1、Board of Governors of the Federal Reserve SystemFor use at 11:00 a.m.EDTJune 17,2022Monetary Policy rePortJune 17,2022Letter of transmittaLBoard of Governors of the Federal Reserve SystemWashington,D.C.,June 17,2022The President of the Senate The Speaker of the House of RepresentativesThe Board of G

2、overnors is pleased to submit its Monetary Policy Report pursuant to section 2B of the Federal Reserve Act.Sincerely,Jerome H.Powell,ChairStatement on Longer-run goaLS and monetary PoLicy StrategyAdopted effective January24,2012;as reaffirmed effective January25,2022The Federal Open Market Committee

3、(FOMC)is firmly committed to fulfilling its statutory mandate from the Congress of promoting maximum employment,stable prices,and moderate long-term interest rates.The Committee seeks to explain its monetary policy decisions to the public as clearly as possible.Such clarity facilitates well-informed

4、 decisionmaking by households and businesses,reduces economic and financial uncertainty,increases the effectiveness of monetary policy,and enhances transparency and accountability,which are essential in a democratic society.Employment,inflation,and long-term interest rates fluctuate over time in res

5、ponse to economic and financial disturbances.Monetary policy plays an important role in stabilizing the economy in response to these disturbances.The Committees primary means of adjusting the stance of monetary policy is through changes in the target range for the federal funds rate.The Committee ju

6、dges that the level of the federal funds rate consistent with maximum employment and price stability over the longer run has declined relative to its historical average.Therefore,the federal funds rate is likely to be constrained by its effective lower bound more frequently than in the past.Owing in

7、 part to the proximity of interest rates to the effective lower bound,the Committee judges that downward risks to employment and inflation have increased.The Committee is prepared to use its full range of tools to achieve its maximum employment and price stability goals.The maximum level of employme

8、nt is a broad-based and inclusive goal that is not directly measurable and changes over time owing largely to nonmonetary factors that affect the structure and dynamics of the labor market.Consequently,it would not be appropriate to specify a fixed goal for employment;rather,the Committees policy de

9、cisions must be informed by assessments of the shortfalls of employment from its maximum level,recognizing that such assessments are necessarily uncertain and subject to revision.The Committee considers a wide range of indicators in making these assessments.The inflation rate over the longer run is

10、primarily determined by monetary policy,and hence the Committee has the ability to specify a longer-run goal for inflation.The Committee reaffirms its judgment that inflation at the rate of 2percent,as measured by the annual change in the price index for personal consumption expenditures,is most con

11、sistent over the longer run with the Federal Reserves statutory mandate.The Committee judges that longer-term inflation expectations that are well anchored at 2percent foster price stability and moderate long-term interest rates and enhance the Committees ability to promote maximum employment in the

12、 face of significant economic disturbances.In order to anchor longer-term inflation expectations at this level,the Committee seeks to achieve inflation that averages 2percent over time,and therefore judges that,following periods when inflation has been running persistently below 2percent,appropriate

13、 monetary policy will likely aim to achieve inflation moderately above 2percent for some time.Monetary policy actions tend to influence economic activity,employment,and prices with a lag.In setting monetary policy,the Committee seeks over time to mitigate shortfalls of employment from the Committees

14、 assessment of its maximum level and deviations of inflation from its longer-run goal.Moreover,sustainably achieving maximum employment and price stability depends on a stable financial system.Therefore,the Committees policy decisions reflect its longer-run goals,its medium-term outlook,and its asse

15、ssments of the balance of risks,including risks to the financial system that could impede the attainment of the Committees goals.The Committees employment and inflation objectives are generally complementary.However,under circumstances in which the Committee judges that the objectives are not comple

16、mentary,it takes into account the employment shortfalls and inflation deviations and the potentially different time horizons over which employment and inflation are projected to return to levels judged consistent with its mandate.The Committee intends to review these principles and to make adjustmen

17、ts as appropriate at its annual organizational meeting each January,and to undertake roughly every 5years a thorough public review of its monetary policy strategy,tools,and communication practices.Contentsnote:This report reflects information that was publicly available as of 4 p.m.EDT on June15,202

18、2.Unless otherwise stated,the time series in the figures extend through,for daily data,June14,2022;for monthly data,May2022;and,for quarterly data,2022:Q1.In bar charts,except as noted,the change for a given period is measured to its final quarter from the final quarter of the preceding period.For f

19、igures 23,36,and 42,note that the S&P/Case-Shiller U.S.National Home Price Index,the S&P 500 Index,and the Dow Jones Bank Index are products of S&P Dow Jones Indices LLC and/or its affiliates and have been licensed for use by the Board.Copyright 2022 S&P Dow Jones Indices LLC,a division of S&P Globa

20、l,and/or its affiliates.All rights reserved.Redistribution,reproduction,and/or photocopying in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC.For more information on any of S&P Dow Jones Indices LLCs indices,please visit .S&P is a registered trademark of Stan

21、dard&Poors Financial Services LLC,and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC.Neither S&P Dow Jones Indices LLC,Dow Jones Trademark Holdings LLC,their affiliates,nor their third-party licensors make any representation or warranty,express or implied,as to the ability o

22、f any index to accurately represent the asset class or market sector that it purports to represent,and neither S&P Dow Jones Indices LLC,Dow Jones Trademark Holdings LLC,their affiliates,nor their third-party licensors shall have any liability for any errors,omissions,or interruptions of any index o

23、r the data included therein.Summary.1Recent Economic and Financial Developments .1Monetary Policy.3Special Topics.3Part 1:Recent Economic and Financial Developments.5Domestic Developments.5Financial Developments.27International Developments.35Part 2:Monetary Policy.43Part 3:Summary of Economic Proje

24、ctions.51Abbreviations.69List of BoxesDevelopments in Global Supply Chains.8Developments in Employment and Earnings across Groups.14Developments Related to Financial Stability.31Global Inflation.37Monetary Policy in Foreign Economies.39Monetary Policy Rules in the Current Environment.46Developments

25、in the Federal Reserves Balance Sheet and Money Markets.49Forecast Uncertainty.66 1summaryIn the first part of the year,inflation remained well above the Federal Open Market Committees(FOMC)longer-run objective of 2percent,with some inflation measures rising to their highest levels in more than 40ye

26、ars.These price pressures reflect supply and demand imbalances,higher energy and food prices,and broader price pressures,including those resulting from an extremely tight labor market.In the labor market,demand has remained strong,and supply has increased only modestly.As a result,the unemployment r

27、ate fell noticeably below the median of FOMC participants estimates of its longer-run normal level,and nominal wages continued to rise rapidly.Although overall economic activity edged down in the first quarter,household spending and business fixed investment remained strong.The most recent indicator

28、s suggest that private fixed investment may be moderating,but consumer spending remains strong.In response to sustained inflationary pressures and a strong labor market,the FOMC has been adjusting its policies and communications since last fall.At its March meeting,the FOMC raised the target range f

29、or the federal funds rate off the effective lower bound to to percent.The Committee continued to raise the target range in May and June,bringing it to 1 to 1percent following the June meeting,and indicated that ongoing increases are likely to be appropriate.The Committee ceased net asset purchases i

30、n early March and began reducing its securities holdings in June.The Committee is acutely aware that high inflation imposes significant hardship,especially on those least able to meet the higher costs of essentials.The Committees commitment to restoring price stabilitywhich is necessary for sustaini

31、ng a strong labor marketis unconditional.Recent Economic and Financial DevelopmentsInflation.Consumer price inflation,as measured by the 12-month change in the price index for personal consumption expenditures(PCE),rose from 5.8percent in December2021 to 6.3percent in April,its highest level since t

32、he early 1980s and well above the FOMCs objective of 2percent.This increase was driven by an acceleration of retail food and energy prices,reflecting further increases in commodity prices due to Russias invasion of Ukraine.The 12-month measure of inflation that excludes the volatile food and energy

33、categories(so-called core inflation)rose initially and then fell back to 4.9percent in April,unchanged from last December.Three-month measures of core inflation have softened since December but remain far above levels consistent with price stability.Measures of near-term inflation expectations conti

34、nued to rise markedly,while longer-term expectations moved up by less.The labor market.Demand for labor continued to outstrip available supply across many parts of the economy,and nominal wages continued to increase at a robust pace.While labor demand remained very strong,labor supply increased only

35、 modestly.As a result,the labor market tightened further between December and May,with job gains averaging 488,000per month and the unemployment rate falling from 3.9percent to 3.6percentjust above the bottom of its range over the past 50years.Economic activity.Real gross domestic product(GDP)is rep

36、orted to have surged at a 6.9percent annual rate in the fourth quarter of 2021 and then to have declined at a 1.5percent annual rate in the first quarter.The large swings in growth rates reflected fluctuations in the volatile expenditure categories of net 2 SUMMARyexports and inventory investment.Ab

37、stracting from these volatile components,growth in private domestic final demand(consumer spending plus residential and business fixed investmenta measure that tends to be more stable and better reflects the strength of overall economic activity)was strong in the first quarter,supported by some unwi

38、nding of supply bottlenecks and a further reopening of the economy.The most recent indicators suggest that private fixed investment may be moderating,but consumer spending remains strong.As a result,real GDP appears on track to rise moderately in the second quarter.Financial conditions.Financial con

39、ditions have tightened significantly this year.The expected path of the federal funds rate over the next few years shifted up substantially,and yields on nominal Treasury securities across maturities have risen considerably since late February amid sustained inflationary pressures and associated exp

40、ectations for further monetary policy tightening.Equity prices were volatile and declined sharply,on net,while corporate bond yields increased substantially and spreads increased notably,partly reflecting some concerns about the future corporate credit outlook.Mortgage rates also rose sharply.In tur

41、n,tighter financial conditions may have begun to weigh on some financing activity.On the business side,nonfinancial corporate bond issuance was solid in the first quarter but slowed somewhat in April and May,with speculative-grade bond issuance being particularly weak.That said,the growth of bank lo

42、ans to businesses picked up,and business credit quality has remained strong thus far.For households,mortgage originations declined materially.Nevertheless,mortgage credit remained broadly available for a wide range of potential borrowers.For other consumer loans(such as auto loans and credit cards),

43、credit standards eased somewhat further or changed little,and credit outstanding grew briskly.Financial stability.Despite experiencing a series of adverse shockshigher-than-expected inflation,the ongoing supply disruptions related to COVID-19,and Russias invasion of Ukrainethe financial system has b

44、een resilient,though portions of the commodities markets temporarily experienced elevated levels of stress.The drop in equity prices and rising bond spreads suggest that valuation pressures in corporate securities markets have eased some from their previously elevated levels,but real estate prices h

