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US Federal Reserve - Research Papers

FEDS Notes

FEDS Note: Homeownership and Housing Equity in the Mid-Twentieth Century

9/24/2025

Carola Frydman, <a href="https://www.federalreserve.gov/econres/raven-molloy.htm">Raven Molloy</a> and Austin Palis<a name="f1"></a> Housing is an important component of wealth for most American households (Bricker, Moore and Thompson 2019; Kuhn et al., 2020), so studying trends in homeownership can shed light on changes in aggregate household wealth and how it is distributed across families. The aggregate US homeownership rate increased by 20 percentage points from 1940 to 1960, the largest change in American homeownership in the past 100 years....

FEDS Note: Examining the Relationship Between Loan Pricing and Credit Risk

9/24/2025

Azamat Abdymomunov, Ronel Elul, <a href="https://www.federalreserve.gov/econres/doriana-ruffino.htm">Doriana Ruffino</a>, and <a href="https://www.federalreserve.gov/econres/james-wang.htm">James Wang</a><a name="f1"></a> In this note, we focus on examining bank lenders' pricing of credit risk, and how higher loan interest rates may serve as compensation for higher credit losses. First, we study the extent to which loan-level and regional-level risk is priced at the product level....

FEDS Note: Inflation's Shared DNA: Regional and Global Factors in Post-Pandemic Core Inflation

9/19/2025

<a href="https://www.federalreserve.gov/econres/daniel-o-beltran.htm">Daniel O. Beltran</a>, and <a href="https://www.federalreserve.gov/econres/julio-l-ortiz.htm">Julio L. Ortiz</a><a name="f1"></a> The COVID-19 pandemic recovery created inflationary pressures globally. These effects, however, were felt differently across countries and regions....

FEDS Note: Rising Property Insurance Costs and Pass-Through to Rents for Apartment Buildings

9/19/2025

<a href="https://www.federalreserve.gov/econres/samuel-k-hughes.htm">Samuel K. Hughes</a> and <a href="https://www.federalreserve.gov/econres/raven-molloy.htm">Raven Molloy</a> Substantial increases in homeowners' insurance costs since the late 2010s have raised homeowners' housing costs. Spreading reports about similar insurance cost increases for apartment buildings may prompt similar questions about the implications for renters' costs....

FEDS Note: Evaluating Empirical Regularities in Variable Comovement in Stress Test Scenarios

9/19/2025

<a href="https://www.federalreserve.gov/econres/elena-afanasyeva.htm">Elena Afanasyeva</a>, <a href="https://www.federalreserve.gov/econres/william-f-bassett.htm">William Bassett</a>, <a href="https://www.federalreserve.gov/econres/bora-durdu.htm">Bora Durdu</a>, <a href="https://www.federalreserve.gov/econres/sam-jerow.htm">Sam Jerow</a>, and Fiona Waterman<a name="f1"></a> Each year, the Federal Reserve Board conducts a stress test of large banks to assess their ability to withstand economic downturns while continuing to lend and meet their obligations. These stress tests include severely adverse scenarios which feature 13-quarter paths of key macroeconomic and financial v...

FEDS Note: The Fed Funds Market During the Quantitative Tightening of 2017-19

9/19/2025

<a href="https://www.federalreserve.gov/econres/david-bowman.htm">David Bowman</a> The effective federal funds rate (EFFR) declined by about 10 basis points on every month end from 2016 to February 2018. Then, in March 2018, this pattern suddenly stopped (Figure 1). This Note discusses the dynamics behind the federal funds market, including its relationship with repo markets, to explain this change and to better understand the behavior of money markets during the period of the Federal Reserve’s quantitative tightening between October 2017 and September 2019....

FEDS Note: Debt Payments and Spending: Evidence from the 2023 Student Loan Payment Restart

9/5/2025

<a href="https://www.federalreserve.gov/econres/aditya-aladangady.htm">Aditya Aladangady</a>, <a href="https://www.federalreserve.gov/econres/edmund-s-crawley.htm">Edmund Crawley</a>, <a href="https://www.federalreserve.gov/econres/william-l-gamber.htm">William Gamber</a>, <a href="https://www.federalreserve.gov/econres/patrick-moran.htm">Patrick Moran</a>, and Jose Nino In October 2023, roughly 40 million Americans faced a new monthly bill as federal student loan payments resumed after a three-year pandemic-induced pause. The restart of loan payments effectively reduced disposable income for borrowers, raising a critical question: How do debt payments affect household spend...

