Investor Presentaiton

Recession Tightrope... "These uncertainties, both old and new, complicate our task of balancing the risk of tightening monetary policy too much against the risk of tightening too little. Doing too little could allow above- target inflation to become entrenched and ultimately require monetary policy to wring more persistent inflation from the economy at a high cost to employment. Doing too much could also do unnecessary harm to the economy." Remarks by Jerome Powell, Jackson Hole, Wyoming, August 25, 2023 "For those concerned about inflation pressures emanating from labor markets, there was no relief in the July employment report. The July employment report is consistent with our view that the Fed is not done tightening." S&P Global / Macro Watch Compilation, August 22, 2023. "However, while the economy's resilience has tempered concerns of an imminent recession, a period of below-trend growth and an accompanying increase in the unemployment rate will be necessary to reduce wage growth to a range consistent with core PCE inflation near the Fed's 2% objective within a time frame acceptable to the Fed... The recent resilience in spending and employment, persistently strong wage gains, and still-elevated core inflation signal the need for tighter financial conditions to slow growth enough to contain inflation. Further interest rate hikes from the Fed likely will be necessary to maintain financial conditions tight enough to achieve the requisite economic slowdown. We expect the Fed to raise its policy rate to 5.5% -5.75% in November, but an increase to 5.75% to 6% by yearend, while not our base case, is certainly possible." S&P Global / U.S. Economic Outlook, August 16, 2023 "To be sure, inflation for some goods and services is likely to accelerate in coming months. Most notable are medical care service prices, which have been steadily falling but will soon begin to rise. This is due to how the cost of health insurance is measured by the Bureau of Labor Statistics and the considerable pressure on the labor-intensive healthcare industry to pass along more of its increased labor costs." Moody's Analytics, U.S. Outlook: The Economy Finds Footing, August 14, 2023. 6

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