45、ave risen further this year.While business and household debt has been growing solidly,the ratio of credit to GDP has decreased to near pre-pandemic levels and most indicators of credit quality remained robust,suggesting that vulnerabilities from nonfinancial leverage are moderate.Large bank capital

46、 ratios dipped in the first quarter,but overall leverage in the financial sector appears moderate and little changed this year.Recent strains experienced in markets for stablecoinsdigital assets that aim to maintain a stable value relative to a national currency or other reference assetsand other di

47、gital assets have highlighted the structural fragilities in that rapidly growing sector.A few signs of funding pressures emerged amid the geopolitical tensions,particularly in commodities markets.However,broad funding markets proved resilient,and with direct exposures of U.S.financial institutions t

48、o Russia and Ukraine being small,financial spillovers have been limited to date.International developments.Economic activity has continued to recover in many foreign economies,albeit with new significant headwinds from Russias invasion of Ukraine and COVID lockdowns in China.These headwinds have,on

49、net,pushed commodity prices higher,worsened supply disruptions,and lowered household and business confidence,thus damping the rebound in foreign economic activity.As in the United States,consumer price inflation abroad is high and has continued to rise in many economies,boosted by higher energy,food

50、,and other commodity prices as well by supply chain constraints.In response,many foreign central banks have MONETARy POLICy REPORT:JUNE 2022 3 raised policy rates,and some have started to reduce the size of their balancesheets.Foreign financial conditions have tightened notably since the beginning o

51、f the year,in part reflecting the tightening in foreign monetary policy and concerns about persistently high inflation.Sovereign bond yields in many advanced foreign economies rose.Foreign risky asset prices declined,also driven by downside risks to the growth outlook amid the lockdowns in China and

52、 Russias invasion of Ukraine.The trade-weighted value of the dollar appreciated notably.Monetary PolicyIn response to significant ongoing inflation pressures and the tightening labor market,the Committee has been adjusting its policies and communications since last fall.The Committee wound down net

53、purchases of securities and began reducing those securities holdings more rapidly than expected,and also initiated a swift increase in interest rates.Adjustments to both interest rates and the balance sheet are playing a role in firming the stance of monetary policy in support of the Committees maxi

54、mum-employment and price-stability goals.Interest rate policy.In March,after holding the federal funds rate near zero since the onset of the pandemic,the FOMC raised the target range for that rate to to percent.The Committee raised the target range again in May and June,bringing it to the current ra

55、nge of 1 to 1percent,and conveyed its anticipation that ongoing increases in the target range will be appropriate.Balance sheet policy.The Federal Reserve began reducing its monthly net asset purchases last November and accelerated the reductions in December,bringing net purchases to an end in early

56、 March.In January,the FOMC issued a set of principles regarding its planned approach for significantly reducing the size of the Federal Reserves balance sheet.Consistent with those principles,the Committee announced in May its specific plans for significantly reducing its securities holdings and tha

57、t these reductions would begin on June1.1The Committee acutely recognizes the significant hardship caused by elevated inflation,especially on those least able to meet the higher costs of essentials.The Committee is strongly committed to restoring price stability,which is necessary for sustaining a s

58、trong labor market.Special TopicsLabor market disparities.The labor market recovery over the past year and a half has been robust and widespread as the labor market effects of the pandemic have eased,with particularly strong improvement among groups that had suffered the most.As a result,employment

59、and earnings of nearly all major demographic groups are near or above their levels before the pandemic,and employment rates are again near multidecade highs.However,there remain notable differences in employment and earnings across groups that predate the pandemic.Developments in global supply chain

60、s.Supply chain bottlenecks remain a major impediment for domestic and foreign firms.While U.S.manufacturers have been recording solid output growth for more than a year,order backlogs and delivery times remain high,and producer prices have risen rapidly.Further risks to global supply chains abound.I

61、n China,COVID-19 lockdowns drove the largest monthly declines in industrial production there since early 2020 while also disrupting internal and international freight transportation.In addition,the war in Ukraine continues to put 1.See the May4,2022,press release regarding the Plans for Reducing the

62、 Size of the Federal Reserves Balance Sheet,available at https:/www.federalreserve.gov/newsevents/pressreleases/monetary20220504b.htm.4 SUMMARyupward pressure on energy and food prices and has raised the risk of disruption in the supply of inputs to some manufacturing industries.Monetary policy rule

63、s.Simple monetary policy rules,which relate a policy interest rate to a small number of other economic variables,can provide useful guidance to policymakers.Many simple policy rules prescribed strongly negative values for the federal funds rate during the pandemic-driven recession.With inflation run

64、ning well in excess of the Committees 2percent longer-run objective,a strong U.S.economy,and tight labor market conditions,the simple monetary policy rules considered here call for raising the target range for the federal funds rate significantly.Global inflation.Inflation abroad rose rapidly over t

65、he past year,reflecting soaring food and commodity prices,pandemic-related supply disruptions,and demand imbalances between goods and services.The price pressures have been amplified by the war in Ukraine and COVID-19 lockdowns in China.Although the recent inflation surge was concentrated in volatil

66、e components,such as food and energy,price increases have broadened to core goods and services.Global monetary policy.With inflation rising sharply across the globe,many central banks have tightened monetary policy.Policy tightening started last year as some emerging market central banks,particularl

67、y those in Latin America,were concerned that sharp increases in inflation could become entrenched in inflation expectations.Since fall 2021,many central banks in the advanced foreign economies have also started tightening monetary policy or are expected to do so soon,and several central banks that h

68、ad expanded their balance sheets over the past two years are now allowing them to shrink.Developments in the Federal Reserves balance sheet.Following the conclusion of net asset purchases,the balance sheet remained stable at around$9trillion.Alongside the removal of policy accommodationthrough actua

69、l and expected increases in the policy rateplans for shrinking the size of the balance sheet were announced in May and were initiated in June.Despite the size of the balance sheet remaining steady,reserve balances fell,in large part because of increasingly elevated take-up at the overnight reverse r

70、epurchase agreement(ONRRP)facility,which reached a record high of$2.2trillion.In an environment of ample liquidity,limited Treasury bill supply,and low repurchase agreement rates,the ONRRP facility continued to serve its intended purpose of helping to provide a floor under short-term interest rates

71、and to support effective implementation of monetary policy.5Domestic DevelopmentsInflation continued to run high.After surging 5.8percent over 2021the largest increase since 1981the price index for personal consumption expenditures(PCE)continued to post notable increases so far this year,and the cha

72、nge over the 12 months ending in April stood at 6.3percent(figure1).This pace is well above the FOMCs longer-run objective of 2percent.reflecting further large increases in food and energy prices.Grocery prices increased at a very rapid pace of 10percent over the 12months ending in April,more than 4

73、percentage points faster than over the 12 months ending in December and the highest reading since 1981(figure2).Food commodity prices(such as wheat and corn),which had already increased last year,have risen further since Russias invasion of Ukraine.At the same time,high fuel costs,supply chain bottl

74、enecks,and high wage growth have also pushed up processing,packaging,and transportation costs for food.The PCE price index for energy increased 30percent over the 12 months ending in April,Part 1reCent eConomiC and finanCiaL deveLoPmentsExcluding foodand energyTrimmed mean0.51.01.52.02.53.03.54.04.5

75、5.05.56.06.57.0Percent change from year earlier202220201520141.Change in the price index for personal consumption expenditures MonthlyTotalNOTE:The data extend through April 2022.SOURCE:For trimmed mean,Federal Reserve Bank of Dallas;for allelse,Bureau of Economic Analysis;all

76、via Haver Analytics.2.Personal consumption expenditures price indexes Food andbeverages42+_024681012Percent change from year earlier2010+_00202220218Percent change from year earlierEnergyNOTE:The data are monthly and extend through April 2022.SOURCE:Bureau of Economic Analysis

77、via Haver Analytics.Servicesex energyand housingGoods ex food,beverages,and energy2+_02468Percent change from year earlier202220218MonthlyHousingservicesNOTE:The data extend through April 2022.SOURCE:Bureau of Economic Analysis via Haver Analytics.6 PART 1:RECENT ECONOMIC AND FINANCIAL DE

78、vELOPMENTS42+_0246812-month percent change202220201520145.Nonfuel import price index MonthlyNOTE:The data extend through April 2022.SOURCE:Bureau of Labor Statistics via Haver Analytics.about the same pace as over the 12months ending in December.Large increases in crude oil and

79、 natural gas commodity prices have boosted consumer prices for gasoline and natural gas.which,in turn,partly reflected rising prices of commodities and importsBecause of Russias invasion of Ukraine,oil prices rose sharply in early March,reaching eight-year highs(figure3).Prices remain elevated and v

80、olatile,boosted by a European Union embargo of Russian oil imports but weighed down at times by concerns about global economic growth.In addition,producers in other countries are struggling to ramp up oil production.Nonfuel commodity prices also surged after the invasion,with large increases in the

81、prices of both agricultural commodities and industrial metals(figure4).Although the price of industrial metals has declined recently,agricultural prices remain elevated.Ukraine and Russia are notable exporters of wheat,Russia is a major exporter of fertilizer,and higher energy prices are spilling ov

82、er into the agricultural sector.Export restrictions and unfavorable weather conditions in several countries have also boosted agricultural prices.(See the box“Developments in Global Supply Chains.”)With commodity prices surging and foreign goods prices on the rise,import prices increased significant

83、ly(figure5).Excluding food and energy prices,monthly inflation readings have softened since the turn of the year but remain far above levels consistent with price stabilitySupply chain issues,hiring difficulties,and other capacity constraints have prevented the supply of products from rising quickly

84、 enough to satisfy continued strong demand,resulting in large price increases for many goods and services over the past year.After excluding consumer food and energy prices,Brent spot price204060800Dollars per barrel20072001920223.Spot and futures prices for crude oil Weekly24-

85、month-aheadfutures contractsNOTE:The data are weekly averages of daily data and extend throughJune 10,2022.SOURCE:ICE Brent Futures via Bloomberg.Agricultureand livestock60800180Week ending January 3,2014=1002014 2015 2016 2017 2018 2019 2020 2021 20224.Spot prices for commodities WeeklyI

86、ndustrial metalsNOTE:The data are weekly averages of daily data and extend throughJune 10,2022.SOURCE:For industrial metals,S&P GSCI Industrial Metals IndexSpot;for agriculture and livestock,S&P GSCI Agriculture&LivestockSpot Index;both via Haver Analytics.MONETARy POLICy REPORT:JUNE 2022 7 the 12-m