FEDS Note: Measuring Geopolitical Risk Exposure Across Industries: A Firm-Centered Approach

8/29/2025

Isabel Culver, <a href="https://www.federalreserve.gov/econres/friederike-niepmann.htm">Friederike Niepmann</a>, and Leslie Sheng Shen Business sentiment shapes real outcomes. Firms respond not only to hard data but also act on how they perceive risks and uncertainty. A growing literature shows that shifts in business sentiment can meaningfully affect investment, employment, and firm performance, even when fundamentals are unchanged....

FEDS Note: Pre-Pledged Collateral and Likelihood of Discount Window Use

8/29/2025

<a href="https://www.federalreserve.gov/econres/mark-a-carlson.htm">Mark Carlson</a> and <a href="https://www.federalreserve.gov/econres/mary-frances-styczynski.htm">Mary-Frances Styczynski</a> Depository institutions (DIs) periodically experience liquidity shocks, for instance due to unusually large customer payment needs or deposit withdrawals. In such cases, the DI may need to obtain funding on a short-term basis in order to bolster their liquidity position. One possible source of such funding is the Federal Reserve's discount window....

FEDS Note: U.S. Reciprocal Tariff Announcement and European Bank Stock Performance

8/26/2025

<a href="https://www.federalreserve.gov/econres/pinar-uysal.htm">Pinar Uysal</a>, Kellen Lynch and <a href="https://www.federalreserve.gov/econres/ilknur-zer.htm">Ilknur Zer</a> European bank equity prices fell sharply following the April 2, 2025, U.S. reciprocal tariff announcement, reflecting investor concerns about rising trade tensions and their potential impact on global growth and financial stability. In this note, we examine how the effects of the tariff announcement on European banks varied with their trade exposure, capital strength, and asset quality....

FEDS Note: Decoding the Productivity Puzzle: A New Perspective on the Relationship between Remote Work and Productivity

8/25/2025

<a href="https://www.federalreserve.gov/econres/maria-d-tito.htm">Maria D. Tito</a><a name="f1"></a> Over the past decade, the relationship between remote work and productivity has drawn increasing attention from researchers, especially after the unprecedented shift to remote work following the COVID-19 pandemic. A growing body of literature suggests that remote work enhances productivity by offering employees greater autonomy, reducing commute times, and minimizing workplace distractions....

FEDS Note: Corporate Cash Accumulation During the COVID-19 Pandemic

8/22/2025

Elie Singer and <a href="https://www.federalreserve.gov/econres/jie-yang.htm">Jie Yang</a> Cash holdings of U.S. nonfinancial (publicly traded) corporations increased notably during the recent COVID-19 pandemic. As depicted in Figure 1, the median cash-to-assets ratio (black, solid line) – which remained near 12 percent in the years following the Great Financial Crisis (GFC) – surged to a historic high of over 20 percent in mid-2021....

FEDS Note: A Roadmap for the Federal Reserve's 2025 Review of Its Monetary Policy Framework

8/22/2025

Sylvain Leduc, Anna Paulson, <a href="https://www.federalreserve.gov/econres/trevor-a-reeve.htm">Trevor Reeve</a>, and <a href="https://www.federalreserve.gov/econres/stacey-tevlin.htm">Stacey Tevlin</a><a name="f*"></a> The Federal Reserve’s first formal, public review of its monetary policy framework (MPF) was completed in 2020 and included a plan to review monetary policy strategy, tools, and communication practices roughly every five years. The review conducted in 2025 thus constituted the Fed’s first five-year review of its MPF....

FEDS Note: Wealth Heterogeneity and Consumer Spending

8/5/2025

Samara Beach, <a href="https://www.federalreserve.gov/econres/william-l-gamber.htm">William Gamber</a>, and <a href="https://www.federalreserve.gov/econres/patrick-moran.htm">Patrick Moran</a> Economists have become increasingly interested in the effects of household heterogeneity on macroeconomic dynamics. Changes in the distribution of income and wealth, coupled with advances in data and computation, have brought questions about how heterogeneity affects macroeconomic dynamics to the forefront of the discipline....

FEDS Note: An Assessment of China's Innovative Capacity

8/5/2025

<a href="https://www.federalreserve.gov/econres/sina-t-ates.htm">Sina T. Ates</a> and Sharon Jeon Over the past two decades, China has become a manufacturing powerhouse while quadrupling its per capita output and significantly closing the large per capita income gap with developed economies, with China's per capita income now about 20 percent of U.S. per capita income, compared to just over 5 percent in 2004. (Figure 1a). However, China's economic growth has been declining in recent years....