The Federal Reserve’s response to the coronavirus pandemic has been unprecedented in its size and scope. In a matter of months, the Fed has, among other things, cut the federal funds rate to the zero lower bound, purchased a large amount of Treasury securities and agency mortgage?backed securities (MBS) and, together with the U.S. Treasury, introduced several lending facilities. Some of these facilities are very similar to ones introduced during the 2007-09 financial crisis while others are completely new. In this post, we argue that the new facilities, while unprecedented, are a natural extension of the Fed’s toolkit, as they operate through similar economic mechanisms to prevent self-reinforcing bad outcomes. We also explain why these new facilities are particularly useful as part of the response to the pandemic, which is an economic shock very different from a financial crisis. An Overview of the Facilities The distinction between new and old facilities loosely maps to a...

The SCE Labor Market Survey, fielded every four months as part of the Survey of Consumer Expectations, collects information on individuals' experiences and expectations with respect to earnings, job transitions, and job offers, among other topics. The results of the November 2018 survey show that the average full-time offer wage rose to $58,035, up from $52,590 in July.

The SCE Labor Market Survey, fielded every four months as part of the Survey of Consumer Expectations, collects information on individuals' experiences and expectations with respect to earnings, job transitions, and job offers, among other topics. The results of the November 2018 survey show that the average full-time offer wage rose to $58,035, up from $52,590 in July.

The SCE Labor Market Survey, fielded every four months as part of the Survey of Consumer Expectations, collects information on individuals' experiences and expectations with respect to earnings, job transitions, and job offers, among other topics. The results of the November 2018 survey show that the average full-time offer wage rose to $58,035, up from $52,590 in July.

Rajashri Chakrabarti, Sebastian Heise, Davide Melcangi, Maxim Pinkovskiy, and Giorgio Topa In our previous post, we looked at the effects that the reopening of state economies across the United States has had on consumer spending. We found a significant effect of reopening, especially regarding spending in restaurants and bars as well as in the healthcare sector. In this companion post, we focus specifically on small businesses, using two different sources of high-frequency data, and we employ a methodology similar to that of our previous post to study the effects of reopening on small business activity along various dimensions. Our results indicate that, much like for consumer spending, reopenings had positive and significant effects in the short term on small business revenues, the number of active merchants, and the number of employees working in small businesses. It is important to stress that we are not expressing any views in this post on the normative...

August Survey: Households appear slightly less pessimistic about some aspects of their financial situation, with home price growth expectations nearly back to levels seen a year ago and delinquency expectations still low. However, year-ahead spending, household income, and labor market expectations all remain weak compared to the pre-COVID-19 period. Median inflation expectations rose at both the short- and medium-term horizons, while inflation uncertainty remains elevated. (posted Sep 14)

Capital Markets

The Function conducts research on asset pricing and market microstructure and on the interaction between markets, institutions, and the macroeconomy. A close working relationship with the Bank’s Trading Desk, well-established contacts with market participants, and strong ties to business school finance departments create a unique environment for financial market research.

Policy Focus: Economists contribute to the formulation of monetary policy and the monitoring of financial stability by developing new analytical tools and providing rigorous analysis to senior Bank management.

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Financial Intermediation

The Function conducts research on issues relating to financial intermediaries—both banks and nonbanks alike—and innovations in financial markets and institutions. Economists examine these issues from both a macroeconomic and a microeconomic perspective, with an emphasis on the...

U.S. Economy in a Snapshot, produced by the Research Function of the New York Fed, is designed to provide a tight yet comprehensive overview of current economic and financial developments. This monthly packet presents charts and commentary on a broad range of topics that include labor and financial markets, the behavior of consumers and firms, and the global economy. What’s more, Snapshot aims to cover special topics such as movements in commodity prices, developments in the Second District, or findings from the New York Fed Survey of Consumer Expectations.

Rajashri Chakrabarti, Sebastian Heise, Davide Melcangi, Maxim Pinkovskiy, and Giorgio Topa The spread of COVID-19 in the United States has had a profound impact on economic activity. Beginning in March, most states imposed severe restrictions on households and businesses to slow the spread of the virus. This was followed by a gradual loosening of restrictions (“reopening”) starting in April. As the virus has re-emerged, a number of states have taken steps to reverse the reopening of their economies. For example, Texas and Florida closed bars again in June, and Arizona additionally paused operations of gyms and movie theatres. Taken together, these measures raise the question of how closures and reopenings affect consumer spending. In this post, we investigate how much consumer spending increased after the reopenings. It is important to stress that we are not expressing any views on the normative question of whether, when, or how states should loosen or tighten...

William Chen, Marco Del Negro, Michele Lenza, Giorgio Primiceri, and Andrea Tambalotti U.S. inflation used to rise during economic booms, as businesses charged higher prices to cope with increases in wages and other costs. When the economy cooled and joblessness rose, inflation declined. This pattern changed around 1990. Since then, U.S. inflation has been remarkably stable, even though economic activity and unemployment have continued to fluctuate. For example, during the Great Recession unemployment reached 10 percent, but inflation barely dipped below 1 percent. More recently, even with unemployment as low as 3.5 percent, inflation remained stuck under 2 percent. What explains the emergence of this disconnect between inflation and unemployment? This is the question we address in “What’s Up with the Phillips Curve?,” published recently in Brookings Papers on Economic Activity. Inflation Has Been Less Responsive to Unemployment since 1990 To illustrate this...

Each year the Bank’s Research and Statistics Group seeks roughly twenty exceptional college graduates with a strong background in economics, mathematics, and statistics to enter its Research Analyst (RA) program. RAs generally stay in the position for two years.

According to the results of the August 2020 Survey of Consumer Expectations, home price growth expectations nearly returned to levels seen a year ago, while delinquency expectations remain low. However, year-ahead spending, household income, and labor market expectations all remain weak compared to the pre-COVID-19 period. Median inflation expectations increased at both the short- and medium-term horizons, while uncertainty and disagreement about future inflation remain elevated. 9/14, 10:30 a.m.: We published the August 2020 core SCE survey results ahead of the 11 a.m. release schedule due to an early release of the headline news on social media. For more details: Press Release: Consumers’ Expectations Improve Slightly But Remain Weak

According to the results of the August 2020 Survey of Consumer Expectations, home price growth expectations nearly returned to levels seen a year ago, while delinquency expectations remain low. However, year-ahead spending, household income, and labor market expectations all remain weak compared to the pre-COVID-19 period. Median inflation expectations increased at both the short- and medium-term horizons, while uncertainty and disagreement about future inflation remain elevated. 9/14, 10:30 a.m.: We published the August 2020 core SCE survey results ahead of the 11 a.m. release schedule due to an early release of the headline news on social media. For more details: Press Release: Consumers’ Expectations Improve Slightly But Remain Weak