APPENDIX 1

Charts used by Mr. Fisher in his statement 3-Month Deposit Rates Page 1 January 1,1997 - January 30, 1998 Current Euro-deposit Rate; Forwards Implied by Traded Forward Rate Agreements LIBOR Fixing 3-mo. forward 6-mo. forward 9-mo. forward United States German

Percent

6.4 ------6 4 ------6.4 . United DJIA FOMC Jan States declines Nov 12 FOMC 554 pts 6.2 Mar 25 6.2

6.0 6.0

5.8 5.8

4.2 4.2 Germany

3.8 3.8 3.8 3.8

3.6 3.6

3.2

3.4

1.0

0.8 .8 0.6 1.00.8

0.4 0.4

01/01 01/29 02/26 03/26 04/23 05/21 06/18 07/16 08/13 09/10 10/08 11/05 12/03 12/31 01/28 Page 2

Percent U.S. Treasury Yields & Fed Funds Future Implied Rate Percent 6.25 6.25 FOMC Chairman's Meyer's ECI Dec 16 Speech Speech Jan 3 Jan 8 6 6

5.75 5.75

5.5 5.5 April Fed Funds Contract 5.25 5.25

5 5 1 3 5 9 11 15 17 19 23 25 29 31 2 6 8 12 14 16 20 22 26 30 Dec Jan Implied Fed Funds Rate Curves Yield Yield Treasury Yield Curv Yield 6.0 6.0 6.0 6.0 /

5.8 5.8 5.8 5.8 Dec 16 Dec 16 5.6 5.6 5.6 5.6

5.4 5.4 5.4 5.4

Jan 9 5.2 5.2 5.2 5.2

5.0 5.0 5.0 5.0 Jan Feb Mar Apr May Jun Jul Aug 3m 6m 1Yr 2Yr 3Yr 5Yr 10Yr 30Yr30Yr $/Yen Yen per Dollar and Marks per Dollar $/DM 135.0 1.850 FOMC Dec 16 132.5 1.825 Yen per dollar (left axis)

130.0 1.800

127.5 Marks per dollar (right axis) 127.5 1775

125.0 1.750

1 3 5 9 11 15 17 19 23 25 29 31 2 6 8 12 14 16 20 22 26 28 30 Jan Per. Avg. Rate 5.44% 10 10 Per. Avg. Rate 5.59% 7 1/2 10 Per Avg. Excess $1.9bn. Per Avg. Excess $1.8bn. FEDERAL FUNDS RATE D effective Range Per. Avg. Rate 5.53% standard Per Avg. Excess $1.7bn. deviation H H (+/- one) 0 O L L I I

D A Fed Funds Target Rate

A

Y End of Y Maintenance Period

Dec 24 31 Jan

4 8

2 0 APPENDIX 2

Charts used by Mr. Prell and Ms. Johnson in their presentations STRICTLY CONFIDENTIAL (FR) CLASS II-FOMC

Material for

Staff Presentation to the Federal Open Market Committee

February 3, 1998 Chart 1 Summary of Staff Forecast

Economic Growth Four-quarter percent change

Q4/Q4 percent change Real private domestic final purchases

Private Domestic GDP Final Purchases

1996

1997

1998

1999

1996 1997 1998 1999

Resource Utilization Percent

Q4 average Manufacturing Capacity Utilization

U CU

1996 81.4

1997 82.2

Unemployment rate 1998 79.3 1999 78.6

1996 1997 1996 1999

Consumer Price Inflation Four-quarter percent change

Q4/Q4 percent change

Total Core

1996 2 1997

1998 1 1999

1996 1997 1998 1999 Chart 2 Financial and Fiscal Backdrop

* Federal funds rate remains near * Bond yields generally remain in recent 5-1/2 percent lower range Real Funds Rate Term Structure and Real GDP Growth Percent 8

6 Based on, PCE forpastfourquaetersinflation 10 year - 3 month Treasury rates 4

2

+ 0

2

4 1986 1990 1994 1998 1986 1990 1994 1998 * 9801 observation based on January survey.

* Share prices will drop moderately * No changes in fiscal policy over coming year Corporate Earnings Forecasts Federal Budget Deficit Percent change from previous year Billions of dollars 300 Unified

S&P 500 operating earningsper share

200

100

NIPA after-tax book profits

0

1992 1994 1996 1998 1986 1990 1994 1998 * Source: Goldman Sachs provided history for 1992-96. Fiscal years I/B/E/S provided 1997 estimate and forecast for 1998-99. Chart 3 Exchange Rates and Interest Rates

Nominal Exchange Rates Nominal Exchange Rates (Foreign currency per U.S. dollar) (Foreign currency per U.S. dollar) 1/94 = 100 1/94 = 100 120

