- Liberty Street Economics
Liberty Street Economics
Return to Liberty Street Economics Home Page

12 posts from February 2019

February 27, 2019

Global Trends in Interest Rates



LSE_2019_Global Trends in Interest Rates

Long-term government bond yields are at their lowest levels of the past 150 years in advanced economies. In this blog post, we argue that this low-interest-rate environment reflects secular global forces that have lowered real interest rates by about two percentage points over the past forty years. The magnitude of this decline has been nearly the same in all advanced economies, since their real interest rates have converged over this period. The key factors behind this development are an increase in demand for safety and liquidity among investors and a slowdown in global economic growth.

Continue reading "Global Trends in Interest Rates" »

Posted by Blog Author at 7:00 AM in Banks, Central Bank, Credit, Expectations, Federal Reserve, Financial Institutions, Financial Markets, Inflation, Liquidity, Macroecon, Monetary Policy, Treasury | Permalink | Comments (2)

February 25, 2019

What Can We Learn from the Timing of Interbank Payments?



LSE_What Can We Learn from the Timing of Interbank Payments?

From 2008 to 2014 the Federal Reserve vastly increased the size of its balance sheet, mainly through its large-scale asset purchase programs (LSAPs). The resulting abundance of reserves affected the financial system in a number of ways, including by changing the intraday timing of interbank payments. In this post we show that (1) there appears to be a nonlinear relationship between the amount of reserves in the system and the timing of interbank payments, and (2) with the increase in reserves, smaller banks shifted their timing of payments more significantly than larger banks did. This result suggests that tracking the timing of payments sent by banks could provide an informative signal about the impact of the shrinking Federal Reserve balance sheet on the payments system.

Continue reading "What Can We Learn from the Timing of Interbank Payments?" »

Posted by Blog Author at 7:00 AM in Banks, Crisis, Liquidity | Permalink | Comments (1)

February 20, 2019

Stressed Outflows and the Supply of Central Bank Reserves



LSE_Stressed Outflows and the Supply of Central Bank Reserves

Since the financial crisis, banking regulators around the world have been intensely aware of liquidity risk and, in part as a response, have introduced the Basel III liquidity regulation. Today, the world’s largest banks hold substantial liquidity buffers comprising both securities and central bank reserves, to satisfy internal liquidity stress tests and minimum quantitative regulatory requirements. The appropriate level of liquidity buffers depends on the likely outflows in a market stress situation. In this post, we use public data to provide a rough estimate of stressed outflows that the largest banks would face and consider how they could meet these outflows.

Continue reading "Stressed Outflows and the Supply of Central Bank Reserves" »

Posted by Blog Author at 7:00 AM in Banks, Federal Reserve, Liquidity | Permalink | Comments (1)

February 19, 2019

Just Released: Introducing the SCE Household Spending Survey



Introducing the SCE Household Spending Survey

Today we are releasing new data on individuals’ experiences and expectations regarding household spending. These data have been collected every four months since December 2014 as part of our Survey of Consumer Expectations (SCE). The goal of this blog post is to introduce the SCE Household Spending Survey and highlight some of its features.

Continue reading "Just Released: Introducing the SCE Household Spending Survey" »

Posted by Blog Author at 11:00 AM in Expectations, Household Finance, Liquidity, Mortgages, Student Loans, Unemployment, Wages | Permalink | Comments (0)

February 13, 2019

Could Rising Household Debt Undercut China’s Economy?



LSE_Could Rising Household Debt Undercut China’s Economy?

Although there has been a notable deceleration in the pace of credit growth recently, the run-up in debt in China has been eye-popping, accounting for more than 60 percent of all new credit created globally over the past ten years. Rising nonfinancial sector debt was driven initially by an increase in corporate borrowing, which surged in 2009 in response to the global financial crisis. The most recent leg of China’s credit boom has been due to an important shift toward household lending. To better understand the rise in household debt in China and its implications for financial stability and China’s economic performance, it is important to examine the expansion in household credit, how the rise in debt compares to international experience, and the associated risks.

Continue reading "Could Rising Household Debt Undercut China’s Economy?" »

Posted by Blog Author at 7:13 AM in Credit, International Economics | Permalink | Comments (2)

February 12, 2019

Just Released: Auto Loans in High Gear



LSE_Just Released: Auto Loans in High Gear

Total household debt increased modestly, by $32 billion, in the fourth quarter of 2018, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Although household debt balances have been rising since mid-2013, their sluggish growth in the fourth quarter was mainly due to a flattening in the growth of mortgage balances. Auto loans, which have been climbing at a steady clip since 2011, increased by $9 billion, boosted by historically strong levels of newly originated loans. In fact, 2018 marked the highest level in the nineteen-year history of the loan origination data, with $584 billion in new auto loans and leases appearing on credit reports, up in nominal terms from 2017’s $569 billion. In this post, we take a closer look at the composition and performance of outstanding auto loan debt using the New York Fed’s Consumer Credit Panel (CCP), which is based on anonymized Equifax credit data and also the source for the Quarterly Report.

