ECONOMY
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Bank Failures: The Roles of Solvency and Liquidity
Bank Failures in the United States, 1863–2024 Source: “Bank Failures: The Roles of Solvency and Liquidity,” Correia, Luck, and Verner (2026a). Bank Failures: The Theory Bank failures can stem from two related but distinct sources. Under the liquidity view, a sudden wave of withdrawals forces a bank to liquidate assets at fire-sale discounts, rendering it insolvent. Runs can thus trigger…
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Use of Gen AI in the Workplace and the Value of Access to Training
Ali Hashim, Gizem Kosar, and Wilbert van der Klaauw The rapid spread of generative AI (AI) tools is reshaping the workplace at a remarkable rate. Yet relatively little is known about whether workers have access to these tools, how the tools affect workers’ daily productivity, and how much workers value the training needed to use the tools effectively. In this…
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A Closer Look at Emerging Market Resilience During Recent Shocks
Hunter L. Clark, Jeffrey B. Dawson, and Julian Gonzalez-Murphy A succession of shocks to the global economy in recent years has focused attention on the improved economic and financial resilience of emerging market economies. For some of these economies, this assessment is well-founded and highlights the fruits of deep, structural economic reforms since the 1990s. However, for a much larger…
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The Fed Has Two Tools to Influence Money Market Conditions
Adam Copeland and Owen Engbretson The Federal Reserve’s 2022-23 tightening cycle involved the use of two monetary policy tools: changes in administrative rates and changes in the size of its balance sheet. This post highlights the results of a recent Staff Report that explores how these tools affect money market conditions. Using confidential trade-level data, we find that both tools have significant…
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Behind the ATM: Exploring the Structure of Bank Holding Companies
Lily Gordon and Lee Seltzer Many modern banking organizations are highly complex. A “bank” is often a larger structure made up of distinct entities, each subject to different regulatory, supervisory, and reporting requirements. For researchers and policymakers, understanding how these institutions are structured and how they have evolved over time is essential. In this post, we illustrate what a modern…
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Treasury Market Liquidity Since April 2025
Henry Dyer and Michael J. Fleming In this post, we examine the evolution of U.S. Treasury market liquidity over the past year, which has witnessed myriad economic and political developments. Liquidity worsened markedly one year ago as volatility increased following the announcement of higher-than-expected tariffs. Liquidity quickly improved when the tariff increases were partially rolled back and then remained fairly…
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Sports Betting Is Everywhere, Especially on Credit Reports
Jacob Goss and Daniel Mangrum Editor’s Note: The chart notes for the first chart have been updated to correct errors in how we labeled the trend line colors. (March 25, 2026) Since 2018, more than thirty states have legalized mobile sports betting, leading to more than a half trillion dollars in wagers. In our recent Staff Report, we examine how legalized sports…
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China’s Electric Trade – Liberty Street Economics
Thomas Klitgaard China has spent considerable government resources to develop advanced electric technology industries, such as those that produce electric vehicles, lithium batteries, and solar panels. These efforts have spilled over to international trade as improvements in price and quality have increased the global demand for these goods. One consequence is that passenger cars and batteries have been disproportionately large…
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The New York Fed DSGE Model Forecast—March 2026
Marco Del Negro, Ibrahima Diagne, Keshav Dogra, Elena Elbarmi, Donggyu Lee, and Michael Pham This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since December 2025. To summarize, growth in 2026 is expected to be more robust, and inflation…
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What’s Driving Rising Business Costs?
Jaison R. Abel, Richard Deitz, and Nick Montalbano After a period of moderating cost increases, businesses faced mounting cost pressures in 2025. While tariffs played a role in driving up the costs of many inputs—especially among manufacturers—they represent only part of the story. Indeed, firms grappled with substantial cost increases across many categories in the past year. This post is…
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