EFTA Document EFTA01459017

tbne: paittoos Thr, bt ;tour" Irrortrinctrt v1119: Hohts Aisablas paspstak.ai Porthaa .15i4s The Phillips curve.. ze • V.:07 CA •19.35 s 10 0.5 4 ' yearly average foot! ar..a +2502 7001. .250S • •Zr.:04 42014 20:5.1 • 2503 20', • :0 .1 ♦ • :al • 20 I., U 5. unw`PLI, Theni rate in 2 consumer-price index excluding food and energy, yearly average Evolution of asset classes in the United States hVe.Ot., itY,1 n iO4 le iel 140 :20 1 CO w 40 ■ U$ S&P / Case-Shiller Home Price Index a S&P 500 Index • US Benchmark 10 Year DS Govt. Index 2a)4 2tV5 KY,5 :5:07 20Cri ?.:110 2011 2012 2014 201$ Source: Thomson Reuters Datastream; as of 11/2015 Since the beginning of the crisis, the Fed has attempted to kick-start the economy by boosting asset prices. This has been especially effective for equities. as returns on the S&P 500 Index show. Real estate too has made up much of the previously lost ground. 10 The Phillips curve shows how inflation and unemployment relate to each other. When unemployment is low, employers have to pay up to attract staff, which in turn pushes up prices. Conversely, high unemployment reduces wages and therefore prices. Inflation and unemployment appear inversely related. Note, however, that this relies on a very mechanistic view of the economy. The relationship breaks down if the inflationary expectations of workers shift. Sources: Thomson Reuters Datastream Deutsche Bank Research; as of I1/2015; e = expected United States (unemployment rate) The ongrnpkirnent rats * e•To56,ed 10 ccorrn'ar. 10 Shrink ram year. 4.5-4.7%* (December 2016F*) • ()march; AMA ietUa2t1:4•:3! tett 5 If Nowadays, there is perhaps a tendency to exaggerate the effectiveness of monetary policy [...) The idea that the business cycle can be altogether abolished seems to me as fanciful as the notion that the law of supply and demand can be repealed. Si Witham Malin. c.!vACI,:1,1 al t5afing.:1RISCeNV Bead. 't5rYicli an Gotta; IR. 1555 United States (federal funds rate) Given the declining unemployment and wage tncreaStr5 a raton to wcan rlarma ;Wariest :nut .1.1.", 3115313)Mit "01 :'x!..:1 0.75-1.00%* (December 2016F4) iboutictoc AVYM le:9CW ;ea t? 11111 '5 Past performance is not indicative of future returns. It is not possible to invest directly in an index. No assurance can be given that any forecast or target will be reached. F = forecast. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analyses that may prove to be incorrect. CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL V.OW I A"4, It &Mr,: I can crane 10:5 =ten. 0 5 DB-SDNY-0119214 SDNY_GM_00265398 EFTA01459017