–Not Ruling Out More Stimulus But Depends On How Economy Evolves
–Less Concerned About Risk From Europe To U.S. Economy

By Brai Odion-Esene

WASHINGTON (MNI) – While recent U.S. economic data has been
encouraging, the Federal Reserve must maintain its current monetary
policy stance, given current risks to the recovery, like Iran-related
tensions, and the fact that several sectors remain “quite weak,” Atlanta
Federal Reserve Bank President Dennis Lockhart said Friday.

This does not mean he is advocating more monetary stimulus —
so-called QE3 — he said in remarks to students at Georgetown
University. Lockhart is a voter on the Fed’s policymaking Federal Open
Market Committee this year.

He said the credit system “isn’t working as efficiently as it can,
and therefore I have some reservations about employing more
accommodative or more stimulative policies to try to push it through a
transmission mechanism that needs to be repaired before it is fully
receptive to more stimulus.”

And despite the recent bout of positive data, Lockhart cautioned
against overstating the strength of the recovery and the current health
of the economy.

It is important that the FOMC does not tighten monetary policy
“prematurely or inadvertently,” Lockhart said, and the committee is
working very hard to ensure there are no “misinterpretations” of its
message.

He warned that “it’s appropriate to be cautiously optimistic about
the future, but not overweening about the health of the economy.” “The
directions are positive but not necessarily back to where we would like
to see them.”

“The directions, in general, are pretty positive. The levels of
activity in a number of areas are still quite weak,” he said.

These include, not surprisingly, the housing sector and the labor
markets.

Lockhart also pointed to risks related to tensions over Iran’s
nuclear ambitions, which he said “are on my radar screen.” This poses a
risk to the recovery, Lockhart said, and means maintaining accommodative
monetary policy is “sensible.”

As for whether more stimulus in the form of additional quantitative
easing is needed or not, Lockhart said his position is one of “patient
vigilance.”

“I want to see how the economy evolves before drawing conclusions
that more stimulus is needed,” he said. “I don’t rule it out, we
certainly have the tools to do more if the Federal Open Market Committee
decides that conditions are such that the economy needs more stimulus.”

Although urging a wait-and-see approach, Lockhart said the economy
appears to be gaining some “traction,” noting that incoming indicates
conditions are getting “better and better.”

Lockhart said he expects growth this year to be between 2.5% to 3%.
As for prices, he said headline inflation is “spiking a bit” because of
gasoline prices.

As a result, “We expect that we are going to see, and have already
seen some indication — at the headline level — of higher inflation,”
he said.

Excluding the volatile food and energy components, however, “the
underlying inflation picture is more benign than what you would get by
just reading the short-term headlines,” he said.

So looking at inflation more broadly, Lockhart said the current
pace is consistent with his definition of “a reasonable performance”
around the Fed’s now explicit annual inflation target of 2%.

“Consequently, I’m pretty confident that the inflation picture is
in a satisfactory range,” Lockhart declared.

There has been recent “encouraging news” on the labor front and the
recent increases in job creation should positively impact the
unemployment rate, he continued, while consumer activity is “holding
up.”

Lockhart said he agreed with comments by Fed Chairman Ben Bernanke
that more consumer activity is needed to maintain the recovery’s
momentum, and described the current growth in consumer spending as
“modest.”

Measures of consumer confidence have been “reasonably buoyant,” he
continued, with the public becoming more confident about the economic
outlook.

Business investment continues to grow “at a nice pace” as well, he
said, adding that the anecdotal evidence the Atlanta Fed receive from
local businesses “is really pretty upbeat.”

Lockhart was also more bullish in his outlook for Europe, saying
the risk of contagion in Europe’s financial system spread to the U.S.
has lessened, especially given the recent restructuring of Greek debt
and the approval of a second round of aid for the debt-laden nation.

Also, the cheap 3-year loans provided to Europe’s banks by the
European Central Bank mean he is also “much less concerned” about the
state of the EU banking system.

And while this does not mean the risk posed by the euro area has
disappeared, it has abated “somewhat,” he said.

“I am less concerned today than I would have been some months ago
about that there could be a serious effect on the U.S. economy coming
out of Europe,” Lockhart said.

Europe’s issue now, he continued, is about improving conditions to
support economic growth.