110

100

German mark Sterling

1994 1995 1996 1997 1998 1999 1994 1995 1996 1997 1998 1999

Three-Month Interest Rates Ten-Year Interest Rates

Level Change Level Change 1/30/98 7/1/97 to 1/30/98 1/30/98 7/1/97 to 1/30/98 United Kingdom 7.41 0.59 United Kingdom 6.05 -1.01 Canada 5.08 1.53 Canada 5.42 -0.90 Germany 3.48 0.46 Germany 5.05 -0.67 Japan 0.80 0.10 Japan 1.82 -0.56 United States 5.52 -0.16 United States 5.53 -0.92

Nominal Exchange Rates Real Exchange Rates* (U.S. dollar per foreign currency) (U.S. dollar per foreign currency) 1/94 = 100 1/94 = 100

Hong Kong dollar

That baht

1994 1995 1996 1997 1998 1999 * Adjusted by consumer prices Mexican Peso Real Weighted-Average Dollar (U.S. dollar per foreign currency) 1/94 = 100 1994Q1 = 100

100

80 29-Currency CPI-adjusted dollar* 60

40

20 1994 1995 1996 1997 1998 1999 * Weighted-average for exports Chart 4 Import Prices

Prices of U.S. Imports Foreign Consumer Prices in Dollars*

EU

1995 1996 * Weighted by shares in U.S. bilateral imports. Non-oil Commodity Prices Oil Prices 1995Q1 = 100

1995 1996 1997 1998 1999

Import Prices

* Non-oil goods excluding computers, and semiconductors. Chart 5 Foreign Outlook

Real GDP: US and Foreign Foreign Real GDP* Percent change, annual

foreign

1996 1997 1998 1999 1996 1997 1998 * Weighted by U.S. nonagricultural exports. * Weighted by U.S. nonagricultural exports. **Annual data are Q4 to Q4 percent change.

Share of US Exports : 1996-1997 Real GDP: Asian Developing Countries

Industrial Countries 57 Percent Change, Q4/Q4 Developing Countries 43 of which 1997 1998 1999 Latin America 19 Korea 3.9 -3.6 3.0 Asia 19 Southeast Asia* 2.5 -1.0 2.6 of which Greater China* 6.4 2.7 4.5 Korea 4 Southeast Asia* 4 Greater China** 7

*Indonesia, Philippines, Thailand and Malaysia. * Weighted by U.S. nonagricultural exports **China, Taiwan and Hong Kong

Current Account Balances: Asia* Current Account Balances: Latin America Billions of dollars Billions of dollar 120

Current Current September Greenbook 40 Greenbook Greenbook 0

September 40 Greenbook

80 1996 1997 1998 1999 *Asia excluding Japan Chart 6 Industrial Countries

Real GDP: Industrial Countries Price-Adjusted Exchange Rates* 1996Q1 = 100 110 Percent change, Q4/Q4 199 1998 1999 Japan 0.3 1.3 1.5 100 Canada 4.3 3.0 2.6 Japanese yen 100 United Kingdom 3.1 1.7 1.9 EU-11 2.9 2.5 2.9 of which: Germany France German mark Italy 80 1996 1997 1998 1999 * Weighted average for exports

Trade with Asian Developing Countries, 1995-1996

Share of Total Share of Exports Exports Going to Asian in Total GDP Developing Countries

Japan Canada EU memo: United States

Business Confidence Business Confidence 1977Q1 = 100 Percent balance Percent balance Chart 7

Real Net Exports

Core Import Quantities* Core Export Quantities* Four-quarter percent change 15 Four-quarter percent change

10

5

10 1995 1996 1997 1998 1999 *Non-oilgoods excluding computers and semiconductors. *Nonagricultural good excluding computers and semiconductors.

Total Real Goods and Services Contribution of Real Net Exports to Real GDP Growth* nge 16 Percentage Points, AR 12 1996 -0.4 1997-Q1 -1.0 8 Q2 -0.4 Q3 -1.3 Q4 0.6 1998 -0.9

1999 -0.4 0 * Annual dataQ4,Q4. Chart 8 Household Spending

Real Personal Consumption Consumer Sentiment Four-quarter percent change Index, 1966=100 6 120

5 100 4

3 80

2 60

0 40 1996 1997 1998 1999 1982 1987 1992 1997

Net Worth and Personal Saving Rate Mortgage Refinancing Activity Percent Ratio Index, 1990=100 2400 4-quarter moving average MBA loan applications index, monthly

1800

1200

600

0 1982 1987 1992 1997 1992 1995 1998 Note: Last observation is average for first three weeks of January

Cash-flow Burden of Homeownership* Housing Starts Monthly payment/income Millions of units. saar 2

1.5 Multifamily

0.5

0 1978 1985 1992 1999 1996 1997 1998 1999 * Based on new home, 30 year ARM Chart 9 Business Spending

