The Fed-Minutes of the Federal Open Market Committee,June 14-15,2022-report (2022-07-07)（英文）行业资料

LorieK.Logan,Manager,SystemOpenMarket

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MinutesoftheFederalOpenMarketCommittee

June14–15,2022

AjointmeetingoftheFederalOpenMarketCommitteeandtheBoardofGovernorsoftheFederalReserveSys-temwasheldintheofficesoftheBoardofGovernorsonTuesday,June14,2022,at11:00a.m.andcontinuedonWednesday,June15,2022,at9:00a.m.1

Attendance

JeromeH.Powell,Chair

JohnC.Williams,ViceChair

MichelleW.Bowman

LaelBrainard

JamesBullard

LisaD.Cook

EstherL.George

PhilipN.Jefferson

LorettaJ.Mester

ChristopherJ.Waller

MeredithBlack,CharlesL.Evans,PatrickHarker,

NaureenHassan,andNeelKashkari,AlternateMembersoftheCommittee

ThomasI.Barkin,RaphaelW.Bostic,andMaryC.Daly,PresidentsoftheFederalReserveBanksofRichmond,Atlanta,andSanFrancisco,respectively

KennethC.Montgomery,InterimPresidentofthe

FederalReserveBankofBoston

JamesA.Clouse,Secretary

MatthewM.Luecke,DeputySecretary

BrianJ.Bonis,AssistantSecretary

MichelleA.Smith,AssistantSecretary

MarkE.VanDerWeide,GeneralCounsel

TrevorA.Reeve,Economist

StaceyTevlin,Economist

BethAnneWilson,Economist

ShaghilAhmed,BrianM.Doyle,CarlosGarriga,JosephW.Gruber,EllisW.Tallman,andWilliamWascher,AssociateEconomists

Account

PatriciaZobel,DeputyManager,SystemOpenMarketAccount

AnnE.Misback,Secretary,OfficeoftheSecretary,

Board

MatthewJ.Eichner,2Director,DivisionofReserveBankOperationsandPaymentSystems,Board;MichaelS.Gibson,Director,DivisionofSupervisionandRegulation,Board;AndreasLehnert,Director,DivisionofFinancialStability,

Board

DanielM.Covitz,DeputyDirector,DivisionofResearchandStatistics,Board;SallyDavies,DeputyDirector,DivisionofInternationalFinance,Board;RochelleM.Edge,DeputyDirector,DivisionofMonetaryAffairs,Board;MichaelT.Kiley,DeputyDirector,DivisionofFinancialStability,Board

JonFaustandJoshuaGallin,SeniorSpecialAdviserstotheChair,DivisionofBoardMembers,Board

BurcuDuygan-Bump,JaneE.Ihrig,KurtF.Lewis,NitishR.Sinha,andPaulR.Wood,SpecialAdviserstotheBoard,DivisionofBoardMembers,Board

LindaRobertson,AssistanttotheBoard,DivisionofBoardMembers,Board

MarnieGillisDeBoer3andDavidLópez-Salido,SeniorAssociateDirectors,DivisionofMonetaryAffairs,Board;DianaHancockandJohnJ.Stevens,SeniorAssociateDirectors,DivisionofResearchandStatistics,Board

1TheFederalOpenMarketCommitteeisreferencedasthe“FOMC”andthe“Committee”intheseminutes;theBoardofGovernorsoftheFederalReserveSystemisreferencedasthe“Board”intheseminutes.

2Attendedthroughthediscussionofdevelopmentsinfinan-cialmarketsandopenmarketoperations.

3AttendedTuesday’ssessiononly.