** MNI Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$,MK$$$$,M$$CR$,M$X$$$]

• Europe considering firewall options
• US new home sales 313K vs 325K exp
• Obama nominates Jim Yong Kim to lead World Bank
• Iranian oil exports are expected down by 300K barrels per day in March
• Rumors on Iran and North Korea spook oil
• Moody’s analyst says Canada’s AAA-rating could survive housing drop, severe slowdown in China
• Italian Cabinet approves labor market overhaul
• Greece extends foreign-law bond swap
• Fed’s Bullard says Fed should stay on sidelines
• Fed’s Lockhart sees economy gaining traction
• IMF sees Greek funding gap in 2015
• S&P 500 gains 0.3% to 1397

EUR/USD started the session at 1.3241 after a strong bid came in Europe just before the US open. The pair ran up to 1.3294 but offers up to 1.33 held the line and the pair ranged down to 1.3220 before settling near 1.3269.

USD/JPY pinched through 82.00 by one pip but it was a headfake as anticipated stops didn’t materialize and the pair bolted back higher, above 82.50.

A similar effort saw AUD/USD touch a session low of 1.0372 at 2 p.m. ET but no follow through led to a reversal up to 1.0460 for most of the afternoon until a late break to 1.0480.

Oil popped to $108 from $105 on war worries but quickly fell back to $106.80 with most players choosing not to believe the vague rumors, which were later denied.

A few late stops hit and AUD/USD jumps to 1.0480.

–Vice Chairman of Joint Economic Committee To Focus on Fed
–Rep. Brady: Panel To Study How Fed Should ‘Achieve A Sound Dollar’
–Panel To Hear From John Taylor, William Poole, Laurence Meyer

By John Shaw

WASHINGTON (MNI) – Rep. Kevin Brady, the vice chairman of the Joint
Economic Committee, said Friday that his panel will hold a hearing next
week to consider “how the Federal Reserve should achieve a sound
dollar.”

In a statement, Brady said his panel will hold a hearing Tuesday at
2.p.m to consider future Fed policies.

Brady said his panel will hear from former Fed governor Laurence
Meyer, former president of the St. Louis Federal Reserve Bank William
Poole and former Treasury Under Secretary John Taylor.

Several weeks ago, Brady unveiled sweeping legislation to revamp
the mission and decision-making structure of the Federal Reserve Board.
It’s likely that Brady will invite the witnesses to comment on his
proposal.

Brady says it’s now time for the Fed’s mandate to focus exclusively
on price stability rather than operating under it’s long-standing dual
mandate of price stability and full employment.

Brady’s bill would require the Fed to use inflation targeting to
achieve stable prices.

The bill would require the Fed to “formally articulate it’s lender
of last resort” policy to eliminate uncertainty in markets.

Brady’s bill would expand voting membership in the FOMC to 19 —
the seven Fed governors and the 12 regional Fed Bank presidents. This
expanded membership, Brady said, would “broaden input, increase
geographic diversity and reduce the overwhelming influence of Washington
and New York.”

The bill would require the Fed to release FOMC meeting transcripts
within three years of each FOMC meeting rather than the current
five-year release period. This would enhance transparency at the central
bank, Brady said.

Brady’s legislation would require the Fed to report on the impact
of FOMC policies on the exchange rate value of the dollar.

The legislation would prohibit the Fed from investing in any
instruments others than U.S. Treasuries, repos and reverse repos, except
during times of emergency.

The Brady bill would put sharp limits on the the Treasury
Department’s Exchange Stabilization Fund.

The bill would require the Consumer Financial Protection Agency to
secure its annual funds through Congress’s regular appropriations
process.

The legislation faces an uncertain future.

Brady’s Joint Economic Committee does not have any legislative
authority, so his bill would have to be considered by the House
Financial Services Committee which Brady is not a member of.

While it’s possible the House Republican leadership could put the
bill on a fast-track, there is virtually no prospect for the
legislation moving in the Senate this year.

Sen. Richard Shelby, the ranking Republican on the Senate Banking
Committee, has told Market News International that he does not see any
legislation altering the structure or role of the Fed passing Congress
this year.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MFU$$$]

A Bloomberg story says MF Global CEO gave direct instructions to transfer $200 million of client money to meet one of the firms obligations to JPMorgam.

