1. Omair Ali Antonio Alfonso Shehab Chowdhury Mohammad Zubair Ahsan Syed Federal Reserve Open Market Committee Fed Challenge 2011

2. AGENDA I. General Comments II. GDP growth trends III. Consumer Sector IV. Housing Market V. Labor Markets and Productivity VI. Inflation VII. Financial Markets VIII. Specific Issues of Concern: Eurozone Worries IX. Policy Action

3. I. General Comments: U.S. Economic Climate  GDP growth has improved  Labor market is weak with the unemployment rate stuck at 9.1%  Consumers remain cautious – Consumer confidence still low.  Business investment picking up.  Oil Prices are volatile.  Financial market worries dominate.  Policy actions – focus on reducing unemployment

4. II. GDP Growth  3Q 2011 marks ninth consecutive quarter increase in real GDP.  3Q 2011 real GDP growth stepped up to a 2.5% rate from 1.3% in 2Q and 0.4% in 1Q.  Growth is up 1.6% compared to a year ago.  Strength seen in consumer spending (up 2.4%) and fixed nonresidential investment (up 14%).  Final sales grew at a healthy 3.6% rate, but inventories subtracted 1.1% from this to give us 2.5% 3Q growth.  Core PCE deflator was up at a 2.4% rate in 3Q, which is high, but better than the 3.3% rate seen in 2Q.  Despite 3Q improvement, the GDP gap – the difference between actual and potential GDP is sizeable at 6.7%

5. Large GDP Gap  Overall Assessment: Despite firmer 3Q growth, downside risks remain.

6. III. Consumer Outlook  3Q 2011 revival in consumer spending but negative signs dominate.  Consumer confidence slipped in October.  Income growth is meager

7. IV. Housing  Some stabilization seen  Consumer confidence slipped in October.  Income growth is meager

8. Mortgage rates

9. Housing starts

10. Home Sales and the NAHB Housing Market Index

11. Foreclosure activity and Delinquency

12. Case Shiller Home Price Indexes

13. Case-Shiller continued

14. Retail Sales

16. V. Labor Markets and Productivity  Unemployment rate is stuck at 9.1%  Consumer confidence slipped in October.  Income growth is meager

17. Unemployment

18. Under Utilized labor

19. Pay Roll

20. Job less

21. ISm

22. Industrial Production

23. Inventory Sales

24. Durable goods

25. Non Defense Captial goods

26. Trade Balance

27. U.S Dollar Index

28. Federal Deficit In terms of GDP

29. Out Put Per Hour

30. PPI

31. Capacity

33. Federal Funds Rate

34. Commercial Paper

35. CDS