• The Fed reveals what ETFs it purchased in its emergency lending program Link via @markets
    David Wessel Fri 29 May 2020 19:34
  • Essential but undervalued: Millions of health care workers aren’t getting the pay or respect they deserve in the COVID-19 pandemic Link via @BrookingsInst @MollyKinder
    David Wessel Fri 29 May 2020 13:48

    Too often, we overlook the heroism and dignity of millions of low-paid, undervalued, and essential health workers like Sabrina Hopps, a 46-year-old housekeeping aide in an acute nursing facility in Washington, D.C.

    “If we don’t clean the rooms correctly, the pandemic will get worse,” said Hopps. She cares deeply about the patients she works with, and knows that the value of her job goes well beyond cleaning. “It’s me and the other housekeepers who sit and talk with [patients] to brighten up their day, because they can’t have family members visiting.”

    Despite her contributions, she doesn’t feel recognized. “Housekeeping has never been respected,” she told me recently. “When you think about health care work, the first people you think about are the doctors and the nurses. They don’t think about housekeeping, maintenance, dietary, nursing assistants, patient care techs, and administration.”

    Hopps is one of millions of low-wage essential health...

  • RT @Reddy: Wild chart of the day Link
    David Wessel Fri 29 May 2020 13:28

    You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

  • OK. Maybe this *is* The End of Days. Link
    David Wessel Fri 29 May 2020 12:58

    You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

  • RT @politico: The House in a 417-1 vote passed a bill that would loosen rules for government-backed small business loans — an overwhelming…
    David Wessel Fri 29 May 2020 12:33
  • Updated with the revised Q1 GDP numbers: The Hutchins Center Fiscal Impact Measure shows how much (i.e. not much) local, state and federal tax and spending policy boosted economic growth in Q1. Q2 will look *much* different Link via @BrookingsInst
    David Wessel Fri 29 May 2020 11:08
    The Hutchins Center Fiscal Impact Measure shows how much local, state, and federal tax and spending policy adds to or subtracts from overall economic growth, and provides a near-term forecast of fiscal policies’ effects on economic activity. Editor’s Note: Due to significant uncertainty about the effect of the COVID-19 pandemic on the outlook for GDP and federal legislation, we are temporarily suspending the near-term forecast of the FIM. It will resume in coming months.  
  • RT @SenSchumer: If President Trump doesn’t like Twitter, he can do everyone a favor and stop tweeting.
    David Wessel Fri 29 May 2020 01:18
  • Hutchins Roundup: NY Fed’s John Williams on inflation. Mortgage rates fall (but not as much as Treasurys.) What happened when states lifted lockdowns. Comparing living standards across US states. Link? l @BrookingsEcon
    David Wessel Thu 28 May 2020 15:22

    The Hutchins Roundup brings the latest in fiscal and monetary policy to your inbox. Have something you'd like us to include in the next Roundup? Email us and we'll take a look.

  • From The Economist: The legacy of Alberto Alesina Link
    David Wessel Thu 28 May 2020 14:52

    A DECADE AFTER the last global downturn, the economics establishment’s U-turn on austerity is complete. In 2010 the IMF praised Britain’s tough deficit-reduction plan. Now it recommends a big fiscal expansion to cope with the coronavirus pandemic. Politicians were once fond of citing research co-authored by Kenneth Rogoff, an economist, to warn that public debt exceeding 90% of a country’s GDP would crimp growth. Today Mr Rogoff advises spending more. But Alberto Alesina, an economist at Harvard University who died on May 23rd, stood his ground.

    In a book written with Carlo Favero and Francesco Giavazzi and published last year, Mr Alesina once again defended austerity—as long as the right policies were used. Tax rises might damage economic growth more than cuts in public spending—which in some cases could actually boost the economy, perhaps because investors would expect their future tax burden to be lower. Other economists criticised the results. Yet Mr Alesina did not...