87、onth measure of core PCE inflation rose initially and then fell back to 4.9percent in April,unchanged from December.That said,monthly core inflation readings have softened noticeably since the start of the year,with the three-month measure of core PCE inflation falling from an annual rate of 6.0perc

88、ent last December to 4.0percent in April.In particular,inflation stepped down for durable goods,likely reflecting some easing in supply constraints.Nevertheless,the recent inflation readings have been mixed,remain far above levels consistent with price stability,and are far from conclusive evidence

89、on the direction of inflation.Unlike durable goods price inflation,core services inflation has not declined significantly.Housing service prices continue to rise at a brisk pace,and increased demand for travel is markedly pushing up inflation rates for lodging and airfares.More generally,rapid growt

90、h of labor costs is putting upward pressure on the prices of all labor-intensive services.Measures of near-term inflation expectations continued to rise markedly,while longer-term expectations moved up by lessThe first half of 2022 saw further increases in expectations of inflation for the year ahea

91、d in surveys of both consumers and professional forecasters(figure6).In the University of Michigan Surveys of Consumers,the median value for inflation expectations over the next year jumped to 5.4percent in March,its highest level since November1981,and has moved sideways since then.A portion of the

92、 upward movement so far this year likely reflects the war in Ukraine and the accompanying increases in the prices of commodities,especially those related to energy and food.Longer-term expectations,which are more likely to influence actual inflation over time,moved up by less and remained above pre-

93、pandemic levels.The Michigan surveys median inflation expectation for the next CIE,projected onto10-year SPFMichigan survey,next 12 monthsSPF,10 years aheadCIE,projected ontoMichigan,next 5 to 10 years1.01.52.02.53.03.54.04.55.05.5Percent202220202000066.Measures of inflation ex

94、pectations Michigan survey,next 5 to 10 yearsNOTE:The Survey of Professional Forecasters(SPF)data arequarterly,begin in 2007:Q1,and extend through 2022:Q2.The data forthe Index of Common Inflation Expectations(CIE)and the Michigansurvey are monthly and extend through June 2022;the June data for theM

95、ichigan survey and the CIE are preliminary.SOURCE:University of Michigan Surveys of Consumers;FederalReserve Bank of Philadelphia,SPF;Federal Reserve Board,CIE;Federal Reserve Board staff calculations.8 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSmixed for bottlenecks in the transportation of g

96、oods.The number of ships waiting for berths at West Coast ports has declined noticeably,as port throughput has remained high,although manufacturers continue to cite logistics and transportation constraints as reasons for loweroutput.Bottlenecks in global production and transportation remain a major

97、impediment for both domestic and foreign fi rms.Russias invasion of Ukraine and the widespread COvID-19 lockdowns in China have exacerbated strains in global supply networks and have led to greater uncertainty about the timing of improvement in supply conditions.Despite this turbulence in the global

98、 supply network,U.S.manufacturers have been recording solid output growth for more than a year.There have been gains in domestic motor vehicle production,as the supply of semiconductors has recovered somewhat(fi gure A).In addition,survey results suggest shorter supplier delivery times and lower ord

99、er backlogs relative to their late 2021 levels(fi gure B).Notwithstanding these improvements,backlogs and delivery times for the sector remain elevated,and light vehicle assemblies are still a bit below pre-pandemic levels,with low dealer inventories continuing to constrain sales.For some materials

100、that had previously been in short supplysuch as lumber and steelprices have declined from notable highs.Even so,the overall producer price index for manufacturing in April was more than 18percent above its year-earlier level(fi gureC).Progress has been similarly Developments in Global Supply Chains(

101、continued)708090100110January 2020=100Feb.Apr.Jun.Aug.Oct.Dec.Feb.Apr.20212022A.U.S.light motor vehicle production MonthlyNOTE:The data extend through April 2022.The data are adjustedusing Federal Reserve Board seasonal factors.SOURCE:Wards Automotive Group,AutoInfoBank and IntelligenceData Query;Ch

102、rysler Group LLC,North American Production Data;General Motors Corporation,GM Motor Vehicle Assembly ProductionData.Order backlogs20304050607080Difusion index2022201720122007B.Suppliers delivery times and order backlogs MonthlyDelivery timesNOTE:Values greater than 50 indicate that more respondents

103、reportedlonger delivery times or order backlogs relative to a month earlier thanreported shorter delivery times or order backlogs.SOURCE:Institute for Supply Management,ISM Manufacturing Report on Business.105+_05101520Percent change from year earlier2022202182017C.Producer price index fo

104、r manufacturing MonthlySOURCE:Bureau of Labor Statistics via Haver Analytics.MONETARy POLICy REPORT:JUNE 2022 9 Risks to supply chain conditions abound,including those arising from COvID-19 lockdowns in China beginning in mid-March and the ongoing war in Ukraine.1 Committed to their zero-COvID strat

105、egy,Chinese authorities ratcheted up restrictions quickly in the face of rising cases of the Omicron variant,which included a complete lockdown of Shanghai.The containment strategy managed to reduce case counts,allowing authorities to begin relaxing some citywide restrictions in late April.The lockd

106、owns drove the largest monthly declines in Chinese activity since early 2020,with industrial production dropping about 13percent between February and April(fi gure D)before recovering some in May.With severely disrupted domestic logistics,supplier delivery times increased sharply in April and contin

107、ued increasing in May,but not as strongly(fi gure E).Chinese international trade was also hit,contracting in the three months before April(fi gure F).As Chinese production continues to recover,the associated rebound in trade fl ows may further strain international transportation networks.1.The July1

108、 expiration of the contract between dockworkers and West Coast port operators poses an additional risk for shipping-related disruption.Retail sales161284+_04812Percent changeJan.Mar.MayJulySept.Nov.Jan.Mar.May20212022D.Chinese industrial production and retail sales MonthlyIndustrial productionNOTE:I

109、ndustrial production data are adjusted using Federal ReserveBoard seasonal factors.Retail sales data are seasonally adjusted by theNational Bureau of Statistics of China.SOURCE:National Bureau of Statistics of China via Haver Analytics;Federal Reserve Board staf calculations.5055606570Difusion index

110、2022202120202019E.Chinas purchasing managers index:Supplier delivery times MonthlyNOTE:The series is seasonally adjusted.Values greater than 50indicate that more respondents reported longer delivery times relative toa month earlier than reported shorter delivery times.SOURCE:Caixin;S&P Global;both v

111、ia Haver Analytics.Imports50+_050100150200Percent changeJan.Mar.MayJulySept.Nov.Jan.Mar.May20212022F.Nominal trade growth in China MonthlyExportsNOTE:All series are seasonally adjusted at an annual rate usingFederal Reserve Board seasonal factors.The data are 3-month movingaverages.SOURCE:General Ad

112、ministration of Customs,China,via HaverAnalytics.The invasion of Ukraine by Russia is causing economic hardship.For instance,the confl ict has disrupted global commodity markets in which Ukraine and Russia account for signifi cant shares of global exports.Notably,energy prices have soared,as(continu

113、ed on next page)10 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSincreasing geopolitical tensions have put the supply of Russian oil and gas to Europe at risk.Indeed,Russian energy exports have already been falling amid embargos on Russian oil,self-sanctioning by some companies,transportation dif

114、fi culties,and Russias decision to halt gas deliveries to several European countries.The prices of several nonfuel commodities that are vital inputs to some manufacturing industries jumped in the early days of the confl ict,including neon gas(an input in semiconductor chip production),palladium(an i

115、nput in semiconductors and catalytic converters),nickel(an input in electric vehicles batteries),and platinum.However,prices have since retreated to near pre-invasion levels as major disruptions have failed to materialize thus far.Finally,blocked shipping routes in the Black Sea have severed the reg

116、ions agricultural exports,disrupting global food markets.As a result,prices of corn,wheat,sunfl ower oil,and fertilizer have climbed to record-high levels,raising concerns of food insecurity across the globe.Further aggravating the situation,a number of countries introduced export bans on some food

117、commodities to contain rising domestic food prices.Thus far,the war appears to have had more limited effects on other aspects of global supply chains.The effect on supplier delivery times across Europe has been muted,suggesting that the repercussions for manufacturers in the region have been relativ

118、ely modest so far outside of the shifts in commodity prices Developments in Global Supply Chains(continued)Euro area4045505560657075808590Difusion index2022202120202019G.Purchasing managers index:Supplier delivery times MonthlyUnited KingdomNOTE:The series are seasonally adjusted.Values greater than

119、 50indicate that more respondents reported longer delivery times relative toa month earlier than reported shorter delivery times.SOURCE:For the United Kingdom,S&P Global and the CharteredInstitute of Procurement&Supply;for the euro area,S&P Global;all viaHaver Analytics.(fi gure G).The global transp

120、ortation system has also proved mostly resilient to the war,with signs of further strain in only a couple of sectors.Oil tanker charter rates spiked,boosted by a rise in demand as oil started to move to new markets,while truck transportation prices rose further,refl ecting higher diesel fuel costs.M

121、ONETARy POLICy REPORT:JUNE 2022 11 5to 10years rose to 3.3percent in the June preliminary reading.If confirmed,this reading would be near the top of the range from the past 25years.Nevertheless,it remains well below the corresponding measure of 1-year-ahead inflation expectations.In the second-quart

122、er Survey of Professional Forecasters,the median expectation for 10-year PCE inflation edged up to 2.4percent,reflecting noticeable upward revisions to expected inflation this year and next but little change thereafter;the median expectation for 6 to 10years ahead held steady at 2percent.Market-base

123、d measures of longer-term inflation compensation,which are based on financial instruments linked to inflation,are sending a similar message.A measure of consumer price index(CPI)inflation compensation 5 to 10years ahead implied by Treasury Inflation-Protected Securities is little changed(on balance)

124、since late 2021 and remains well below the corresponding measure of inflation compensation over the next 5years(figure7).The Index of Common Inflation Expectations,which is produced by Federal Reserve Board staff and synthesizes information from a large range of near-term as well as longer-term expe

125、ctation measures,edged up in the first half of this year and now stands at the high end of the range from the past 20years.The labor market continued to tightenPayroll employment expanded an average of 488,000 per month in the first five months of the year(figure8).Payroll gains so far this year hav

126、e been broad based across industries,with the leisure and hospitality sector continuing to see the largest gains as people continued their return to activities that had been cut back by the pandemic.The increase in payrolls was accompanied by further declines in the unemployment rate,which fell 0.3p

127、ercentage point over the first five months of the year to 3.6percent in May,just above the bottom of its range 0145150155Millions of jobs202220202000068.Nonfarm payroll employment MonthlySOURCE:Bureau of Labor Statistics via Haver Analytics.5-year0.51.01.52.02.53.03.

