Liberty Street Economics

Liberty Street Economics


April 13, 2026

What Millions of Homeowner’s Insurance Contracts Reveal About Risk Sharing

Hyeyoon Jung and Jaehoon (Kyle) Jung

Hurricane Debby tropical rainstorm flooded residential homes and cars in suburban community in Sarasota, Florida. Aftermath of natural disaster.

Housing is the largest component of assets held by households in the United States, totaling $48 trillion in 2025. When natural disasters strike, the resulting damage to homes can be large relative to households’ liquid savings. Homeowner’s insurance is the primary financial tool households use to protect themselves against property risk. Despite the economic importance of homeowner’s insurance, we know surprisingly little about how insurance contracts are actually designed with respect to property risk. In this post, which is based on our new paper, “Economics of Property Insurance,” we examine how homeowner’s insurance contracts are structured in practice. Using a new granular dataset covering millions of homeowner’s insurance policies, we document four striking patterns about coverage limits, deductibles, insurance pricing, and the distribution of property losses.

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Posted at 7:00 am in Household Finance | Permalink | Comments (0)
April 9, 2026

A Closer Look at Emerging Market Resilience During Recent Shocks

Hunter L. Clark, Jeffrey B. Dawson, and Julian Gonzalez-Murphy

Ai generated decorative image of flags of emerging markets done in the style of watercolor.

A succession of shocks to the global economy in recent years has focused attention on the improved economic and financial resilience of emerging market economies. For some of these economies, this assessment is well-founded and highlights the fruits of deep, structural economic reforms since the 1990s. However, for a much larger universe of countries, the ability to weather shocks is still mixed and many remain vulnerable. In this post, we explore the divide between the two sets of countries and focus on the effects of recent economic shocks, including the ongoing conflict in the Middle East.

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Posted at 7:00 am in International Economics | Permalink | Comments (0)
April 6, 2026

The Fed Has Two Tools to Influence Money Market Conditions 

Adam Copeland and Owen Engbretson 

Image of the Federal Reserve building in Washington, D.C.

The Federal Reserve’s 2022-23 tightening cycle involved the use of two monetary policy tools: changes in administrative rates and changes in the size of its balance sheet. This post highlights the results of a recent Staff Report that explores how these tools affect money market conditions. Using confidential trade-level data, we find that both tools have significant effects on the pricing of funds sourced through repo. These results suggest that the Fed can manage how financing conditions are affected even as it influences economic conditions. For example, the Fed can lower its administrative rates to loosen economic conditions, while shrinking its balance sheet to maintain financing conditions in the money markets. 

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Posted at 8:51 am in Federal Reserve, Monetary Policy, Repo | Permalink | Comments (0)
April 2, 2026

Treasury Market Liquidity Since April 2025

Henry Dyer and Michael J. Fleming

image of Government bond yields moving up, bond trading, yields, interest rates. Table with market data, investment opportunities, financial markets, trading, debt, analysis.

In this post, we examine the evolution of U.S. Treasury market liquidity over the past year, which has witnessed myriad economic and political developments. Liquidity worsened markedly one year ago as volatility increased following the announcement of higher-than-expected tariffs. Liquidity quickly improved when the tariff increases were partially rolled back and then remained fairly stable thereafter (through the end of our sample in February 2026), including after the recent Supreme Court decision striking down the emergency tariffs and the subsequent announcement of new tariffs.

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Posted at 7:00 am in Banks, Liquidity, Treasury | Permalink | Comments (0)
March 31, 2026

Behind the ATM: Exploring the Structure of Bank Holding Companies

Lily Gordon and Lee Seltzer

Online banking concept with blurred city abstract lights background

Many modern banking organizations are highly complex. A “bank” is often a larger structure made up of distinct entities, each subject to different regulatory, supervisory, and reporting requirements. For researchers and policymakers, understanding how these institutions are structured and how they have evolved over time is essential. In this post, we illustrate what a modern financial holding company looks like in practice, document how banks’ organizational structures have changed over time, and explain why these details matter for conducting accurate analyses of the financial system.