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FederalOpenMarketCommittee

EdwardNelsonandRobertJ.Tetlow,4SeniorAdvisers,DivisionofMonetaryAffairs,Board

ChristopherJ.Gust,AssociateDirector,DivisionofMonetaryAffairs,Board

ShaneM.Sherlund,DeputyAssociateDirector,

DivisionofResearchandStatistics,Board

GiovanniFavaraandEtienneGagnon,3AssistantDirectors,DivisionofMonetaryAffairs,Board;PaulLengermannandByronLutz,AssistantDirectors,DivisionofResearchandStatistics,

Board

PenelopeA.Beattie,3SectionChief,Officeofthe

Secretary,Board;ValerieS.Hinojosa,Section

Chief,DivisionofMonetaryAffairs,Board

AlyssaArute,2Manager,DivisionofReserveBank

OperationsandPaymentSystems,Board

AyelenBanegasandAnnaOrlik,3PrincipalEconomists,DivisionofMonetaryAffairs,Board;StephenF.Lin,PrincipalEconomist,DivisionofResearchandStatistics,Board

GiovanniNicolò,ArseniosSkaperdas,andHiroatsuTanaka,SeniorEconomists,DivisionofMonetaryAffairs,Board;CisilSarisoy,SeniorEconomist,DivisionofInternationalFinance,Board

AchillesSangsterII,SeniorInformationManager,

DivisionofMonetaryAffairs,Board

DavidNa,SeniorFinancialInstitutionandPolicy

Analyst,DivisionofMonetaryAffairs,Board

JoseAcosta,SeniorCommunicationsAnalyst,DivisionofInformationTechnology,Board

KathleenO.Paese,FirstVicePresident,Federal

ReserveBankofSt.Louis

DavidAltig,KartikB.Athreya,MichelleM.Neal,andAnnaPaulson,ExecutiveVicePresidents,FederalReserveBanksofAtlanta,Richmond,NewYork,andChicago,respectively

4AttendedfromthediscussionoftheeconomicandfinancialsituationthroughtheendofWednesday’ssession.

JamesP.Bergin,MarcGiannoni,GiovanniOlivei,PaoloA.Pesenti,andRobertG.Valletta,SeniorVicePresidents,FederalReserveBanksofNewYork,Dallas,Boston,NewYork,andSanFrancisco,respectively

RocArmenter,VicePresident,FederalReserveBankofPhiladelphia

AlisdairG.McKay,SeniorResearchEconomist,

FederalReserveBankofMinneapolis

DevelopmentsinFinancialMarketsandOpen

MarketOperations

ThemanageroftheSystemOpenMarketAccount(SOMA)turnedfirsttoadiscussionoffinancialdevel-opments.Overtheintermeetingperiod,thereweresig-nificantswingsinassetprices,andfinancialconditionstightened,onnet,asmarketparticipantsassessedincom-inginformationabouttheeconomy.IntheUnitedStates,near-termpolicyrateexpectationsshiftedmark-edlytowardtheendoftheperiod,particularlyafterthereleaseoftheMayconsumerpriceindex(CPI)report.Aheadofthereleaseofthereport,marketexpectationsreflectedabroadconsensusthattherewouldbe50basispointrateincreasesatboththeJuneandJulyFOMCmeetings.Afterthereleaseofthehigher-than-expectedinflationdata,policy-sensitiveratespointedinsteadtoaconsiderableprobabilityof75basispointmovesatboththeJuneandJulymeetings.Themarket-impliedpathofthefederalfundsratemovedhigheratlongerhorizonsaswell.Marketparticipantsnotedelevateduncertaintyabouttheeconomicandmonetarypolicyoutlook.

Acrosstheyieldcurve,ratesonnominalTreasurysecu-ritiesendedtheperiodsignificantlyhigher,primarilyre-flectingtherevisionintheoutlookformonetarypolicyandtheassociatedriseinrealyields.Market-basedmeasuresofinflationcompensationcontinuedtoindi-cateexpectationsthatinflationwoulddeclinenotablyincomingquarters,andmeasuresofmedium-terminfla-tioncompensationfellovertheintermeetingperiod.Marketparticipantsreportedthatwhileliquiditycondi-tionsinthemarketforTreasurysecuritieshadbeenaf-fectedbytheelevatedvolatilityinratesandlargertradeswerehavinganincreasedeffectonpricing,overallmar-ketfunctioninghadheldup.Respondingtohigherin-

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terestratesandsomeconcernsaboutthegrowthout-look,equitypricesmovedsubstantiallylowerovertheperiod.