Real Business Fixed Investment Growth of Net Capital Four-quarter percent change Percent change, saar 30 6

5 20 4

10 3

2 + 0 1

10 0 1995 1996 1997 1998 1999 1973 1978 1983 1988 1993 1998

Computer Prices Orders for Nondefense Capital Goods Ratio scale, index 1992=100 Billions of dollars 1520 45 1020 Excluding aircraft

520 42

39

3-month moving average 36

33 1973 1978 1983 1988 1993 1998 1996 1997

Inventory Growth Inventory-Sales Ratio Months 2.55

2.52

2.49

2.46

2.43 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 Chart 10 Labor Market

Labor Productivity Chained $92/hr, ratio scale 32 Nonfarm Business

Actual 28

T r en d Growth trends

1974:Q1-1990:Q2 1.1%

1990:Q2-1995:Q2 0.8%

1995:Q3-1999:Q4 1.2%*

20 1973 1978 1983 1988 1993 1998 *On a consistently measured basis. As reported, 1.3 percent in 1998, 1.5 percent in 1999.

Payroll Growth Labor Force Participation Rate Thousands per month Percent 500 70 Quarterly averages

400 68

300 66 200

100 6

62 1996 1997 1998 1999 1980 1986 1992 1998

Employment Cost Indexes ECI Total Compensation Four-quarter percent change 10 Private Industry Q4/Q4 percent change

1995 2.6 6 1996 3.1

4 1997 3.4 1998 3.2

Wages and salaries 2 1999 3.1

1982 1986 1990 1994 1998 Chart 11 Inflation Outlook

Unemployment and Inflation Capacity Utilization and Inflation Change in CPIPI inflationInflation Change in CPI inflation 10 10 1959 to 1997 1959 to 1997 8 8 R2 = .36 R 2 = .41 6 6 4 4

2 + + 10 0

1997 2 2 1997 4 4

6 6

8 8 3 4 5 6 7 8 9 1010 70 75 80 85 90 95 Unemployment Rate Manufacturing Capacity Utilization Rate

CPI - Food CPI - Energy Four-quarter percent change Four-quarter percent change 6

5

4

3

2

1

1995 1997 1999 1995 1997 1999

Inflation - Adjusted for BLS Technical Changes to Indexes Q4/Q4 percent change

Cumulative effect of technical changes since 1994 Total CPI

Core CPI

1994 1995 1996 1997 1998 1999 Chart 12

ECONOMIC PROJECTIONS FOR 1998

FOMC Q4 to FOMC Central Q4 Range Tendency Administration Staff change, Percent Percent change, Q4 to Q4

Nominal GDP 3-1/2 to 5 3-3/4 to 4-1/2 July 1997 H-H Report 4-1/4 to 5-3/4 4-1/2 to 5

Real GDP 1-3/4 to 3 2 to 2-3/4 July1997 H-H Report 2 to 3 2 to 2-1/2

CPI 1-1/2 to 2-1/2 1-3/4 to 2-1/4 July 1997 H-H Report 2-1/2 to 3 2-1/2 to 3

Average level, Q4, percent

Unemployment rate 4-1/2 to 5 about 4-3/4 July 1997 H-H Report 4-1/2 to 5-1/4 4-3/4 to 5

NOTE: Central tendencies constructed by dropping top and bottom three from distribution. APPENDIX 3

Charts used by Mr. Lindsey in his statement STRICTLY CONFIDENTIAL (FR) CLASS I-FOMC

Material for StaffPresentation on -Run Ranges

February 3-4, 1998 Growth of Money and Debt and Alternative Ranges (percent)

1997 1998 Alt. I Alt. II Alt. III (actual) (projected) (provisional)

5.4* 1 to 5 1 to 5 1 to 5 M3 8.6* 2 to 6 3 to 7 2 to 6

Debt 3 to 7 3 to 7 2 to 6 Memo: Nominal GDP

*Reflects incoming data from the Investment Company Institute on the IRA component of retail money market mutual funds, which are netted from M2, and hence M3. The new data have led us to revise up the growth rates of M2 and M3 in 1997 each by 0.3 percentage point. Chart 6

M2 Velocity and Opportunity Cost

M2 Velocity 1959:Q2-1997:Q4

97:Q4

93:Q4 94:Q2 1.9 92:04

90:Q2 91:Q4 90:Q4

1.7

Fit from 1959:Q2-1989:Q4

Opportunity Cost (ratio scale)

1994:Q3-1998:Q4 V2 (ratio scale) 2.10

97:Q2

2.05

2.00 94:Q3

Opportunity Cost (ratio scale) Chart 7

Actual and Projected Velocity of M3 and Debt

Ratio Scale 2.5 M3 Velocity

2.0

1.5

1.0 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998

Ratio Scale 1.25 Total Domestic Nonfinancial Debt Velocity

-11.00

0.75

0.50 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998