Continue reading "Just Released: Auto Loans in High Gear" »

Posted by Blog Author at 11:02 AM in Household Finance | Permalink | Comments (8)

February 11, 2019

The U.S. Dollar’s Global Roles: Where Do Things Stand?



LSE_The U.S. Dollar’s Global Roles: Where Do Things Stand?

Previous
Liberty Street Economics analysis and New York Fed research addressed the potential implications for the United States if the dollar’s global role changed, noting that the currency might not retain its dominance forever. This post checks the status of the dollar, considering whether any erosion in the dollar’s international standing has occurred. The evidence to date is that the dollar remains the world’s dominant currency by broad margins. Alternatives have not gained extensive traction, albeit this does not rule out potential future pressures.

Continue reading "The U.S. Dollar’s Global Roles: Where Do Things Stand?" »

Posted by Blog Author at 7:00 AM in Central Bank, International Economics | Permalink | Comments (0)

February 08, 2019

The New York Fed DSGE Model Forecast—January 2019



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 October 2018. As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE model Q & A.

Continue reading "The New York Fed DSGE Model Forecast—January 2019" »

Posted by Blog Author at 11:00 AM in DSGE, Forecasting, Macroecon | Permalink | Comments (0)

February 06, 2019

Where Are Manufacturing Jobs Coming Back?



Second of two posts
LSE_Where Are Manufacturing Jobs Coming Back?

As we outlined in our previous post, the United States lost close to six million manufacturing jobs between 2000 and 2010 but since then has gained back almost one million. In this post, we take a closer look at the geographic dimension of this modest rebound in manufacturing jobs. While job losses during the 2000s were fairly widespread across the country, manufacturing employment gains since then have been concentrated in particular parts of the country. Indeed, these gains were especially large in “auto alley”—a narrow motor vehicle production corridor stretching from Michigan south to Alabama—while much of the Northeast continued to shed manufacturing jobs. Closer to home, many of the metropolitan areas in the New York-Northern New Jersey region have been left out of this rebound and are continuing to shed manufacturing jobs, though Albany has bucked this trend with one of the strongest performances in the country.

Continue reading "Where Are Manufacturing Jobs Coming Back?" »

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

February 05, 2019

Monitoring Economic Conditions during a Government Shutdown



Monitoring Economic Conditions during a Government Shutdown

The recent partial shutdown of the federal government has disrupted publication schedules for many U.S. Census Bureau and Bureau of Economic Analysis (BEA) data releases. Most notably, the release of GDP for the fourth quarter of 2018—originally scheduled for January 30—has been postponed indefinitely. Even without the full slate of Census Bureau and BEA releases, forecasters have continued to make predictions for 2018:Q4 GDP growth; as of February 1, the New York Fed Staff Nowcast stands at 2.6 percent, the Atlanta Fed's GDPNow stands at 2.5 percent, and the Blue Chip Financial Forecasts estimate stands at 2.6 percent. How accurate are these predictions for 2018:Q4 relative to the BEA’s first estimate? Have the missing data jeopardized the accuracy of predictions for 2019:Q1? The New York Fed Staff Nowcast provides a lens through which to answer these questions, thanks to its entirely automated design and its ability to mimic judgmental forecasters’ processing of incoming data. Using real‑time historic data, we can assess the importance of missing releases by simulating similar dataflow disruptions for past quarters.

Continue reading "Monitoring Economic Conditions during a Government Shutdown" »

Posted by Blog Author at 11:00 AM in Forecasting, Macroecon | Permalink | Comments (0)

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.

The views expressed are those of the authors, and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.


Economic Research Tracker

Liberty Street Economics is now available on the iPhone® and iPad® and can be customized by economic research topic or economist.


Most Viewed

Last 12 Months
Useful Links
Comment Guidelines
We encourage your comments and queries on our posts and will publish them (below the post) subject to the following guidelines:
Please be brief: Comments are limited to 1500 characters.
Please be quick: Comments submitted after COB on Friday will not be published until Monday morning.
Please be aware: Comments submitted shortly before or during the FOMC blackout may not be published until after the blackout.
Please be on-topic and patient: Comments are moderated and will not appear until they have been reviewed to ensure that they are substantive and clearly related to the topic of the post. We reserve the right not to post any comment, and will not post comments that are abusive, harassing, obscene, or commercial in nature. No notice will be given regarding whether a submission will or will not be posted.‎
Disclosure Policy
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.
Archives