128、54.0Percent202220202001220107.Inflation compensation implied by Treasury Inflation-Protected Securities Daily5-to-10-yearNOTE:The data are at a business-day frequency and are estimatedfrom smoothed nominal and inflation-indexed Treasury yield curves.SOURCE:Federal Reserve Bank of New York

129、;Federal Reserve Boardstaff calculations.12 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSover the past 50years(figure9).The decline in the unemployment rate has been fairly broad based across age,educational attainment,gender,and ethnic and racial groups(figure10).These declines have helped empl

130、oyment of nearly all major demographic groups recover to near or above their levels before the pandemic.(See the box“Developments in Employment and Earnings across Groups.”)While labor demand remained very strong,labor supply increased only modestly and stayed below pre-pandemic levelsDemand for lab

131、or continued to be very strong in the first half of the year.At the end of April,there were 11.4million job openings60percent above pre-pandemic levels and down a bit from the all-time high recorded in March.Meanwhile,the supply of labor rose only gradually and remained below pre-pandemic levels.The

132、 labor force participation rate(LFPR),which measures the share of people Black or African AmericanAsianHispanic or Latino24680Percent2022202020000610.Unemployment rate,by race and ethnicity MonthlyWhiteNOTE:Unemployment rate measures total unemployed as a percentage

133、of the labor force.Persons whose ethnicity is identified as Hispanic or Latinomay be of any race.Small sample sizes preclude reliable estimates for Native Americans and other groups for which monthly data are not reported bythe Bureau of Labor Statistics.SOURCE:Bureau of Labor Statistics via Haver A

134、nalytics.246810121416Percent202220202000069.Civilian unemployment rate MonthlySOURCE:Bureau of Labor Statistics via Haver Analytics.MONETARy POLICy REPORT:JUNE 2022 13 either working or actively seeking work,edged up just 0.1percentage point in the first five months of the year

135、following a 0.4percentage point improvement last yearto 62.3percent in May(figure11).2Despite these improvements,the LFPR remains 1.1percentage points below its February2020 level.3 About one-half of this decline in the participation rate was to be expected even in the absence of the pandemic,as add

136、itional members of the large baby-boom generation have reached retirement age.In addition,several pandemic-related factors appear to be continuing to hold down the participation rate,including a pandemic-induced surge in retirements(beyond that implied by the aging of the baby boomers)and,to a dimin

137、ishing extent,increased caregiving responsibilities and some continuing concerns about contracting COVID-19.In addition to subdued participation,a second factor constraining the size of the labor force has been a marked slowing in population growth since the start of the pandemic.Over 2020 and 2021,

138、the working-age(16 and over)population grew by 0.4percent per year on averagenotably less than the 0.9percent2.The Bureau of Labor Statistics incorporated new population estimates beginning with the January2022 employment report.This development resulted in a one-time jump in the estimate of the agg

139、regate LFPR of about 0.3percentage point due to a change in the age distribution of the population.Accordingly,the 0.4percentage point increase in the published measure from December to May overstates the improvement in the LFPR by about 0.3percentage point.3.This shortfall in the LFPR corresponds t

140、o a shortfall in the labor force of about 2.8million persons.(This calculation holds the LFPR constant at its February2020 level and assumes population growth equal to the actual growth observed since February2020.)Employment-to-population ratio50525456586062646668Percent20222020200122010

141、2008200611.Labor force participation rate and employment-to-population ratio MonthlyLabor force participation rateNOTE:The labor force participation rate and the employment-to-population ratio are percentages of the population aged 16 and over.SOURCE:Bureau of Labor Statistics via Haver Analytics.14

142、 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSEmployment for Blacks and Hispanics not only declined by more than that for whites and Asians early in the pandemic,but also recovered more quickly since the end of last year(fi gure A,upper-right panel).In addition,men and women with high school deg

143、rees or less saw larger declines and a faster recovery(fi gureA,lower-left panel).Similarly,gaps in employment between prime-age mothers and non-mothers that widened through 2020 have essentially closed(fi gureA,lower-right panel).By April2022,employment for all of those groups was near or above its

144、 pre-pandemiclevel.These differences in the timing of the employment recovery across different demographic groups partly refl ect the evolution of the pandemics effect on the labor market.For instance,social-distancing restrictions and concerns about contracting or spreading COvID-19 had likely inhi

145、bited employment in in-person services.As these restrictions and concerns have waned,employment of groups more commonly employed in in-person services,such as those with less education and some minority groups,has recovered quickly.3 Further,the closing of many schools and childcare facilities for t

146、he 202021 school year due to elevated levels of COvID cases likely held back the employment recovery of parents,as many families faced uncertainties about the consistent availability of in-person education for school-age children and childcare for younger children.The effects appear to have been par

147、ticularly acute for mothers,especially Black and Hispanic mothers,as well as those with less 3.Before the pandemic,Blacks and Hispanics were less likely to be employed in jobs that could be performed remotely,and women and Blacks were more likely to be employed in occupations that involved greater f

148、ace-to-face interactions;for example,see Laura Montenovo,Xuan Jiang,Felipe Lozano Rojas,Ian M.Schmutte,Kosali I.Simon,Bruce A.Weinberg,and Coady Wing(2020),“Determinants of Disparities in COvID-19 Job Losses,”NBER Working Paper Series 27132(Cambridge,Mass.:National Bureau of Economic Research,May;re

149、vised June2021),https:/www.nber.org/system/files/working_papers/w27132/w27132.pdf.Other research shows that even after accounting for workers job characteristics,Hispanic and nonwhite workers experienced a higher rate of job loss relative to other workers;see Guido Matias Cortes and Eliza Forsythe(2

150、021),“The Heterogeneous Labor Market Impacts of the Covid-19 Pandemic,”unpublished paper,August,http:/publish.illinois.edu/elizaforsythe/files/2021/08/Cortes_Forsythe_Covid-demo_revision_8_1_2021.pdf.Labor market gains have been robust over the past year and a half as the economy continues to recove

151、r from the effects of the pandemic.Historically,economic downturns have tended to exacerbate long-standing differences in employment and earnings across demographic groups,especially for minorities and for those with less education,and this pattern was especially true early on in the pandemic.Howeve

152、r,as pandemic-related factors have eased and the labor market has recovered,groups with larger employment declines early in the pandemic have had especially large increases lately.Now employment and real earnings of nearly all major demographic groups are near or above their levels before the pandem

153、ic,and employment rates are again near multidecade highs.Different age groups have had very different employment experiences over the course of the pandemic.1 Early in the pandemic,the employment-to-population(EPOP)ratio for people aged 16 to 24 not only declined by much more than that for people of

154、 prime age(25 to 54)and those aged 55 to 64,but also recovered much more quickly(see fi gure A,upper-left panel).2 Conversely,employment recovered more slowly for prime-age people throughout 2020 and nearly all of 2021.But in late 2021 and early 2022,the prime-age EPOP rose quickly,such that now all

155、 three of these age groups EPOP ratios have essentially recovered to their pre-pandemic levels.The EPOP ratio for those aged 65 and over,however,remains about 1percentage point below its pre-pandemic levela level it has maintained through much of the pandemic.The lower EPOP ratio for that group is e

156、ntirely attributable to a lower labor force participation rate,which in turn largely refl ects an increase in retirements since the onset of the pandemic.A closer look at the prime-age group shows that there has been considerable heterogeneity in the pace of the employment recovery across race and e

157、thnicity,educational attainment,and parental status.1.The January2022 employment report incorporates population controls that showed that the working-age population was both larger and younger over the past decade than the Census Bureau had previously estimated.Those population controls had meaningf

158、ul effects on the aggregate EPOP ratio,but much smaller effects at the levels of disaggregation examined in this discussion.2.This discussion defi nes the pre-pandemic baseline EPOP ratio for each group as that groups average EPOP ratio over 2019.Developments in Employment and Earnings across Groups

159、(continued)MONETARy POLICy REPORT:JUNE 2022 15 year,these childcare burdens likely eased,allowing many parents to reenter the workforce.See Joshua Montes,Christopher Smith,and Isabel Leigh(2021),“Caregiving for Children and Parental Labor Force Participation during the Pandemic,”FEDS Notes(Washingto

160、n:Board of Governors of the Federal Reserve System,November5),https:/www.federalreserve.gov/econres/notes/feds-notes/caregiving-for-children-and-parental-labor-force-participation-during-the-pandemic-20211105.htm.A.Changes in employment-to-population ratio compared with the 2019 average ratio,by gro

161、up16 to 24Black or African American65+Asian55 to 64Hispanic or Latino2+_02Percentage points2022202120202019Age group Monthly25 to 541412108642+_024Percentage points2022202120202019Race and ethnicity:Prime age MonthlyWhiteMen,college or moreParentsWomen,high school or lessWomen,college or

162、more2+_024Percentage points2022202120202019Educational attainment:Prime age MonthlyMen,high school or lessNOTE:Prime age is 25 to 54.The age groups 16 to 24 and prime age show seasonally adjusted data published by the Bureau of Labor Statistics,whereas all other groups data are seasonally

163、 adjusted by the Federal Reserve Board staf.SOURCE:Bureau of Labor Statistics;Federal Reserve Board staf calculations from Current Population Survey microdata.12108642+_02Percentage points2022202120202019Parental status:Prime-age women MonthlyNonparents(continued on next page)education.4 However,wit

164、h schools having generally provided in-person education for the 202122 school 4.The increase in the share of mothers of school-age children who reported being out of the labor force due to caregiving closely tracked the degree to which schools were fully closed to in-person learning over the 202021

165、school year,and districts that serve more Blacks and Hispanics were less likely to provide fully in-person education during the 202021 school year,which may account for some of the larger and more persistent declines in labor force attachmentfor Black and Hispanic mothers over this period.16 PART 1:

166、RECENT ECONOMIC AND FINANCIAL DEvELOPMENTStime real earnings for women versus men is slightly smaller in 2022:Q1 than it was in 2019,as is the gap in median real earnings between Black and white full-time workers.66.Some of a groups earnings growth relative to 2019 may refl ect lingering pandemic-re

167、lated compositional shifts in the groups full-time workers.Additionally,real earnings growth accounts for aggregate infl ation,but some demographic groups may be disproportionately exposed to infl ation due to differences in groups consumption patternsimplying lower real earnings growth for groups w

168、ith greater exposure to infl ation.Although the gaps in employment outcomes across groups that widened during the pandemic have diminished,the considerable gaps that existed before the pandemic remain.For example,the EPOP ratio for whites of prime age remains more than 3percentage points above those