Themanagerturnednexttoadiscussionofdevelop-mentsrelatedtoforeigncentralbanks.Mostmajorfor-eigncentralbankswereproceedingonapathofremov-ingpolicyaccommodationinordertoaddresselevatedlevelsofinflation.Several—includingthoseofCanada,Australia,andNewZealand—hadraisedtheirpolicyrates50basispointsovertheintermeetingperiod,andsomesignaledthepotentialneedformoreforcefultight-eninginordertoaddressinflationrisks.TheEuropeanCentralBank(ECB)announcedanendtoitsassetpur-chaseprogramandsignaledanintentiontoliftpolicyratesinJuly.Meanwhile,thestanceofmonetarypolicyinJapanwasgenerallyexpectedtoremainhighlyaccom-modative,thoughrecentupwardpressureonJapanesegovernmentbondyieldshadledtheBankofJapan(BOJ)tostepupitseffortstodefenditsyieldcurvecon-troltarget.Onbalance,marketparticipantswerefo-cusedonthelargelysynchronousshifttowardmonetarypolicytighteningacrossmostadvancedeconomies.

Regardingmoneymarketdevelopments,themanagernotedthatthe50basispointincreaseinthetargetrangeattheMayFOMCmeetingpassedthroughtotheeffec-tivefederalfundsrateandwasalsotransmittedtootherovernightrates.Thefederalfundsrateheldsteadyat83basispointsthroughouttheperiod,whiletheSecuredOvernightFinancingRatesoftened,onnet,fallingtothebottomofthefederalfundstargetrangelaterinthepe-riod.Contactsattributedthedownwardpressureonse-curedratestohighliquiditylevelsanddecliningTreasurybillsupply,aswellaselevateduncertaintyaboutthein-terestratepath,whichhadincreaseddemandforshort-terminvestments.Inthisenvironment,participationintheovernightreverserepurchaseagreement(ONRRP)facilityincreased,andagreatershareofactivityinover-nightprivaterepurchaseagreement(repo)marketswasconductedbylenderswholackedaccesstothefacility.Themanagernotedthat,ifONRRPusagecontinuedtorise,itmaybeappropriateatsomepointtoconsiderfur-therliftingtheper-counterpartylimit.Overthelongerterm,ONRRPusagewasexpectedtofall,withthere-ductioninthesizeoftheFederalReserve’sbalancesheetresultinginagradualriseinmoneymarketratesrelativetotheONRRPrate.

ThedeputymanagerturnednexttoadiscussionofFed-eralReserveoperationsandrelatedtopics.Inaccord-ancewiththedirectivetotheOpenMarketDesk,thereductioninSOMAsecuritiesholdingsbeganinJune,

undertheinitialmonthlycapsonredemptionsof$30billionforTreasurysecuritiesand$17.5billionforagencydebtandagencymortgage-backedsecurities(MBS).Undercurrentstaffprojections,theSOMAportfoliowasanticipatedtodeclineroughly$400billionbytheendof2022.AsnotedintherecentSOMAan-nualreportandreportedintheBoard’sfirst-quarterfi-nancialstatementsfortheFederalReserveSystem,theSOMAportfoliohadanunrealizedloss,reflectingtheincreaseinlonger-terminterestrates.UnrealizedlosseshadnoimplicationsforFederalReserveincomeandwouldeventuallyfalltozeroassecuritiesreachedma-turity.ThestaffprojectedthatSOMAnetincomewoulddeclineandpotentiallyturnnegative,withincreasesinthetargetrangeliftingtheinterestexpenseonsomelia-bilities,andthatthiseventualitycouldresultinadeferredassetentryontheFederalReserve’sbalancesheet.Nei-therunrealizedlossesontheFederalReserve’sexistingsecuritiesportfolionornegativenetincomewouldim-pairtheimplementationofmonetarypolicyortheFed-eralReserve’sabilitytoachieveitsdual-mandateobjec-tives.

Onotheroperationalmatters,thedeputymanagernotedthat,overtheintermeetingperiod,theDeskonboardedthreedepositoryinstitutionsasnewcounterpartiesforthestandingrepofacility(SRF),resultinginatotalofninedepositoryinstitutionsapproved,todate,asSRFcounterparties.

