FOMC/FOMC20070628meeting/FOMC20070628meeting--134.txt MR. WARSH Since we last met , as Bill said at the outset , we witnessed ten-year Treasury yields increase on the order of between 30 and 50 basis points . FOMC/FOMC20070628meeting/FOMC20070628meeting--134.txt MR. WARSH Let me build on a couple of remarks that Vice Chairman Geithner made about risks now in the financial markets . FOMC/FOMC20070816confcall/FOMC20070816confcall--22.txt MR. KOHN The Board approved a reduction in the spread between the primary credit rate and the FOMC 's target funds rate to bring the primary credit rate to 5 3/4 percent . FOMC/FOMC20070816confcall/FOMC20070816confcall--22.txt MR. KOHN The Federal Reserve will continue to accept a broad range of collateral for discount window loans , including home mortgages and related assets . FOMC/FOMC20071031meeting/FOMC20071031meeting--41.txt MR. ROSENGREN -LSB- Laughter -RSB- Somewhat surprising to me has been the lack of spillover to the rest of the economy from the problems in residential investment . FOMC/FOMC20071211meeting/FOMC20071211meeting--10.txt MR. DUDLEY The rise in high-yield debt spreads is important for banks that still have significant leveraged-loan exposure that they hope to distribute to the capital markets . FOMC/FOMC20071211meeting/FOMC20071211meeting--10.txt MR. DUDLEY I also request a vote to ratify the swap agreement with the Swiss National Bank that Chairman Bernanke discussed earlier . FOMC/FOMC20070807meeting/FOMC20070807meeting--98.txt MR. KOHN For some time I thought that the risk of a shortfall from our central tendency outweighed the risk of an overshoot , mainly centered on housing and consumption . FOMC/FOMC20070509meeting/FOMC20070509meeting--3.txt MR. DUDLEY The matrix shown in exhibit 3 , which shows the correlations since the March FOMC meeting , looks similar to exhibit 1 . FOMC/FOMC20070509meeting/FOMC20070509meeting--3.txt MR. DUDLEY Finally , the survey of the primary dealers shows little change in interest rate expectations since the last FOMC meeting . FOMC/FOMC20070918meeting/FOMC20070918meeting--103.txt MR. ROSENGREN However , these improvements are tenuous , and the ability to raise funds in a number of short-term financial markets remains quite difficult . FOMC/FOMC20070807meeting/FOMC20070807meeting--57.txt MS. YELLEN In addition to tighter financial conditions , lower structural productivity growth was the reason that we lowered our forecast for real GDP growth to 2 1/4 percent in 2008 . FOMC/FOMC20070807meeting/FOMC20070807meeting--57.txt MS. YELLEN The Greenbook has long highlighted , and we have long worried about , the possibility and potential consequences of a broader shift in risk perceptions . FOMC/FOMC20070807meeting/FOMC20070807meeting--57.txt MS. YELLEN A key development during the intermeeting period was the downward revision of real GDP growth over the 2004-06 period . FOMC/FOMC20070807meeting/FOMC20070807meeting--100.txt MR. WARSH The financial markets have really provided wind at the back of the broader economy throughout this most recent period , even until a month ago . FOMC/FOMC20070807meeting/FOMC20070807meeting--100.txt MR. WARSH My base case assessment there has a much lower confidence level , both in terms of timing and in terms of outcome . FOMC/FOMC20070918meeting/FOMC20070918meeting--122.txt VICE CHAIRMAN GEITHNER Asset prices and risk premiums may have to move further as more deleveraging takes place and assets are liquidated . FOMC/FOMC20070807meeting/FOMC20070807meeting--89.txt MR. ROSENGREN Given the use of subcontractors and with little obvious economies of scale , the primary advantage of large homebuilders would seem to be access to external finance , which allows them to purchase large tracts of land . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY One should expect that the tightening of credit standards in the corporate sector would generate some rise in default rates independent of other developments . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY In part , this greater deterioration reflects the fact that loss estimates have been trending higher , putting the higher-rated tranches more in harm 's way . