Questions tagged [federal-reserve]

Use only for questions that are directly related to the central bank of the United States, the "Fed". For example, US monetary policy, US money supply, US balance sheet, etc. Do not use for generic questions related to central banks, monetary policy or other, which are not directly related to the Fed. Use instead central-banking, monetary-policy, or related tags.

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Do Fed OMOs directly and immediately increase M1 or M2 if they buy treasuries from a member bank? And what proportion of OMOs does that constitute?

I commonly hear that when the Fed conducts open market operations, it is directly increasing the money supply by exchanging newly created electronic money for US treasuries. But in the case where the ...
Tim kinsella's user avatar
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1 answer
110 views

How can the Fed enforce exit criteria if they begin yield curve control?

Over the past year, the notion yield curve control has resurfaced and appeared on FOMC minutes, decades after its last implementation. According to the Fed's introduction page: As the U.S. continued ...
Arash Howaida's user avatar
3 votes
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30 views

Impacts of Suspending Mortgage and Rent Payments

Recently, there has been some support for suspending rent and mortgage payments, the goal being to provide financial relief during the Covid-19 response. I'm wondering what the impacts for the ...
DoubtingThomas3005's user avatar
2 votes
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Due-diligence behind discount window lending

Its clear the Federal reserve is doing risk assessments at the discount window since they separate credit into primary and secondary. I'm curious how secondary credit risk is handled. Given that ...
curiousgeorge's user avatar
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Does the federal reserve create any type of deadweight/welfare loss?

In microeconomics, we learn that when a good is overproduced or under produced, there is a dead weight loss associated with it. It seems like the same concept would apply to macroeconomics, where the ...
johnsmith13579's user avatar
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Federal Reserve Leveraging of COVID-19 Fund

Reading an article in The New York Times about the COVID-19 stimulus bill, I stumbled on this detail the Fed can take a limited amount of funds and deploy them widely: The central bank only needs ...
David Marlowe's user avatar
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What is the privilege of a primary dealer?

Primary dealers have a privileged position, so there is value in being registered as a primary dealer. - https://economics.stackexchange.com/a/13450/8387 I was previously under the assumption that ...
Kent Shikama's user avatar
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How does the Fed choose its asset purchase rate in an ample reserves era?

The St. Louis Fed's article "A New Frontier: Monetary Policy with Ample Reserves" states that the Fed now uses the IOER and ON RRP rates to set the FFR, instead of open market operations, which are no ...
alexchandel's user avatar
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56 views

Does Fannie Mae get money from the FED

Does Fannie Mae directly or indirectly get money that is printed from the federal reserve to buy mortgages, or have they ever? If so, when has this happened? How much money? What is the process by ...
Brandon Frenchak's user avatar
2 votes
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60 views

Why did the rate of money supply growth increase from 1993-96 in the United States?

Even though the rate of growth in the monetary base decelerated — and the money multiplier decreased for the most part — from 1993-96 in the United States, the growth rate of the M2 money stock still ...
Ulysses Li's user avatar
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1 answer
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Are bailouts destabilizing the global economy?

I saw this posited in this WSJ opinion piece here Notes on the Fed In 1998, engineering a \$3.6 billion rescue of the giant hedge fund Long-Term Capital Management. In 2001, slashing interest rates ...
Grant Curell's user avatar
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What were the biggest events in terms of Monetary Policy in May 1975?

Take a look at this plot, which is the daily American zero-coupon yield curve from 1975, as reconstructed by Liu and Wu (JFE, 2021): One can see a major change of shape in May, 1975. It seems that ...
Raul Guarini Riva's user avatar
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Why are Fed's Tealbooks released with a 5 years lag?

In "On DSGE models", Christiano, Eichenbaum & Trabandt (2018) mentions the "so-called Tealbooks" (p.21). They also say that these Tealbooks are released with a 5-years lag. I ...
krauuuus's user avatar
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Do some investment banks make a spread by borrowing from the Fed at low rates and earning from higher Treasury and agency bond yields?

In his 60 Minutes interview for promoting his book, The Big Short, Michael Lewis says this: if you look at their businesses right now they're heavily government dependent that if you were uh goldman ...
TheReal_Skywalker's user avatar
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Did countries ever default against Federal Reserve's swap line?

Did foreign countries ever default against Fed's swap line or Foreign and International Monetary Authorities ? Or is it technically possible? I guess they will lose their collateral, and it's a big ...
Matt Frank's user avatar
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1 answer
84 views

What treasury security SOMA holdings have matured so far this month?

