Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

We don’t quite understand why this sector seems to have resembled the cartoon character that keeps running along when we think there shouldn’t be any support underneath it. [Laughter] We are staunchly negative about the second half for this sector, and that view is informed by the precipitous drop in the architectural billings index. That’s one of the relatively few indicators that gives us any purchase on what’s going to happen in this sector. It’s a helpful indicator of spending about six months ahead. We think that financial conditions are pretty tough in this area. We’re getting a lot of anecdotal evidence that people are having greater difficulty financing projects than was the case before, and we’ve seen some uptick in vacancy rates as well. So we think all of those are factors. I guess I would say that we’ve heard very persistently negative reports from our supervision colleagues as well about what’s going on in that area.

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