169、 for prime-age Black and Hispanic people;the EPOP ratio of college-educated,prime-age people is about 15percentage points higher than that of prime-age people with high school degrees or less;and the EPOP ratio for prime-age mothers is about 5percentage points below that of non-mothersall similar in

170、 size to the gaps that existed before the pandemic.The broad-based nature of the labor market recovery is also apparent in workers earnings,which have grown rapidly as employment surged in 2021 and early 2022.As of 2022:Q1,the median full-time workers usual weekly earnings had grown 12.3percent rela

171、tive to pre-pandemic levelsimplying real earnings growth of 3.1percent(fi gure B).5 Although this earnings growth has been widespread,it has been largest for women,minorities,young workers,and workers with less than a high school education.The growth in earnings for some demographic groups has been

172、suffi ciently robust to shrink some pre-pandemic disparities in real earnings between groups.For instance,the gap in median full-5.Just as with the change in the EPOP ratio,each groups pre-pandemic baseline is defi ned as the groups average median usual weekly earnings in 2019.The reported growth in

173、 real usual weekly earnings defl ates nominal earnings growth by total PCE(personal consumption expenditures)infl ation.If,instead,the CPI were used to defl ate nominal earnings,then reported real earnings growth since 2019 would be 2percentage points lowerbut even when using the CPI to defl ate nom

174、inal earnings,real earnings have risen for most groups since 2019.B.Growth in median full-time usual weekly earnings from 2019 to 2022:Q1 Percent change relative to 2019 averageNominalReal(PCE)0246810121416Hispanic or LatinoAsianBlack or African AmericanWhite65+556425541624Bachelors or moreSome coll

175、egeHigh schoolLess than high schoolWomenMenOverallNOTE:The percent change as of 2022:Q1 is relative to the 2019 average ofthe median usual weekly earnings for full-time workers in each group.Realearnings growth defates the nominal earnings growth by the average growth inthe personal consumption expe

176、nditures(PCE)price index as of 2022:Q1relative to its 2019 average level.The overall earnings,as well as those for menand women,use seasonally adjusted data,but the other groups earnings arenot seasonally adjusted.The key identifes bars in order from left to right.SOURCE:For median usual weekly earn

177、ings,Bureau of Labor Statistics;forthe PCE price index,Bureau of Economic Analysis.Developments in Employment and Earnings across Groups(continued)MONETARy POLICy REPORT:JUNE 2022 17 average rate over the previous five years.4 The slowing in population growth over 202021 was due to both a sharp decl

178、ine in net immigration and a spike in COVID-related deaths.5 Had the population increased over 202021 at the same rate as over the previous five years,the labor force would have been about 1million larger as of the second quarter of this year.6As a result,labor markets remained extremely tight.Refle

179、cting very strong demand for workers alongside still-subdued supply,a wide range of indicators have continued to point to an extremely tight labor market despite the fact that the level of payroll employment in May remained about 820,000 below the level in February2020.7 The number of total availabl

180、e jobs,measured by total employment plus posted job openings,continued to far exceed the number of available workers,measured by the size of the labor force.8 The gap was 4.Population forecasts just before the onset of the pandemic also projected faster population growth for 202122 than has been rea

181、lized.For example,the Congressional Budget Office projected 0.8percent growth per year in 202122 in its January2020 budget and economic projections;see Congressional Budget Office(2020),The Budget and Economic Outlook:2020 to 2030(Washington:CBO,January),https:/www.cbo.gov/publication/56020.Before 2

182、015,population growth was even higher.For example,the average growth rate in the working-age population between 1980 and 2014 was 1.2percent per year.5.The effect of COVID-related deaths on the labor force,however,was relatively smaller,because these deaths have been concentrated among older individ

183、uals,who tend to have low LFPRs.6.This calculation uses the actual LFPR in May2022 and multiplies it by the level of the population that would have been realized in that month had population growth over 202021 been the same as the growth observed over 201519.7.After adjusting for population growth s

184、ince the beginning of the pandemic,the shortfall in payrolls relative to their pre-pandemic level was about 2.3million in May.8.The labor force includes all people aged 16 and older who are classified as either employed or unemployed.18 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSabout 5million

185、 at the end of April,near the highest level on record.9 The share of workers quitting jobs each month,an indicator of the availability of attractive job prospects,was 2.9percent at the end of April,near the all-time high reported in November(figure12).Initial claims for unemployment benefits remain

186、near the lowest levels observed in the past 50years.Households and small businesses perceptions of labor market tightness were near or above the highest levels observed in the history of these series.And,finally,employers continued to report widespread hiring difficulties.That said,some possible sig

187、ns of modest easing of labor market tightness have recently appeared.For example,as noted in the next section,some measures of wage growth appear to have moderated.And in the June2022 Beige Book,employers in some Federal Reserve Districts reported some signs of modest improvement in worker availabil

188、ity.and nominal wages continued to increase at a robust paceReflecting very tight labor market conditions,nominal wages continued to rise at historically rapid rates.For example,the employment cost index(ECI)of total compensation rose 4.8percent over the 12 months ending in March,well above 2.8perce

189、nt from a year earlier(figure13).The most recent readings include a surge in bonuses,which may reflect the challenges of retaining and hiring workers.In addition,wage growth as computed by the Federal Reserve Bank of Atlanta,which tracks the median 12-month wage growth of individuals responding to t

190、he Current Population Survey,picked up markedly this year and rose more than 6percent in May,well above the 3to 4percent pace reported over the previous few years.9.Another usual indicator of the gap between available jobs and available workers is the ratio of job openings to unemployment.At the end

191、 of April,this indicator showed that there were 1.9 job openings per unemployed person.Compensation per hour,business sectorAtlanta Feds Wage Growth TrackerEmployment cost index,private sector2+_0246810Percent change from year earlier20222020203.Measures of change in hourly compensation A

192、verage hourly earnings,private sectorNOTE:Business-sector compensation is on a 4-quarter percent changebasis.For the private-sector employment cost index,change is over the12 months ending in the last month of each quarter;for private-sectoraverage hourly earnings,the data are 12-month percent chang

193、es;for theAtlanta Feds Wage Growth Tracker,the data are shown as a 3-monthmoving average of the 12-month percent change.SOURCE:Bureau of Labor Statistics;Federal Reserve Bank of Atlanta,Wage Growth Tracker;all via Haver Analytics.Vacancy-to-unemployment ratio0.3.6.91.21.51.82.12.4Ratio.81.21.62.02.4

194、2.83.22022202020000612.Ratio of job openings to job seekers and quits rate Percent of employmentNonfarm quits rateNOTE:The data are monthly and extend through April 2022.Thevacancy-to-unemployment ratio data are the ratio of job openings tounemployed.SOURCE:Bureau of Labor Stat

195、istics,Job Openings and LaborTurnover Survey.MONETARy POLICy REPORT:JUNE 2022 19 That said,there are some signs that nominal wage growth may be leveling off or moderating.The growth of wages and salaries as measured by the ECI moderated from 5.6percent at an annual rate in the second half of last ye

196、ar to 5.2percent early this year.And even as payroll employment continued to grow rapidly and the unemployment rate continued to fall,the three-month change in average hourly earnings declined from about 6percent at an annual rate late last year to 4.5percent in May,with the moderation in earnings g

197、rowth particularly notable for employees in the sectors that experienced especially strong wage growth last year,such as leisure and hospitality.Following a period of solid growth,labor productivity softenedThe extent to which sizable wage gains raise firms unit costs and act as a source of inflatio

198、n pressure depends importantly on the pace of productivity growth.Considerable uncertainty remains around the ultimate effects of the pandemic on productivity.From 2019 through 2021,productivity growth in the business sector picked up(albeit by less than compensation growth),averaging about 2percent

199、 at an annual rateabout 1percentage point faster than the average pace of growth over the previous decade(figure14).Some of this pickup in productivity growth might reflect persistent factors.For example,the pandemic resulted in a high rate of new business formation,the widespread adoption of remote

200、 work technology,and a wave of labor-saving investments.The latest reading,however,showed a decline in business-sector productivity in the first quarter of this year.While quarterly productivity data are notoriously volatile,this decline nevertheless highlights the possibility that some of the earli

201、er productivity gains could prove transitory,perhaps reflecting worker effort initially surging in response to employment shortages and hiring difficulties 1+_01234Percent,annual rate14.Change in business-sector output per hour 1949 731974 954 082009 182019 212022NOTE:Changes are measured

202、 from Q4 of the year immediatelypreceding the period through Q4 of the final year of the period,except2022 changes,which are calculated from 2021:Q1 to 2022:Q1.SOURCE:Bureau of Labor Statistics via Haver Analytics.20 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSand then subsequently returning to

203、 more normal levels.10 If the gap between wage growth and productivity growth remains comparably wide in the future,the result will be significant upward pressure on firms laborcosts.Gross domestic product declined in the first quarter of 2022 after having surged in the fourth quarter of 2021.Real g

204、ross domestic product(GDP)is reported to have surged at a 6.9percent annual rate in the fourth quarter of 2021and then to have declined at a 1.5percent annual rate in the first quarterbecause of fluctuations in net exports and inventory investment(figure15).These two categories of expenditures are v

205、olatile even in normal times,and they have been even more so in recent quarters.Some improvement in supply chain conditions late last year appears to have enabled firms to rebuild depleted inventories;inventory investment surged in the fourth quarter and then moderated to a still-elevated pace in th

206、e first quarter,thereby weighing on GDP growth.Other measures of activity,including employment,industrial production,and gross domestic income,indicate continued growth in the first quarter.while growth in consumer spending and business investment was solid in the first quarterAfter abstracting from

207、 these volatile components,growth in private domestic final demand(consumer spending plus residential and business fixed investmenta measure that tends to be more stable and better reflects the strength of overall economic activity)was solid in the first quarter,supported by some unwinding of supply

208、 bottlenecks and a further reopening of the economy.The most recent spending data and other indicators suggest that private fixed investment may be 10.The November2021 Beige Book reported that many employers were planning to increase hiring because of concerns that their current workforce was being

209、overworked.17.017.518.018.519.019.520.0Trillions of chained 2012 dollars202220201515.Real gross domestic product QuarterlySOURCE:Bureau of Economic Analysis via Haver Analytics.MONETARy POLICy REPORT:JUNE 2022 21 moderating,but consumer spending remains strong and drag from inv

210、entory investment and net exports may be dissipating.As a result,private domestic final demand and real GDP appear on track to rise moderately in the second quarter.Real consumer spending growth remained strong.Real consumer spendingthat is,spending after adjusting for inflationcontinued to grow bri

211、skly,supported by a partial unwinding of supply bottlenecks and continued normalization of spending patterns as the pandemic fades.For example,spending on motor vehicles grew markedly in the first quarter,reflecting improvements in both domestic and foreign production,and spending on services(especi

