299 posts on "Financial Markets"
June 29, 2016
Monetary Policy Transmission before and after the Crisis
The Federal Open Market Committee implements monetary policy by raising or lowering its target for the federal funds rate, the interest rate banks charge each other for overnight loans.
June 1, 2016
Revisiting the Case for International Policy Coordination
Prompted by the U.S. financial crisis and subsequent global recession, policymakers in advanced economies slashed interest rates dramatically, hitting the zero lower bound (ZLB), and then implemented unconventional policies such as large-scale asset purchases. In emerging economies, however, the policy response was more subdued since they were less affected by the financial crisis. As a result, capital flows from advanced to emerging economies increased markedly in response to widening interest rate differentials. Some emerging economies reacted by adopting measures to slow down capital inflows, acting under the presumption that these flows were harmful. This type of policy response has reignited the debate over how to moderate international spillovers.
Posted at 7:00 am in Exchange Rates, Exports, Financial Markets, International Economics, Monetary Policy | Permalink
May 5, 2016
Borrowing, Lending, and Swapping Collateral in GCF Repo®
By Marco Cipriani and Adam Copeland In the third post in this series, we examined GCF Repo® traders’ end-of-day strategies. In this final post, we further our understanding of dealers’ behavior by looking at their trading pattern within the day.
May 4, 2016
Why Dealers Trade in GCF Repo®
Analysis using confidential market data shows that the majority of individual dealers follow consistent strategies in GCF Repo, where dealers are net borrowers or lenders on almost every day that they are active.
May 3, 2016
Understanding the Interbank GCF Repo® Market
In this post, we provide a different perspective on the General Collateral Finance (GCF) Repo® market.
May 2, 2016
Lower Oil Prices and U.S. Economic Activity
After a period of stability, oil prices started to decline in mid-2015, and this downward trend continued into early 2016.
Posted at 7:00 am in Exports, Financial Markets, International Economics, Macroeconomics | Permalink
What’s Up with GCF Repo®?
In a recent Important Notice, the Fixed Income Clearing Corporation (FICC) announced that it would no longer support interbank trading for its General Collateral Finance Repo Service.
April 11, 2016
Just Released: U.S. Economy in a Snapshot—More Data for More Charts
We launched the U.S. Economy in a Snapshot in June 2015 to provide interested readers with a monthly update of current economic and financial developments. Combining charts and summary points, the packet covers a range of topics that include labor and financial markets, the behavior of consumers and firms, survey responses, and the global economy.
April 8, 2016
Reconciling Survey‑ and Market‑Based Expectations for the Policy Rate
In our previous post [LINK], we showed that the gap between the market-implied path for the federal funds rate and the survey-implied mean expectations for the federal funds rate from the Survey of Primary Dealers (SPD) and the Survey of Market Participants (SMP) narrowed from the December survey to the January survey.
April 7, 2016
How Do Survey‑ and Market‑Based Expectations of the Policy Rate Differ?
Over the past year, market pricing on interest rate derivatives linked to the federal funds rate have suggested a significantly lower expected path of the policy rate than responses to the New York Fed’s Survey of Primary Dealers (SPD) and Survey of Market Participants (SMP). However, this gap narrowed considerably from December 2015 to January 2016, before widening slightly at longer horizons in March. This post argues that the narrowing between December and January was mostly the result of survey respondents placing greater weight on lower rate outcomes, while the subsequent widening in February and March likely reflects an increased demand for insurance against states of the world where the policy rate remains at very low levels.
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