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Economic Research

Liberty Street Economics
Are Rising Employee Health Insurance Costs Dampening Wage Growth?
Employer-sponsored health insurance costs have climbed by about 25 percent over the past five years, with particularly steep increases in the past three years. The authors’ February regional business surveys asked firms whether their wage-setting decisions were influenced by these rising costs. The respondents indicated that absent these cost increases, they would have raised wages by roughly an additional percentage point, on average, suggesting that rising health insurance costs resulted in a drag on wage growth.
By Jaison R. Abel, Richard Deitz, and Nick Montalbano
Firms’ Inflation Expectations Return to 2024 Levels
The New York Fed’s February surveys of firms in the New York-Northern New Jersey region find that these businesses experienced substantial cost pressures in 2025 as the cost of insurance and utilities rose sharply, while an increase in tariffs contributed to rising goods and materials costs. The authors find that, while both cost and price increases intensified last year, these do not contribute to firms believing that inflation will be on the rise in the short or longer term.
By Jaison R. Abel, Richard Deitz, and Nick Montalbano
Seeing Through the Shutdown’s Missing Inflation Data
Data releases for inflation have been scarce over the past four months due to the government shutdown. The authors use the New York Fed's Multivariate Core Trend (MCT) inflation model to examine changes in underlying inflation over this period. Their findings suggest that while the fragmented data from November initially signaled a deceleration in price pressures, once the full data set is used, the aggregate trend for December stands at 2.83 percent, an increase from 2.55 percent in September.
By Martin Almuzara and Geert Mesters
Who Is Paying for the 2025 U.S. Tariffs?
Over the course of 2025, the average tariff rate on U.S. imports increased from 2.6 to 13 percent. The authors ask, how much of the tariffs were paid by the U.S.? Using import data through November 2025, they find that nearly 90 percent of the tariffs’ economic burden fell on U.S. firms and consumers.
By Mary Amiti, Chris Flanagan, Sebastian Heise, and David E. Weinstein
Photo: lower income neighborhood in the U.S.
Where Are Mortgage Delinquencies Rising the Most?
The Center for Microeconomic Data recently released its Quarterly Report on Household Debt and Credit for the fourth quarter of 2025. Although mortgage balances are generally held by borrowers with strong credit profiles relative to historic standards, mortgage delinquency rates increased in the fourth quarter. This deterioration has been most pronounced among borrowers living in lower-income neighborhoods. The authors examine some potential factors that may be contributing to disparities in mortgage performance.
By Andrew F. Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally, and Wilbert van der Klaauw
Does the Phillips Curve Steepen When Costs Surge?
Inflation does not always respond to cost and demand pressures in the same way. When shocks are small, the mapping from costs to prices is roughly proportional. But when the economy is hit by large shocks, this proportionality breaks down. Economists refer to this pattern as nonlinear inflation dynamics. The author discusses what these nonlinearities mean, how they relate to the slope of the Phillips curve, and how firm-level data can help us understand the mechanisms behind them.
By Simone Lenzu
RESEARCH TOPICS
Applied Macroeconomics
and Econometrics Center
The mission of the Applied Macroeconomics and Econometrics Center (AMEC) is to provide intellectual leadership in the central banking community in the fields of macro and applied econometrics.

Data Releases
Global Supply Chain Pressure Index
(Updated: Monthly)

Labor Market Tightness Index
(Updated: Monthly)

Measuring the Natural Rate of Interest
(Updated: Quarterly)

Multivariate Core Trend Inflation
(Updated: Monthly)

The New York Fed DSGE Model
(Updated: Quarterly)

New York Fed Staff Nowcast
(Updated: Weekly)

Outlook-at-Risk
(Updated: Monthly)

Treasury Term Premia
(Updated: Daily)

Yield Curve as a Leading Indicator
(Updated: Monthly)
Center for Microeconomic Data
AI generated, people walking in office building.
Labor Market Tightness Index
The HPW Labor Market Tightness Index is an indicator of labor market tightness for summarizing current wage pressures and predicting wage inflation.
Photo: a four-panel picture of people cleaning up after natural disasters
Losses from Natural Disasters
Losses from Natural Disasters provides county-level estimates of the economic and human impact of extreme weather events in the United States.
Reserve Demand Elasticity (RDE)
RDE estimates provide a quantitative measure of the ampleness of reserves in the U.S. banking system in real time. New data are published monthly.
Economic Heterogeneity Indicators (EHIs)
The EHIs are broad-based economic indicators that measure macroeconomic outcomes experienced by different demographic, economic, and geographic groups on both a regional and national level.
Corporate Bond Market Distress Index (CMDI)
The CMDI is a summary metric of corporate bond market functioning based on information from multiple sources including measures of primary market issuance and pricing, secondary market pricing and liquidity conditions, and the relative pricing between traded and nontraded bonds. It updates monthly.
Regional Surveys
Monthly surveys conducted by the New York Fed track the sentiment of executives at regional manufacturing and service-sector firms regarding business conditions.

