As a result, the Fed is widely expected to raise rates for the first time since 2006 at its 16 December meeting Everyone expects a Fed hike in December 1 Fed officials "When the Committee begins to normalize the stance of policy...it is a day that I expect we all are looking forward to." Janet Yellen, Fed Chair, 3 December, "Assuming that we continue to get good data on the economy... there's a strong case to be made in December to raise rates." John Wilkams, San Francisco Fed President, 21 November it is quite possible that the conditions (...) to begin to normalize monetary policy could soon be satisfied." Bill Dudley, New York Fed President, 12 November: "I'm comfortable with moving off zero soon." Dennis Lockhart. Atlanta Fed President, 19 November 3 Economists 100% -% of economists 80% a 60% 1 40% 20% -I 0% Sep. FOMC Source: Bloomberg Finance LP, Deutsche Bank Research Dec. FOMC • No hike a Hike 2 Market Probability of a hike by December' 100% 80 'i so 40 20 0 Jan Feb Mar Sep FOMC Oct payrolls 9 i August selloff in risk Oct FOMC 78% Apr May Jun Jul Aug Sep Oct Nov Dec priced' Note r): It is likely that a 25bp hike by the Fed raises the Fed funds rile by less than 25bp. given excess Iquidity in the system. The lower (upper) bound of range entries Fed funds rate rises by 25bps (20bps) when the Fed hikes rates Source: Bloomberg Finance LP, Deutsche Bank Research 4 Other officials and prominent investors OECD thinks US Federal Reserve needs to raise rates Remodel Review, Nov 10* 2015 Central Bankers Urge Fed to Get On With Interest-Rate Increase WSJ. Oct 11" 2015 Bill Gross: `100% Chance' Fed Will Raise Rates in December Bloomberg, Nov 6" 2015 Deutsche Bank tjraLwsii.:Apst.dh hoinx,14:4wity, ;w:a;rh db :-:m 4 Research TleiHatraaVew Special - December 701) CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0119251 CONFIDENTIAL SDNY_GM_00265435 EFTA01459042