212、ally at restaurants)grew briskly.That said,consumer spending growth has moderated from its very rapid pace from early 2021 as fiscal support has declined from historical highs,some households have likely depleted excess savings accumulated during the pandemic,and inflation has eroded households purc

213、hasing power.The composition of spending remains more tilted toward goods and away from services than it was before the pandemic.Real goods spending is still well above its trend,while real spending on services remains below trend(figure16).Nevertheless,the composition continued to shift back toward

214、 services.While goods spending was only modestly higher in April compared with its average from late last year,services spending rose significantly.supported by high levels of wealthHousehold wealth grew by roughly$30trillion between late 2019 and late 2021 because of rises in equity and house price

215、s along with the elevated rate of saving in 2020 and 2021(figures17 and 18).Since the beginning of the year,wealth has declined because of the drop in equity prices.Nevertheless,wealth remains 048236PercentMonthly2022202020000618.Personal saving rate NOTE:The data ex

216、tend through April 2022.SOURCE:Bureau of Economic Analysis via Haver Analytics.Goods6.57.07.58.08.59.09.5Trillions of chained 2012 dollars2.53.03.54.04.55.05.56.02022202020000616.Real personal consumption expenditures Trillions of chained 2012 dollarsServicesNOTE:The data are m

217、onthly and extend through April 2022.SOURCE:Bureau of Economic Analysis via Haver Analytics.5.05.56.06.57.07.58.08.5Ratio2022202020000617.Wealth-to-income ratio QuarterlyNOTE:The series is the ratio of household net worth to disposablepersonal income.SOURCE:For net worth,Federa

218、l Reserve Board,Statistical ReleaseZ.1,“Financial Accounts of the United States”;for income,Bureau ofEconomic Analysis via Haver Analytics.22 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSwell above pre-pandemic levels,providing continuing support for consumer spending.Consumer financing conditio

219、ns were generally accommodative,especially for borrowers with stronger credit scoresFinancing has been generally available to support consumer spending.Following a period of widespread reported easing last year,standards on credit card loans eased somewhat further in the first quarter,whereas those

220、on auto and other consumer loans changed little.Partly reflecting higher credit card purchase volumes,credit card balances grew rapidly in recent months(figure19).Even so,many credit card users still have ample unused credit.Auto loans grew briskly during the first quarter,consistent with the concur

221、rent rebound in autosales.Meanwhile,borrowing costs rose.However,they remain below pre-pandemic levels for credit cards and auto loans,partly reflecting strong consumer credit quality.Indeed,delinquency rates on consumer loans remain low relative to historical averages despite some recent increases

222、among nonprime borrowers.Housing construction remained high but may be moderating.New single-family construction has remained well above pre-pandemic levels.However,new construction may be softening,with single-family permits turning down some in March and April(figure20).As in the past year,still-t

223、ight supplies of materials,labor,and other inputs may still be restraining new construction.Also,builders have become distinctly less optimistic about prospects for housing sales,perhaps owing to the sharp rise in mortgage rates(figure21).while home sales fell amid low inventories and rising mortgag

224、e ratesHome sales stepped down substantially from the very high levels prevailing late last year and are now close to pre-pandemic levels 2.53.03.54.04.55.05.5Percent20222020201.Mortgage rates WeeklyNOTE:The data are contract rates on 30-year,fixed-rate conventionalhome mortgage commitmen

225、ts and extend through June 9,2022.SOURCE:Freddie Mac Primary Mortgage Market Survey.Single-familypermitsMultifamily starts0.2.4.6.81.01.21.41.61.82.0Millions of units,annual rate2022202020000620.Private housing starts and permits MonthlySingle-family startsNOTE:The data extend

226、through April 2022.SOURCE:U.S.Census Bureau via Haver Analytics.2010+_010203040Billions of dollars,monthly rate202220202009.Consumer credit flows Apr.Q1SOURCE:Federal Reserve Board,Statistical Release G.19,“ConsumerCredit.”Student loansAuto loansCredit cardsMONETARy POLICy REPO

227、RT:JUNE 2022 23(figure22).Some of this decline may have reflected further reductions in inventories of existing homes to historically low levels early in the year.In addition,the sharp increases in mortgage rates may have begun to moderate housing demand.Even so,financing conditions in the residenti

228、al mortgage market remained accommodative for borrowers who met standard loan criteria,and the terms of mortgage credit for households with lower credit scores continued to ease toward pre-pandemic levels.Listings,sales,and price data suggest that so far,demand remains strong relative to the pace at

229、 which homes are being made available for sale.For example,the share of homes off market within two weeks remains elevated,and as of April,several measures of national house prices were up about 20percent from a year earlier,though less in real terms(figure23).Business fixed investment rose strongly

230、 in the first quarter but may now be moderatingInvestment in equipment and intangibles surged at a 12percent annual rate in the first quarter(figure24).Investment demand remained strong,as worker shortages and high-capacity utilization in manufacturing likely maintained strong incentives for firms t

231、o automate production and boost capital expenditures.In turn,strong investment demand continued to boost equipment prices in an environment of constrained supply,but there have been initial signs that supply constraints may have begun to ease.In particular,since late last year,shipments of capital g

232、oods have begun to catch up with orders.The most recent indicators suggest that the growth of investment in equipment and intangibles will slow significantly in the second quarter,possibly reflecting drag from tighter financial conditions.Investment in nonresidential structures declined moderately i

233、n the first quarter after falling more rapidly over the second half of CoreLogic price indexS&P/Case-Shillernational index6070809002005:Q1=20000623.Real prices of existing single-family houses QuarterlyZillow indexNOTE:Series are deflated by the personal c

234、onsumption expendituresprice index.SOURCE:Bureau of Economic Analysis via Haver Analytics;CoreLogic Home Price Index;Zillow,Inc.,Real Estate Data;S&P/Case-Shiller U.S.National Home Price Index.The S&P/Case-Shillerindex is a product of S&P Dow Jones Indices LLC and/or its affiliates.(For Dow Jones In

235、dices licensing information,see the note on theContents page.)Existing home sales.2.4.6.81.01.21.4Millions,annual rate3.03.54.04.55.05.56.06.57.02022202020000622.New and existing home sales Millions,annual rateNew home salesNOTE:The data are monthly and extend through April 202

236、2.Newhome sales include only single-family sales.Existing home sales includesingle-family,condo,and co-op sales.SOURCE:For new home sales,U.S.Census Bureau;for existing homesales,National Association of Realtors;all via Haver Analytics.24 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTS2021,and it

237、appears on track to decline again in the second quarter.Declines in spending on nondrilling structures have been only partly offset by rapid increases in drilling investment,which reflect the recent rise in energy prices.Business financing conditions tightened somewhat but remained generally accommo

238、dativeCredit remained available to most nonfinancial corporations,but financing conditions tightened somewhat,especially for lower-rated firms.Gross nonfinancial corporate bond issuance was solid in the first quarter but slowed somewhat in April and May,with speculative-grade bond issuance particula

239、rly weak.Leveraged loan issuance also declined notably in May,partly reflecting weakening demand from retail investors.The growth of business loans at banks picked up from the subdued pace of last year,reflecting stronger loan originations as well as a moderation in loan forgiveness associated with

240、the Paycheck Protection Program.Credit also remained broadly available to small businesses.The share of small firms reporting that it was more difficult to obtain loans(compared with three months earlier)remained low by historical standards.Loan origination data through April were consistent with cr

241、edit availability being comparable with pre-pandemic levels amid gradually recovering demand for small business credit.Most measures of loan performance remained largely stable;through April,default and delinquency rates remained below their pre-pandemic levels.The strong U.S.demand has partly been

242、met through a rapid rise in importsDriven by the continued strength in domestic economic activity,including still-strong demand for goods consumption,U.S.imports continued to grow at a rapid pace,surging well above their pre-pandemic trend(figure25).High levels of imported goods have kept internatio

243、nal logistics channels operating Imports1,5001,7502,0002,2502,5002,7503,0003,2503,5003,7504,000Billions of chained 2012 dollars202220202005.Real imports and exports of goods and services QuarterlyExportsSOURCE:Bureau of Economic Analysis via Haver Analytics.Structures1,0001,200

244、1,4001,6001,8002,0002,2002,4002,600Billions of chained 2012 dollars350400450500550600650202220010200724.Real business fixed investment Billions of chained 2012 dollars Equipment and intangible capitalNOTE:Business fixed investment is known as“private nonresidentialfixed investment”in the

245、national income and product accounts.The dataare quarterly.SOURCE:Bureau of Economic Analysis via Haver Analytics.MONETARy POLICy REPORT:JUNE 2022 25 under high pressure,which has continued to impair the timely delivery of goods to U.S.customers.Real goods exports have only recovered to pre-pandemic

246、 levels.Real exports and imports of services remain subdued,reflecting a slow recovery of international travel.Given the recent strength of imports relative to the milder recovery in exports,the nominal trade deficit widened further as a share of GDP(figure26).The support to economic activity provid

247、ed by federal fiscal actions continued to diminish.In response to the pandemic,the federal government enacted fiscal policies to address the economic consequences of the pandemic.Because the boost to spending from these policies ended last year,the effects on demand are likely waning this year and w

248、eighing on GDP growth.and,in turn,the budget deficit has fallen sharply from pandemic highs,and the growth of federal debt has moderatedThe Congressional Budget Office estimates that fiscal policies enacted since the start of the pandemic will increase federal deficits roughly$5.4trillion by the end

249、 of fiscal year2030,with the largest deficit effects having occurred in fiscal 2020 and 2021.11 These policies,combined with the effects of the automatic stabilizersthe reduction in tax receipts and increase in transfers that occur as a consequence of depressed economic 11.For more information,see C

250、ongressional Budget Office(2020),“The Budgetary Effects of Laws Enacted in Response to the 2020 Coronavirus Pandemic,March and April2020,”June,https:/www.cbo.gov/system/files/2020-06/56403-CBO-covid-legislation.pdf;Congressional Budget Office(2021),“The Budgetary Effects of Major Laws Enacted in Res

251、ponse to the 202021 Coronavirus Pandemic,December2020 and March2021,”September,https:/www.cbo.gov/system/files/2021-09/57343-Pandemic.pdf;and Congressional Budget Office(2021),“Senate Amendment 2137 to H.R.3684,the Infrastructure Investment and Jobs Act,as Proposed on August1,2021,”August9,https:/ww

