en Sinem Hacıoğlu-Hoke, Sarojini Malladi, and Leo Feler

The speed and extent to which tariffs built pressure on consumer prices in 2025 remains an ongoing and important debate. This note examines tariff-related retail price changes using a detailed item-level retail spending dataset combined with information on the countries where products are produced.]]> FEDS Notes Andrei Zlate

Relatively little is known about how banks form their expectations about future credit supply, with a nascent stream of work documenting the role of past experiences in shaping banks' expectations for macroeconomic and credit performance and, in turn, their credit supply decisions (Ma et al., 2022; Falato and Xiao, 2024).]]> FEDS Notes Tim Schmidt-Eisenlohr, and Matthew P. Seay

Deposits are the largest source of funding for U.S. banks, representing approximately two-thirds of liabilities. Deposits also remain key to bank profitability, as they typically function as a stable source of long-term funding at a cost well-below interest earned on bank assets.]]> FEDS Notes Ruth Judson and Colin Weiss

The size of the Federal Reserve's balance expanded dramatically from 2008 to 2022 and has recently begun to adjust as the Fed moves toward a policy of "ample" reserves. While this expansion was unprecedented in its speed and came after a long period of stability, the Federal Reserve's balance sheet has risen and fallen and changed in composition over time. This note provides a graphical review of the evolution of the balance sheet from the Fed's founding in 1914 through 2025, with particular emphasis on how the balance sheet changed as the gold standard ended in the early 1970s, as the Fed shifted to interest-rate targeting in the early 1990s, and as the Fed responded to the 2008 financial crisis.]]> FEDS Notes François de Soyres, Alex Haag, Mike Liu and Eva Van Leemput

Artificial intelligence (AI) has become a key driver of the global economic outlook, underscored by the unprecedented scale of announced investment commitments aimed at expanding AI-related infrastructure. The AI boom is also increasingly influencing international trade by boosting demand for critical inputs and intermediate goods needed to build data centers.]]> FEDS Notes Ruth Judson and Nyssa Kim

Understanding the effects of cross-border securities holdings depends critically on accurate data, and two significant data sources in this area are the U.S. Treasury’s Treasury International Capital (TIC) system and the IMF’s Portfolio Investment Positions by Counterpart Economy (PIP, formerly known as CPIS).]]> FEDS Notes Daniel Covitz and Eric Engstrom

Increases in far-forward nominal interest rates in recent years have been remarkable. For example, the increase in the 9- to 10-year forward Treasury rate over the past five years is the largest since its extraordinary ramp-ups in the late 1970s and early 1980s (Figure 1). The increase in far-forward rates is consequential for the economy because higher forward rates mean higher long-term Treasury yields, which boosts the current cost of long-term credit to households and businesses. Indeed, more than 80 percent of the variation in annual changes in the 10-year Treasury yield over the past 50 years can be explained with a simple regression of the 10-year yield on changes in the 9-to-10 year forward rate.]]> FEDS Notes Juan M. Londono and Sai Ma

Over the last year, many forecasts have called out a slowdown in the U.S. economy driven mainly by heightened trade and geopolitical tensions. Instead, growth in the United States has remained quite solid. Real U.S. gross domestic product (GDP) grew at a strong annual rate of 3.8 percent in the second quarter of 2025.]]> FEDS Notes Mark Carlson

Prior to the establishment of the Federal Reserve, commercial banks issued "bank notes" that circulated as a privately issued form of money. In addition to being backed by the issuing bank, these notes were backed by various types of collateral, including state government bonds and U.S. government bonds.]]> FEDS Notes Arsenios Skaperdas

Since the Global Financial Crisis, central banks have used the size and composition of their balance sheets to influence financial conditions and economic activity when policy rates are constrained by the effective lower bound. A common measure of the size of the Federal Reserve's balance sheet is the System Open Market Account (SOMA) securities holdings expressed as a share of nominal gross domestic product (NGDP).]]> FEDS Notes Carlos A. Ramírez, Andre F. Silva, and Andrei Zlate

During times of increased trade policy uncertainty and geopolitical tensions, supply chain disruptions can be an important source of instability. Due to the interconnected nature of modern economies, problems in one market can often ripple across others, triggering logistical bottlenecks and longer delivery times.]]> FEDS Notes Danilo Cascaldi-Garcia and Camilo Morales-Jiménez

U.S. employment growth slowed down notably in the second part of 2025, and a key question is how much of the weakness stems from labor demand and how much from labor supply. In this note, we examine this question from the point of view of two different models: a statistical model that uses an intuitive interpretation of the joint behavior of employment and wage growth to infer the effects of labor supply and demand (VAR), and a structural dynamic stochastic general equilibrium (DSGE) model that uses a much wider array of data.]]> FEDS Notes Sriya Anbil, Alyssa Anderson, and Benjamin Eyal

The Global Financial Crisis (GFC) and the Federal Reserve's (Fed) large-scale asset purchases fundamentally reshaped the U.S. monetary policy implementation framework. Before 2008, the Fed operated under a scarce-reserves regime, steering the federal funds rate through daily open market operations.]]> FEDS Notes Florencia Airaudo, Johannes Fleck, and Kevin Vega

Recent U.S. trade policy changes have rekindled interest in Brexit, as it represents one of the few instances in which another large advanced economy implemented substantial trade policy changes. In this note, we answer two questions: How similar were trade policy adjustments in Brexit to U.S. trade policy changes of 2025? What were the short- and long-run effects of Brexit on the U.K. economy?]]> FEDS Notes Vitaly M. Bord, Agnes Kovacs, and Patrick Moran

Behind the scenes of every credit card lies an increasingly complex algorithmic infrastructure that determines who receives more credit and when, largely outside the inspection or knowledge of credit card users. Credit card issuers deploy sophisticated algorithms that continuously analyze consumer spending and borrowing behaviors, often increasing credit limits without consumers requesting such changes.]]> FEDS Notes