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The Federal Reserve Bank of St. Louis is the center of the Eighth District of the Federal Reserve System. This District includes Arkansas, eastern Missouri, southern Illinois and Indiana, western Kentucky and Tennessee, and northern Mississippi.

Articles by FRED Blog

A lesson on time series to get you started with FREDcast : Learn how to go from zero to forecasting hero

2 days ago

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Two years ago, the St. Louis Fed introduced FREDcast, a forecasting game in the style of fantasy sports. In FREDcast, users enter a forecast for four economic time series each month: GDP, payroll employment, the unemployment rate, and CPI. Now in its third year, FREDcast is growing in popularity and taking hold at some major universities.
The motivation behind FREDcast has been to lower the barriers of forecasting macroeconomic time series, and the game is designed so that anyone with a basic understanding of data can join the game and start forecasting. One of the major challenges, though, is establishing that common, basic understanding of time series data. So let’s lay out a few concepts and definitions to get you started.
What is a time series?
In plain

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Where do states get their tax revenue? : Income, sales, fuel, corporate, property, license, tobacco, alcohol…

5 days ago

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State governments run on tax revenue in much the same way the federal government does. The FRED graph above shows the specific shares of state tax revenue from many sources. The two major sources are sales tax and individual income tax. While there’s a clear seasonal pattern (mostly from income taxes), there are no strong trends: The shares seem rather stable. If we look a little more closely, though, we can see a shift from corporate income tax to individual income tax and a decrease in motor fuel tax revenue. Granted, it’s not perfectly clear unless you look at the numbers directly. So, if you’re using a mouse, hover over the graph to reveal the values for each series for a particular date, including the percentages. Given the seasonal pattern, it’s best to

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Zoom in on unemployment : GeoFRED maps and BLS data help us view unemployment up close

9 days ago

View on GeoFRED®
The U.S. is a large, diverse country with many differences in sectoral composition, demographics, geography, labor mobility, climate, and much more. FRED recently added a bunch of data on U.S. unemployment rates, which is a dataset with its own diverse set of differences and facets. This post explores one of those facets: geographies. We often hear about the national unemployment rate, but the Bureau of Labor Statistics provides a decomposition of unemployment at many geographic levels. Zooming in to these specific areas can help us better understand the country’s economic challenges.
View on GeoFRED®
The first two maps look at different ways the Census Bureau has divided up the country: The first has four U.S. Census regions, and the second has nine Census

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What’s a countercyclical capital buffer? : A new monetary policy tool, that’s what

12 days ago

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The Federal Reserve has tools to achieve its monetary policy goals: the discount rate, reserve requirements, open market operations, the interest rate on reserves… and now also the countercyclical capital buffer (CCyB). The CCyB is intended to avoid the banking failures of the Great Recession by ensuring individual banks and the banking sector as a whole have enough capital on hand to provide a flow of credit to the economy without jeopardizing the solvency of this sector. To achieve this goal, a monetary authority (such as the Fed) would require banks to hold a percentage of their capital in a reserve or buffer account. The exact percentage can be changed depending on the state of the economy. If the authority believes too much credit exists, then the percentage

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Gauging returns and risk in the bond market : The term premium, risk premium, and yield curve

16 days ago

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Investors in the corporate bond market routinely make decisions about which bonds to purchase; and they look at, among other things, the rates of return of those bonds. One way of computing a bond’s rate of return is to take into account all future streams of payments (interest coupons) as well as the difference between the price and the principal if the bond is held to maturity. This rate of return is known as the yield of the bond.
The yield on a security allows investors to decide whether to accept the riskiness and the cost of holding that security for an extended period or to invest in a safer, shorter-term bond. In other words, yields capture both a risk premium (the compensation for uncertainty in the streams of payments) and a term premium (the compensation

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Moonlighting in the spotlight : Trends for multiple jobholders

23 days ago

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Today we’ll try to better understand moonlighting—that is, holding multiple jobs. The Bureau of Labor Statistics records the number of multiple jobholders, and FRED has the data all the way back to 1994. What can we learn from the graph?
Most multiple jobholders hold a full-time plus a part-time job (blue line in the graph), and this group now makes up about 3% of the working population in the U.S. The percentage of workers with this particular work arrangement has declined since at least 1994, when it was over 3.5%.
Those in the next-largest group hold two part-time jobs (red line). The percentage of workers with this arrangement is significantly lower than the first group—a little less than 1.5% of all employees—and has been quite stable over time.
Finally

