Liberty Street Economics
February 29, 2016

The “Cadillac Tax”: Driving Firms to Change Their Plans?

Since the 1940s, employers that provide health insurance for their employees can deduct the cost as a business expense, but the government does not treat the value of that coverage as taxable income.

February 26, 2016

From the Vault: The Path of Interest Rates

Numerous posts in the Liberty Street Economics archive cover the measurement and dynamics of the natural rate of interest as well as its use as a benchmark for calibrating monetary policy settings.

February 25, 2016

Just Released: Five New Data Series on Consumer Expectations

Today, the New York Fed is introducing a number of new data series and interactive charts reporting findings from its Survey of Consumer Expectations (SCE).

February 24, 2016

The Graying of American Debt

The U.S. population is aging and so are its debts. In this post, we use the New York Fed Consumer Credit Panel, which is based on Equifax credit data, to look at how debt is changing as baby boomers reach retirement age and millennials find their footing. We find that aggregate debt balances held by younger borrowers have declined modestly from 2003 to 2015, with a debt portfolio reallocation away from credit card, auto, and mortgage debt, toward student debt. Debt held by borrowers between the ages of 50 and 80, however, increased by roughly 60 percent over the same time period. This shifting of debt from younger to older borrowers is of obvious relevance to markets fueled by consumer credit. It is also relevant from a loan performance perspective as consumer debt payments are being made by older debtors than ever before.

Posted at 7:00 am in Household Finance, Housing | Permalink | Comments (0)
February 22, 2016

Whither Mortgages?

Our most recent Quarterly Report on Household Debt and Credit showed that although total household debt has increased somewhat since 2012, that growth has been driven almost entirely by nonhousing debt—credit cards, auto loans and student loans.

Posted at 7:00 am in Household Finance, Housing | Permalink | Comments (2)
February 19, 2016

Did Third Avenue’s Liquidation Reduce Corporate Bond Market Liquidity?

Tobias Adrian, Michael J. Fleming, Erik Vogt, and Zachary Wojtowicz The announced liquidation of Third Avenue’s high-yield Focused Credit Fund (FCF) on December 9, 2015, drew widespread attention and reportedly sent ripples through asset markets. Events of this kind have the potential to increase the demand for market liquidity, as investors revise expectations, reassess risk […]

Quantifying Potential Spillovers from Runs on High-Yield Funds

On December 9, 2015, Third Avenue Focused Credit Fund (FCF) announced a “Plan of Liquidation,” effectively halting investor redemptions.

February 18, 2016

Are Asset Managers Vulnerable to Fire Sales?

According to conventional wisdom, an open-ended investment fund that has a floating net asset value (NAV) and no leverage will never experience a run and hence never have to fire-sell assets.

February 17, 2016

High-Frequency Cross-Market Trading and Market Volatility

The close relationship between market volatility and trading activity is a long-established fact in financial markets.

Posted at 7:00 am in Financial Markets, Treasury | Permalink | Comments (0)
February 16, 2016

The Workup, Technology, and Price Discovery in the Interdealer Market for U.S. Treasury Securities

The interdealer market for Treasury securities shares many features with other highly liquid markets that trade electronically using anonymous central limit order books.

About the Blog

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.

The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Asani Sarkar, all economists in the Bank’s Research Group.

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The LSE editors ask authors submitting a post to the blog to confirm that they have no conflicts of interest as defined by the American Economic Association in its Disclosure Policy. If an author has sources of financial support or other interests that could be perceived as influencing the research presented in the post, we disclose that fact in a statement prepared by the author and appended to the author information at the end of the post. If the author has no such interests to disclose, no statement is provided. Note, however, that we do indicate in all cases if a data vendor or other party has a right to review a post.

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