Today is August 15th 2022. Let's say I'd like to know the treasury security SOMA holdings that have matured so far this month as well as the total that will mature this month. Here's one approach I've ...
dharmatech's user avatar
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39 views

Federal Reserve Balance Sheet - June MBS Data

MBS balance sheet changes for June 2022 If I take the weekly changes of the MBS asset data: https://fred.stlouisfed.org/graph/?g=SBRc and look at June 2022 I get the following: So \$1.882 billion was ...
dharmatech's user avatar
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Is it accurate to say reverse repo is 'conflicting' with monetary policy?

As seen in the chart, historically, reverse repo levels have been fairly small or at most, a few hundred billion dollars: Now into the USD trillion handle, it's a more prominent fixture of the money ...
Arash Howaida's user avatar
1 vote
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28 views

Is the following information related to interest rates, and the Federal Reserve accurate?

There are actually two interest rates that are directly affected by the Fed. The Federal Funds Rate is the interest rate banks charge other banks who borrow funds to meet reserve requirements. If that ...
bestofthebeast's user avatar
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Why did Greenspan think rate hikes would increase treasury term premiums?

Greenspan once called long-term treasury yield's continued downtrend despite his multiple rate hikes a "conundrum." The Fed has research on what is often called "Greenspan's Bond Yield ...
Arash Howaida's user avatar
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48 views

How the Fed and Treasury coordinate on liquidity management

On top of the Fed's USD120bn monthly treasury/MBS purchases, the drawdown in Treasury issuance over the last year has also added over USD1tr to the system. The premise is, faced with drawn-out debt ...
Arash Howaida's user avatar
1 vote
1 answer
107 views

Where can I retrieve a complete history of macro economic data annoucements?

I'd like to get the complete ( well at least the last 20 years) history of economic data announcement calendar firstly for US and secondly for G5 countries. I have found many websites that propose the ...
hariboy's user avatar
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overnight index swaps OIS

I'm writing a paper where I am using expected federal funds rates at different horizons and wanted to use the OIS as a proxy for what the market expects the FFR to be post FOMC-meetings. However, I ...
qhand's user avatar
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How can the Fed realistically address the issue of frontrunning (in the context of its ETF purchases)

In the first two days in which the Fed's corporate bond program started buying ETFs, purchases totaled around USD305m. The size of the program is much larger, and it would seem very reasonable to ...
Arash Howaida's user avatar
1 vote
0 answers
260 views

Dynamic factor model for inflation (UIG)

I'm trying to replicate some results of Fed Underlying Inflation Gauge (UIG) model, which is a dynamic factor model to capture inflation trend. https://www.newyorkfed.org/research/policy/underlying-...
Lipton's user avatar
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94 views

How does the Fed predict Economic Growth?

Which factors or formulas are used by the Fed to predict Economic Growth?
aalberti333's user avatar
1 vote
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54 views

Do you have a list of books about the evolution of the banking sector?

I'm looking for interesting books to read about the banking sector. Topics: Changes in the banking sector, Adaptation of financial services in the digital age, European and US banking regulations ...
Aymen Fassi's user avatar
1 vote
0 answers
90 views

Dollar Before the Federal Reserve

A lot of bloggers like to write that the dollar has lost 90+% of its value against a basket of goods since the Fed was created. Without a comparison to the former dollar, that's a meaningless ...
user541852587's user avatar
1 vote
0 answers
16 views

What is the FRB's Z.1 table L.218

I'm updating a document that cites this: As of December 2011, 67 percent of home mortgage debt was either securitized through agency or non-agency MBS or held on the balance sheets of Fannie ...
user7708's user avatar
1 vote
0 answers
47 views

Is Eurodollar borrowing close substitute for Fed funds borrowing?

It is often stated that eurodollar borrowing is clost substitute for Fed funds borrowing. In other words, when US banks cannot fund themselves domestically, they might go to the eurodollar market and ...
Kun's user avatar
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Taylor Rule Model Specification: Serial Correlation and Interest Rate Smoothing

I'm reading this paper by Abrams and Iossifov. The paper investigates electoral cycles influence on monetary policy by estimating a Taylor Rule reaction function using OLS. The authors describe the ...
alvalentini's user avatar
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0 answers
8 views

Can a Federal District Bank be negative in SOMA shares after interdistrict settlement?

I looked at publications examining whether the FED interdistrict settlement could apply to the Target-2 system. While most of my questions were answered, I am still left with one big issue I could not ...
Max's user avatar
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0 answers
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When Cathie Wood says the Powell has 20x rates vs Volker 2x rates in 1981, is this the right way to look at it?

