ECONOMY
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An Overlooked Factor in Banks’ Lending to Minorities
Matteo Crosignani and Hanh Le In the second quarter of 2022, the homeownership rate for white households was 75 percent, compared to 45 percent for Black households and 48 percent for Hispanic households. One reason for these differences, virtually unchanged in the last few decades, is uneven access to credit. Studies have documented that minorities are more likely to be denied…
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Towards Increasing Complexity: The Evolution of the FX Market
Alain Chaboud, Lisa Chung, Linda S. Goldberg, and Anna Nordstrom The foreign exchange market has evolved extensively over time, undergoing important shifts in the types of market participants and the mix of instruments traded, within a trading ecosystem that has become increasingly complex. In this post, we discuss fundamental changes in this market over the past twenty-five years and highlight…
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Measuring Price Inflation and Growth in Economic Well-Being with Income-Dependent Preferences
Danial Lashkari How can we accurately measure changes in living standards over time in the presence of price inflation? In this post, I discuss a novel and simple methodology that uses the cross-sectional relationship between income and household-level inflation to construct accurate measures of changes in living standards that account for the dependence of consumption preferences on income. Applying this…
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Bond Funds in the Aftermath of SVB’s Collapse
Nicola Cetorelli and Sarah Zebar March 2023 will rightfully be remembered as a period of major turmoil for the U.S. banking industry. In this post, we go beyond banks to analyze how fixed-income, open-end funds (bond funds) fared in the days after the start of the banking crisis. We find that bond funds experienced net outflows each day for almost…
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Treasury Bill Supply and ON RRP Investment
Gara Afonso, Marco Cipriani, Catherine Huang, Gabriele La Spada, and Sergio Olivas Take-up at the Federal Reserve’s Overnight Reverse Repo Facility (ON RRP) increased from a few billion dollars in January 2021 to around $2.6 trillion at the end of December 2022. In this post, based on a recent Staff Report, we explain how the supply of U.S. Treasury bills…
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FHA First-Time Buyer Homeownership Sustainability: An Update
Donghoon Lee and Joseph Tracy An important part of the mission of the Federal Housing Administration (FHA) is to provide affordable mortgages that both promote the transition from renting to owning and create “sustainable” homeownership. The FHA has never defined what it means by sustainability. However, we developed a scorecard in 2018 that tracks the long-term outcomes of FHA first-time…
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Dropping Like a Stone: ON RRP Take-up in the Second Half of 2023
Gara Afonso, Marco Cipriani, and Gabriele La Spada Take-up at the Overnight Reverse Repo Facility (ON RRP) has halved over the past six months, declining by more than $1 trillion since June 2023. This steady decrease follows a rapid increase from close to zero in early 2021 to $2.2 trillion in December 2022, and a period of relatively stable balances…
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Does Trade Uncertainty Affect Bank Lending?
Ricardo Correa, Julian di Giovanni, Linda S. Goldberg, and Camelia Minoiu The recent era of global trade expansion is over. Faced with increased geopolitical risk, fragile foreign supply chains, and uncertainties in the international trade environment, firms are postponing entry into foreign markets and pulling back from foreign activities (IMF 2023). Besides its direct effects on real activity, the recent…
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Where Is R-Star and the End of the Refi Boom: The Top 5 Posts of 2023
Anna Snider The topics covered on Liberty Street Economics in 2023 hit many themes, reflecting the range of research interests of the more than sixty staff economists at the New York Fed and their coauthors. We published 122 posts this year, exploring important subjects such as equitable growth and the economic impacts of extreme weather, alongside our deep and long-standing coverage…
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Hey, Economist! Outgoing Advisor Antoine Martin Reflects on How His New York Fed Perch Has Shaped His Work
An Interview with Antoine Martin Antoine Martin, an economist and financial stability advisor in the New York Fed’s Research and Statistics Group, will soon take up a new post at the Swiss National Bank (SNB), as head of its third department covering money markets/foreign exchange (FX). In that role, Martin, who is originally from Switzerland, also becomes one of three…
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