Byunanimousvote,theCommitteeratifiedtheDesk’sdomestictransactionsovertheintermeetingperiod.Therewerenointerventionoperationsinforeigncurren-ciesfortheSystem’saccountduringtheintermeetingpe-riod.

StaffReviewoftheEconomicSituation

TheinformationavailableatthetimeoftheJune14–15meetingsuggestedthatU.S.realgrossdomesticproduct(GDP)wasreboundingtoamoderaterateofincreaseinthesecondquarterafterhavingdeclinedinthefirstquar-ter.Thelabormarketremainedverytight,butthereweresomesignsthatmomentumwasslowing.Con-sumerpriceinflation—asmeasuredbythe12‑monthpercentagechangeinthepriceindexforpersonalcon-sumptionexpenditures(PCE)—remainedelevatedinApril,andavailableinformationsuggestedthatinflationwasstillelevatedinMay.

TotalnonfarmpayrollemploymentrosesolidlyinAprilandMay,thoughthepaceofincreasewasslowerthaninthefirstquarter,andtheunemploymentrateremainedunchangedat3.6percent.TheunemploymentratesforAfricanAmericansandforHispanicswerelittle

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changed,onnet,thoughbothratesremainednoticeablyhigherthanthenationalaverage.Onnet,thelaborforceparticipationrateedgeddownbetweenMarchandMay,whiletheemployment-to-populationratiowasun-changed.Theprivate-sectorjobopeningsrate,asmeas-uredbytheJobOpeningsandLaborTurnoverSurvey,edgedlowerinAprilbutremainedatahighlevel.Nom-inalwagegrowthremainedelevated,withaveragehourlyearningshavingrisen5.2percentoverthe12monthsendinginMay,andtheincreaseswerewidespreadacrossindustries.

Consumerpriceinflationremainedelevated.TotalPCEpriceinflationwas6.3percentoverthe12monthsend-inginApril,andcorePCEpriceinflation,whichex-cludeschangesinconsumerenergypricesandmanyconsumerfoodprices,was4.9percentoverthesamepe-riod.Thetrimmedmeanmeasureof12‑monthPCEpriceinflationconstructedbytheFederalReserveBankofDallaswas3.8percentinApril,nearly2percentagepointshigherthanitsyear-earlierrateofincrease.InMay,the12-monthchangeintheCPIwas8.6percent,whilecoreCPIinflationwas6.0percentoverthesameperiod.Measuresofinflationexpectationsderivedfromsurveysofprofessionalforecastersandofconsumersgenerallysuggestedthatinflationwasexpectedtoremainhighintheshortrunbutthenfallbacktowardlevelsconsistentwithalonger-runrateof2percent.

Productionandspendingindicatorsweremixedbutgen-erallyremainedstrong.Consumerspendingandindus-trialproductionpostedsizablegainsinApril.However,retailsalesdeclinedinMay,dataonhomesalesandsin-gle-familyhousingstartsmoveddowninApril,somein-dicatorsofmanufacturingactivityweakenedinMay,andtheUniversityofMichiganSurveysofConsumersmeas-ureofconsumersentimentdecreasednoticeablyinthepreliminaryJunereading.Supplydisruptionsappearedtohaveimprovedinsomesectors(suchasgeneralmer-chandiseretailers)buttohavedeterioratedinothers(suchasmaterialsforhomeconstruction).Onbalance,theavailableindicatorssuggestedthatprivatedomesticfinalpurchaseswereincreasingataslowerpaceinthesecondquarterthaninthefirstquarter.AndwiththeavailabletradedataforAprilpointingtoareboundinexportsandamoderationinimportgrowthinthesec-ondquarter,GDPgrowthappearedtobereboundingafterhavingdeclinedinthefirstquarter.