In an email, the firm’s Treasurer says the transfer was “per JC’s direct instructions”.

–ECB LTRO Also Eased Threat of ‘Bank Run’ in European Banks
–Central Bank Long-term Bond Purchases Can Help Even In ‘Steady State’

By Chris Cermak

WASHINGTON (MNI) – The European Central Bank’s two rounds of
long-term repurchase operations made sense to ease the threat of a bank
run in Europe and were clearly targeted at encouraging purchases of
sovereign debt, IMF Chief Economist Olivier Blanchard said Friday.

Speaking in Washington at a Federal Reserve conference of central
bankers, Blanchard said it was the “possibility of a bank run” that
spurred the ECB to act, as there was a “risk that European banks could
not rollover their debts,” though he said the clear goal of the LTROs
was to fuel additional purchases by banks of European government bonds.

The result of the ECB’s LTRO was to “help banks, but you don’t care
directly about the banks, you want to help the sovereigns,” Blanchard
said.

Blanchard said one had to “ask the question” in Europe of whether
the ECB should have used LTROs or instead tapped the primary bond market
with direct purchases of sovereign debt, though he did not specifically
express an opinion either way.

Speaking more generally of the merits of quantitative easing by
central banks, Blanchard said the efforts had been successful during the
economic crisis largely because of their “indirect effects” on various
financial assets, rather than the direct effects on lowering yields of
long-term government bonds.

Blanchard also suggested there could be a role for the purchase of
long-term bonds by central banks even in normal times, when benchmark
interest rates are not at extreme lows. There was “an argument for doing
it even in a steady state” due to its effects on raising bond prices.

Blanchard was responding to a paper on the effects of quantitative
easing by New York University Professor Mark Gertler, who argued QE was
most successful when central banks purchased private assets, rather than
government bonds, and only had a major effect on interest rates at the
zero lower bound.

The two-day Fed conference in Washington is entitled “Central
Banking: Before, During and After the Crisis” and includes panel
discussions and papers presented on central banks’ easy monetary policy
and new regulatory roles.

Fed Chairman Ben Bernanke, in introductory remarks to the
conference earlier Friday, included no comments on current monetary or
economic policy. He said policymakers still had “much to learn” about
the financial system’s vulnerabilities, connections to the broader
economy and the central bank’s expanding monetary and regulatory policy
tool chest.

Since the crisis, Bernanke said the Fed and other central banks
have deployed “a variety of new tools and approaches to carry out their
responsibilities regarding monetary policy and the provision of
liquidity, tools about which we still have more to learn.”

– Chris Cermak is a Washington reporter for Need to Know News

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$$EC$,M$C$$$,M$U$$$,MN$FX$,MT$$$$,MI$$$$,M$J$$$,M$X$$$,M$A$$$,M$Q$$$]

JPMorgan is being sued by an FX trader who thought he would be paid 10 times what was actually offered because of a misplaced decimal.

 "If it is too good to be true, then it probably is, but if the trader signed the contract in good faith it is probably binding," Adrian Crawford, an employment lawyer at Kingsley Napley LLP in London who isn't involved in the case, said in a phone interview.

• The euro net short position fell to 83K from 99K
• JPY shorts to 26K from 42K
• GBP shorts to 16K from 42K
• CAD longs to 42K from 27K
• AUD longs to 45K from 67K
• NZD longs to 4K from 13K
• CHF shorts to 11K from 15K
• The net USD long position fell 37%

The data is as of the close on Tuesday. The full Commitments of Traders report is here.

The big story this week was the rebound in the yen but shuffling through the JPY weekly charts, there hasn’t been any real damage, which bodes well for yen shorts. Personally, I want to short JPY but I can play a bit of wait-and-see.

• Underlying inflation picture is benign
• Sees growth in 2.5-3.0% range
• Sees ‘fair amount’ of business investment
• public starting to be ‘more confident’
• Fed balance sheet growth causes some concerns

EU sources tell Dow Jones there is a proposal to lift the Eurozone firewall to €700 billion is gaining ground. A proposal to lift it €940 billion is off the table, the sources say.

By Vicki Schmelzer

NEW YORK, March 23 (MNI) – In the wake of the U.S. financial crisis
and the subsequent eurozone debt crisis, three Federal Reserve Banks
have developed three separate “financial stress” indicators to gauge if
trouble is brewing in financial markets.

