richard w. fisher - the federal reserve bank of dallas · 2016. 5. 26. · richard w. fisher...
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Richard W. FisherPresident and CEOFederal Reserve Bank of Dallas
Dallas, TexasFebruary 11, 2014
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Total Nonagricultural Employment Since 1990 in Selected States
SOURCES: Bureau of Labor Statistics; Federal Reserve Bank of Dallas.
90
100
110
120
130
140
150
160
170
1990 1995 2000 2005 2010
Texas
U.S.
California
New York
Florida
Index, January 1990 = 100
Illinois
Michigan
+61%
+8%
+26%
Increase since 1990
+19%
+43%
+11%
+5%
-
80
85
90
95
100
105
110
115
120
125
2000 2005 2010
Index, January 2000 = 100
SOURCES: Bureau of Labor Statistics; Federal Reserve Bank of Dallas.
Total Nonagricultural Employment Since 2000 in Selected States
+21%
–12%
+5%
Increase since 2000
+4%
+10%
+5%
–3%
Texas
U.S.
CaliforniaNew York
Florida
Illinois
Michigan
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2013 Employment Growth in Texas
NOTES: Categories are North American Industry Classification System supersectors. Data seasonally adjusted.SOURCE: Federal Reserve Bank of Dallas.
67.0
46.743.6
34.9
17.6 15.4 14.710.7 10.4 9.0
0
10
20
30
40
50
60
70
80
Trade, Transp& Utilities(20.1%)
Prof. &BusinessServices(13.1%)
Leisure &Hospitality(10.2%)
Educational &Health
Services(13.4%)
Oil & GasExtraction and
MiningSupport(2.5%)
Construction(5.4%)
FinancialActivities(6.1%)
Government(16.0%)
Manufacturing(7.8%)
Information(1.8%)
Thousands of jobs 2013 total jobs gained in Texas = 266,900
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Job Growth by Wage Quartile, 2000-12
NOTES: Calculations include workers over age 15 with positive wages and exclude the self-employed. Wage quartiles constructed based on U.S. 2000 wage distribution. SOURCE: Current Population Survey Merged Outgoing Rotation Groups, 2000, 2012.
18.6
10.4
31.0 30.3
9.7
-6.9
0.9
9.9
-10
-5
0
5
10
15
20
25
30
35
Lowest wage quartile Lower-middle wagequartile
Upper-middle wagequartile
Highest wage quartile
Texas U.S. minus Texas
Percent change
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Adios Texas Ratio
• Texas has more banks than any other state yet experienced just 11 of the 489 U.S. bank failures since the Great Recession began– Time to rename the “Texas Ratio,” a measure of
bad assets versus available capital
• The state escaped the brunt of the housing sector fallout and the spike in underwater mortgages
NOTE: Texas ratio defined as the book value of all nonperforming assets plus other real estate owned divided by tangible equity capital plus loan loss reserves.
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Share of Unprofitable Banks: U.S. and 11th District
* YTD through third quarter 2013.SOURCE: Federal Reserve Bank of Dallas.
* 0
5
10
15
20
25
30
35
2006 2007 2008 2009 2010 2011 2012 2013
U.S. 11th District
Percent of banks reporting a net loss
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80
100
120
140
160
180
200
220
240
260
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
U.S. minus Texas
Texas
Index, Jan. 2000=100*
8%
36%
9%
11%
15% 18%
3%
Other
Mexico
Canada
European Union
Asia, excl. China
Latin America, excl.MexicoChina
2013:Q3
Texas Export Growth
* Real, seasonally adjusted. SOURCES: Census Bureau; World Institute for Strategic Economic Research; Federal Reserve Bank of Dallas.
+26%since peak
+3%
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Employment by Metro Area
SOURCES: Bureau of Labor Statistics; Federal Reserve Bank of Dallas.