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Posted at 9:00 am in Banks | Permalink | Comments (0)
March 25, 2026

Sports Betting Is Everywhere, Especially on Credit Reports

Jacob Goss and Daniel Mangrum

Man using online sports betting services on phone and laptop

Since 2018, more than thirty states have legalized mobile sports betting, leading to more than a half trillion dollars in wagers. In our recent Staff Report, we examine how legalized sports betting affects household financial health by comparing betting activity and consumer credit outcomes between states that legalized to those that have not. We find that legalization increases spending at online sportsbooks roughly tenfold, but betting does not stop at state boundaries. Nearby areas where betting is not legal still experience roughly 15 percent the increase of counties where it is legal. At the same time, consumer financial health suffers. Our analysis finds rising delinquencies in participating states, with spillover effects across state lines. What is more, even though the share of people taking up sports betting after legalization is small (roughly 3 percent of the population), overall credit delinquency rises by about 0.3 percentage points. Our findings suggest that sports betting can have dramatic implications for household financial stability.

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Posted at 7:00 am in Household Finance, Microeconomics | Permalink | Comments (0)
March 23, 2026

China’s Electric Trade

Thomas Klitgaard

AI generated image: red background with yellow stars similar the China flag in the top left corner, white lightning bolt in the center of the image and white grid lines in the top right, bottom left and right of the image.

China has spent considerable government resources to develop advanced electric technology industries, such as those that produce electric vehicles, lithium batteries, and solar panels. These efforts have spilled over to international trade as improvements in price and quality have increased the global demand for these goods. One consequence is that passenger cars and batteries have been disproportionately large contributors to the rise in the country’s trade surplus in recent years. This has not been the case, though, for solar panels, as falling prices due to a supply glut pulled down export revenues despite higher volumes.

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Posted at 7:00 am in Exports, International Economics | Permalink | Comments (0)
March 20, 2026

The New York Fed DSGE Model Forecast—March 2026

Marco Del Negro, Ibrahima Diagne, Keshav Dogra, Elena Elbarmi, Donggyu Lee, and Michael Pham

decorative photo: chart and stock prices background.

This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since December 2025. To summarize, growth in 2026 is expected to be more robust, and inflation more persistent, than predicted in December. Stronger investment is the main driver for higher growth, while cost-push shocks, possibly capturing the effects of tariffs, are the key factors behind higher inflation. Projections for the short-run real natural rate of interest (r*) are the same as in December.

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Posted at 9:00 am in DSGE | Permalink | Comments (0)
March 4, 2026

Firms’ Inflation Expectations Return to 2024 Levels

Jaison R. Abel, Richard Deitz, and Nick Montalbano

Image of a cafe receipt with U.S. money on top to pay the bill.

Businesses experienced substantial cost pressures in 2025 as the cost of insurance and utilities rose sharply, while an increase in tariffs contributed to rising goods and materials costs. This post examines how firms in the New York-Northern New Jersey region adjusted their prices in response to these cost pressures and describes their expectations for future price increases and inflation. Survey results show an acceleration in firms’ price increases in 2025, with an especially sharp increase in the manufacturing sector. While both cost and price increases intensified last year, our surveys reveal that these do not contribute to firms believing that inflation will be on the rise in the short or longer term. In fact, firms’ inflation expectations have moderated compared to what was expected a year ago. Firms now anticipate inflation of 3 percent in the year ahead, lower than what was expected last year at this time. Importantly, like last year, longer-term inflation expectations also remain well anchored.

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Posted at 10:02 am in Inflation, New Jersey, New York, Regional Analysis | Permalink

Are Rising Employee Health Insurance Costs Dampening Wage Growth?

Jaison R. Abel, Richard Deitz, and Nick Montalbano

Photo: light blue background, with a stethoscope and white paper image of family standing up.

Employer-sponsored health insurance represents a substantial component of total compensation paid by firms to many workers in the United States. Such costs have climbed by close to 20 percent over the past five years. Indeed, the average annual premium for employer-sponsored family health insurance coverage was about $27,000 in 2025—roughly equivalent to the wage of a full-time worker paid $15 per hour. Our February regional business surveys asked firms whether their wage setting decisions were influenced by the rising cost of employee health insurance. As we showed in our companion post, respondents reported an average increase in such costs of more than 13 percent this year. Businesses providing insurance to their workers indicated that absent these cost increases, they would have raised wages by roughly an additional percentage point, on average, suggesting that rising health insurance costs resulted in a drag on wage growth for workers at these firms.

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Posted at 10:01 am in Labor Market, Microeconomics, New Jersey, New York, Regional Analysis | Permalink
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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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