252、w.cbo.gov/system/files/2021-08/hr3684_infrastructure.pdf.Current account7654321+_0Percent of nominal GDP202220000126.U.S.trade and current account balances QuarterlyTradeNOTE:GDP is gross domestic product.Current account balance dataextend through 2021:Q4.SOURCE:Bureau of Econo

253、mic Analysis via Haver Analytics.26 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSactivitycaused the federal deficit to surge to 15percent of nominal GDP in fiscal 2020 and remain elevated at 12percent in fiscal 2021.But with pandemic fiscal programs having largely ended and receipts surging,the

254、deficit has fallen sharply thus far in fiscal 2022 relative to fiscal 2021 and,by the end of the fiscal year,is expected to be close to the deficits prevailing just before the pandemic(figure27).As a result of the fiscal support enacted during the pandemic,federal debt held by the public jumped to a

255、round 100percent of nominal GDP in fiscal 2020the highest debt-to-GDP ratio since 1947(figure28).But with deficits falling and economic growth having rebounded,the debt-to-GDP ratio has since receded slightly from its recent peak.State and local government budget positions are remarkably strong.Fede

256、ral policymakers provided a historic level of fiscal support to state and local governments during the pandemic,with aid totaling about$1trillion.This aid has more than covered pandemic-related budget shortfalls in the aggregate.Moreover,following the pandemic-induced slump,total state tax collectio

257、nspushed up by the economic expansionrose appreciably in 2021 and continued to grow rapidly in early 2022(figure29).In turn,this recovery in revenues has led some state governments to enact or consider enacting tax cuts.At the local level,property taxes have continued to rise apace,and the typically

258、 long lags between changes in the market value of real estate and changes in tax collections suggest that property tax revenues will rise quite substantially going forward,given the rise in house prices.but hiring and construction outlays have continued to lagDespite the return to in-person schoolin

259、g and the strong fiscal position of state and local governments,state and local government payrolls continued to expand only modestly in the first half of 2022.Employment levels Expenditures426283032Percent of nominal GDP2022200021997Annual27.Federal receipts and expenditures R

260、eceiptsNOTE:Through 2021,the receipts and expenditures data are on aunified-budget basis and are for fiscal years(October to September);gross domestic product(GDP)is for the 4 quarters ending in Q3.For2022,receipts and expenditures are for the 12 months ending in May;GDP is the average of 2021:Q4 an

261、d 2022:Q1.SOURCE:Department of the Treasury,Financial Management Service;Office of Management and Budget and Bureau of Economic Analysis viaHaver Analytics.Debt held bythe public020406080100120Percent of nominal GDP.51.01.52.02.53.03.528.Federal government debt and net interest outlays Percent of no

262、minal GDP222022Net interest outlayson federal debtNOTE:The data for net interest outlays are annual,begin in 1948,andextend through 2021.Net interest outlays are the cost of servicing thedebt held by the public.Federal debt held by the public equals federaldebt less Treasury se

263、curities held in federal employee defined-benefitretirement accounts,evaluated at the end of the quarter.The data forfederal debt are annual from 1901 to 1951 and quarterly thereafter.GDPis gross domestic product.SOURCE:For GDP,Bureau of Economic Analysis;for federal debt,Congressional Budget Office

264、 and Federal Reserve Board,StatisticalRelease Z.1,“Financial Accounts of the United States.”MONETARy POLICy REPORT:JUNE 2022 27 have regained about 60percent of their sizable pandemic losses,falling well short of the recovery in private payrolls(figure30).One reason for this disparity appears to be

265、that public-sector wages have not kept pace with the rapid gains in the private sector,which may be inhibiting the ability of these governments to staff back up to pre-pandemic levels.Meanwhile,real construction outlays by state and local governments continued to decline in the first half of the yea

266、r and are currently about 15percent below pre-pandemic levels.Financial DevelopmentsThe expected level of the federal funds rate over the next few years shifted up substantiallyIn March,May,and June,the FOMC raised the target range for the federal funds rate a total of 1percentage points.The expecte

267、d path of the federal funds rate over the next few years also shifted up substantially since late February(figure31).Economic data releases and FOMC communications were viewed by market participants as implying tighter monetary policy than previously expected.Market-based measures suggest that inves

268、tors anticipate the federal funds rate to exceed 3.6percent by the end of this year,which is about 2percentage points higher than the level expected in late February.The same measures suggest that the federal funds rate is expected to peak at about 4percent in mid-2023 before gradually declining to

269、about 3.1percent by the end of 2025,which is about 1.4percentage points higher than the end-2025 rate expected in late February.Similarly,according to the results of the Survey of Primary Dealers and the Survey of Market Participants,both conducted by the Federal Reserve Bank of New York in April,th

270、e median of respondents projections for 18.018.519.019.520.020.5Millions of jobs20222020200006Monthly30.State and local government payroll employment SOURCE:Bureau of Labor Statistics via Haver Analytics.Total state taxes5+_051015202530Percent change from year earlier2022202020

271、01229.State and local tax receipts NOTE:State tax data are year-over-year percent changes of 12-monthmoving averages,begin in June 2012,extend through April 2022,and areaggregated over all states except Wyoming,for which data are notavailable.Revenues from Washington,D.C.,are also exclude

272、d.Data aremissing for March 2022 to April 2022 for New Mexico and Oregon andApril 2022 for Nevada,as these states have longer reporting lags thanothers.Property tax data are year-over-year percent changes of 4-quartermoving averages,begin in 2012:Q2,extend through 2021:Q4,and areprimarily collected

273、by local governments.SOURCE:Monthly State Government Tax Revenue Data via UrbanInstitute;U.S.Census Bureau,Quarterly Summary of State and LocalGovernment Tax Revenue.Property taxes28 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSthe most likely path of the federal funds rate shifted up significan

274、tly since January.12Before late February,the expected path of the federal funds rate had started to increase notably in the third quarter of last year,in anticipation of increases in the target range.Consistent with the rise in the expected path of the federal funds rate,yields on Treasury securitie

275、s and corporate bonds,as well as mortgage rates,all started to increase materially at a similar time.Meanwhile,broad equity price indexes have declined on net.Overall,these moves in asset prices suggest tightening of financial conditions even before the initial increase in the target range of the fe

276、deral funds rate occurred in March(figure32).Yields on U.S.nominal Treasury securities also rose considerablyYields on nominal Treasury securities across maturities have risen considerably since late February(figure33).After a brief dip in late February,following Russias invasion of Ukraine,yields r

277、ose steadily amid higher inflationary pressures and associated expectations for monetary policy tightening.The increases in nominal Treasury yields were primarily accounted for by rising real yields.Uncertainty about longer-term interest ratesas measured by the implied volatility embedded in the pri

278、ces of near-term options on 10-year interest rate swapsalso increased significantly,reportedly reflecting,in part,an increase in uncertainty about the policyoutlook.Yields on other long-term debt increased substantiallyAcross credit categories,corporate bond yields have increased substantially and 1

279、2.The results of the Survey of Primary Dealers and the Survey of Market Participants are available on the Federal Reserve Bank of New Yorks website at https:/www.newyorkfed.org/markets/primarydealer_survey_questions.html and https:/www.newyorkfed.org/markets/survey_market_participants,respectively.1

280、0-year TreasuryMortgage rate01234567Percent202220201532.Financial market indicators DailyInvestment-grade corporateNOTE:Investment-grade corporate reflects the effective yield of theICE Bank of America Merrill Lynch triple-B U.S.Corporate Index(C0A4).The mortgage rate is contra

281、ct rates on 30-year,fixed-rateconventional home mortgage commitments.Mortgage rate data extendthrough June 9,2022.SOURCE:Department of the Treasury via Haver Analytics;FreddieMac Primary Mortgage Market Survey;ICE Data Indices,LLC,usedwith permission.2-year5-year01234Percent20222020200123

282、3.Yields on nominal Treasury securities Daily10-yearSOURCE:Department of the Treasury via Haver Analytics.June 14,20220.51.01.52.02.53.03.54.04.5Percent2026202520242023202231.Market-implied federal funds rate path QuarterlyFebruary 25,2022NOTE:The federal funds rate path is implied by quotes on over

283、nightindex swapsa derivative contract tied to the effective federal funds rate.The implied path as of February 25,2022,is compared with that as ofJune 14,2022.The path is estimated with a spline approach,assuming aterm premium of 0 basis points.The February 25,2022,path extendsthrough 2026:Q1 and th

284、e June 14,2022,path through 2026:Q2.SOURCE:Bloomberg;Federal Reserve Board staff estimates.MONETARy POLICy REPORT:JUNE 2022 29 spreads over yields on comparable-maturity Treasury securities have increased notably since late February.Corporate bond yields and spreads are somewhat above the historical

285、 median values of their respective historical distributions since the mid-1990s(figure34).Municipal bond yields also increased significantly while spreads increased somewhat since late February.Spreads on municipal bonds are now moderately above their historical medians.On net,corporate bond spreads

286、 are moderately above their pre-pandemic levels,and municipal bond spreads are near levels prevailing shortly before the pandemic.While the widening of corporate bond spreads since late February appears to partly reflect a deterioration in market expectations of future credit quality,corporate and m

287、unicipal credit quality thus far in 2022 have remained strong.So far this year,defaults have been low,and upgrades of bond ratings have outpaced downgrades in both markets.Since late February,yields on agency mortgage-backed securities(MBS)an important pricing factor for home mortgage ratesincreased

288、 significantly,as longer-term Treasury yields increased and spreads over comparable-maturity Treasury securities widened(figure35).MBS spreads increased as market participants expectations of a gradual reduction in the Federal Reserves balance sheet shifted to a faster reduction.Broad equity price i

289、ndexes declined sharply,on net,amid substantial volatilityBroad equity price indexes were volatile and declined sharply,on net,amid sustained inflation pressures and expectations of monetary policy tightening,as well as heightened uncertainty regarding Russias invasion of Ukraine and the economic ou

290、tlook(figure36).Bank stock prices also declined on net.One-month option-implied volatility on the S&P 500 indexthe VIXrose notably to elevated levels in the days following Russias invasion of Ukraine.The VIX trended down for some time only to increase again and Yield0500Basis points123452

291、02220202001235.Yield and spread on agency mortgage-backed securities PercentSpreadNOTE:The data are daily.Yield shown is for the uniformmortgage-backed securities 30-year current coupon,the coupon rate atwhich new mortgage-backed securities would be priced at par,or face,value,for dates a

292、fter May 31,2019;for earlier dates,the yield shown isfor the Fannie Mae 30-year current coupon.Spread shown is to theaverage of the 5-year and 10-year nominal Treasury yields.SOURCE:Department of the Treasury;J.P.Morgan.Courtesy of J.P.Morgan Chase&Co.,Copyright 2022.High-yield corporateMunicipal024

