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14 posts from August 2013

August 12, 2013

The SOMA Portfolio through Time

Meryam Bukhari, Alyssa Cambron, Michael J. Fleming, Jonathan McCarthy, and Julie Remache

The System Open Market Account (SOMA) is a portfolio held by the Federal Reserve to support monetary policy implementation and reflects assets and liabilities (domestic, and some foreign) acquired through open market operations. The SOMA has attracted greater attention in recent years as, with the federal funds rate near its lower bound, the size and composition of the domestic portfolio has been used as an active monetary policy instrument. Earnings on the SOMA portfolio represent a significant amount of the Fed’s income and, given the substantial increase in the size of the portfolio and shift in its composition, income has increased notably, with remittances to the Treasury totaling $88.4 billion in 2012.

Continue reading "The SOMA Portfolio through Time" »

Posted by Blog Author at 7:00 AM in Fiscal Policy | Permalink | Comments (2)

August 09, 2013

Historical Echoes: Off the Charts!

Kathleen McKiernan

The visual representation of information, knowledge, or data has been around since the time of the caveman. But it wasn’t until 1786, when William Playfair, a Scottish engineer, published The Commercial and Political Atlas, illustrating for the first time how economic data could be represented by charts. Playfair’s work preceded that of Florence Nightingale—broadly acknowledged as the founder of modern nursing—who used information graphics in the 1850s to convince Queen Victoria that reform was needed in the British military health service. Nightingale developed the Coxcomb chart—a combination of stacked pie and bar charts—to assess mortality among soldiers during the Crimean War.

Continue reading "Historical Echoes: Off the Charts!" »

Posted by Blog Author at 7:00 AM in Historical Echoes | Permalink | Comments (0)

August 07, 2013

Could Superstorm Sandy Stimulate the Region's Economy?

Jaison R. Abel, Jason Bram, Richard Deitz, James A. Orr, Kaivan K. Sattar, and Eric Stern

The New York metro region’s recovery from Superstorm Sandy is well under way. Spending on restoration and rebuilding activities following a natural disaster is a potentially powerful economic stimulus to the affected area. Indeed, money from outside the region—in the form of federal aid and private insurance payments—flowing to the damaged areas in the region gives a temporary boost to economic activity. But does this mean that Sandy—along with the federal aid and insurance payouts associated with it—was actually good for the region’s economy? In this post, we examine the nature and magnitude of the stimulus the New York metro region is receiving as it recovers from Sandy and provide some thoughts on how the economy may be affected over the longer term by rebuilding activities.

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Posted by Blog Author at 7:00 AM in New Jersey, Regional Analysis | Permalink | Comments (0)

August 05, 2013

The Recent Bond Market Selloff in Historical Perspective

Tobias Adrian and Michael J. Fleming

Long-term Treasury yields have risen sharply in recent months. The yield on the most recently issued ten-year note, for example, rose from 1.63 percent on May 2 to 2.74 percent on July 5, reaching its highest level since July 2011. Increasing yields result in realized or mark-to-market losses for fixed-income investors. In this post, we put these losses in historical perspective and investigate whether the yield changes are better explained by expectations of higher short-term rates in the future or by investors demanding greater compensation for holding long-term Treasuries.

Continue reading "The Recent Bond Market Selloff in Historical Perspective" »

Posted by Blog Author at 7:00 AM in Financial Markets | Permalink | Comments (5)

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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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