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY It also reflects efforts to hedge subprime risk by going short these indexes by people who ca n't liquidate securities easily . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY The effective shutdown of the CDO and CLO markets has , in turn , raised questions about the sustainability of the strong bid by private equity firms to conduct leveraged buyouts . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY The loss of confidence among investors in the ability to assess the value and risks associated with this structured product has led to a sharp drop in CDO and CLO issuance . FOMC/FOMC20071031meeting/FOMC20071031meeting--6.txt MR. DUDLEY Two other market developments deserve a brief mention before I turn to dealer expectations concerning monetary policy and a brief look at inflation expectations . FOMC/FOMC20071031meeting/FOMC20071031meeting--6.txt MR. DUDLEY You can see that by the fact that U.S. 10-year Treasury note yields are still fairly low , trading around 4.4 percent . FOMC/FOMC20071031meeting/FOMC20071031meeting--6.txt MR. DUDLEY More recently , however , they have diverged a bit , with the Board staff measure showing a more persistent increase following the September FOMC meeting . FOMC/FOMC20071031meeting/FOMC20071031meeting--6.txt MR. DUDLEY The rating agency models have been battle-tested over a much longer period and have been shown to be robust across a broad range of environments . FOMC/FOMC20070628meeting/FOMC20070628meeting--5.txt MR. DUDLEY Today , I want to focus on the significant rise in long-dated Treasury yields that has occurred since the last FOMC meeting . FOMC/FOMC20070918meeting/FOMC20070918meeting--6.txt MR. DUDLEY Second , bank backstop liquidity facilities have been triggered as investor appetite for asset-backed commercial paper has fallen sharply . FOMC/FOMC20070918meeting/FOMC20070918meeting--6.txt MR. DUDLEY Turning to the first question , the losses in subprime mortgages had wide-ranging effects because the poor investment performance made investors much less willing to invest in structured-finance products more generally . FOMC/FOMC20070918meeting/FOMC20070918meeting--6.txt MR. DUDLEY This pressure on bank balance sheets -- both existing and anticipated -- has led to significant dysfunction in financial markets . FOMC/FOMC20070918meeting/FOMC20070918meeting--6.txt MR. DUDLEY In addition , these depository institutions have turned to the Federal Home Loan Bank system as a source of term funding . FOMC/FOMC20070918meeting/FOMC20070918meeting--6.txt MR. DUDLEY Exhibits 19 and 20 compare the dealer surveys before the August 7 FOMC meeting and before the current FOMC meeting . FOMC/FOMC20070918meeting/FOMC20070918meeting--107.txt MR. LOCKHART It is a fair question whether the process of information revelation -- that is , removing uncertainty -- will be accelerated by an aggressive rate cut . FOMC/FOMC20070321meeting/FOMC20070321meeting--115.txt MR. WARSH Having spent a lot of time in New York in the past several weeks , I think that , if that was a wake-up call , many market participants seem to have hit the snooze button . FOMC/FOMC20070321meeting/FOMC20070321meeting--3.txt MR. DUDLEY Second , what is the ongoing risk of contagion from the market area that has experienced the most stress -- the subprime mortgage market -- to other markets ? FOMC/FOMC20070321meeting/FOMC20070321meeting--3.txt MR. DUDLEY First , the dealers ' forecasts are modal forecasts and do not reflect the downside risks that many dealers now believe have emerged in the growth outlook . FOMC/FOMC20070321meeting/FOMC20070321meeting--3.txt MR. DUDLEY The good news is that markets have generally remained liquid and well functioning , with a minor exception on the New York Stock Exchange on February 27 . FOMC/FOMC20070321meeting/FOMC20070321meeting--3.txt MR. DUDLEY An investor with speculative risk positions that would be vulnerable to economic weakness might hedge these risks by buying Eurodollar futures contracts .