Federal Reserve Board
Press Releases
Federal and state financial regulatory agencies issue interagency statement on supervisory practices regarding financial institutions affected by Hurricane Milton
Federal and state financial regulatory agencies issue interagency statement on supervisory practices regarding financial institutions affected by Hurricane Milton
Minutes of the Board's discount rate meetings on September 9 and 18, 2024
Minutes of the Board's discount rate meetings on September 9 and 18, 2024
Federal Reserve Board fines Toronto-Dominion Bank $123.5 million for violations related to anti-money laundering laws
Federal Reserve Board fines Toronto-Dominion Bank $123.5 million for violations related to anti-money laundering laws
Speeches
Waller, Thoughts on the Economy and Policy Rules at the Federal Open Market Committee
Speech At “A 50 Year Retrospective on the Shadow Open Market Committee and Its Role in Monetary Policy,” a conference sponsored by the Hoover Institution, Stanford University, Stanford, California
Bowman, Challenges to the Community Banking Model
Speech At the 18th Annual Community Bankers Symposium, Community Banking: Navigating a Changing Landscape, Chicago, Illinois
Cook, Entrepreneurs, Innovation, and Participation
Speech At the 2024 Women for Women Summit, Charleston, South Carolina
Working Papers
IFDP Paper: Household Excess Savings and the Transmission of Monetary Policy
Thiago R.T. Ferreira, Nils Gornemann, and Julio L. Ortiz
Household savings rose above trend in many developed countries after the onset of COVID-19. Given its link to aggregate consumption, the presence of these "excess savings" has raised questions about their implications for the transmission of monetary policy. Using a panel of euro-area economies and high-frequency monetary policy shocks, we document that household excess savings dampen the effects of monetary policy on economic activity and inflation, especially during the pandemic period. To rationalize our empirical findings, we build a New Keynesian model in which households use savings to self-insure against counter-cyclical unemployment and consumption risk.
Household savings rose above trend in many developed countries after the onset of COVID-19. Given its link to aggregate consumption, the presence of these "excess savings" has raised questions about their implications for the transmission of monetary policy. Using a panel of euro-area economies and high-frequency monetary policy shocks, we document that household excess savings dampen the effects of monetary policy on economic activity and inflation, especially during the pandemic period. To rationalize our empirical findings, we build a New Keynesian model in which households use savings to self-insure against counter-cyclical unemployment and consumption risk.
FEDS Paper: Disagreement About the Term Structure of Inflation Expectations
Hie Joo Ahn and Leland E. Farmer
We develop a model of the individual term structure of inflation expectations across forecasting horizons. Using the Survey of Professional Forecasters, we decompose disagreement about inflation expectations into individuals’ long-term beliefs, private information, and public information. We find that in normal times, long-horizon disagreement is predominantly driven by individuals’ long-term beliefs, while short-horizon disagreement stems from private information. During economic downturns, heterogeneous reactions to public information become a key driver of disagreement at all horizons. When forecasters disagree about public information, monetary policy exhibits a delayed response and a price puzzle emerges, underscoring the importance of anchoring inflation expectations.
We develop a model of the individual term structure of inflation expectations across forecasting horizons. Using the Survey of Professional Forecasters, we decompose disagreement about inflation expectations into individuals’ long-term beliefs, private information, and public information. We find that in normal times, long-horizon disagreement is predominantly driven by individuals’ long-term beliefs, while short-horizon disagreement stems from private information. During economic downturns, heterogeneous reactions to public information become a key driver of disagreement at all horizons. When forecasters disagree about public information, monetary policy exhibits a delayed response and a price puzzle emerges, underscoring the importance of anchoring inflation expectations.
FEDS Paper: Are Manufacturing Jobs Still Good Jobs? An Exploration of the Manufacturing Wage Premium(Revised)
Kimberly Bayard, Tomaz Cajner, Vivi Gregorich, and Maria D. Tito
This paper explores the factors behind the disappearance of the manufacturing wage premium—the additional pay a manufacturing worker earns relative to a comparable nonmanufacturing worker. With substantially larger declines across union members, we quantify the role of unionization by exploiting the heterogeneity in membership status across manufacturing industries. We find that the decline in union membership explains more than 70 percent of the decline in the wage premium since the 1990s for union members but does not affect nonunion premia. Our findings suggest that the erosion of “good” manufacturing jobs has contributed to the increase in overall wage inequality.