Each financial stress index considers different variables, but all
seek to be the first to sound warning bells about negative developing
trends.

The Kansas City Fed started the ball rolling in August 2009, by
releasing its KCFSI on a monthly basis and the St. Louis Fed followed in
January 2010, by releasing the STLFSI on a weekly basis. At the initial
releases, both offered back-dated information extending into the 1990s.

This week, the Cleveland Fed announced the creation of their own
financial stress index, to be released on a monthly basis, the third
Monday of each month.

The Kansas City Fed’s FSI considers 11 variables, seven which
concern yield spreads and four which track the behaviour of asset
spreads.

For yields, the KC Fed looks at 1) three-month Libor/Treasury (TED)
spread, 2) two-year swap spread 3) Off the run/on-the run 10-year
Treasury spread 4) Aid/10-year Treasury spread 5) Baba/Aid spread 6)
High-yield bond/Baba spread and 7) Consumer ABAC/five-year Treasury
spread.

The KC Fed then factors in the correlation between stock and
Treasury returns, 9) the implied volatility of overall stock prices
(VIA) 10) the “idiosyncratic volatility of bank stock prices” and 11)
“cross-section dispersion of bank stock returns.”

In contrast, the St. Louis Fed considers 18 variables, and
eyes pure interest rates, yield spreads and other key indicators: 1) the
effective fed funds rate 2) the two-year Treasury 3) the 10-year
Treasury 4) the 30-year Treasury 5) Baba-rated corporate 6) Merrills Lynch
High-Yield Corporate Master II Index 7) Merrills Lynch Asset-Backed
Master BBB-rated the yield curve, i.e. 10-year Treasury minus the
three-month Treasury 9) the Corporate Baba-rated bond minus the 10-year
Treasury 10) Merrills Lynch High-Yield Corporate Master II Index minus
the 10-year Treasury 11) three-month London Interbank Offering Rate
minus the Overnight Index Swap (or LIBOR-OIS) spread 12) three-month
Treasury – Eurodollar (TED) spread 13) three-month commercial paper
minus three-month Treasury bill; 14) JP Morgan Emerging Market Bond
Index Plus 15) Chicago Board Options Exchange Market Volatility Index
(VIA) 16) Merrills Lynch Bond Market Volatility Index (one-month) 17)
10-year nominal Treasury yield minus the 10-year Treasury Inflation
Protected Security yield (breakeven inflation rate) and 18) Vanguard
Financial Exchange-Traded Fund (equities)

This week, the Cleveland Fed offered its own FSI, which looks at 11
slightly different variables, The data was back-dated to the 1990s, as
the other Fed stress indexes available.

“Like other indexes that measure aggregate movements in financial
markets, the CFSI takes components that quantify individual aspects and
combines them into a single value,” the Cleveland Fed said Wednesday.

The CFSI is constructed using daily data from components that
reflect credit, equity, foreign exchange and interbank markets.

“The overall financial system is complex and comprises many
individual markets of varying size and significance,” the Cleveland Fed
said.

“These four sectors were selected because they encompass major U.S.
markets and looking at them provide considerable coverage of the system
– stress in any of these four could carry over to others, affecting the
system at large,” the Cleveland Fed said.

In credit, the CFSI looked at 1) the “covered interest spread,”
which measures the difference between the 90-day UK Treasury yield and
the 90-day U.S. Treasury yield 2) corporate bond spread (10-year Moody’s
Aid-rate corporate bond yield – U.S. 10-year Treasury yield. 3)
liquidity spread (“changes in the short-term differences in bid and ask
prices on three-month U.S. Treasuries) 4) the Commercial Paper-T-bill
spread (the spread between 90-day financial commercial paper and the
90-day U.S.Treasury yield) 5) the Treasury yield curve spread (the
three-month versus 10-year Treasury yield).

In equities 6), the “stock market crashes” indicator” is measured
as “the ratio of the current value of the S&P 500 financial index
relative to its maximum over the previous 365 days.”

In currencies 7), the “weighted dollar crashes” indicator “is
measured as the ratio of the current value of the trade-weighted U.S.
dollar exchange index relative to the maximum over the previous 365
days.”