94
96
98
100
102
104
106
108
110
112
T T +10 T +20 T +30 T +40 T +50 T +60 T +70
Index, peak employment = 100
TexasHouston
El Paso
Austin
T = months from peak employment
Dallas-Ft. Worth
San Antonio
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43
8011,149
1,073
1,597
1,521
2,558
2,540
0
500
1000
1500
2000
2500
3000
'07 '08 '09 '10 '11 '12 '13 '14
SOURCES: Federal Reserve Board of Governors, H.3 release.
Total Reserves of Depository Institutions
Bank Reserves Have Ballooned
Billions, Reserves ($)QE3
-
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Total assets
Trillions of dollars
$4.13Jan. 2014
$2.869/26/12
SOURCES: Federal Reserve Board; Federal Reserve Bank of Dallas.
$0.949/10/08
Interest rates cut to the zero bound
Lehman failure QE3
Fed’s Balance Sheet Has Quadrupled in Size …
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0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Other
Agency MBS + agency debt
Treasury securities
Trillions of dollars
assets
15%0%
85%
11/28/07
54%
8%
38%48%9/10/08
0%51%
Lehman failure
10%32%58%
9/26/12
QE3
SOURCES: Federal Reserve Board; Federal Reserve Bank of Dallas.
Now Has Large Holdings of Agency Debt and MBS …
Agency debt and MBSTreasury securities
Other assets
Share of Total Portfolio
Jan. 2014
-
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Other
More than 5 years
Over 1 to 5 years
Up to 1 year
Trillions of dollars
79%20%1%
9/26/12
22%30%48%
11/28/07> 5 years
39%9/10/08
34%27%
Lehman failure QE3
21%
79%
0%
SOURCES: Federal Reserve Board; Federal Reserve Bank of Dallas.
assets
1 – 5 years< 1 year
And Has a Portfolio with Longer Terms to Maturity
Share of Total Portfolio
Jan. 2014
-
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Excess reserves
Required reserves
Non-bank currency
Trillions of dollars
SOURCES: Federal Reserve Board; Federal Reserve Bank of Dallas.
But Newly Created Money Mostly Sitting Fallow as Excess Reserves
54%4%
42%
9/26/12QE3
$2.56T
31%
65%
4%
$3.73T
$2.45T in excess
reserves
Lehman failure
5%Required ReservesNon-bank Currency
Share of Monetary Base 9/10/08
0%
95%
Excess Reserves
$0.85T
Jan. 2014
Monetary Base
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U.S. Economic Dashboard
NOTE: Data updated as of February 10, 2014.
9 0 . 0
-1
-0.5
0
0.5
11.5 2 2.5
3
3.5
4
4.5
5
1.4
Trimmed Mean PCE Inflation (%)
-2.5
-2
-1.5
-1
-0.5
0
0.51
1.5 22.5
3
3.5
4
4.5
5
5.5
6
2.7Year-over-year
Real GDP growth
4
4.5
5
5.5
66.5 7 7.5
8
8.5
9
9.5
10
6.6
Unemployment rate (%)
Percent of jobs recovered
3
3.5
4
4.5
55.5
6 6.5 77.5
8
8.5
9
9.5
10
3.68
Junk-bond spread (%)
Warning lights
Unemp.jump
Yieldcurve
Oilshock
Enginestall
5
5.5
6
6.5
77.5 8 8.5
9
9.5
10
10.5
11
5.81
High Yield Corp. Debt (%)
!
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Corporate Bond Yields and Spreads Remain LowPercent
SOURCES: Moody’s, Bank of America Merrill Lynch, Federal Reserve Bank of Dallas.
5.815
7
9
11
13
15
17
19
21
23
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
02468
10
'10 '11 '12 '13 '14
Junk bond / 7-year Treasury spread
Historical average spread: 1997-Present
Percent
3.7
5.6
Junk bond yield
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Richard W. FisherPresident and CEOFederal Reserve Bank of Dallas
Dallas, TexasFebruary 11, 2014