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Economic Research

Liberty Street Economics
How Do Deposit Rates Respond to Monetary Policy?
Deposits are critical to the funding structure of banks and a key source of savings for households and businesses. The degree to which changes in the target fed funds rate pass through to deposits is important for bank funding, monetary policy transmission, and depositors’ finances. This post evaluates the pass through of the fed funds rate to deposits (that is, deposit betas) over the past several interest rate cycles and discusses factors that affect deposit rates.
By Matthew Plosser and Alena Kang-Landsberg
Balances Are on the Rise--So Who Is Taking on More Credit Card Debt?
Total household debt rose $351 billion in the third quarter of 2022, the largest nominal quarterly increase since 2007, according to the New York Fed’s Center for Microeconomic Data’s Quarterly Report on Household Debt & Credit. Credit card balances were up $38 billion from the previous quarter. On a year-over-year basis, this marked a 15 percent increase, the largest in more than twenty years. This post takes a closer look at the variation in credit card trends for different demographics borrowers.
By Andrew Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally, and Wilbert van der Klaauw
How Liquid Has the Treasury Market Been in 2022?
Liquidity is crucial to the many important uses of Treasury securities in financial markets and its availability in the U.S. Treasury securities market has been a concern for policymakers and market participants lately. The authors assess the recent evolution of Treasury market liquidity and its relationship with price volatility. They find that although the market has been less liquid in 2022, it has not been unusually illiquid, after accounting for the high level of volatility.
By Michael Fleming and Claire Nelson
Banking System Vulnerability: 2022 Update
To assess the vulnerability of the U.S. banking system, it is important to monitor leverage and funding risks—both individually and in tandem. In this post, the authors provide an update of four analytical models aimed at capturing different aspects of banking system vulnerability with data through the second quarter of 2022, assessing how these vulnerabilities have changed since last year. The four models were introduced in a Liberty Street Economics post in 2018 and have been updated annually since then.
By Matteo Crosignani, Thomas Eisenbach, and Fulvia Fringuellotti
A Look at the New York-Northern New Jersey Region’s Pandemic Housing Boom
Home prices in the U.S. have soared by more than 40 percent since the start of the pandemic. In this post, the authors examine home price growth in the New York-Northern New Jersey region, where prices have shot up by 30 percent or more. Much of the home price boom can be traced to the rise in remote work, which increased the already strong demand for housing at a time when inventories were low and declining.
By Jaison R. Abel, Jason Bram, Richard Deitz, and Jonathan Hastings
Do Exchange Rates Fully Reflect Currency Pressures?
Currency values are important for both the real economy and the financial sector. When faced with currency market pressures, some central banks and finance ministries resort to foreign exchange intervention to stabilize the currency—selling foreign currency and buying domestic currency to reduce realized currency depreciation to diminish its economic and financial consequences. This post provides insights into the effectiveness of these interventions in limiting currency depreciation.
By Linda S. Goldberg and Stone Kalisa
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)

The New York Fed DSGE Model
(Updated: Quarterly)

Treasury Term Premia
(Updated: Daily)

Underlying Inflation Gauge
(Updated: Monthly)

Yield Curve as a Leading Indicator
(Updated: Monthly)

Weekly Economic Index (WEI)
(Updated: Weekly)
Center for Microeconomic Data
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)