Regardingtrade,realimportsofgoodssteppedbackinAprilfromtheirexceptionalstrengthinMarch,drivenbyadeclineinconsumergoodsimports.Bycontrast,realgoodsexportsgrewinbothMarchandAprilafter

decliningintheprevioustwomonths,followingsomenormalizationincategoriessuchassoybeansandphar-maceuticals,whichcanexhibitlargeandidiosyncraticchanges.Exportsandimportsofservicescontinuedtobeheldbackbyanincompleterecoveryofinternationaltravel.ThenominalU.S.internationaltradedeficitwid-enedtoarecordsizeinMarchandthenreversedthatwideninginApril.

IncomingdatasuggestedthattheglobalreverberationsfromlockdownmeasurestodealwiththespreadoftheCOVID-19virusinChinaandtheRussianinvasionofUkraineslowedforeigneconomicgrowth.InChina,ac-tivityindicatorspointedtoasizablerestraintoneco-nomicactivity.TheRussianinvasionofUkrainecontin-uedtohaveanimprintonforeignactivity,withpersis-tentstressesinglobalcommoditymarketsanddecliningconsumerandbusinessconfidence,especiallyinEurope.Inflationabroadmovedhigher,drivenbyfurtherin-creasesinconsumerenergyandfoodpricesaswellassomeadditionalbroadeningofpricepressurestocoregoodsandservices.Centralbanksaroundtheworldfur-thertightenedtheirmonetarypolicystancestocurbhighinflation.

StaffReviewoftheFinancialSituation

Overtheintermeetingperiod,U.S.Treasuryyieldsandthemarket-impliedfederalfundsratepathmovedsub-stantiallyhigheronnet.Broaddomesticequitypricein-dexesdeclinedconsiderably,onbalance,amidelevatedmarketvolatility.Inmostadvancedforeigneconomies(AFEs),sovereignyieldsalsoincreasedfurther,andfor-eignequitypriceindexesmovedlower.Despitefurtherincreasesinborrowingcosts,financingconditionsindo-mesticcreditmarketsremainedgenerallyaccommoda-tive.Thecreditqualityoffirms,municipalities,andhouseholdsremainedlargelystable,althoughtheout-lookforcreditqualityhadbeguntodeterioratesome-what.

SincethepreviousFOMCmeeting,2-,5-,and10-yearnominalTreasuryyieldsincreasedconsiderablyonnet.Earlyintheintermeetingperiod,TreasuryyieldsmovedloweramidrisingconcernsaboutaweakeningU.S.growthoutlookandFederalReservecommunicationsperceivedasloweringthechancesoflargepolicyratehikesatupcomingmeetings.However,yieldsincreasedlateintheperiod,witheconomicdatareleaseslargelybe-inginterpretedashighlightingthepossibilityofamoreaggressivetighteningofmonetarypolicy.Theexpectedfederalfundsratepath—impliedbyastraightreadofovernightindexswapquotes—alsoincreasednotablyonbalance.Realyieldsincreasedmorethantheirnominal

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counterparts,whileinflationcompensationimpliedbyTreasuryInflation-ProtectedSecuritiesdeclined.

Broadequitypriceindexesfellsharplyovertheinter-meetingperiodonnet.Thestockpricedeclineswerelargelyassociatedwithmixedcorporateearningsnewsearlyintheperiodandincreasingconcernsabouttheeconomicoutlookamidglobalpolicytightening.One-monthoption-impliedvolatilityontheS&P500index—theVIX—increasedmoderately,onbalance,remainingelevatedrelativetoitshistoricaldistributionandsignifi-cantlyaboveaveragepre-pandemiclevels.Spreadsoninvestment-gradeand,toagreaterextent,speculative-gradecorporatebondswidenednotably,onnet,reach-inglevelscomparablewiththoseattheendof2018.Thiswideningofspreadswasassociatedwithincreasedconcernsabouttheoutlookforcorporatecreditamidmonetarypolicytightening.SincethepreviousFOMCmeeting,spreadsonmunicipalbondsnarrowedsubstan-tially,onnet,movingnearlevelsobservedforseveralyearsbeforethepandemic,asinvestordemandexhibitedsomerecoveryovermuchoftheperiodfromearlierweaklevels.

