Each year brings a new set of economic challenges: In 2025, major areas of focus included tariffs and trade tensions, as well as the financial pressures facing younger adults. New York Fed economists contributed insightful research on both topics—and readers took notice. In fact, all five of the year’s most-read posts on Liberty Street Economics analyzed aspects of these issues. Read on to see how the restoration of student loan data to credit reports affected borrowers’ credit scores, whether the costs of a college degree are still worth it, how businesses are responding to higher tariffs, and why the U.S. runs a trade deficit.
Jaison R. Abel, Richard Deitz, Sebastian Heise, Ben Hyman, and Nick Montalbano
Surveying firms in New York and Northern New Jersey, the authors were able to gather timely data on how businesses were responding to the historically high import tariffs announced beginning in February. This post summarizes their findings, which showed, among other things, that most businesses passed on at least some of the costs of higher tariffs to customers via price increases, with many passing all of those costs along. (June 4)
Daniel Mangrum and Crystal Wang
Early in the pandemic, the federal government suspended both student loan payments and the accrual of interest on government loans, marking as current all such loans that were past due or in default. Required payments resumed in October 2024, and delinquencies were expected to begin hitting borrowers’ credit reports in the first quarter of 2025. In this post from March, the authors first demonstrate how the pause had improved borrowers’ credit scores and then estimate the imminent impact of the return of negative reporting, finding that more than nine million student loan borrowers would face significant drops in their credit scores. (March 26)
Andrew F. Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally, and Wilbert van der Klaauw
This post analyzes student loan delinquency following the October 2024 resumption of student loan payments and reporting to credit bureaus, identifying which types of borrowers were past due as of the first quarter of 2025 and what that might mean for their access to credit. Drawing on data from the Quarterly Report on Household Debt and Credit, the researchers find that among those borrowers who were required to make payments, nearly one in four were behind on their loans in the first quarter of 2025. In addition, more than 2.2 million who became newly delinquent saw their credit scores fall more than 100 points, and more than one million saw drops of at least 150 points. (May 13)
Thomas Klitgaard
One reason given for the increased tariffs in 2025 was the desire to reduce the size of the U.S. trade deficit. This post explores the question of why the U.S. has a trade deficit at all. In addition to the obvious answer—that exports have not kept up with imports—the author explains that U.S. deficits are also due to a persistent shortfall in domestic saving that requires funds from abroad to finance domestic investment spending. Reducing the trade imbalance therefore requires both more exports relative to imports as well as a narrowing of the gap between saving and investment spending. (May 20)
Jaison R. Abel and Richard Deitz
Concerns about the rising cost of college and the struggles of recent college graduates to find good jobs have led many Americans to question the value of higher education. This shift in sentiment has become even more widespread since the pandemic, as wages have grown for those without a degree as labor markets strengthened. Examining the costs and benefits of college for the typical college graduate, the authors find that the rate of return to college is 12.5 percent, well above the threshold for a sound investment. While the opportunity costs in particular have risen, so has the annual “wage premium” earned by college graduates. (April 16)
Maureen Egan is a senior editor in the Federal Reserve Bank of New York’s Research and Statistics Group.
How to cite this post:
Maureen Egan, “Tariffs, Trade, and Tumbling Credit Scores: The Top 5 LSE Posts of 2025,” Federal Reserve Bank of New York Liberty Street Economics, December 23, 2025, https://doi.org/10.59576/lse.20251223
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The views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author(s).
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