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Is household wealth overvalued? : Fluctuations in household net worth relative to income

26 days ago

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When economists look at household wealth, they’re often concerned about the individual assets that make up that wealth—specifically, that they may be overvalued. Thankfully, FRED has an indicator to help us evaluate household wealth: The ratio of household net worth to disposable personal income. This ratio remained nearly constant for 50 years before the dot-com bubble (roughly 1994-2000), when it started increasing. And a increasing ratio may signal that the assets underlying net worth are overvalued. Since 2017, household net worth relative to income (dashed blue line) generally has been above its previous record level from the year before the Great Recession.
We also include the value of financial assets, a component of net worth, relative to income (solid

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Taking the time to measure money : A closer look at broad money in the U.K.

August 22, 2019

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The FRED graph above, which tracks broad money in the U.K. over the past 172 years, makes it look like the Bank of England has let the money supply go completely out of control since 1970. But not so fast! Two important effects are at play here. The first is the power of compounding: Any statistic that increases at a constant rate will look like it is accelerating, especially if the sample period is long. That’s why FRED graphs offer the option of taking the natural logarithm, as shown in the second graph, below.
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If broad money had increased at a constant rate, the graph would show a straight line. That’s not the case, though, as broad money reacts to economic conditions, which is the second effect at play here. Consider that the money supply

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The stock market is not the economy : Taking a “random walk” through the data

August 19, 2019

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Does the stock market tell us anything about the economy? The stock market seems to react continually to various data and economic news, and many of us follow its day-to-day changes, especially if we’re invested in it. But do fluctuations in the stock market actually reflect economic health?
The best measure we have for measuring total economic activity is GDP. But GDP is measured only quarterly and with a considerable lag. With the help of FRED, though, we can look at a decade’s worth of data to see how closely GDP relates to the stock market.
The graph above looks at quarter-to-quarter percent changes in the Dow Jones Industrial Average (DJIA), deflated to remove general price increases, and real GDP, which is by definition also deflated to remove general price

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Paychecks at the top, at the bottom, and in the middle : A look at the distribution of wage income

August 15, 2019

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Let’s consider the topic of income disparity by looking at some data from our friends at the Bureau of Labor Statistics—or, as we like to call them, the BLS. (Just to clarify: Top incomes are increasing more than others not so much because of regular labor income, but largely because of capital income, various bonuses, and the like. That said, in this post we’ll stick with the distribution of regular wage income.)
The BLS’s Current Population Survey provides weekly wage income data for the U.S. population that can be split into various segments: These segments are ordered by income, from the very top (100%) to the very bottom (1%). The segments we chose, from top to bottom in the graph, are the 90%, 75%, 25%, and 10% levels. (That is, the ninth decile, the third

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The give and take of technology : Changes in U.S. imports and exports of intellectual property

August 12, 2019

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The U.S. creates many technological innovations that the rest of the world wants to use. The FRED graph above tracks how much technology the U.S. exported to the rest of the world from 2002 to 2018 (blue line), as measured by payments the world made for the use of U.S. intellectual property (IP). These payments, in the form of royalties and licensing fees, increased from $67 billion to about $118 billion, showing that the U.S. has substantially increased the knowledge it shares globally.
The U.S. also seeks out technology it doesn’t produce at home. So our graph also displays what the U.S. imported from the rest of the world (red line), as measured by the royalty payments the U.S. made to all other countries for the use of their IP. Take care to connect the exports

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Capital’s gain is lately labour’s loss : The global decline in the labour share of income

August 8, 2019

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The GDP of a country reflects, among other things, the total payments to all factors of production. For a long time, the share of payments to labour* relative to total payments to all factors of production was relatively stable. In recent decades, the share of payments to labour has been trending down in many countries, which FRED can help us illustrate.
The first graph shows that the share of labour compensation in GDP has been declining for several countries around the world. In the U.S., this share has declined by 5% between 1975 and 2017. The decline in other countries is even greater, with the largest occurring in Canada, at almost 11%.
Researchers Karabarbounis and Neiman recently argued that there’s an association between the declining labour share and the

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Live by the barrel, die by the barrel : Connections between oil production, oil dependency, and economic growth

