Liberty Street Economics
July 18, 2016

Forecasting Interest Rates over the Long Run

In a previous post, we showed how market rates on U.S. Treasuries violate the expectations hypothesis because of time-varying risk premia.

July 15, 2016

Historical Echoes: The Fed’s Cuban Connection

Did you know that the Federal Reserve once had not one, but two offices in Cuba?

Posted at 7:00 am in Historical Echoes | Permalink | Comments (3)

Implementing Monetary Policy Post-Crisis: What Do We Need to Know?

Columbia University’s School of International and Public Affairs and the New York Fed co-sponsored a recent workshop to discuss important issues related to monetary policy implementation. The May 4 event, held at Columbia, supports the extended effort that the Federal Reserve has undertaken to evaluate potential long-run monetary policy implementation frameworks, which was announced at a Federal Open Market Committee meeting last July.

Posted at 7:00 am in Monetary Policy | Permalink | Comments (0)
July 13, 2016

Could Liquidity Regulation Revive the Bank Lending Channel?

Dong Beom Choi and Ulysses Velasquez How does monetary policy affect spending in the economy? The economic literature suggests two main channels of monetary transmission: the money or interest rate channel and the bank lending channel. The first view focuses on changes in real interest rates resulting from a shift in monetary policy and corresponding […]

Posted at 7:00 am in Credit, Liquidity, Regulation | Permalink | Comments (2)
July 11, 2016

How Have High Reserves and New Policy Tools Reshaped the Fed Funds Market?

Gara Afonso and Sammuel Stern Over the last decade, the federal funds market has evolved to accommodate new policy tools such as interest on reserves and the overnight reverse repo facility. Trading motives have also responded to the expansion in aggregate reserves as the result of large-scale asset purchases. These changes have affected market participants […]

Posted at 7:00 am in Credit, Fed Funds | Permalink | Comments (0)
July 8, 2016

Hey, Economist! Why—and When—Did the Treasury Embrace Regular and Predictable Issuance?

Few people know the Treasury market from as many angles as Ken Garbade, a senior vice president in the Money and Payments Studies area of the New York Fed’s Research Group. Ken taught financial markets at NYU’s graduate school of business for many years before heading to Wall Street to assume a position in the research department of the primary dealer division of Bankers Trust Company. At Bankers, Ken conducted relative-value research on the Treasury market, assessing how return varies relative to risk for particular Treasury securities. For a time, he also traded single-payment Treasury obligations known as STRIPS—although not especially successfully, he notes.

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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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