The SCE is a nationally representative, Internet-based survey of a rotating panel of approximately 1,300 household heads. Respondents participate in the panel for up to twelve months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, our panel enables us to observe the changes in expectations and behavior of the same individuals over time.

We show that insurance companies have almost nonupled their investments in collateralized loan obligations (CLOs) in the post-crisis period, reaching total holdings of $125 billion in 2019. The growth in CLOs’ investments has far outpaced that of loans and corporate bonds, and was characterized by a strong preference for mezzanine tranches rated investment grade over triple-A rated tranches. We document that these phenomena reflect a search for yield behavior. Conditional on capital charges, insurance companies invest more heavily in bonds and CLO tranches with higher yields. Preferences for CLO tranches derived from tranches’ higher yields relative to bonds with the same rating, and increased following the 2010 capital regulatory reform, resulting in insurance companies holding more than 40 percent of mezzanine tranches outstanding in 2019. In the process, insurance companies created the demand for the risky tranches that are critical to the CLO issuance.

In the map below, we look at the forbearance participation rates of all states, beyond Texas. Texas and Oklahoma rank the highest, both having been affected by the storms: it is unlikely that this reflects forbearances associated with the CARES Act and more likely are weather related. The map reveals substantial geographic differences in the participation in pandemic mortgage forbearance programs, with states in the Southeast having the highest lingering forbearance rate, excepting the Carolinas. This dispersion likely captures a combination of the severity of the pandemic’s local economic impact and differences in the borrowers’ awareness, interest in, and access to these programs.

We explore how the sources of shocks driving interest rates, country vulnerabilities, and central bank communications affect the spillovers of U.S. monetary policy changes to emerging market economies (EMEs). We utilize a two-country New Keynesian model with financial frictions and partly dollarized balance sheets, as well as poorly anchored inflation expectations reflecting imperfect monetary policy credibility in vulnerable EMEs. Contrary to other recent studies that also emphasize the sources of shocks, our approach allows the quantification of effects on real macroeconomic variables as well, in addition to financial spillovers. Moreover, we model the most relevant vulnerabilities structurally. We show that higher U.S. interest rates arising from stronger U.S. aggregate demand generate modestly positive spillovers to economic activity in EMEs with stronger fundamentals but can be adverse for vulnerable EMEs. In contrast, U.S. monetary tightening’s driven by a more-hawkish...

Summary of responses to topical questions from the Federal Reserve Bank of New York’s Empire State Survey of manufacturers in New York State and Business Leaders' Survey of service sector firms in the New York – Northern New Jersey region.

Business activity grew at its fastest pace on record in the region’s service sector, according to firms responding to the Federal Reserve Bank of New York’s June 2021 Business Leaders Survey. The survey’s headline business activity index increased four points to 43.2. The business climate index rose ten points to 1.0, indicating that for the first time since the pandemic began, firms generally viewed the business climate as about normal for this time of year. Employment levels rose at a solid clip, and wages continued to increase. Both input and selling price increases picked up further. Capital spending held steady, and firms expect to increase capital spending significantly over the next six months. Looking ahead, firms expressed widespread optimism that conditions would improve, with the future business activity and future employment indexes just slightly below last month’s record highs.

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Marco Cipriani and Gabriele La Spada In March 2020, U.S. prime money market funds (MMFs) suffered heavy outflows following the liquidity shock triggered by the COVID-19 crisis. In a previous post, we characterized the run on the prime MMF industry as a whole and the role of the liquidity facility established by the Federal Reserve (the Money Market Mutual Fund Liquidity Facility) in stemming the run. In this post, based on a recent Staff Report, we contrast the behaviors of retail and institutional investors during the run and explain the different reasons behind the run. Retail and Institutional Investors during the COVID-19 Run of March 2020 The chart below shows cumulative percentage outflows from prime MMFs offered to retail and institutional investors from January to April 2020. Institutional funds suffered larger outflows than retail ones, with outflows for institutional funds reaching 29 percent by March 26 versus only 7 percent for retail funds. The...

Explore year-over-year changes in home prices since 2003, both regionally and nationally, using this dynamic map — updated with new home price index data on a monthly basis. Hover over a county for granular data.

