earnings from operations abroad, a rising rate of increase in value - added prices received, or from an economy - wide prospective, ever faster labor force growth — are not credible. thus, companies are apparently conveying to analysts that, to date, they see no diminution in expectations of productivity acceleration. this does not mean that the analysts are correct, or for that matter the companies, only that what companies are evidently telling the analysts about their productivity and profits are doubtless reflected in the longer - term profit projections. the macroeconomic data to date certainly suggest little evidence of a slowdown in productivity growth. i said the evidence for technology - driven acceleration in productivity is compelling, but not conclusive. indeed, there are a large number of economists who doubt that the rise in productivity growth is anything more than a cyclical phenomenon or some type of statistical aberration. to be sure, they say, nonfarm productivity growth has risen in recent years, but they note that there have been other periods in our postwar records that exhibited similar patterns of acceleration only to fall back to subnormal growth. many analysts offer as the explanation of the recent acceleration the slow pace of labor productivity growth earlier this decade. the current surge is judged a mere catch - up. the recent acceleration is admittedly not sufficient proof of an irreversible trend for a variable as statistically volatile as labor productivity. but catch - up or not, the evidence appears to be mounting that, even if productivity does not continue to accelerate, the pickup already observed does seem to explain much of the extraordinary containment of inflation despite the ever - tightening labor markets of recent years. the newer technologies, as i indicated earlier, have facilitated a dramatic foreshortening of the lead times on the delivery of capital equipment over the past decade, presumably allowing businesses to react more expeditiously to an actual or expected rise in nominal compensation costs than, say, they could have in the 1980s. the newer technologies and foreshortened lead times apparently have made capital investment distinctly more profitable, enabling firms to substitute capital for labor and other inputs far more productively than they could have a decade or two ago. capital, as economists like to say, has deepened significantly since 1995. the surge in investment not only has restrained costs, it has also increased industrial capacity faster than the rise in factory output. the resulting slack in product markets has put greater competitive pressure on businesses to hold down prices, despite taut labor markets. purchasing managers

assets aimed at improving mortgage lending and housing markets as well as overall conditions in private credit markets. in november 2008, the federal reserve announced plans to purchase a total of up to $ 1. 25 trillion of agency mbs and up to $ 200 billion of agency debt by the end of the year, and in march 2009, the federal reserve announced that it may also buy up to $ 300 billion of treasury securities by the fall. 8 the program appears to be having its intended effect. yields on mortgages relative to treasury yields have come down since november 2008. as shown in figure 6, the 30 - year fixed mortgage rate relative to the 5 - year constant maturity treasury rate benchmark has declined about 1 - 1 / 4 percentage points since the first mbs purchase program was announced. indeed, today mortgage spreads are a lot closer to their mean for 2000 - 2007 the types of collateral eligible under talf are : the highest investment - grade - rated tranches of abs issued on or after january 1, 2009, for which the underlying credit exposures are auto loans, student loans, credit card loans, equipment loans, floor plan loans, insurance - premium finance loans, small business loans fully guaranteed as to principal and interest by the u. s. small business administration, and receivables related to residential mortgage servicing advances or commercial mortgage loans ; the highest investment - grade - rated tranches of cmbs issued on or after january 1, 2009 ; and certain high - quality cmbs issued before january 1, 2009. the observed narrowing of spreads likely represents both direct and indirect benefits of the talf to financial markets. the direct benefit is the increased demand for the specific types of securities that are eligible for the talf, which has likely contributed to the observed reduction in spreads. the indirect benefits are the increase in the general level of confidence in the financial system, which has almost certainly contributed to the narrowing of risk premiums in a wide variety of markets, including cash markets – such as the corporate bond and leveraged loan markets – as well as markets for a range of structured products. as of june 10, the federal reserve held $ 427 billion of agency mbs and $ 84 billion of agency debt ( of which almost all was purchased since late november ) and $ 622 billion of treasury securities ( of which $ 210 billion was purchased since march ). than they were in november. that said, mortgage rates have recently risen with the increase in treasury rates. fiscal policy : emergency economic