Cathie Wood regularly says the FED today gone too far with rate rises, saying they have raised rates 20 times from their 0.25% lows in 2020, where as in the early 1980 Volcker only doubled rates from ...
MicroscooterMan's user avatar
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0 answers
20 views

Was the Federal Reserve Bailout of $85B to AIG in 2008 'printed money'

Was the federal reserve loan of $85 billion to AIG in 2008 done with existing reserves from the Treasury or were new reserves created and exchanged for assets at AIG similar to how the Fed performs ...
user3911038's user avatar
0 votes
0 answers
12 views

Fed Balance Sheet : flow of funds 2023-04-26

Fed Balance Sheet Changes Here's a chart of the Fed Balance Sheet changes for 2023-04-26: Flow of funds Here's some guesses as to how the funds flowed between items: ...
dharmatech's user avatar
0 votes
0 answers
33 views

How to explain negative correlation betwen FED funds rate and dollar volatility?

actually I am looking into monthly price data on bitcoin and the us-dollar (USD/EUR) and the monthly federal funds rate. I calculated the volatility by: ...
BlankerHans's user avatar
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0 answers
59 views

Federal Funds Rate & Reserves Market Contradiction

Edit: I do understand this isn't how things work anymore, since we are in a "Ample-Reserves Framework" and the quantity of reserves no longer makes a difference that much and it is primarily ...
ayazasker's user avatar
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0 answers
639 views

Calculating Core PCE Services excluding shelter/housing

On FRED, I would like to calculate monthly Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index) (PCEPILFE) (SA) excluding housing, either by removing it from this ...
saltyeggs's user avatar
0 votes
1 answer
45 views

Deriving the H.4.1 MBS data from the Agency Mortgage-Backed Securities Operations

MBS changes for June 2022 If I go through the H.4.1 data: https://www.federalreserve.gov/releases/h41/ and pull out the Mortgage-backed securities data, I get the following for June 2022: So \$1,882,...
dharmatech's user avatar
0 votes
0 answers
38 views

Does the Fed Change the Discount Rate in Monetary Policy?

Here, it's given that: The first tool used by the Fed, as well as central banks around the world, is the manipulation of short-term interest rates. Put simply, this practice involves raising/lowering ...
MangoPizza's user avatar
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1 answer
138 views

Why does the Fed raise the FFR before reducing bond holdings?

In recent months, the Federal Reserve has been purchasing bonds at a decreasing rate. This is evident in the flattening of the slope of the total assets plot. The Fed's total assets plot... The ...
H2ONaCl's user avatar
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FRED Data - Recession indicators

I'm interested in using FRED data for investment purposes, but I'm wondering about the timeliness of the data. One metric that looks to be pretty informative for the stock market is new unemployment ...
SuperCodeBrah's user avatar
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0 answers
51 views

Why do we have *daily* series of T-bill yields?

I understand that each week the US Treasury issues new T-bills at different maturities (1-month, 3-months, 1-year, etc). As far as I understand, this issuance happens every Tuesday. After the auction, ...
Raul Guarini Riva's user avatar
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42 views

Why isn't the Federal Reserve interest rate set by a published algorithm?

The Federal Reserve sets the interest rate, presumably based on a number characteristics and trends in the economy: inflation, GDP growth, population growth, unemployment, housing prices, etc. However,...
MWB's user avatar
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0 answers
57 views

How does the U.S. Fed printing money result in a debt for future generations?

I'm unclear when I see news articles about how the U.S. Treasury will borrow $2 Trillion in the second half of 2020, why would the Fed printing money result in a debt for future generations? I can ...
Sam's user avatar
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35 views

Must US Treasury backstop US Federal Reserve?

The Constitutional Case for the Fed's Treasury Backstops | Cato @ Liberty writes no, I think? But I don't quite understand the financial terms iike "lever-up", backstop", "helicopter money". I looked ...
user avatar
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16 views

Is it possible to see the precise steps that the Fed uses to make its decisions?

The current economic in the US is very complex and uncertain. Is it possible to see the precise steps that the Fed uses to make its decisions? Why did they choose a rate of that amount and not another ...
Victor's user avatar
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24 views

Why the historically narrow asset class purchases from QE

Let's begin by mapping out some context by assuming the following goals of implementing QE: prevent dire systemic liquidity concerns reach inflation targets manage expectations in the private sector ...
Arash Howaida's user avatar
0 votes
0 answers
256 views

How did the Federal Reserve determine 3.5T USD in assets?

The financial media have reported that... In general, Fed officials appear to have converged to a minimum balance sheet of roughly $3.5 trillion, which means the runoff would end in the second ...
H2ONaCl's user avatar
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1 answer
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Why is the Fed worried about short term interest rates going negative?

I refer to the following article: https://www.bloomberg.com/opinion/articles/2021-02-25/negative-interest-rates-could-be-trouble-unless-fed-acts, notably the following paragraph: Market observers ...
Kyoma's user avatar
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