This paper explores the factors behind the disappearance of the manufacturing wage premium—the additional pay a manufacturing worker earns relative to a comparable nonmanufacturing worker. With substantially larger declines across union members, we quantify the role of unionization by exploiting the heterogeneity in membership status across manufacturing industries. We find that the decline in union membership explains more than 70 percent of the decline in the wage premium since the 1990s for union members but does not affect nonunion premia. Our findings suggest that the erosion of “good” manufacturing jobs has contributed to the increase in overall wage inequality.
FEDS Notes
FEDS Note: A Better Way of Understanding the US Consumer: Decomposing Retail Spending by Household Income
Sinem Hacıoğlu Hoke, Leo Feler, and Jack Chylak
Changes in retail spending reflect changes in consumer demand for goods. For the past several months, retail sales estimates published by the Census Bureau have indicated that consumer demand for retail goods remains resilient. However, published measures do not provide details on which consumers’ spending has remained resilient. Using a detailed micro dataset, we construct a measure of average retail spending for low-, middle- and high-income households.
Changes in retail spending reflect changes in consumer demand for goods. For the past several months, retail sales estimates published by the Census Bureau have indicated that consumer demand for retail goods remains resilient. However, published measures do not provide details on which consumers’ spending has remained resilient. Using a detailed micro dataset, we construct a measure of average retail spending for low-, middle- and high-income households.
FEDS Note: Rising Auto Loan Delinquencies and High Monthly Payments
Robert Adams, Vitaly Bord, and Haja Sannoh
Delinquency rates on auto loans rose substantially to above pre-pandemic levels by the end of 2023, after falling to historical lows during the COVID-19 pandemic. Because auto loans are an important sector in consumer credit, accounting for about 25 percent of nonmortgage consumer credit, a deeper analysis of the increase in delinquencies can give insights into the financial health of borrowers in consumer credit markets and overall household financial well-being.
Delinquency rates on auto loans rose substantially to above pre-pandemic levels by the end of 2023, after falling to historical lows during the COVID-19 pandemic. Because auto loans are an important sector in consumer credit, accounting for about 25 percent of nonmortgage consumer credit, a deeper analysis of the increase in delinquencies can give insights into the financial health of borrowers in consumer credit markets and overall household financial well-being.
FEDS Note: Dealer Balance Sheet Constraints Evidence from Dealer-Level Data across Repo Market Segments
Lia Chabot, Paul Cochran, Sebastian Infante, Benjamin Iorio
The continued growth of U.S. Treasury issuance has garnered interest in understanding dealers’ ability to intermediate the U.S. Treasury market. These trends have spurred various efforts to measure the degree to which dealer balance sheet constraints—broadly defined as restrictions on the overall size of an intermediary’s balance sheet—can affect the intermediation of the Treasury market.
The continued growth of U.S. Treasury issuance has garnered interest in understanding dealers’ ability to intermediate the U.S. Treasury market. These trends have spurred various efforts to measure the degree to which dealer balance sheet constraints—broadly defined as restrictions on the overall size of an intermediary’s balance sheet—can affect the intermediation of the Treasury market.
Board Meetings
Notice of a Meeting
A closed meeting of the Board of Governors of the Federal Reserve System was held at 11:30 a.m. on October 7, 2024. Matter(s) considered: Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.
Advance Notice of a Meeting
A closed meeting of the Board of Governors of the Federal Reserve System will be held at 11:30 a.m. on October 7, 2024. Matter(s) considered: Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.
Notice of a Meeting
A closed meeting of the Board of Governors of the Federal Reserve System was held at 10:30 a.m. on September 17, 2024 and continued at 9:00 a.m. on September 18, 2024. Matter(s) considered: Discussion of Monetary Policy Issues.