  • Census Bureau’s Small Business Pulse Survey (May 17-23) 74.6% have sought PPP money since March 13 69.4% got PPP money Link
    David Wessel Thu 28 May 2020 14:27
    Differences between estimates may be attributed to sampling or nonsampling error, rather than to differences in underlying economic conditions. Caution should be used in drawing conclusions from the estimates and comparisons shown. Additional information on the survey methodology, including sampling error (e.g., standard errors and relative standard errors) and nonsampling error, may be found at: Small Business Pulse Survey Methodology.
  • RT @lenkiefer: Freddie Mac has been doing the Primary Mortgage Market Survey since April 1971, each week surveying lenders on the rates the…
    David Wessel Thu 28 May 2020 14:22
  • RT @sdonnan: It’s not an unimportant number... Almost 7.8m of the >30m receiving benefits are independent contractors and gig workers. That…
    David Wessel Thu 28 May 2020 12:57
  • RT @RobinBrooksIIF: Q1 GDP levels in the COVID-19 shock: 1. The US (black) is 21% above Q1 '08 level 2. Germany (blue) is 11% higher than Q…
    David Wessel Thu 28 May 2020 12:52
  • Wondering what to make of today’s economic indicators (durables, UI claims, etc.)? Says Ian Lyngen of BMO: "Overall, a marginally better round of economic data than feared, but by no means 'good news' -- rather just less bad.”
    David Wessel Thu 28 May 2020 12:52
  • In the week endiedMay 16, 14.5% of the US workforce was collecting unemployment benefits (down 2.6 pct pts from the previous week.) In other words, roughly 1 in 7 US workers is out of work BUT getting income. Link
    David Wessel Thu 28 May 2020 12:47
  • ICYMI How Treasury and corp bond mkts amplified initial #COVID19Economy shock, what to do about it: Darrell Duffie, Beth Hammack, Itay Goldstein, Don Kohn, Nellie Liang. Hutchins Center @BrookingsInst Slides, Duffie paper: Link Video: David Wessel Thu 28 May 2020 12:17

    The COVID-19 pandemic and the shutdown of the economy in an effort to contain the virus led to unanticipated disruptions in several parts of the financial markets—even the market for U.S. Treasury debt. These disruptions led the Federal Reserve to use everything from its 2008-2009 playbook, and then some, including buying corporate bonds. Financial markets have calmed, but questions remain: What happened and why? What worked well, and what didn’t? What role did the rules put in place after the Great Recession play? What vulnerabilities were exposed, and how should they be addressed?

    On May 27, the Hutchins Center at Brookings will address these issues during a webinar. Darrell Duffie of the Stanford Graduate School of Business will present a background paper and field audience questions. He will then be joined in a discussion with Itay Goldstein of the University of Pennsylvania, Beth Hammack of Goldman...

  • Huh? NYTimes CEO Mark Thompson recently visited NYT hq by bike. Cycling through the empty newsroom he observed the eerie sight of tightly packed, but vacant cubicles, “like stalls in a milking parlour”.  Link via @financialtimes
    David Wessel Thu 28 May 2020 12:02
  • New from NYFed: US-China trade war lowered the market capitalization of US listed firms by $1.7 trillion and will lower their investment growth rate by 1.9 percentage points by the end of 2020. Link
    David Wessel Thu 28 May 2020 11:17
    Mary Amiti, Sang Hoon Kong, and David E. Weinstein Starting in early 2018, the U.S. government imposed tariffs on over $300 billion of U.S. imports from China, increasing the average tariff rate from 2.7 percent to 17.5 percent. Much of the escalation in tariffs occurred in the second and third quarters of 2019. In response, the Chinese government retaliated, increasing the average tariff applied on U.S. exports from 5.7 percent to 20.4 percent. Our new study finds that the trade war reduced U.S. investment growth by 0.3 percentage points by the end of 2019, and is expected to shave another 1.6 percentage points off of investment growth by the end of 2020. In this post, we review our study of the trade war’s effect on U.S. investment. Assessing U.S. Firm Exposure to China This substantial rise in bilateral tariffs is likely to have affected the expected profitability of U.S. firms through a number of channels. First, our previous research has...
  • RT @Andrea_Risotto: Tuesday June 2: A roadmap for reopening America: How to save lives & livelihoods, moderated by @BrookingsInst President…
    David Wessel Wed 27 May 2020 19:21
  • New post in our Voter Vitals series. Fiona Hill on “Public service and the federal government” Link #policy2020 @BrookingsInst
    David Wessel Wed 27 May 2020 18:11