Supplemental Survey Report
(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
U.S. Economy in a Snapshot
U.S. Economy in a Snapshot is a monthly presentation designed to give you a quick and accessible look at developments in the economy.
Oil Price Dynamics Report
Our oil price decomposition, reported weekly, examines what’s behind recent fluctuations in oil prices: demand factors, supply factors, or some combination of the two?
The Labor Market for Recent College Graduates
Labor market conditions improved for recent college graduates through 2022:Q3. While the unemployment rate was little changed at 4.0 percent, the underemployment rate declined to 39.5 percent, its lowest level in more than two years.
Nowcasting Report
Weekly report tracks the evolution of the New York Fed Staff Nowcast of GDP growth and the impact of new macroeconomic data releases on the forecast.
Measuring the Natural Rate of Interest
The Laubach-Williams and Holston-Laubach-Williams models provide estimates of the natural rate of interest, or r-star, and related variables for the United States and other advanced economies. We share quarterly estimates as well as the replication code and documentation for both models.
Recent Publications
Banks’ Balance-Sheet Costs, Monetary Policy, and the ON RRP
The Federal Reserve began normalizing its balance sheet in June 2022. However, while banks’ reserves at the Fed have decreased, the investment of money market funds (MMFs) at the Fed's overnight reverse repo (ON RRP) facility has increased. This paper identifies the drivers of ON RRP take-up through a difference-in-differences approach. The authors show that banks’ balance sheet costs incentivize banks to push deposits toward MMFs and reduce their overnight borrowing from MMFs, leading to an increase in MMF investment at the ON RRP.
Gara Afonso, Marco Cipriani, and Gabriele La Spada, Staff Report 1041, December 2022
How Abundant Are Reserves? Evidence from the Wholesale Payment System
Before the era of large central bank balance sheets, banks relied on incoming payments to fund outgoing payments, as a means of conserving scarce liquidity. Even in the era of large central bank balance sheets, rather than funding payments with abundant reserve balances, the authors show that outgoing payments remain highly sensitive to incoming payments. By providing a window on liquidity constraints revealed by payment behavior, their results shed light on thresholds for the adequacy of reserve balances. Their findings are timely given the ongoing shrinking of central bank balance sheets around the world in response to inflation.
Gara Afonso, Darrell Duffie, Lorenzo Rigon, and Hyun Song Shin, Staff Report 1040, November 2022
The Impact of U.S. Monetary Policy on Foreign Firms
The impact of U.S. monetary policy on the real economy is a long-studied topic and one that is of primary importance to understand today, as the Federal Reserve and other central banks have entered a tightening cycle. This paper uses cross-country firm-level, sectoral, and macroeconomic data to examine the impact of U.S. monetary policy shocks on foreign firms’ sales, investment, and employment.
Julian di Giovanni and John Rogers, Staff Report 1039, November 2022
Should Mothers Work? How Perceptions of the Social Norm Affect Individual Attitudes Toward Work in the U.S.
The converging roles of women and men in the labor market is one of the most significant economic and social developments of the past century. Nevertheless, gender equality in labor market outcomes has remained elusive. The authors examine the role of misperceptions and information gaps in contributing to the stickiness of gender norms in the U.S. They study opinions regarding the labor supply decisions of mothers using hypothetical scenarios presented to a representative sample of respondents drawn from the New York Fed’s Survey of Consumer Expectations.
Patricia Cortès, Gizem Koşar, Jessica Pan, and Basit Zafar, Staff Report 1038, November 2022
All-to-All Trading in the U.S. Treasury Market
Although the U.S. Treasury market remains the deepest and most liquid securities market in the world, several episodes of abrupt deterioration in market functioning over recent years have brought the market’s resilience into focus. The adoption of all-to-all trading in the Treasury market could be one avenue to strengthen market resilience. The authors assess what all-to-all trading would mean for the cash secondary Treasury market, the benefits it might bring, and the conditions that might make adoption of the protocol more likely.
Alain Chaboud, Ellen Correia Golay, Caren Cox, Michael Fleming, Yesol Huh, Frank Keane, Kyle Lee, Krista Schwarz, Clara Vega, and Carolyn Windover, Staff Report 1036, October 2022
The Curious Case of the Rise in Deflation Expectations
The authors study the behavior of U.S. consumers’ inflation expectations during the high inflation period of 2021-22 using data from the New York Fed Survey of Consumer Expectations. Short- and, to a lesser extent, medium-term inflation expectations rose as inflation surged in 2021. Then, in 2022, medium- and longer-term inflation expectations unexpectedly fell and medium- and longer-term deflation expectations increased. The findings show that respondents with deflation expectations tend to expect prices to mean revert and are more optimistic about the economic outlook.
Olivier Armantier, Gizem Koşar, Jason Somerville, Giorgio Topa, Wilbert van der Klaauw, and John C. Williams, Staff Report 1037, October 2022
Intermediation Frictions in Debt Relief: Evidence from CARES Act Forbearance
The authors study how intermediaries—mortgage servicers—shaped the implementation of mortgage forbearance during the COVID-19 pandemic, and use servicer-level variation to trace out the causal effect of forbearance on borrowers. The study shows forbearance provision varied widely across servicers. Easier access to forbearance substantially increased mortgage nonpayment but also reduced delinquencies outside of forbearance.
You Suk Kim, Donghoon Lee, Tess Scharlemann, and James Vickery, Staff Report 1035, October 2022
The Financial Stability Implications of Digital Assets
The value of assets in the digital ecosystem has grown rapidly, amid periods of high volatility. Does the digital financial system create new potential challenges to financial stability? This paper explores this question using the Federal Reserve’s framework for analyzing vulnerabilities in the traditional financial system. It describes emerging vulnerabilities that could present risks to financial stability in the future if the digital asset ecosystem becomes more systemic, including: run risks among large stablecoins, valuation pressures in crypto-assets, fragilities of DeFi platforms, growing interconnectedness, and a general lack of regulation.
Pablo D. Azar, Garth Baughman, Francesca Carapella, Jacob Gerszten, Arazi Lubis, JP Perez-Sangimino, David E. Rappoport, Chiara Scotti, Nathan Swem, Alexandros Vardoulakis, and Aurite Werman, Staff Report 1034, September 2022
RESEARCH SERIES
Economic Inequality
This ongoing Liberty Street Economics series analyzes disparities in economic and policy outcomes by race, gender, age, region, income, and other factors.
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