Conditionsinshort-termfundingmarketsremainedsta-bleovertheintermeetingperiod,withtheMayincreaseintheFederalReserve’sadministeredratespassingthroughpromptlytoovernightmoneymarketrates.Spreadsonlonger-tenorcommercialpaper(CP)andne-gotiablecertificatesofdepositnarrowedmoderately,withnosignsofspilloversbeyondthestablecoinmarketfollowingthecollapseofalargealgorithmicstablecoin.Indeed,CPoutstandingincreasedslightlyoverthepe-riod.Moneymarketfund(MMF)netyieldsacrossallfundtypesrosenotably,asincreasesinadministeredratespassedthroughtomoneymarketinstruments.Se-curedovernightratessoftenedsignificantlyrelativetotheONRRPofferingratesincetheMayFOMCmeet-ing,withthedownwardpressureonratesattributedtocontinuingdeclinesinnetTreasurybillissuance,ele-vateddemandforcollateralintheformofTreasuryse-curities,andMMFsmaintainingveryshortportfolioma-turitiesamiduncertaintyaboutthepaceofanticipatedpolicyrateincreases.Consistentwiththedownwardpressureonreporates,dailytake-upintheONRRPfa-cilityincreasedfurther.

SovereignyieldsinmostAFEsroseovertheintermeet-ingperiodamidinvestors’concernsaboutfurtherinfla-tionarypressuresandmajorcentralbanks’policycom-municationssuggestingafirmerstanceofpolicy.Inter-estratevolatilityinAFEsincreased,consistentwithin-

creaseduncertaintyaboutthepathofpolicyrates.Con-cernsabouttheglobalgrowthoutlookweighedoneq-uityprices,andthebroaddollaredgedup.Impliedeq-uitypricevolatilityremainedatelevatedlevels.Japaneseyieldsandequityprices,however,endedtheperiodaboutunchanged,astheBOJreaffirmeditsaccommo-dativemonetarypolicystance.SovereignbondspreadsoverGermanbundyieldsforeuro-areaperipheralcoun-trieswidenedfurther.Thesemoveswerepartiallyre-tracedfollowinganunscheduledmeetingoftheECBonJune15,atwhichtheECBindicatedthatitwouldtakeactiontoaddresspotentialfragmentationriskineuro-areasovereignbondmarkets.Outflowsfromemergingmarket-dedicatedfundsintensifiedinearlyMay,espe-ciallyfromlocalcurrencybondfunds,andcreditspreadsinemergingmarketeconomieswidenedmoderately.

Indomesticcreditmarkets,financingconditionsformostbusinessesandhouseholdsremainedgenerallyac-commodativeovertheintermeetingperiod.Creditre-mainedwidelyavailable,particularlytohigher-ratedfirmsandconsumerswithhighercreditscores.GrossnonfinancialcorporatebondissuanceslowedinMay,es-peciallyamongspeculative-gradeissuers,amidelevatedmarketvolatilityandhighyields.Grossinstitutionallev-eragedloanissuancedeceleratedandinitialpublicoffer-ingvolumesremainedextremelyslowinMay,whilegrossissuanceofmunicipalbondsremainedrobust.

Commercialandindustrial(C&I)andcommercialrealestate(CRE)loansonbanks’balancesheetsexpandedatarapidpaceinAprilandMay.Issuanceofbothagencyandnon-agencycommercialmortgage-backedsecurities(CMBS)steppeddownslightlyinMayfromitsstrongpaceearlierintheyear.SmallbusinessloanoriginationsthroughAprilwereinlinewithpre-pandemiclevelsandindicatedthatcreditappearedtobeavailable.

ResidentialmortgagecreditremainedwidelyavailablethroughMayformostborrowers.Whilerefinancevol-umescontinuedtrendinglowerinAprilandMayamidhighermortgagerates,outstandingbalancesofhomeeq-uitylinesofcreditatcommercialbankspostedthefirstsignificantincreaseinmorethanadecade,likelyreflect-ingasubstitutionbyhomeownersawayfromcash-outrefinances.Inconsumercreditmarkets,autoloansout-standinggrewatarobustpaceinthefirstquarter,con-sistentwithareboundinautosales,butslowedinAprilandMay.CreditcardbalancesatcommercialbanksroseinAprilatthefastestpaceseeninrecentdecades,butgrowthslowedinMay.

