Reports

“We have shown evidence that the reported estimates of nonresidential investment in 2021 and 2022 have been understated. Indeed, models based on sector-specific indicators suggest real nonresidential investment could be about 20 percent higher in the third quarter of 2022 than in the published statistics. The measurement issues likely have arisen due to the unprecedented…

“Despite significant disruptions to the economy during the pandemic, household balance sheets remained surprisingly strong. Substantial government transfers and altered spending patterns led to excess savings peaking at $2.3 trillion in the third quarter of 2021 (Aladangady and others 2022). Although excess savings have since declined, updated estimates show that excess savings remained around $1.1…

March 2022 – Before Rate Hikes January 2022 – After 425bps of Rate Hikes

“The H.4.1 statistical release, “Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks.” “The release presents a balance sheet for each Federal Reserve Bank, a consolidated balance sheet for all 12 Reserve Banks, an associated statement that lists the factors affecting reserve balances of depository institutions, and several other tables…

“CBO’s projections suggest that, over the long term, changes in fiscal policy would need to be made to address the rising costs of interest and mitigate other adverse consequences of high and rising debt.” “In coming decades, the aging of the population and rising health care costs will put increasing pressure on the federal budget.”…

“Neither the commercial real estate (CRE) nor the residential real estate market poses a significant risk to the U.S. financial system in the foreseeable future. The CRE market performed well throughout most of 2022, but it is now showing weakness. Home prices began to soften in 2022, in conjunction with the Federal Reserve’s interest rate…

The terminal rate stays at 5.1% (YE23), dropping to 4.3% by YE24. In the dot plot, 10 of 19 Fed Officials are in the 5.00% to 5.25% range.

“Digital currencies have the potential to greatly reshape the financial sector. We provide a macroe­conomic model with a financial sector in which digital currencies coexist with bank deposits and households hold both forms of liquidity. Our main theoretical result is that when banks face financial frictions (costly equity issuance), digital currency harms financial stability, increasing…

“The use of cash for payments is not well measured. We view the value of cash withdrawn from ATMs, or as a share of all payments, as a more accurate and timely measure of cash use compared to the standard measure of currency in circulation, or as a ratio to GDP. These two measures are…

“One implication of these insights is that we need better aggregate supply models that reflect the pandemic’s lessons. For instance, it will help to further develop sectoral models that differentiate between goods and services and incorporate sectoral capacity constraints to help account for speed effects and nonlinearities at both the sectoral and aggregate levels ……