Liberty Street Economics

September 29, 2026

Follow the Cash! Microstructure of Repo Markets

Gara Afonso, Jun-Davinci Choi, Gonzalo Cisternas, and Will Riordan

Illustration of a tag cloud in a circle with a large question mark. Some of the words are Federal Reserve, Dealer, Money Market Fund, Cash, Repo Market, Securities.

The repo market in the U.S. is a mosaic of segments with distinct participants and various settlement and clearing practices. Why do large cash lenders typically settle their trades through a third-party agent? Why does the interdealer market clear through a central counterparty? Why do levered investors favor bilateral trades? In the second post of this series, we follow the cash as it navigates through repo markets to better understand the costs and benefits that shape the existing market structures.

Posted at 7:00 am in Dealers, Financial Intermediation, Liquidity, Repo | Permalink | Comments (0)

September 28, 2026

Who’s Borrowing and Lending in Repo Markets?

Gara Afonso, Jun-Davinci Choi, Gonzalo Cisternas, and Will Riordan

Illustration of two banks with a dollar bill and treasury notes going back and forth in between.

Repo markets play a vital role in the U.S. financial system. In this three-part series, we examine who participates in these markets, what trade-offs influence how different repo segments are structured, and why repos matter for monetary policy. Today’s post introduces repo transactions, focusing on the major private-sector participants and why they engage in these markets.

Posted at 7:00 am in Financial Markets, Monetary Policy, Repo | Permalink | Comments (0)

September 22, 2026

Treasury Trading at the Close

Henry Dyer, Michael J. Fleming, and Or Shachar

Floor of the stock exchange with a large screen in front that says closing bell.

In past work, we showed that trading in U.S. Treasury securities is becoming increasingly concentrated on the last trading day of each month. In this post, we show that trading is also becoming more concentrated around the designated pricing, or “strike,” times for fixed-income indexes. The concentration is especially pronounced on month-end trading days. We also document a marked shift in trading activity from around 3 p.m. (ET) to around 4 p.m. after a major fixed-income index provider moved its strike time from 3 p.m. to 4 p.m. in January 2021.

Posted at 7:00 am in Financial Markets, Treasury | Permalink | Comments (0)

September 18, 2026

The New York Fed DSGE Model Forecast—September 2026

Marco Del Negro, Keshav Dogra, Elena Elbarmi, Donggyu Lee, Michael Pham, and Elizabeth Wright

decorative photo of line and bar chart over data

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 June 2026. The New York Fed DSGE model expects similar growth, and slightly more persistent inflation, compared to its forecasts in June. r* forecasts are slightly lower for 2026 but higher for the remainder of the forecast horizon.

Posted at 9:00 am in DSGE | Permalink | Comments (0)

September 3, 2026

Jackson Hole: Exploring the Financial Frontier

Kartik B. Athreya

LSE_2026_street-level-jackson-hole_athreya_460

After two days of heady discussions with academics and policymakers from around the world in high-altitude Jackson Hole, Wyoming, I’m now decompressing back at Street Level. The main theme of this year’s Kansas City Fed symposium was financial innovation in the payments space—a fast-evolving topic with major implications for consumers and central bankers alike. In this post, I’ll share some general takeaways from those Jackson Hole talks and highlight related New York Fed research on payments and financial intermediation.

Posted at 7:00 am in Cryptocurrencies, Financial Intermediation, Street Level | Permalink | Comments (0)

September 2, 2026

Are Central Banks Moving Out of Dollar Assets?

Linda S. Goldberg, Oliver Hannaoui, and Sneha Parthasarathy

Decorative image of flattened globe with dollar signs

The dollar’s share of global official foreign exchange reserves fell from 64 percent in 2015 to 56 percent in 2025. This downward trajectory is sometimes read as evidence that the dollar’s role in international financial markets is eroding. However, aggregate statistics obscure the composition of changes occurring at the country level. In this post, we show that the aggregate decline is not a systematic global shift away from dollar assets. Rather, the aggregate decline reflects the actions of a handful of large reserve holders, changing either their currency preferences or the size of their reserve portfolio. From the perspective of the cross section of countries holding dollar assets, the dollar’s status in official portfolios is largely intact.

