Reports

“As the current debt ceiling episode unfolds, we infer the likelihood of a U.S. default through the lens of the sovereign credit default swaps (CDS) market. Beginning from January 2023, we document a significant increase in U.S. CDS trading, accompanied by a spike in premiums. Accordingly, we estimate an increase in default probability from about…

“We have argued that the year-over-year change in the unemployment rate or initial UI claims is a pretty good predictor (based on the AUROC criterion) for the start of a recession in the U.S. economy. We have also argued that including the six-month-lagged 10Y3M Treasury spread significantly improves the performance.” “Conditional on the current unemployment…

“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.” https://www.newyorkfed.org/research/home-price-index

Key Findings “The value of core noncash payments in the United States grew faster from 2018 to 2021 than in any previous FRPS measurement period since 2000.” “The increase in the value of ACH transfers accounted for more than 90 percent of the rise in noncash payments value from 2018 to 2021.” “The average value…

“The aging population is clearly a powerful influence on the labor force. A recent blog post  by my colleagues at the New York Fed argues that the aging population is behind almost all the shortfall in the overall labor force participation rate relative to pre-COVID. Importantly, an aging population is likely to continue to pressure the…

“Taken together, the results in this paper show that the effectiveness of monetary policy during the negative policy rate period was likely diminished, but did not disappear. They lend credence to the usage of negative nominal interest rate policies by central banks. Although the negative rate policy lasted for years, the policy rate did not…

“Our findings indicate that flood mapping is associated with higher borrower income in regions that are designated a special flood hazard zone. This is likely a mechanical response to the necessity of paying for relatively expensive insurance. However, we also find that applicant income in neighboring regions is lower than in mapped regions, despite these…

“If firms can issue debt only at discrete dates, debt maturity is an effective device against the commitment problem on debt and investment policies. With shorter maturities, debt dynamics are less persistent and more valuable because upward leverage adjustments are faster and long-run leverage lower. Debt maturities that are relatively shorter than asset maturities increase…

Overall Economic Activity “Overall economic activity was little changed in recent weeks. Nine Districts reported either no change or only a slight change in activity this period while three indicated modest growth. Expectations for future growth were mostly unchanged as well; however, two Districts saw outlooks deteriorate. Consumer spending was generally seen as flat to…