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Borrowingcostshadcontinuedtoincreaseinmanysec-torssincethepreviousFOMCmeeting.Yieldsonnon-financialcorporatebondsremainedwellabovepre-pandemiclevels,andnewissuancespreadsforinstitu-tionalleveragedloanstickedupinMay.BankinterestratesforbothC&IandCREloansalsoincreased.Amongsmallbusinessesthatborrowonaregularbasis,thesharefacinghigherborrowingcostsroseinbothAprilandMay.Borrowingcostsforresidentialmortgageloansincreasedsignificantlyovertheintermeetingpe-riod,inlinewiththeincreasesinMBSandTreasuryyields,reachingtheirhighestlevelssince2010.Incon-sumercreditmarkets,ratesonautoloansandnewcreditcardofferscontinuedtotrendupward.

DespitethehistoricallylowvolumesofdefaultsonbothcorporatebondsandleveragedloansinApril,inthelaterweeksoftheintermeetingperiodthevolumeofcreditratingdowngradesofleveragedloansexceededthevol-umeofupgrades.Inaddition,marketindicatorsoffu-turedefaultexpectationsofbusinessesdeterioratedtosomeextent,asinvestorsappearedtomarkdowntheirassessmentofthemacroeconomicoutlook.

Creditqualityofbusinessloansonbanks’booksre-mainedsound,withC&IandCREdelinquencyratescontinuingtobelowthroughMarch.Nonetheless,banksallocatednetpositiveloanlossprovisionsinthefirstquarterofthisyear.Thisdevelopmentreversedapatternofloanlossreservesbeingreleasedthroughoutlastyearandreflectedconcernsaboutthecreditqualityoutlook.DelinquencyratesonCMBSandsmallbusi-nessloanscontinuedtodecline,andthecreditqualityofmunicipalsecuritiesremainedstrong.

Householdcreditqualityremainedsolid,withtheshareofconsumerswithsubprimecreditscoresstillnearhis-toricallows.Inaddition,mortgagedelinquenciesandtheshareofmortgagesinforbearancebothcontinuedtotrenddowninrecentmonths.Whilenonprimeautoloandelinquencyratesedgeddownatouchinthefirstquarter,creditcarddelinquencyratesforaccounthold-erswithbelow-primecreditscoresinchedupfromlowlevels.Thesizableincreasesincreditcardpurchasevol-umesthroughMarchwereroughlyoffsetbyhighlevelsofcreditcardpayments,thusincreasinghouseholdbor-rowingonlyslightly.

StaffEconomicOutlook

TheprojectionforU.S.economicactivitypreparedbythestafffortheJuneFOMCmeetingimpliedatrajectoryforrealGDPthatwaslowerthanintheMayprojection.ThestaffcontinuedtoprojectthatGDPgrowthwouldreboundinthesecondquarterandremainsolidoverthe

remainderoftheyear.However,monetarypolicywasassumedtobelessaccommodativethaninthepreviousprojection,andtherecentandprospectivetighteningoffinancialconditionsledthestafftoreduceitsGDPgrowthforecastforthesecondhalfof2022andfor2023.ThelevelofrealGDPwasstillexpectedtoremainwellabovepotentialovertheprojectionperiod,thoughthegapwasprojectedtonarrowsignificantlythisyearandtonarrowalittlefurthernextyear.Labormarketconditionsalsowereexpectedtoremainverytight,albeitsomewhatlesssothaninthepreviousprojection.

WithregardtoPCEpriceinflation,thestaffrevisedupitsprojectionforthesecondhalfof2022inresponsetostronger-than-expectedwagegrowthandthestaff’sas-sessmentthattheboosttoinflationfromsupply–demandimbalancesintheeconomy,includinginfoodandenergymarkets,wouldbemorepersistentthanpre-viouslyassumed.Alltold,totalPCEpriceinflationwasexpectedtobe5.0percentin2022,whilecoreinflationwasexpectedtobe4.1percent.PCEpriceinflationwasthenexpectedtostepdownto2.4percentin2023andto2.0percentin2024,asenergypriceswer