Significant progress toward the Fed's full employment objective and robust momentum justify a Fed funds rate well above zero US economy is near full employment, confidence is high and leading indicators are supportive, even if some measures of slack remain high • Leading Indicators 7-8 8. Firms unable to fill job openings near 15-year high — labour market is tight for small businesses 7 Initial claims near 40+ year lows; signal further progress on unemployment is likely forthcoming 1 Payroll employment growth has averaged 240k per month over past 18 months, near the fastest pace since 2000 6 Work part time for economic reasons remains elevated as many would like a full-time job but have settled for part-time work — slack remains Dec-07 (pre-crisis. seen as a solid reference) Dec-09 (worst of the crisis) Current Reference Points c ltiliSatiOn 5 Unemployment at 5.0%, has \ 5-6 fallen to post-crisis low, and within the range the Fed believes will begin to lead to higher inflation uhocrsaviekvalmt.dh win hfirffihrouseviery, rfnwarLis,dh coin *IintrxeVew Special - ‘` Lierembet 20lb openings near record high levels, suggesting employers are looking to expand employment Employer Behaviour 1-2 3. Hiring plans over the next 3 months for small businesses are near pre-crisis levels — employment growth should remain robust 4. Quits: leading indicator for wage growth — more people quitting means they can find higher paying jobs elsewhere Confidence 3-4 Ouhsord movement if the wafer than denotes improvement Source. Hover Ana/tics, BLS, National Federation of Independent Businesses. Department of Latour. Deutsche Bank Research 17 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL SDNY_GM_00265448 DB-SDNY-0 119264 EFTA01459052