Philadelphia Fed, Report: Has the Banking Industry Become Too Concentrated?
“There is no universal trend toward increasing concentration. While deposits concentration increased substantially, none of these markets were concentrated by any traditional measures as of 2019, and they were not trending that way. Market entry, not increasing concentration, explains these trends. In mortgage lending, nonbanks have become major players. Meanwhile, small banks are still important…
Read MorePhilip Jefferson, Speech: Implementation and Transmission of Monetary Policy
“In conclusion, the Fed has a congressional mandate of maximum employment and price stability. The FOMC conducts monetary policy by setting the target range for the federal funds rate. Then, the Fed uses its monetary policy tools to implement the policy, which guides market interest rates toward the Fed’s desired setting of policy. The Fed…
Read MoreFed Unfiltered, Daily Trends: Tables (3/27/23)
SF Fed, Report: House Prices Respond Promptly to Monetary Policy Surprises
“In this Letter, we show that house list prices respond to monetary policy surprises in a matter of weeks; this is contrary to the established research that suggests house prices take years to adjust. We find that short-term changes such as shocks to the federal funds rate have less of an impact than surprises to…
Read MoreSt. Louis Fed, Report: Real Wage Growth at the Individual Level in 2022
“Overall, for 54% of workers, nominal wage growth has not kept up with inflation. Typically, the share of workers with real wage declines ranged from 42% to 48% from the mid-1990s up to 2019, according to the Dallas Fed. Here, we took into account variation in consumption baskets and found that it does not play a large…
Read MoreCleveland Fed, Report: Low Passthrough from Inflation Expectations to Income Growth Expectations, Why People Dislike Inflation
“This paper relies on a novel experimental setup to study the direction of causality between consumers’ inflation expectations and their income growth expectations. Based on the results from a large, nationally representative survey, we find that the rate of passthrough from consumers’ inflation expectations to income growth expectations is incomplete, on the order of only…
Read MoreFed Unfiltered, Up to Speed: Implementation of Monetary Policy
Fed: “Research and analysis about consumers, their financial experiences, and the communities in which they live inform Federal Reserve policymaking.” – Fed Board Fed Unfiltered: Each week we’ll read through and outline the most relevant information for your decision-making. Implementation of Monetary Policy: Philip Jefferson talks about the specific actions the Fed takes and the…
Read MoreFed Unfiltered, Weekly Report: 3/27/23
A 25bp rate hike this week, with a forecast for one more and an option for additional hikes (if the expected downturn isn’t restrictive enough).
Read MoreFed Unfiltered, Annotated Graphs: 2y & 10yr Treasury, Fed Funds
Neel Kashkari, Interview: CBS Face the Nation
Fed Funds “What’s unclear for us is how much of these banking stresses are leading to a widespread credit crunch. And then that credit crunch, you’re right, just as you said, would then slow down the economy. This is something we are monitoring very, very closely. Now, on one hand, such strains could then bring…
Read MoreFed Unfiltered, Annotated Graphs: Balance Sheet
Fed Board, Report: Nonresidential Construction Spending is likely not as Weak as it Seems
“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…
Read MoreTom Barkin, Interview: CNN Business (Print)
Excerpts from article, transcript is not available — Monetary Policy “Inflation is high. Demand hadn’t seemed to come down. And so, the case for raising was pretty clear.” “For me, the question was: Do you see such stresses happening that you felt like you really had to pull back and learn more? It felt very…
Read MoreRaphael Bostic, Interview: NPR
Fed Funds “There was a lot of debate. Look, this wasn’t a straightforward decision. But at the end of the day, what we decided was that there was clear signs that the banking system is sound and resilient and that the efforts that the Fed took with Treasury and the FDIC to deal with the…
Read MoreFed Unfiltered, Daily Trends: Tables (3/24/23)
KC Fed, Report: When the Music Stops, Slowing Wage Growth May Lead to More Delinquent Debt
“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…
Read MoreNY Fed, Report: Mapping Home Price Changes
March 2022 – Before Rate Hikes January 2022 – After 425bps of Rate Hikes
Read MoreJames Bullard, Speech: Financial Stress and the Current Macroeconomic Outlook
Banking Crisis “I think the overall message here is that we do have macroprudential policy tools which have been deployed. They can contain financial stress while appropriate monetary policy can continue to put downward pressure on inflation. So we do have tools to do both. We’re deploying those effectively and I think we’ll be successful.”…
Read MoreFed Unfiltered, Annotated Graphs: 2yr & 10yr Treasury, Fed Funds
Fed Board, Report: H.4.1 Statistical Release
“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…
Read More