Liberty Street Economics

June 23, 2017

At the New York Fed: Twelfth Annual Joint Conference with NYU‑Stern on Financial Intermediation

Michael Blank, Nicola Cetorelli, and Anna Kovner

Anyone who has a savings account, has taken out a mortgage, or has been part of a business seeking new capital has relied on the smooth functioning of the institutions and markets that collectively perform financial intermediation. Because financial intermediation is so critical to the functioning of a modern economy, it is important to understand its inner workings—its fundamental features, recent innovations, and lines of transmission to real economy activity, as well as its imperfections and its interactions with regulatory policies. As part of an ongoing effort to foster such an understanding, the Federal Reserve Bank of New York recently hosted the twelfth annual Federal Reserve Bank of New York–New York University, Stern School of Business Conference on Financial Intermediation. In this post, we explore some of the discussions and findings from the May 10 conference, which focused on recent advances in the study of financial intermediation.

Posted at 7:00 am in Financial Intermediation | Permalink

June 21, 2017

Low Interest Rates and Bank Profits

Katherine Di Lucido, Anna Kovner, and Samantha Zeller

The Fed’s December 2015 decision to raise interest rates after an unprecedented seven-year stasis offers a chance to assess the link between interest rates and bank profitability.

Posted at 7:00 am in Banks, Financial Institutions | Permalink | Comments (6)

June 19, 2017

Introducing the Revised Broad Treasuries Financing Rate

Kathryn Bayeux, Alyssa Cambron, Marco Cipriani, Adam Copeland, Scott Sherman, and Brett Solimine

The Federal Reserve Bank of New York in cooperation with the Office of Financial Research is proposing to publish three new overnight Treasury repurchase (repo) benchmark rates. Recently, the Federal Reserve decided to modify the construction of the broadest proposed benchmark rate (the other two proposed rates are expected to remain unchanged; see the Bank’s announcement on May 24). In this post, we describe the changes to this rate in further detail. We compare this revised rate to the originally proposed benchmark rate and show that, in the post-liftoff period, it trades higher, on average.

Posted at 7:00 am in Financial Markets | Permalink | Comments (2)

June 16, 2017

Hey, Economist! How Do You Forecast the Present?

A Conversation with Domenico Giannone, Argia Sbordone, and Andrea Tambalotti

New York Fed macroeconomists have been sharing their “nowcast” of GDP growth on the Bank’s public website since April 2016. Now, they’ve launched an interactive version of the Nowcasting Report, which updates the point forecast each week, but also helps users better visualize the impact of the flow of incoming data on the estimate produced by the model. Tables offer more detail on the data series informing the estimate. The interactive version also reports the staff nowcast back to January 2016, a longer nowcast history than has previously been available. Cross-media editor Anna Snider spoke to Domenico Giannone, Argia Sbordone, and Andrea Tambalotti—economists who developed the model underlying the report and produce estimates weekly with the help of research analysts Brandyn Bok and Daniele Caratelli—about nowcasting and its role in the policymaking process.

Posted at 11:15 am in Forecasting, Hey, Economist!, Macroeconomics | Permalink

Just Released: June Regional Business Surveys Paint a Mixed Picture

By Jason Bram and Richard Deitz

Yesterday’s June Empire State Manufacturing Survey pointed to a significant increase in regional manufacturing activity. However, our parallel survey for the region’s service sector, the June Business Leaders Survey, released today, paints a somewhat dreary picture of regional service-sector activity. These two surveys, taken together, suggest that economic conditions in the New York-Northern New Jersey region are mixed.

Posted at 8:45 am in New Jersey, New York, Regional Analysis | Permalink

June 2, 2017

Valuing Workplace Benefits

Gizem Kosar, Wilbert van der Klaauw, and Basit Zafar

Workplace benefits—such as parental leave, sick leave, and flexible work arrangements—are increasingly being recognized as important determinants of differences in labor supply behavior, education and occupation choice, inequality in wages, and gender disparities in labor market outcomes.

Posted at 7:00 am in Labor Market | Permalink

June 1, 2017

Just Released: Bank Loan Performance Under the Magnifying Glass

James Vickery and April Meehl

The New York Fed’s recently released Quarterly Trends for Consolidated U.S. Banking Organizations (QT report) confirms that bank loan portfolios look a lot healthier than they did just a few years ago, reflecting the sustained economic recovery from the Great Recession. In this post, we sharpen the focus to look at bank loan performance in more detail, using more disaggregated charts added to the QT report this quarter.

Posted at 7:00 am in Banks, Financial Institutions | Permalink

May 31, 2017

The New York Fed DSGE Model Forecast—May 2017

Ozge Akinci, Marco Del Negro, Abhi Gupta, Pearl Li, and Erica Moszkowski

This post presents our quarterly 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 February 2017. 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 .

Posted at 7:00 am in DSGE, Macroeconomics, Monetary Policy | Permalink

May 24, 2017