    Popular appreciation of and respect for government service and public servants have steadily declined in the United States since the 1960s, with only two brief exceptions: in the 1990s during the Clinton administration, and in the months immediately after the 9/11 terrorist attacks. There is a particularly deep sense of distrust in the U.S. federal government. In an April 2019 Pew Research Center poll, for example, only 17% of respondents indicated that they trusted the federal government “to do the right thing.” Why is this the case?

  • How financial markets (including US Treasuries) amplified initial #Covid19Economy shock and what to do about it: Darrell Duffie, Beth Hammack, Itay Goldstein, Don Kohn, Nellie Liang Hutchins Center @BrookingsInst TODAY (5/27) 2:30 PM EDT, Link #EconTwitter
    David Wessel Wed 27 May 2020 15:11

    The COVID-19 pandemic and the shutdown of the economy in an effort to contain the virus led to unanticipated disruptions in several parts of the financial markets—even the market for U.S. Treasury debt. These disruptions led the Federal Reserve to use everything from its 2008-2009 playbook, and then some, including buying corporate bonds. Financial markets have calmed, but questions remain: What happened and why? What worked well, and what didn’t? What role did the rules put in place after the Great Recession play? What vulnerabilities were exposed, and how should they be addressed?

    On May 27, the Hutchins Center at Brookings will address these issues during a webinar. Darrell Duffie of the Stanford Graduate School of Business will present a background paper and field audience questions. He will then be joined in a discussion with Itay Goldstein of the University of Pennsylvania, Beth Hammack of Goldman...

  • And here’s the short version of Darrell Duffie’s case for centrally clearing trading in US Treasuries in light of what happened during the Covid-19 pandemic: Link #Covid19Economy
    David Wessel Wed 27 May 2020 14:36

    The market for U.S. Treasuries has long been viewed as the world’s most liquid and deepest financial market. That presumption was questioned when the COVID-19 crisis triggered heavy investor demands for trading that overwhelmed the capacity of dealers who usually serve as middlemen in this market. Over several tense days in March, yields rose sharply, calling into question the longstanding view that Treasuries are a reliable safe haven in a crisis. Bid-offer spreads widened dramatically, the yields of similar-maturity Treasuries were no longer close to each other, and the number of failures to settle jumped.  

    Although the Fed, through an unprecedented quantity of Treasury purchases and other actions, was able to restore market liquidity, the episode revealed the Treasury market to be overdue for an upgrade. Since 2008, growing federal deficits have caused the stock of marketable Treasuries to grow...

  • RT @Brad_Setser: The Fed's response to the pandemic has been bold and creative. The IMF's response? Not so much. My new piece in @F…
    David Wessel Wed 27 May 2020 14:36
  • Here’s Darrell Duffie’s proposal for central clearing of US Treasuries. To be discussed at Hutchins Center this afternoon. Link
    David Wessel Wed 27 May 2020 14:21
  • Some things never change. WSJ edit page touts tax cut: Trump should “propose that every private investment made for the rest of this year be exempt from any capital gains tax...A zero rate on gains would counter the uncertainty of pandemic risk.” Link
    David Wessel Wed 27 May 2020 12:01

    The economy is beginning to show early signs of life as the government lockdowns ease, but in Washington the politicians are debating how to spend another few trillion dollars in the name of virus relief. Maybe it’s time they focused instead on what we want the economy to look like after we defeat the coronavirus.

    Speaker Nancy Pelosi and the Democrats know what they want: Keep the economy locked down for as long as the virus exists, and appropriate as much taxpayer money as possible to replace the lost private incomes. Mrs....

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