Note: Survey responses were collected between April 2 and April 9.

Download the full report 

Business activity grew strongly in New York State, according to firms responding to the April 2021 Empire State Manufacturing Survey. The headline general business conditions index climbed nine points to 26.3, a multi-year high. New orders and shipments grew at a solid clip, and unfilled orders increased. Delivery times were the longest on record, and inventories were notably higher. Employment levels and the average workweek both expanded modestly. Input prices rose at the fastest pace since 2008, and selling prices climbed at a record-setting pace. Looking ahead, firms remained optimistic that conditions would improve over the next six months, expecting significant increases in employment and prices.

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We share two monthly estimates of trend inflation. The first derives a measure from a large number of price series in the consumer price index (CPI) as well as macroeconomic and financial variables; the second employs the prices-only data set. For more information, see our FAQ.

A surprisingly neglected facet of sector evolution is the evolutionary analysis of firms’, and thus a sector’s, scope. Defining a sector as a group of firms that can change their scope over time, we study the transformation of U.S. banking firms. We undertake a sectoral, population-wide study of business-scope transformation, with particular focus on which segments banks expand into. As financial intermediation evolved, a continuously shifting set of activities became associated with “core banking,” with scope changing and relatedness itself (measured through coincidence) evolving over the banking sector’s history. Banks that expand scope while staying close to this evolving core attain net performance benefits. Identification tests show that the benefits of following the evolving core are robust to endogeneity.

Matthew Higgins and Thomas Klitgaard Household saving has soared in the United States and other high-income countries during the COVID-19 pandemic, despite widespread declines in wages and other private income streams. This post highlights the role of fiscal policy in driving the saving boom, through stepped-up social benefits and other income support measures. Indeed, in the United States, Japan, and Canada, government assistance has pushed household income above its pre-pandemic trajectory. We argue that the larger scale of government assistance in these countries helps explain why saving in these countries has risen more strongly than in the euro area. Going forward, how freely households spend out of their newly accumulated savings will be a key factor determining the strength of economic recoveries. The pandemic sent consumer spending into retreat, helping drive up saving Consumer spending plummeted in the United States and other high-income economies with...

The average year-ahead expected change in local home prices was 5.1 percent—higher than the 3.7 percent recorded last February (largely before COVID-19). Five-year-ahead home price growth expectations averaged 2.0 percent (annualized), steady with the past two years. Mean year-ahead rent increase expectations were 6.6 percent, slightly higher than the 6.4 percent level from last year. The share of mortgage borrowers who have refinanced in the last six months was 12.2 percent, significantly higher than 4.9 percent last year. Slightly more than 68 percent of respondents expect to buy their next primary residence if they move over the next three years, up from 66 percent last year.

The SCE is a nationally representative, Internet-based survey of a rotating panel of approximately 1,300 household heads. Respondents participate in the panel for up to twelve months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, our panel enables us to observe the changes in expectations and behavior of the same individuals over time.

The SCE is a nationally representative, Internet-based survey of a rotating panel of approximately 1,300 household heads. Respondents participate in the panel for up to twelve months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, our panel enables us to observe the changes in expectations and behavior of the same individuals over time.

March Survey: Expectations about home, gas, and rent price changes all reached new series highs in March. Inflation expectations extended an upward trend, reaching 3.2 percent at the one-year horizon and 3.1 percent at the three-year horizon. (posted Apr 12)

Donghoon Lee and Joseph Tracy Efforts in the spring of 2020 to contain the spread of COVID-19 resulted in a sharp contraction in U.S. economic growth and an unprecedented, rapid rise in unemployment. While the first wave of the pandemic slowed the spring housing market, home sales rebounded sharply over the rest of the year, with strong gains in house prices. Given the rising house prices and continuing high unemployment, concerns arose that COVID-19 may have negatively affected first-time homebuyers. Using a new and more accurate measure of first-time homebuyers, we find that these buyers have not been adversely affected by the pandemic. At the same time, gains from lower mortgage rates have gone to existing homeowners and not to households purchasing their first home. The strong performance of the housing market during 2020 is reflected both in terms of the volume of home purchases as well as the growth in house prices. The chart below shows total purchase...