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/FOMC20070816confcall/FOMC20070816confcall--22.txt MR. KOHN The Board is also announcing a change to the Reserve Banks ' usual practices to allow the provision of term financing for as long as thirty days , renewable by the borrower . FOMC/FOMC20070807meeting/FOMC20070807meeting--98.txt MR. KOHN The relationship of financial markets to real activity is multifaceted , not easily modeled with interest rates and stock prices , especially when markets are reconsidering risk . FOMC/FOMC20070628meeting/FOMC20070628meeting--124.txt MR. POOLE Perhaps what is going on here is simply what is also in the Greenbook 's second-quarter numbers , because the goods part of the economy -- consumption -- is pretty flat . FOMC/FOMC20070131meeting/FOMC20070131meeting--32.txt MR. DUDLEY Although U.S. inventories remain high relative to the five-year historical average -LRB- as shown in chart 14 -RRB- , this situation has persisted for some time without having a big effect on prices . FOMC/FOMC20071211meeting/FOMC20071211meeting--82.txt MS. YELLEN Banks are showing increasing concern that their capital ratios will become binding and are tightening credit terms and conditions . FOMC/FOMC20071211meeting/FOMC20071211meeting--82.txt MS. YELLEN Data on house sales , prices , and construction have been downbeat , and foreclosures on subprime loans have moved even higher . FOMC/FOMC20071211meeting/FOMC20071211meeting--84.txt MR. ROSENGREN While incoming data have generally been weak , some higher-frequency data , like the recent labor report , might be consistent with a stronger outlook than the Greenbook forecast . FOMC/FOMC20071211meeting/FOMC20071211meeting--84.txt MR. ROSENGREN However , those flows could quickly reverse if investors lose confidence in their ability to redeem money market funds at par . FOMC/FOMC20070807meeting/FOMC20070807meeting--42.txt MR. WILCOX In line with our custom in years past , we carried the revision to the growth of potential through into the forecast period . FOMC/FOMC20070807meeting/FOMC20070807meeting--42.txt MR. WILCOX The second scenario adds a deterioration in consumer sentiment , giving the meltdown in the housing sector an additional vehicle for spilling over into consumer spending more generally . FOMC/FOMC20070628meeting/FOMC20070628meeting--136.txt MR. KROSZNER As a number of you know -- and all of you have been facing pressure on some of these things -- we will be putting out the subprime adjustable-rate mortgage guidance that we put out for comment just at the end of February . FOMC/FOMC20070628meeting/FOMC20070628meeting--36.txt MS. LIANG The sharp rise in loans reflects in part greater demand , particularly for collateralized loan obligations -LRB- CLOs -RRB- , by institutional investors , who are estimated to have purchased more than half of these loans last year . FOMC/FOMC20070628meeting/FOMC20070628meeting--36.txt MS. LIANG However , in view of the sparseness of earnings warnings thus far , we expect second-quarter earnings to top analysts ' forecasts by a few percentage points . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY Exhibit 8 shows the structure for a representative CLO : More than two-thirds is AAA-rated debt , and 87 percent is investment grade . 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 In particular , as shown in exhibit 6 , corporate default rates for both investment-grade and below-investment-grade borrowers have been at very low levels . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY In addition , the asset-backed commercial paper market is very skittish in two areas -- structured investment vehicles and extendable commercial paper programs . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY I request a vote to ratify the operations conducted by the System Open Market Account since the June FOMC meeting . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY For example , global growth has been unusually strong with little volatility , and corporate profit margins are unusually wide , both in the United States and elsewhere . FOMC/FOMC20070807meeting/FOMC20070807meeting--17.txt MR. DUDLEY Nevertheless , other measures also underscore the positive fundamentals of the corporate sector -- in contrast to the poor fundamentals in residential mortgages . FOMC/FOMC20071031meeting/FOMC20071031meeting--6.txt MR. DUDLEY Finally , I want to discuss briefly the Desk 's performance in implementing the FOMC 's directive from the last meeting for a 4.75 percent federal funds rate target . 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 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 I request a vote to ratify the operations conducted by the System Open Market Account since the September 18 FOMC meeting . 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/FOMC20070918meeting/FOMC20070918meeting--6.txt MR. DUDLEY The good news , of course , is that as time passes , the uncertainty about bank balance sheet pressures and funding requirements should lessen . FOMC/FOMC20070918meeting/FOMC20070918meeting--6.txt MR. DUDLEY I request a vote to ratify the operations conducted by the System Open Market Account since the August 7 FOMC meeting . 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/FOMC20071206confcall/FOMC20071206confcall--75.txt MR. LACKER Banks are paying a lot for insurance against term funding costs to them going up , and a lot of banks are forgoing large spreads in order to marshal their resources . FOMC/FOMC20070918meeting/FOMC20070918meeting--101.txt MS. YELLEN With respect to economic activity , I 've downgraded my forecast for growth in the fourth quarter by about the same amount as Greenbook and lowered it only marginally , a bit less than Greenbook , in 2008 . FOMC/FOMC20070321meeting/FOMC20070321meeting--3.txt MR. DUDLEY Moreover , there are few signs of significant contagion from the subprime mortgage market into the rest of the mortgage market or from subprime mortgage credit spreads to corporate credit spreads more generally . FOMC/FOMC20070321meeting/FOMC20070321meeting--3.txt MR. DUDLEY In the most recent episode , the VIX index rose 848 basis points , and the BB corporate spread rose 27 basis points . FOMC/FOMC20070321meeting/FOMC20070321meeting--3.txt MR. DUDLEY Second , I want to talk a little about the decline in U.S. equity prices and the accompanying rise in actual and implied price volatility . 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 . FOMC/FOMC20070321meeting/FOMC20070321meeting--3.txt MR. DUDLEY The result is that the volume of subprime mortgage originations is likely to fall sharply this year -- perhaps dropping one-third or more from the 2006 rate of slightly more than $ 600 billion . FOMC/FOMC20070321meeting/FOMC20070321meeting--3.txt MR. DUDLEY I request a vote to ratify the operations conducted by the System Open Market Account since the January FOMC meeting .