Data Releases
Empire State Manufacturing Survey
(Updated: Monthly)

Business Leaders Survey
(Updated: Monthly)

Regional Business Surveys:
Special Topics
(Updated: Quarterly)
Regional Employment Trends
These interactive charts track employment in state and metro regions in the Federal Reserve’s Second District, utilizing the New York Fed’s early benchmarks of payroll employment data. It updates monthly.
Mapping Home Price Changes
Explore year-over-year changes in home prices since 2003, both regionally and nationally, using this dynamic map — updated with new home price index data on a monthly basis. Hover over a county for granular data.
Early Benchmarked Employment Data
Monthly releases of early benchmarked employment figures for New York State, New Jersey, Puerto Rico, and the U.S. Virgin Islands, as well as the metropolitan areas in New York and Northern New Jersey
The Labor Market for Recent College Graduates
Labor market conditions worsened for recent college graduates at the end of 2025. The unemployment rate climbed to about 5.7 percent in the fourth quarter of 2025 from an average of 5.3 percent during the third quarter, and the underemployment rate rose to 42.5 percent—its highest level since 2020.
Recent Publications
Systemic Cyber Risk
Cyber risk has grown to be broadly recognized as a source of vulnerability for financial stability, with virtually every layer of the financial system architecture having experienced a material cyber attack in the last five years. The authors propose a quantitative framework to track systemic risk arising from cyber vulnerabilities of the U.S. financial system. Synthesizing financial, economic, cyber, and network data, they develop an index that tracks financial-system-level cyber vulnerability (SCV) for the financial system.
Steven D. Baker and Michael Junho Lee, Staff Report 1186, February 2026
Stablecoin Disintermediation
Payment stablecoins enable U.S. dollar settlement on blockchains and are positioned to meet global demand for U.S. dollars. Importantly, stablecoins are accessible to anyone with internet access, standing in contrast to traditional banking. How will stablecoins impact the banking system? The authors propose a theory of stablecoin disintermediation, whereby stablecoins not only erode banks deposit franchises but also transmit liquidity stress to the banking system.
Michael Junho Lee and Donny Tou, Staff Report 1185, February 2026
Sports Betting Across Borders: Spatial Spillovers, Credit Distress, and Fiscal Externalities
In the 2018 Murphy v. NCAA decision, the Supreme Court struck down a federal law that banned sports betting in the United States. Since then, 38 states have legalized sports betting within their state boundaries, giving rise to a multi-billion-dollar mobile sports betting industry. The authors study the impact of legalized sports betting on betting intensity and consumer credit outcomes across U.S. states, with a particular focus on spillovers across state lines into states where betting remains illegal.
Jacob Goss and Daniel Mangrum, Staff Report 1184, revised March 2026
Open-Ended Treasury Purchases: From Market Functioning to Financial Easing
Central banks have employed large-scale asset purchases for two distinct objectives: to provide monetary policy accommodation when the policy rate is near zero, and to support market functioning or financial stability. The authors assess whether the Federal Reserve’s asset purchases can be tailored to either restore market functioning or provide economic stimulus by analyzing the ideal setting provided by the $2.9 trillion of Treasury purchases conducted by the Fed in 2020-2022.
Stefania D’Amico, Max Gillet, Sam Schulhofer-Wohl, and Tim Seida, Staff Report 1183, February 2026
The Payoffs of Higher Pay: Labor Supply and Productivity Responses to a Voluntary Firm Minimum Wage
What are the returns to firms of paying more? The authors study a Fortune 500 firm’s voluntary firm-wide $15/hour minimum wage. Using a continuous difference-in-differences design, they find that a $1/hour pay increase halves worker departures, reduces absenteeism, and increases productivity. They develop a simple model that connects efficiency-wage incentives and monopsony power, showing how these forces can counterbalance each other to keep wages closer to workers’ marginal revenues.
Natalia Emanuel and Emma Harrington, Staff Report 1182, February 2026
Bank Failures: The Roles of Solvency and Liquidity
Bank failures can stem from runs on otherwise solvent banks or from losses that render banks insolvent, regardless of withdrawals. Disentangling the relative importance of liquidity and solvency in explaining bank failures is central to understanding financial crises and designing effective financial stability policies. The authors review evidence on the causes of bank failures and find that bank failures—both with and without runs—are almost always related to poor fundamentals.
Sergio Correia, Stephan Luck, and Emil Verner, Staff Report 1181, February 2026
Programming Money Without Programmable Money
Innovations in money and payments have brought forth the potential for enabling programmability. This could support a wide range of arrangements and transactions that automatically execute and settle when certain conditions are met. The discourse on programmability inadequately differentiates between programmable money, which is generally negatively viewed, and programmable payments, which is generally accepted as part of the future. They provide a framework for programmable monetary systems that distinguishes between programmable money and programmable payments.
Michael Junho Lee and Antoine Martin, Staff Report 1180, February 2026
Stablecoins vs. Tokenized Deposits: The Narrow Banking Debate Revisited
As blockchain-based economic activity has developed in recent years, demand has grown for a blockchain-native or “tokenized” form of money denominated in a traditional unit of account, especially the U.S. dollar. The authors study how the type of money used in blockchain-based trade affects interest rates, investment, and welfare, using a dynamic general equilibrium model of money and exchange that highlights similarities between this current policy issue and historical debates in money and banking.
Xuesong Huang and Todd Keister, Staff Report 1179, February 2026


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