For interbank markets, the CFSI takes into consideration
“financial beta,” which “is measured as the volatility of share prices
in the banking sector relative to the overall stock market.”

The CFSI also looks at 9) the “Bank Bond Spread” (difference
between 10-year A-rated bond yield and the 10-year U.S. Treasury yield),
10) the “Interbank Liquidity Spread” (difference between three-month
LIBOR and the three-month U.S. Treasury yield, and 11) the “Interbank
Cost of Borrowing” which gauges counterparty risk (measures the
difference between the three-month LIBOR and the fed funds rate).

The Cleveland Fed offers four grades of stress: Grade 1 (below
normal stress with the index in a range of less than or equal to -0.50;
Grade 2 (normal stress with the index in a range of -0.50 to 0.59);
Grade 3 (moderate stress with the index in a range of between 0.59; and
1.68) and Grade 4 (signifiant stress, with the index above 1.68)

In the fall of 1998, at the peak of the Long-Term Capital
Management crisis, the CFSI “neared a value of 2.0,” a level that was
not seen again until the start of the subprime mortgage crisis.

The Cleveland Fed noted that the CFSI “climbed into the
‘significant stress period’ grade in late 2007 and remained there
throughout the middle of 2009.”

“While the CFSI has not moved back into this ‘significant stress
period,’ it rose throughout 2011, fell in 2012, and currently remains in
the ‘modest-stress period’ grade,” the Cleveland Fed said.

Data released March 8 from the Kansas City Fed showed that the
KCFSI slipped to -0.11 in February from +0.10 in January, the fourth
consecutive decline in the index.

“The decrease left the KCFSI below its long run average of zero and
close to its level in July 2011, before the jump in late summer and
early fall,” the Kansas City Fed said.

The latest weekly data from the St. Louis Fed showed that for
February 10, the index slipped to 0.378 from the 0.508 seen January 27
and the 0.761 seen December 30.

In early 2007, the STLFSI was mostly on a -1 “handle (lowest level
seen at -1.252 on February 23, 2007), but as the year wore on, the index
edged into positive territory, topping out at +0.984 December 14.

Well before the subprime mortgage crisis peaked and the S&P 500 put
in its crisis low of 666.79 March 6, 2009, the STLFSI topped out at
+5.414 on October 17, 2008. The index was at +3.930 on March 6, 2009 and
ended that year at +0.294.

At the peak of risk appetite in spring 2011, the STLFSI saw a low
reading of -0.222 (April 29) and at the peak of risk aversion last
fall, the STLFSI saw a high reading of 1.178 (October 7).

After ending 2011 at 0.750, the STLFSI has moved from a 0.189 (the
low posted March 16, according to data released Thursday) to 0.673
(January 6) range in 2012.

The latest Kansas City FSI, released March 8, showed the index was
-0.11 in February, “down moderately from +0.10 in January, and “the
fourth consecutive decrease in the index.”

“The decrease left the KCFSI below its long run-average of zero and
close to its level in July 2011, before the jump in late summer and
early fall,” the KC Fed said.

In 2008, as the U.S. financial crisis broadened, the KCFSI moved
from a 1.02 low in February to a red hot peak of 5.64 in October before
gradually edging lower in subsequent years.

Since late 2009, the KC index has returned to sub +1.0 readings and
even posted a few negative readings in 2010 and 2011.

A Cleveland Fed working paper from November 2011 compared the CFSI
results to other stress indicators, not only the STLFSI and KCFSI, but
also various bank stress indicators (Goldman Sachs, Citi, Deutsche Bank
etc.) and other gauges (OECD FCI, MacADV FCI etc).

“A comparative visual assessment of CFSI against alternative series
is promising for CFSI; it tends to distinctly identify stress episodes
and seems to do so earlier than competing indexes,” the working paper
said.

–See MNIEyeOnFX on www.twitter.com
–email: vschmelzer@marketnews.com (212) 669-6438

** MNI New York Bureau 212-669-6430 **

[TOPICS: M$U$$$,MMUFE$,MGU$$$,M$$CR$]

–Adds Comments On Inflation, Economic Trends

MALAGA, Spain (MNI) – The European Central Bank has not yet
considered in detail an exit from its non-conventional measures and
wants to draw conclusions from its long-term refinancing operations,
Executive Board member Jose Manuel Gonzalez-Paramo said Friday.