Posted at 10:00 am in Central Bank, International Economics | Permalink | Comments (0)

September 1, 2026

Businesses Are Using AI to Transform Work, Not Cut Jobs

Jaison R. Abel, Richard Deitz, Natalia Emanuel, and Nick Montalbano

Businesspeople working together at office workplace. Concept of team work, business education, internet surfing, brainstorm, project information technology. Ai technology icons

The ongoing advancement and adoption of artificial intelligence continues to raise concerns about widespread job losses. Over the past three years, our regional business surveys have asked firms about their AI adoption and its effects on their workforces. This year, we found that AI use among regional businesses has continued to rise sharply, with more than 60 percent of service firms and about half of manufacturers now using AI—a notable increase from 40 percent and 26 percent, respectively, reported in 2025. Despite this rapid adoption, regional firms’ investments in AI are generally modest, usage tends to be concentrated among a small share of workers within firms, and layoffs have remained uncommon. And, while some firms have scaled back hiring due to AI, others have added workers to help them use it. Retraining employees in response to AI remains the primary way firms are adjusting their workforces.

Posted at 7:00 am in Artificial Intelligence (AI) | Permalink | Comments (0)

August 19, 2026

Has Broader Stock Market Participation Changed How Interest Rates Affect the Economy?

Juan M. Morelli

Close-up of a stock market chart displaying financial data and trading trends.

Stock market participation in the U.S. has changed dramatically over the past four decades. In the mid-1980s, fewer than 30 percent of households held equity. By the early 2000s, more than half of U.S. households owned equity, either directly or through mutual funds, 401(k)s, and IRAs. As participation widened, the way stock market fluctuations passed through to household spending may have changed, with potential implications for how the broader economy behaves. An argument can be made that the rise in equity market participation has dampened the response of output to interest rate changes as stock market fluctuations are now spread across a larger share of households, moderating movements in consumer spending, asset prices, and investment spending.

Posted at 7:00 am in Household Finance, Monetary Policy, Stocks | Permalink

August 12, 2026

Does the Equity Term Structure Respond to Monetary Policy Shocks?

Henry Dyer and Tomas Jankauskas

Decorative image of stock price board superimposed on the Federal Reserve building in Washington, D.C.

A long-standing body of research, inspired by Bernanke and Kuttner (2005), has documented the effects of Fed interest rate surprises on stock markets. While stock markets provide valuable information about the investor risk premium and dividend growth expectations, researchers have only recently developed more comprehensive tools to estimate the term structure of equity risk premia and dividend growth expectations across a broad range of maturities. In this post, we investigate the impact of monetary policy surprises (or shocks) on short- and long-term estimates of risk premia and growth expectations through the lens of the Giglio, Kelly, and Kozak (2024) model.

Posted at 7:00 am in Financial Markets | Permalink

August 11, 2026

How Distressed Are Consumers? Reconciling Diverging Credit Card Delinquency Measures

Donghoon Lee, Daniel Mangrum, Joelle W. Scally, Tejas Sinha, and Wilbert van der Klaauw

Serious young Black bank customer woman paying for purchase, domestic fees, bills by blue plastic credit card, using online payment app on smartphone, shopping on internet stores

Total debt balances declined slightly by $13 billion in the second quarter of 2026, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Mortgage and student loan balances saw a small decline, while there were increases across other debt products. Delinquency rates across most products remained fairly stable. Still, between 2022:Q3 and 2026:Q1, the percentage of credit card balances 90+ days delinquent rose from 7.6 percent to 12.8 percent, prompting concerns that Americans are falling behind on their debt payments at rates not seen since the Great Recession. Yet the flow delinquency rate—which captures the rate of new delinquencies—has remained relatively stable for almost two years. In this post, we use data from the New York Fed Consumer Credit Panel (CCP) to better understand the state of the consumer, and to explain the difference between our two measures of delinquency. We find that the stock delinquency rate is rising because of a pool of stale, charged-off debts that lenders have been reporting for longer durations, rather than a fundamental worsening in the incidence of delinquency.

Posted at 11:00 am in Credit, Household Finance | Permalink | Comments (2)

Markets & Policy Implementation

Liberty Street Economics

Follow the Cash! Microstructure of Repo Markets

Who’s Borrowing and Lending in Repo Markets?

Treasury Trading at the Close

The New York Fed DSGE Model Forecast—September 2026

Jackson Hole: Exploring the Financial Frontier

Businesses Are Using AI to Transform Work, Not Cut Jobs

Has Broader Stock Market Participation Changed How Interest Rates Affect the Economy?

Does the Equity Term Structure Respond to Monetary Policy Shocks?

How Distressed Are Consumers? Reconciling Diverging Credit Card Delinquency Measures

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