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FEDS Notes

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May 26, 2016

Macroeconomic Modeling of Financial Frictions for Macroprudential Policymaking: A Review of Pressing Challenges

Michael T. Kiley

Structural macroeconomic modeling plays a central role economic policy discussions.

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Financial paperwork
May 26, 2016

Corporate Bond Issuers' Swap Exposure to Rising Interest Rates

Richard Ogden, Francisco Palomino, Nitish Sinha, and Youngsuk Yook

United States corporate bond issuance has been elevated in recent years relative to historical standards, reflecting in part accommodative financing conditions at historically low rates.

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Various workers
May 16, 2016

Is Underemployment Underestimated? Evidence from Panel Data

Geng Li and Brett McCully

Despite a broad recovery of the U.S. economy from the depths of the Great Recession, lingering slack remains in the labor market.

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Board building
May 11, 2016

Where do I see the Monetary Policy Normalization Tools on the Fed's Balance Sheet and Income Statement?

Christian Miller and Casey Clark

On December 16, 2015, the Federal Open Market Committee (FOMC) determined it was appropriate to raise the effective federal funds rate from the 0 to 25 basis point range it had been set at since late 2008. This note highlights where some of the key elements of the FOMC's approach to policy normalization are reported on the Federal Reserve's website.

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A globe sitting on a chart
May 2, 2016

The Role of Global Supply Chains in the Transmission of Shocks: Firm-Level Evidence from the 2011 Tōhoku Earthquake

Christoph E. Boehm, Aaron Flaaen, and Nitya Pandalai-Nayar

The April 2016 Kumamoto earthquake in southwest Japan has sent ripple effects through global supply chains. Toyota, Honda and Sony halted most Japanese production following the quake, and more recently General Motors announced production stoppages at four North American plants, citing parts shortages. Such far-reaching consequences of natural disasters are not without precedent.

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A chart
April 12, 2016

Government-Backed Mortgage Insurance Promoted a Speedier Recovery from the Great Recession

Wayne Passmore and Shane M. Sherlund

The United Sates government has a long history of involvement in mortgage finance. During the 1930s, the government created the Federal Home Loan Banks (FHLB), the Federal Housing Administration (FHA), and the Federal National Mortgage Association (Fannie Mae).

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A chart
April 8, 2016

Recession Risk and the Excess Bond Premium

Giovanni Favara, Simon Gilchrist, Kurt F. Lewis, and Egon Zakrajšek

Corporate bond spreads and the slope of the Treasury yield curve (that is, the term spread) are two financial indicators that are especially informative about the likelihood of an economic downturn over a medium-term horizon.

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A chart
April 4, 2016

Has the inflation risk premium fallen? Is it now negative?

Andrew Chen, Eric Engstrom, Olesya Grishchenko

Inflation compensation is widely used by market commentators to gauge the expectations of investors regarding the outlook for inflation.

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Pen resting on a chart
March 29, 2016

Corporate Equities by Issuer in the Financial Accounts of the United States

Richard E. Ogden, Damian R. Thomas, and Missaka Warusawitharana

This FEDS Note shows how we report the value of corporate equities outstanding in the Financial Accounts and describes how we estimate each of its components.

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Illustration of Houses
March 28, 2016

Do People Leave Money on the Table? Evidence from Joint Mortgage Applications and the Minimum FICO Rule

Geng Li, Weifeng Wu, and Vincent Yao

There is mounting evidence that households make suboptimal savings and investment decisions.

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Oil pump
March 22, 2016

Unraveling the Oil Conundrum: Productivity Improvements and Cost Declines in the U.S. Shale Oil Industry

Ryan Decker, Aaron Flaaen, and Maria Tito

Why have large declines in oil prices and in the rig count not triggered a more dramatic decline in production? At what price level would a large share of U.S. shale oil production lose economic viability?

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Data on a tablet and in printouts
March 4, 2016

History of the Federal Reserve Board Statistical Releases

Gisela Rua and Sian L. Seldin

In this note, we describe the history of the Federal Reserve Board statistical publications presented in FEDS Paper 2016-016.

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Coin stacks
March 3, 2016

Funding Agreement-Backed Securities in the Financial Accounts of the United States

Elizabeth Holmquist and Maria Perozek

This note describes a new method of accounting for funding agreement-backed securities (FABS) in the Financial Accounts of the United States.

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Charts on a computer screen
March 2, 2016

Annual Data on Investment and Capital Stocks

Christopher Kurz and Norman Morin

As part of the estimation of capacity for publication of its G.17 statistical release on industrial production and capacity utilization, the Federal Reserve Board produces annual information on the real capital stock and real investment for detailed industries within the manufacturing sector.

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Board building
February 22, 2016

What Happened in Money Markets after the Fed's December Rate Increase?

Alyssa Anderson, Jane Ihrig, Ellen Meade, and Gretchen Weinbach

At its December 2015 meeting, the Fed's policymaking committee, the Federal Open Market Committee (FOMC), announced an increase in the target range for the federal funds rate of 25 basis points, the first increase in the policy rate since June 2006.

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A pair of glasses rest of financial paperwork
February 12, 2016

The Risk of Returning to the Effective Lower Bound: An Implication for Inflation Dynamics after Lift-Off

Timothy Hills, Taisuke Nakata, and Sebastian Schmidt

In this note, we analyze an implication of the effective lower bound (ELB) risk--the possibility that adverse shocks will force policymakers in the future to lower the policy rate to the ELB--on inflation dynamics after liftoff.

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Generic charts on a blue background
February 12, 2016

The Federal Reserve's New Approach to Raising Interest Rates

Jane Ihrig, Ellen Meade, and Gretchen Weinbach, with Melanie Josselyn

At its December 2015 meeting, the Federal Open Market Committee (FOMC)--the Federal Reserve's monetary policy committee--raised its target range for the federal funds rate by 25 basis points, marking the end of an extraordinary seven-year period during which the federal funds target range was held near zero to support the recovery of the U.S. economy from the worst financial crisis and recession since the Great Depression.

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Line charts
February 9, 2016

The Expected Real Interest Rate in the Long Run: Time Series Evidence with the Effective Lower Bound

Benjamin K. Johannsen and Elmar Mertens

In response to the global financial crisis, the Federal Open Market Committee lowered the target for the federal funds rate to a range of 0 to 25 basis points in December 2008, and maintained that target range until the end of 2015. Over that same period, longer-term interest rates in the United States were at historically low levels.

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Charts on a computer screen
February 5, 2016

State and Local Pension Funding in the Enhanced Financial Accounts

Matthew Hoops, Paul Smith, and Irina Stefanescu

In this Note we describe new state-level data on the funding status of state and local government defined-benefit pension plans, which is part of the Enhanced Financial Accounts (EFA) initiative.

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Graduation cap on top of currency
February 3, 2016

Saving for College and Section 529 Plans

Simona Hannon, Kevin Moore, Max Schmeiser, and Irina Stefanescu 1

The past decade has simultaneously witnessed a substantial increase in enrollment at post-secondary institutions and a marked increase in college tuition. Not surprisingly, this trend overlapped with an increased demand for student loans and tax-advantaged educational savings.

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Disclaimer: FEDS Notes are articles in which Board economists offer their own views and present analysis on a range of topics in economics and finance. These articles are shorter and less technically oriented than FEDS Working Papers.

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Last update: May 26, 2016