“The ECB has not discussed it in detail, because we are still
examining the effects of the two LTROs,” Gonzalez-Paramo told
journalists on the margins of a speaking engagement here. This analysis
“is still not complete.”

Asked about the possibility of a third LTRO, he said, “We never
spoke of three LTROs. We spoke of two. We thought that two would be
sufficient. There is no news yet with respect to this. We have to
analyze the two to draw conclusions.”

As of now, there is “initial evidence” that the two LTROs have not
yet changed bank lending behavior “drastically”, he said. But the ECB’s
bank lending survey suggests banks expect improvement in the coming
months with respect to “their willingness to extend credit and their
willingness to ease their lending standards.”

The price of oil is “obviously” part of the ECB’s analysis of
inflation trends and is indeed “one of the upside risks to price
stability,” he said. “Of course we are watching with great attention the
evolution of raw material prices.”

“Medium-term inflation expectations continue to be anchored at a
level compatible with price stability,” he continued. “But without doubt
[commodity price trends are] a very important piece of information.”

Paramo nevertheless claimed to be no more concerned about inflation
than previously, observing once again that the ECB is “watching very
closely” the upside risks from raw materials. Still, monetary
authorities remain “confident” with respect to the anchoring of
expectations, he insisted.

The recent spate of weaker economic data do not justify a change in
the ECB’s outlook for Eurozone growth, Paramo said. “Activity is
stabilizing at a low level. But we are at a moment of stabilization and
we are confident that in the coming quarters we will see a recovery of
the pace of growth of activity. We can’t change our analysis because of
a few bits of data that are published, we have to do our analysis with a
broader collection of information and this is what we do each month.”

Asked if the worst of the crisis had passed, Paramo said that there
has been a somewhat more positive trend since the start of the
year.

To be sure, it remains to be seen whether this amounts to a
“decisive change,” he said. “But without doubt, the financial and
economic environment is much better” than at the end of last year, he
argued, citing “many reasons” for this, such as the ECB’s liquidity
provisions and the Fiscal Compact.

–Frankfurt bureau tel.: +49 69 720142. Email: dbarwick@marketnews.com

[TOPICS: M$$EC$,M$X$$$,MGX$$$,M$$CR$,MT$$$$]

There is a Dow Jones report that the company that helped with ‘technological’ communications in the Greek debt swap is in talks with another or other eurozone nation(s) to perform a similar function ‘should the need arise’.

Dow Jones is reporting comments from the IMF that say Greece’s funding gap from 2015-2020 may range between 32-67 euros

• Central banks have “more to learn” about policy tools
• “Much to learn” about vulnerabilities of finance

MALAGA, Spain (MNI) – The European Central Bank has not yet
considered in detail an exit from its non-conventional measures and
wants to draw conclusions from its long-term refinancing operations,
Executive Board member Jose Manuel Gonzalez-Paramo said Friday.

“The ECB has not discussed it in detail, because we are still
examining the effects of the two LTROs,” Gonzalez-Paramo told
journalists on the margins of speaking engagement here. This analysis
“is still not complete.”

Ask about the possibility of a third LTRO, he said, “We never spoke
of three LTROs.”

While noting the risk to price stability from costly oil, which the
ECB is following closely, Paramo said he was confident that medium-term
inflation expectations would remain well anchored.

MORE

[TOPICS: M$$EC$,M$X$$$,MGX$$$,M$$CR$,MT$$$$]

S&P 500 at a session high +4 points to 1397 but it’s not inspiring much elsewhere.

Bernanke may have some comments from a conference in about 40 minutes (at 1745 GMT). The Fed’s Lockhart speaks at 1830.

NZD is the leader today, USD and CAD are lagging. On the week, JPY is the best performer with AUD lagging.

• ECB paying ‘great attention’ to oil
• Medium-term inflation expectations are anchored
• ECB studying both LTROs
• Not thinking about another LTRO
• We’ve seen a turning point in the crisis

He had similar comments yesterday.

• UK FTSE +0.4
• DAX +0.3%
• CAC +0.2%
• Spain IBEX -0.8%
• Italy MIB +0.2%
• Portugal +0.1%