At the New York Fed, our mission is to make the U.S. economy stronger and the financial system more stable for all segments of society. We do this by executing monetary policy, providing financial services, supervising banks and conducting research and providing expertise on issues that impact the nation and communities we serve.
On October 14, 2016, amendments to Securities and Exchange Commission (SEC) rule 2a-7, which governs money market mutual funds (MMFs), went into effect. The changes are designed to reduce MMFs’ susceptibility to destabilizing runs and contain two principal requirements.
Just because an entity is referred to all over the place, does that mean it exists? We are not talking about heaven or hell. We are talking about the “Immigrant Savings Bank.”
The “extremely overdue library book” has had a long run as a sitcom trope. As a source of humor, the ludicrously large library late fine pays off in at least two ways: first, there’s the enormity of the fine when compared with the insignificant monetary value of the book itself (paving the way for jokes about inflation and compound interest); and second, there’s the idea of the “criminality” of the offender, who is probably unlikely to commit any other kind of crime, with the concomitant image of “library police” (or actual police) coming after the negligent borrower . . . One day, that could be you, dear reader.
The New York Fed’s latest Beige Book report, released this afternoon, shows the regional economy gathering steam in early 2017. The report, based on information collected through February 17, suggests the regional economy, which had been essentially flat for the second half of 2016, saw growth pick up to a modest pace at the start of the year. Manufacturers, in particular, note a sharp rise in activity, as do businesses in wholesale distribution and transportation. Consequently, the market for industrial and warehouse space was pretty robust in the opening weeks of 2017. Meanwhile, businesses in most service industries continue to report steady to moderately expanding activity. And even though consumer spending has remained fairly subdued, consumer confidence climbed to highs not seen in more than a decade. All in all, it appears the regional economy has gotten off to a good start in 2017.
When faced with financial hardship, borrowers might choose to repay some debts while falling behind on others—potentially going into default.
Debt in China has increased dramatically in recent years, accounting for roughly one-half of all new credit created globally since 2005.
There has been much debate about the proposed border tax adjustment, in which U.S. firms would pay a 20 percent tax on all imported inputs and be exempt from paying taxes on export revenue. The view among many economists, including proponents of the plan, is that the U.S. dollar would appreciate by the full amount of the tax and thus completely offset any relative price effects. In this post, we consider the implications of an alternative scenario where the U.S. dollar only appreciates part of the way. This could happen, for example, as a result of the uncertainty surrounding the policy response from other countries. As the proposed tax is effectively equivalent to an import tax combined with an export subsidy, it is possible that there could be retaliation from other countries in the form of taxes on U.S. exports or litigation with the World Trade Organization. If the U.S. dollar does not appreciate by the full amount of the tax, we argue that the effect of the tax will be to lower both U.S. imports and exports in the short to medium run.
Every quarter, senior loan officers at selected large banks around the United States are asked by Fed economists how their standards for approving business loans changed compared with the quarter before. Of all the questions in the Senior Loan Officer Opinion Survey (SLOOS), responses to that question about standards usually attract the most attention from the financial press and researchers. Relatively ignored by comparison are loan officers’ reports on how they changed interest spreads, collateral requirements, and other terms on loans they are willing to approve. Lenders can clearly expand or contract credit by altering those terms even without changing their standards for approving loans, so we investigate whether the reports on loan terms collected in the SLOOS are also informative.
The homeownership rate—the percentage of households that own rather than rent the homes that they live in—has fallen sharply since mid-2005. In fact, in the second quarter of 2016 the homeownership rate fell to 62.9 percent, its lowest level since 1965. In this blog post, we look at underlying demographic trends to gain a deeper understanding of the large increase in the homeownership rate from 1995 to 2005 and the subsequent large decline. Although there is reason to believe that the homeownership rate may begin to rise again in the not-too-distant future, it is unlikely to fully recover to its previous peak levels. This is a disconcerting finding for those who view homeownership as an integral part of the American Dream and a key component of income security during retirement.
This post presents the latest update of the economic forecasts generated by the Federal Reserve Bank of New York’s (FRBNY) dynamic stochastic general equilibrium (DSGE) model. We introduced this model in a series of blog posts in September 2014 and published forecasts twice a year thereafter. With this post, we move to a quarterly release schedule, and highlight how our forecasts have changed since November 2016.
Readers should keep in mind 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 the variables discussed here, see our DSGE Model Q & A.
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