ECONOMY
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The Emergence of Tokenized Investment Funds and Their Use Cases
Pablo Azar, Francesca Carapella, JP Perez-Sangimino, Nathan Swem, and Alexandros P. Vardoulakis A blockchain is a distributed database where independent computers across the world maintain identical copies of a transaction record, updating it only when the network reaches consensus on new transactions—making the history transparent and extraordinarily difficult to alter. Historically, bonds have traded almost entirely in over-the-counter (OTC) markets, while equities…
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The Financial Stability Implications of Tokenized Investment Funds
Pablo Azar, Francesca Carapella, JP Perez-Sangimino, Nathan Swem, and Alexandros P. Vardoulakis In a previous post, we provided background information about the emergence of tokenized investment funds and their use cases. These use cases are currently limited to the digital asset ecosystem. However, the recent approval of cryptocurrency exchange-traded funds (ETFs) and the passage of the GENIUS Act raise concerns…
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Are Financial Markets Good Predictors of R-Star?
Sophia Cho and John C. Williams Recently, there has been renewed attention on the natural rate of interest—often referred to as “r-star”—and whether it has risen from the historically low levels that prevailed before the COVID-19 pandemic. The natural interest rate is the real (inflation-adjusted) interest rate expected to prevail when supply and demand in the economy are in balance…
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The New York Fed DSGE Model Forecast—September 2025
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 June 2025. To summarize, the model expects growth in 2025 to be stronger,…
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What Is Natural Disaster Clustering—and Why Does It Matter for the Economy?
Jacob Kim-Sherman and Lee Seltzer Understanding the economic and financial consequences of natural disasters is a major concern for researchers and policymakers. The way in which overlapping natural disaster systems interact, as exemplified by the recent fires in Los Angeles being exacerbated by strong winds, is a major area of study in environmental science but has received comparatively little attention…
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Economic Capital: A New Measure of Bank Solvency
Beverly Hirtle and Matthew Plosser Bank supervisors, industry analysts, and academic researchers rely on a range of metrics to track the health of both individual banks and the banking system as a whole. Many of these metrics focus on bank solvency—the likelihood that a bank will be able to repay its obligations and thus retain its funding and continue to…
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Are Businesses Scaling Back Hiring Due to AI?
Jaison R. Abel, Richard Deitz, Natalia Emanuel, Ben Hyman, and Nick Montalbano The swift advancement of artificial intelligence (AI) has sparked significant concern that this new technology will replace jobs and stifle hiring. To explore the effects of AI on employment, our August regional business surveys asked firms about their adoption of AI and if they had made any corresponding…
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Are Financial Markets Good Predictors of R-Star?
Sophia Cho and John C. Williams Recently, there has been renewed attention on the natural rate of interest—often referred to as “r-star”—and whether it has risen from the historically low levels that prevailed before the COVID-19 pandemic. The natural interest rate is the real (inflation-adjusted) interest rate expected to prevail when supply and demand in the economy are in balance…
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Who Is Still on First? An Update of Characteristics of First-Time Homebuyers
Donghoon Lee and Joseph Tracy Following the COVID-19 health crisis, home prices and mortgage rates rose sharply. This created concerns that first-time homebuyers (FTBs) would be disadvantaged and would lose ground. Earlier this year, we documented that the share of purchase mortgages by FTBs, as well as their share of home purchases, have actually increased slightly over the past couple…
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How Firms Spread Good Management
Nicholas Bloom, Jonathan Hartley, Raffaella Sadun, Rachel Schuh, and John Van Reenen What is good management, and how is it transmitted across firms and plants? In a recent paper, we use survey and administrative data, coupled with a structural model of management, to explore these questions. We show that well-managed manufacturing firms—that is, firms that adopt more structured management practices…
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