August 5, 2019

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In every introductory macroeconomics course, oil is used as the classic example of a negative price shock. Professors tend to discuss the 1973 oil price shock triggered by the Arab-Israeli conflict and the 1979 oil price shock caused by the Iranian Revolution as reasons for rising inflation and falling global output—connecting these shocks to models about investment and aggregate supply and demand. More recent literature, including this presentation by St. Louis Fed President James Bullard, indicates that oil prices can sometimes be interpreted as a proxy for demand. But what’s the impact of oil supply for the consumers in oil-producing countries? We can use FRED to plot crude oil production versus GDP growth in oil-producing countries to get at least a first idea

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Switzerland’s mountainous monetary base : More Swiss uniqueness on their national holiday

August 1, 2019

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Today is the Swiss national holiday. In the past, we’ve taken this opportunity to discuss some unique (i.e., weird) feature of the Swiss economy. This time we use FRED to compare the Swiss monetary base with the U.S. monetary base. To make them comparable, we divide each by its country’s nominal GDP. We see that the general patterns are similar, with a sudden increase in 2008. While the U.S. monetary base has started to go back down (it’s lost a quarter since its high point), there’s nothing that shows any tendency to return to the long-run trend. Indeed, Switzerland is still working with extremely low (even negative) interest rates.
But let’s talk about the stark difference shown in the graph. This statistic for Switzerland is dramatically higher than it is for

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What can we claim about initial claims? : Keeping track of initial unemployment insurance claims

July 29, 2019

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Initial unemployment claims is a much-watched indicator of the economy. It counts how many people have become eligible for unemployment insurance compensation in a particular week. The data are available quickly and at a high frequency (weekly), but the series has the disadvantage of being highly volatile. This is why FRED also offers a four-week moving average, shown in the graph above: Simply, it’s the average of the past four weeks. Included in the graph is also a red line that indicates the lowest value of this statistic in the course of its history—in May 1969. Currently, claims are around 230,000 per week; and, while this is low, it was lower for 126 weeks early in the sample period.
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Of course, the population was much smaller in the 1960s,

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A mirror image of mortgages and equity : The story of the Great Recession told with two intersecting lines

July 25, 2019

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Take a look at mortgage or real estate data on FRED. The main story (for a number of years, now) is all about the Great Recession, which is clear in the graph above. Let’s unpack that story.
In blue, we have the share of equity in the real estate that households own. In the 1950s, 70-80% of the value of the average house was owner equity, and 20-30% was owned by a financial institution. The share of owner equity essentially stayed within a 60-70% band until the end of the millennium. Then it quickly dropped to below 40%, before rebounding today to its previous level (from 2001 or so). What happened during the Great Recession is clearly a deviation from normal.
This being a ratio, the deviation could have come from changes on either side of that ratio: 1. Mortgages

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The importance of imports : Import tariffs, imports of production inputs, and domestic investment

July 22, 2019

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U.S. trade policy continues to change, with rising tariffs on imports of capital goods and intermediate inputs from China and other countries. But how important are these types of imports for the U.S. economy, especially compared with total U.S. imports? As usual, FRED can help answer our question: The graph above plots the share of capital and intermediate inputs in aggregate U.S. imports over the period 1999-2019.
As the graph shows, the share is not small. In fact, it’s the majority of total imports, ranging from 46% to 61% over this period, with an average well above 50%. Because these imports play an important role for the domestic production of U.S. goods, one would expect that raising tariffs on these goods would have a negative impact on domestic

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What’s the story behind who’s working? : Disaggregating EPOP by race and gender

July 18, 2019

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Back in 2016, a FRED Blog post discussed the volatility of the labor market for people of different races based on the employment-to-population ratio (EPOP). The Bureau of Labor Statistics defines this measure as “the number of employed people as a percentage of the civilian noninstitutional population.” So EPOP is basically the percentage of adults who are employed.
The EPOPs for Hispanic and Black Americans have increased at roughly the same rates since the Great Recession of 2007-09, while the growth rate for White Americans has leveled off. This change occurred in spite of the decrease in employment from the Great Recession, which hit Hispanics and Blacks harder than Whites, judging by the steepness and level of decreases between 2008 and 2010. In fact, the

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Are firms too attached to bonds? : The evolution of corporate debt securities

July 15, 2019

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If you asked FRED how much the U.S. non-financial sector has in outstanding corporate debt securities (i.e., “bonds”), FRED would answer, “Nearly $6.24 trillion, which is over 30% of GDP, which is the highest it has been since the early 1950s.”
Non-financial corporate debt in the form of securities has grown about 6% on average year over year almost every quarter since 2014. Policymakers have recently voiced concerns about excessive borrowing by the corporate sector.
The graph above shows outstanding corporate debt securities as a share of GDP for four countries: the U.S., Japan, the U.K., and China. The ratio of corporate debt securities to GDP is higher in the U.S. than any of the other nations. Japan’s corporate debt-to-GDP ratio in 2017 was around 14%, the U.K.

