Deputy Seminar, Denver, CO

Federal Funds Rate Short Rates Finally Start Moving (Source: Board of Governors of Federal Reserve System)

25%

20%

15%

10%

5%

0%

Jan-80

Jan-85

Jan-90

Jan-95

Jan-00

Jan-05

Jan-10

Jan-15

Sep-81

Sep-86

Sep-91

Sep-96

Sep-01

Sep-06

Sep-11

Sep-16

May-83

May-88

May-93

May-98

May-03

May-08

May-13

CSBS - 2018 DEPUTY SEMINAR Denver, CO– July 16, 2018

Market’s FFR Outlook (Source: CME Group)

120%

175-200 bps 200-225 bps 225-250 bps 250-275 bps 275 - 300 bps

100%

80%

60%

40%

20%

0%

8/1/2018

9/26/2018

11/8/2018

12/19/2018

1/30/2019

CSBS - 2018 DEPUTY SEMINAR Denver, CO– July 16, 2018