation ; but again , the uptick shows how much variability we see around the inflation numbers quarter to quarter and warrants attention . FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES Initial unemployment claims , goods orders , capacity utilization , and strong corporate balance sheets -- all of them effectively say that we have a strong foundation underneath this growth . FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES We now are in a period when not only the fancy option ARMs , the exotic products of the past eighteen months , but also the 3/1 ARMs and the five-year ARMS that became very popular in 2002 and 2003 are repricing . FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES The integrity with which everything is done , your emphasis on the quality of ideas , and your continuing to search for new ways to look at information -- because the economy is dynamic -- remind us that we have to watch for new things always evolving . FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES The other sad thing is that this is our last meeting with the Chairman , and I just personally also want to echo some of the comments of my colleagues around the table to thank you for your leadership . FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES If interest rates just hold where they are right now , we estimate that the monthly debt service cost is going to go up by at least 50 percent on that 20 percent of mortgage portfolios . FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES In an overall look at consumers , with housing and the cost of heating this winter rising , you 're beginning to see a little caution in the borrowing numbers . FOMC/FOMC20060131meeting/FOMC20060131meeting--118.txt MS. BIES The drop in home equity lines of credit that I mentioned a meeting or two ago now has been sustained through the whole quarter . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON Part of the reason might be caution , but a lot of it is being attributed to the additional regulatory burden , particularly the Sarbanes -- Oxley regulatory burden . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON Commercial lending continues to be solid for both large and small borrowers , but the utilization of credit lines still remains at about 50 percent . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON The markets are much more concerned with event risk than with inflation risk -- which is to say , issues like major energy disruptions , terrorism activity , or even weather-related activity . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON So it means that we are moving up from a very soft commercial loan market and may , in fact , be consistent with what President Poole suggested . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON One significant change that is sort of consistent with the IPO experience is that , in many cases , internationally active businesses are more apt to go offshore for either debt or equity and do it as a private placement rather than do it in the United States . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON In preparation for today 's meeting , I talked with the CEOs of three banks -- one major money center , one major East Coast regional bank , and one major West Coast -- that pretty well have the markets covered . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON In the money center , the liquidity in the market is provided significantly by the institutional investors , and the activity on the loan side is to a great extent in structured credit . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON Notably there is a significant absence of concern expressed about inflationary pressure : None of the three CEOs expressed concern that they are feeling the effect of inflation . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON Also , the banks that are active internationally can follow the flow either through a direct transaction or through some sort of a collateralized arrangement that can provide the financing , so an international customer has a distinct advantage in doing business with an international bank . FOMC/FOMC20060328meeting/FOMC20060328meeting--155.txt MR. OLSON There is a significant disparity between U.S. and offshore markets in terms of regulatory reporting requirements , and that is becoming increasingly apparent and has become a factor in both credit and equity issuance . FOMC/FOMC20060328meeting/FOMC20060328meeting--74.txt MR. HOENIG Because when you look at the alternative scenarios -- and they 're very interesting -- two of them , the productivity factor and the term premium on the yield curve , seem to have the greatest effect . FOMC/FOMC20061212meeting/FOMC20061212meeting--96.txt MS. BIES I thought I 'd start today talking a bit about housing markets and the condition of banks right now . FOMC/FOMC20061212meeting/FOMC20061212meeting--96.txt MS. BIES Banks are still getting some of this business and putting it on their balance sheets , and it is part of the growth of what you 're seeing the banks funding . FOMC/FOMC20061212meeting/FOMC20061212meeting--96.txt MS. BIES I 'm hearing this from folks who understand that the quality of what goes into those pools varies tremendously when you do n't have the Fannie Mae and Freddie Mac framework for the underwriting . FOMC/FOMC20061212meeting/FOMC20061212meeting--96.txt MS. BIES I 'm hearing more from banks that , since we 've stopped raising rates , they 've lost the nice little lag effect -- the ability to wait for us to move before lagging along . FOMC/FOMC20061212meeting/FOMC20061212meeting--96.txt MS. BIES They are taking steps to get costs -- whether related to originations , post-loan closings , or payoff administration -- under control . FOMC/FOMC20061212meeting/FOMC20061212meeting--96.txt MS. BIES We 're seeing that some of the private-label mortgage-backed securities are having very high early default rates or delinquencies in the mortgages , which usually means that the originator has to buy them back out of the pools . FOMC/FOMC20061212meeting/FOMC20061212meeting--96.txt MS. BIES So those pressures are going to be more of a challenge for them , especially with a flat or inverted yield curve , depending on where they 're funding and lending . FOMC/FOMC20061212meeting/FOMC20061212meeting--96.txt MS. BIES The bit of softness that I 'm hearing about from some of my contacts in sectors outside housing and mortgages warns me that we need to be a little more vigilant than I had been expecting about growth maybe softening in a broader sense .