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12 posts on "Federal Reserve"

January 10, 2018

The ‘Banking Desert’ Mirage



LSE_The ‘Banking Desert’ Mirage

Unbanked households are often imagined to live in urban neighborhoods devoid of banks, but is that really the case? Our map of U.S. banking deserts reveals that most are not in urban areas, where financial exclusion may be endemic, but in actual deserts—largely in the sparsely populated, rural West. Across states, we find that the share of the population in a banking desert is unrelated to the share that is unbanked. If distance from a bank is not what causes financial exclusion, then motivating banks to locate closer to the unbanked may not promote financial inclusion.

Continue reading "The ‘Banking Desert’ Mirage" »

January 09, 2018

Fiscal Implications of the Federal Reserve’s Balance Sheet Normalization



LSE_Fiscal Implications of the Federal Reserve’s Balance Sheet Normalization

In the wake of the global financial crisis, the Federal Reserve dramatically increased the size of its balance sheet—from about $900 billion at the end of 2007 to about $4.5 trillion today. At its September 2017 meeting, the Federal Open Market Committee (FOMC) announced that—effective October 2017—it would initiate the balance sheet normalization program described in the June 2017 addendum to the FOMC’s Policy Normalization Principles and Plans.

Continue reading "Fiscal Implications of the Federal Reserve’s Balance Sheet Normalization" »

Posted by Blog Author at 7:00 AM in Federal Reserve, Monetary Policy | Permalink | Comments (0)

December 20, 2017

The Fed’s Balance Sheet, Night Lights, and the Other Top LSE Posts of 2017



LSE_The Fed’s Balance Sheet, Night Lights, and the Other Top LSE Posts of 2017

In the spirit of this season of year-end lists of accomplishments, Liberty Street Economics offers a roundup of our most viewed posts. Our readers continued to gravitate toward timely, topical posts; our most popular explained how the Fed manages its enlarged balance sheet—a major focus of the FOMC, Congress, markets, and economists. Prompted by reader questions in response to their first post, the authors also penned a follow-up post. Another hit this year described an innovative indicator of economic growth—night light intensity measured via satellite—and used it to fact-check official Chinese growth estimates.

Continue reading "The Fed’s Balance Sheet, Night Lights, and the Other Top LSE Posts of 2017" »

Posted by Blog Author at 7:00 AM in Federal Reserve, Household Finance | Permalink | Comments (0)

October 12, 2017

Just Released: New York Fed Markets Data Dashboard



LSE_2017_http://libertystreeteconomics.newyorkfed.org/2017/10/just-released-new-york-fed-markets-data-dashboard.html

The Federal Reserve Bank of New York releases data on a number of market operations, reference rates, monetary policy expectations, and Federal Reserve securities portfolio holdings. These data are released at different times, for different types of securities or rates, and for different audiences. In an effort to bring this information together in a single, convenient location, the New York Fed developed the Markets Data Dashboard, which was launched today.

Continue reading "Just Released: New York Fed Markets Data Dashboard" »

Posted by Blog Author at 10:00 AM in Federal Reserve, Financial Markets, Monetary Policy, Repo | Permalink | Comments (0)

September 27, 2017

Why Pay Interest on Excess Reserve Balances?



LSE_2017_Why Pay Interest on Excess Reserve Balances?

In a previous post, we described some reasons why it is beneficial to pay interest on required reserve balances. Here we turn to arguments in favor of paying interest on excess reserve balances. Former Federal Reserve Chairman Ben Bernanke and former Vice Chairman Donald Kohn recently discussed many potential benefits of paying interest on excess reserve balances and some common misunderstandings, including that paying interest on reserves restricts bank lending and provides a subsidy to banks. In this post, we focus primarily on benefits related to the efficiency of the payment system and the reduction in the need for the provision of credit by the Fed when operating in a framework of abundant reserves.

Continue reading "Why Pay Interest on Excess Reserve Balances?" »

Posted by Blog Author at 7:00 AM in Central Bank, Federal Reserve, Monetary Policy | Permalink | Comments (1)

September 25, 2017

Why Pay Interest on Required Reserve Balances?



LSE_2017.09.25_Interest-on-Reserves_GettyImages-824163956_460x288


The Federal Reserve has paid interest on reserves held by banks in their Fed accounts since 2008. Why should it do so? Here, we describe some benefits of paying interest on required reserve balances. Since forcing banks to hold unremunerated reserves would be akin to levying a tax on them, paying interest on these balances is a way to eliminate or greatly reduce that tax and its negative effects.

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Posted by Blog Author at 7:00 AM in Federal Reserve, Monetary Policy | Permalink | Comments (10)

August 18, 2017

“Hey, Economist!” How Was Your Ph.D. Internship?

LSE_“Hey, Economist!” How Was Your Ph.D. Internship

This week, four Ph.D. students in economics and finance are wrapping up their summer internships at the New York Fed’s Research Department. The ten-week internships—which are compensated—offer interns the opportunity to further their dissertation research, interact with the Bank’s research economists, and give informal, “brown bag” lunch seminars to hear feedback on their work.

Continue reading "“Hey, Economist!” How Was Your Ph.D. Internship?" »

Posted by Blog Author at 9:34 AM in Federal Reserve, Hey, Economist! | Permalink | Comments (0)

August 04, 2017

A Closer Look at the Fed’s Balance Sheet Accounting



LSE_2017_A Closer Look at the Fed’s Balance Sheet Accountingt


An earlier post on how the Fed changes the size of its balance sheet prompted several questions from readers about the Federal Reserve’s accounting of asset purchases and the payment of principal by the Treasury on Treasury securities owned by the Fed. In this post, we provide a more detailed explanation of the accounting rules that govern these transactions.

Continue reading "A Closer Look at the Fed’s Balance Sheet Accounting" »

July 11, 2017

How the Fed Changes the Size of Its Balance Sheet: The Case of Mortgage-Backed Securities



LSE_2017_How the Fed Changes the Size of Its Balance Sheet: The Case of Mortgage-Backed Securities

In our previous post, we considered balance sheet mechanics related to the Federal Reserve’s purchase and redemption of Treasury securities. These mechanics are fairly straightforward and help to illustrate the basic relationships among actors in the financial system. Here, we turn to transactions involving agency mortgage-backed securities (MBS), which are somewhat more complicated. We focus particularly on what happens when households pay down their mortgages, either through regular monthly amortizations or a large payment covering some or all of the outstanding balance, as might occur with a refinancing.

Continue reading "How the Fed Changes the Size of Its Balance Sheet: The Case of Mortgage-Backed Securities" »

Posted by Blog Author at 7:00 AM in Central Bank, Federal Reserve, Monetary Policy | Permalink | Comments (1)

July 10, 2017

Just Released: Updated SOMA Portfolio and Income Projections



LSE_2017_Updated SOMA Portfolio and Income Projections

The Federal Reserve Bank of New York’s Markets Group today published a report presenting updated staff projections for the future path of domestic securities held in the System Open Market Account (SOMA) and portfolio-related income. The updated projections incorporate very recent information and are provided as a tool for the public to further understand factors affecting the evolution of the Federal Reserve’s balance sheet.

Continue reading "Just Released: Updated SOMA Portfolio and Income Projections" »

Posted by Blog Author at 10:00 AM in Federal Reserve, Monetary Policy | Permalink | Comments (0)
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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

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