293、681012Percent20002234.Corporate bond yields,by securities rating,and municipal bond yield DailyInvestment-grade corporateNOTE:Investment-grade corporate reflects the effective yield of theICE Bank of America Merrill Lynch(BofAML)triple-B U.S.CorporateIndex(C0A4).High-yield corp

294、orate reflects the effective yield of the ICEBofAML High Yield Index(H0A0).Municipal reflects the yield to worstof the ICE BofAML U.S.Municipal Securities Index(U0A0).SOURCE:ICE Data Indices,LLC,used with permission.30 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTSremain elevated since late April

295、 amid a notable deterioration in risk sentiment(figure37).(For a discussion of financial stability issues,see the box“Developments Related to Financial Stability.”)Markets for Treasury securities,mortgage-backed securities,corporate and municipal bonds,and equities generally functioned in an orderly

296、 way,but some measures of liquidity deterioratedLiquidity conditions in the market for Treasury securities,which had deteriorated somewhat since late 2021,in part as a result of heightened interest rate risk,worsened further in late February following Russias invasion of Ukraine.Market deptha gauge

297、of the ability to transact in large volumes at quotes posted by market makersfor Treasury securities fell and remains at historically low levels.Bid-ask spreads increased somewhat.However,trading volumes remained within normal ranges,suggesting that market functioning was not materially impaired.The

298、 decreases in depth were the greatest for bonds with shorter maturities because the prices of those securities are more sensitive to expectations for monetary policy over the near term.The market for MBS has functioned in an orderly way since late February,even as some measures of liquidity conditio

299、ns deteriorated.Measures of market functioning in corporate and municipal bond markets indicated that the markets have remained liquid and trading conditions have stayed stable since late February without substantive disruptions around the time of Russias invasion of Ukraine.Transaction costs in the

300、 corporate bond market and in the municipal bond market have both picked up somewhat since late February,and in the corporate bond market,bid-ask spreads are modestly above pre-pandemic levels.Transaction costs remain fairly low by historical standards.Liquidity in equity markets has declined since

301、late 2021 in part because of rising uncertainty about the outlook for monetary policy as well as Russias invasion of Ukraine and has remained VIX00708090Percent2022202020012201037.S&P 500 volatility DailyExpected volatilityNOTE:The VIX is a measure of implied volatility that re

302、presents theexpected annualized change in the S&P 500 index over the following30 days.The expected volatility series shows a forecast of 1-monthrealized volatility,using a heterogeneous autoregressive model based on5-minute S&P 500 returns.SOURCE:Cboe Volatility Index(VIX)via Bloomberg;RefinitivData

303、Scope;Federal Reserve Board staff estimates.S&P 500 index500300350400December 31,2010=2001236.Equity prices DailyDow Jones bank indexSOURCE:S&P Dow Jones Indices LLC via Bloomberg.(For DowJones Indices licensing information,see the note on the Contents page.)MONETARy

304、 POLICy REPORT:JUNE 2022 31 previously very elevated levels but were still above their historical median.Corporate-to-Treasury spreads widened but remained below their historical median.Spreads on leveraged loans were little changed,and leveraged loan issuance remained solid.House prices continued t

305、o rise at a rapid pace that further outstripped rent growth.Commercial real estate prices also rose further,with some price indexes surpassing their 2006peaks.The rapid growth of nominal GDP outpaced the growth of total debt of nonfi nancial businesses and households.The ratio of the aggregate debt

306、owed by the private nonfi nancial sector to nominal GDP further declined to near pre-pandemic levels(fi gure A).Net leverage of large nonfi nancial businesses held stable at This discussion reviews vulnerabilities in the U.S.fi nancial system.The framework used by the Federal Reserve Board for asses

307、sing the resilience of the U.S.fi nancial system focuses on fi nancial vulnerabilities in four broad areas:asset valuations,business and household debt,leverage in the fi nancial sector,and funding risks.With infl ation running higher than expected,the invasion of Ukraine,and the pandemics continued

308、 effects on supply chains and consumer demand patterns,uncertainty about the economic outlook increased,and prices of some fi nancial assets fl uctuated widely.Treasury yields increased markedly,and valuation pressures in corporate securities markets eased,but real estate prices have risen further t

309、his year despite a rise in mortgage rates.While business and household debt has been growing solidly,the ratio of private nonfi nancial credit to gross domestic product(GDP)decreased to near pre-pandemic levels and most indicators of credit quality remained robust.Large bank capital ratios dipped in

310、 the fi rst quarter,but overall leverage in the fi nancial sector appears moderate and little changed this year.A few signs of funding pressures emerged amid the escalation of geopolitical tensions.However,broad funding markets proved resilient,and with direct exposures of U.S.fi nancial institution

311、s to Russia and Ukraine being small,fi nancial spillovers have been limited to date.Nevertheless,the effect of high infl ation,supply chain disruptions,and the ongoing geopolitical tensions remain substantial sources of uncertainty with the potential to further stress the fi nancial system.valuation

312、 measures based on current expectations of cash fl ows decreased in some markets but continued to be high relative to historical norms.Refl ecting a less accommodative monetary policy stance associated with elevated infl ation and a tight labor market,yields on Treasury securities increased markedly

313、 and reached somewhat above their pre-pandemic levels.Broad equity prices fl uctuated widely and declined sharply.Prices relative to earnings forecasts declined from Developments Related to Financial Stability.81.01.21.41.61.8Ratio20222000271982A.Private nonfnancial-sector cred

314、it-to-GDP ratio QuarterlyNOTE:The shaded bars indicate periods of business recession asdefned by the National Bureau of Economic Research:January1980July 1980,July 1981November 1982,July 1990March 1991,March 2001November 2001,December 2007June 2009,and February2020April 2020.GDP is gross domestic pr

315、oduct.SOURCE:Federal Reserve Board,Statistical Release Z.1,“FinancialAccounts of the United States”;Bureau of Economic Analysis,nationalincome and product accounts;Federal Reserve Board staf calculations.(continued on next page)32 PART 1:RECENT ECONOMIC AND FINANCIAL DEvELOPMENTS(continued)have been

316、 directly affected by the RussiaUkraine confl ict,but loan exposures of large U.S.banks to these fi rms and borrowers in Ukraine and Russia are small.However,several indirect channelsheightened volatility in asset markets;new disruptions in payment,clearing,or settlement systems;and interconnections

317、 with large European bankscould adversely affect the U.S.economy and fi nancial system.Funding risks at domestic banks and broker-dealers are low,but structural vulnerabilities persist at some money market funds(MMFs),bond funds,and stablecoins.Banks relied only modestly on short-term wholesale fund

318、ing,and the share of high-quality liquid assets at banks remained historically high.Assets under management at prime and tax-exempt MMFs have continued to decline,but these funds remain a structural vulnerability due to their susceptibility to runs.In December2021,the Securities and Exchange Commiss

319、ion proposed reforms to MMFs,including the adoption of swing pricing for certain fund types,increased liquidity requirements,and other measures meant to make them more resilient to redemptions.The Russian invasion of Ukraine does not appear to have left a material imprint on broader short-term fundi

320、ng markets.Trading conditions in those markets have been stable,issuance continued,and spreads remained well below the levels reached in March2020.Although depth in markets for Treasury securities and some commodity and equity derivatives has been low by historical standards,those markets have funct

321、ioned normally after the initial shock to the nickel market.Elevated market volatilityparticularly in commodity marketscaused central counterparties(CCPs)to make larger margin calls.To date,clearing members have below pre-pandemic levels,supported by ample cash holdings.Fueled by strong earnings and

322、 low borrowing costs,the ratio of earnings to interest expenses for the median fi rm among public nonfi nancial businesses rose to its highest level in two decades,indicating that large fi rms were better able to service debt.However,for fi rms in industries hit hardest by the pandemic,leverage rema

323、ins elevated and interest coverage ratios are lower.The fi nancial position of many households continued to improve.Household debt relative to nominal GDP as well as mortgage,auto,and credit card delinquencies were in the bottom range of the levels observed over the past 20years.Household credit gro

324、wth has been almost exclusively among prime-rated borrowers,including for residential mortgages.Nonetheless,some households remained fi nancially strained and vulnerable to adverse shocks during this period of heightened uncertainty.vulnerabilities from fi nancial-sector leverage are well within the

325、ir historical range.Risk-based capital ratios at domestic bank holding companies declined some in the fi rst quarter of 2022 but remained well above regulatory requirements.Banks increased loan loss provisions to refl ect higher uncertainty about the economic outlook and continued to report that ris

326、ing interest rates will support their profi tability going forward.However,higher interest rates cause losses in the market value of banks long-term fi xed-rate assets.Leverage remained high at life insurance companies and was likely somewhat elevated at hedge funds,though the most comprehensive dat

327、a for hedge funds are considerably lagged.vulnerabilities of most U.S.fi nancial institutions to the Russian invasion of Ukraine appear to be limited.Some nonbank fi nancial intermediariessuch as commodity trading fi rmsDevelopments Related to Financial Stability(continued)MONETARy POLICy REPORT:JUN

328、E 2022 33 infl ation and greater-than-expected increases in interest rates could negatively affect domestic economic activity,asset prices,credit quality,and fi nancial conditions more generally.As concerns over cyber risk have increased,U.S.government agencies and their private-sector partners have

329、 been stepping up their efforts to protect the fi nancial system and other critical infrastructures.These risks,if realized,could interact with fi nancial vulnerabilities and pose additional risks to the U.S.fi nancial system.Invasion of Ukraine and Commodity MarketsRussias invasion of Ukraine and s

330、ubsequent international sanctions disrupted global trade in commodities,leading to surging prices and heightened volatility in agriculture,energy,and metals markets.These markets include spot and forward markets for physical commodities as well as futures,options,and swaps markets that involve an ar

331、ray of fi nancial intermediaries and infrastructures.Stresses in fi nancial markets linked to commodities could disrupt the effi cient production,processing,and transportation of commodities by interfering with the ability of commodity producers,consumers,and traders to hedge risks.Such stresses can

332、 also increase liquidity and credit risks for fi nancial institutions that are active in commodity markets.To date,however,fi nancial market stresses do not appear to have exacerbated the negative effects on broader economic activity or created substantial pressure on key fi nancial intermediaries,i

333、ncluding banks.Since the invasion,for most commodities,futures trading volumes and open interestthe number of contracts outstanding at the end of the dayhave remained in normal ranges.been able to meet these margin calls,and,in general,CCPs effectively managed the increased risks and higher trading volumes.The aggregate value of stablecoinsdigital assets that aim to maintain a stable value relativ