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It sure looks like hosting the 2019 World Cup boosted France’s construction sector… : A real-world example of how to avoid confirmation bias

July 11, 2019

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The 2019 FIFA Women’s World Cup just ended on July 7. The host nation, France, provided nine venues across the country to hold the matches. The FRED Blog team and the St. Louis Fed in general loves using real-world situations to showcase applications of economics, and sports is a fairly popular real-world situation. (Also check out these essays on stadium subsidies, the Olympics, and France’s World Cup win in 1998.) One might expect that a large sporting event such as the World Cup would give an economic boon to the host, but let’s test that expectation by looking at data in FRED. Specifically, let’s see if the literal build-up to this World Cup affected construction in France.
One could easily assume that building stadiums to host the World Cup would cause a spike

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The check is in the mail… : Instrument discrepancies data and the mail float

July 8, 2019

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The FRED graph above shows you the total value of checks that are “in the mail.” More precisely, the mail float measures all checks that are being processed—that is, the checks being cleared between banks. The payer’s check is received by the payee’s bank through the mail or handed over to a cashier, but there’s a delay until that check is credited in their bank account. A large fraction of this time is dedicated to the physical delivery of the check through the postal system or other physical means to be processed.
A few more observations about the data. First, there seems to be a very strong seasonal factor until the turn of the millennium. We also see that the mail float keeps increasing over the first four decades, a reflection of a growing economy and

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20/19 Hindsight : Checking policymakers’ economic predictions against the data

July 1, 2019

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Since 2007, the Federal Open Market Committee (FOMC) has published individual members’ assessments of the economy in the Summary of Economic Projections (SEP). The SEP was one of Chairman Bernanke’s communication innovations in an effort to increase transparency after the 2007-09 Great Recession.
This expanded forward guidance includes predictions of the changes in the federal funds rate, GDP, the unemployment rate, personal consumption expenditures (PCE) inflation, and core PCE inflation. It’s released along with the minutes of selected FOMC meetings. Each policymaker submits an estimate for each indicator for the next three years as well as a longer-run estimate.
A recent St. Louis Fed Review article cites a survey of economists and other Fed watchers: 33% found

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Assets U.S. households hold : Changes in the value of financial assets, real estate, and durable goods

June 27, 2019

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FRED just expanded its coverage of the Z.1 release from the Board of Governors. Hidden behind this obscure name is a massive dataset that describes the financial situation of the nation, divided into sectors— households, businesses, government, and “the rest of the world.” Here, we look at the assets of households, which we’ve divided into three broad categories: real estate, consumer durables (cars, household appliances, furniture, etc.), and financial assets. The value of these assets has generally increased (no surprise; inflation is a factor), so we decided to divide each series by nominal GDP. This gives us a better idea of the quantities.
We can see that financial assets are the largest type of household asset, and their value relative to the other categories

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Metro pop : Growth and decline in U.S. metropolitan population data

June 24, 2019

View on GeoFRED®
FRED has included a lot of population data over the years, and it now offers data specifically for U.S. metropolitan statistical areas (MSAs).
First, a couple of caveats: It makes sense to study population numbers as a percent change year over year; looking at raw numbers can be misleading because size and density matter on a map. Also keep in mind that MSA definitions change, especially after a decennial census but sometimes midway between censuses; so, values at these dates may reflect changes in population, definition, or both.
The GeoFRED map above shows 2018 U.S. Census Bureau data for the 383 MSAs: 295 of them grew and 88 shrank. The largest (proportional) growth was in Midland, TX, with 4.32% in a single year, followed by 3.78% in Myrtle Beach, SC/NC, and

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Something changed in Black unemployment : Unemployment data reveal several differences for race and gender

June 20, 2019

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This post is a bit long, with a puzzling observation and, even after five FRED graphs, no definitive explanation. But sometimes the journey must be the destination…
The (first) graph above shows unemployment rates by race and gender since the start of the Great Recession. It’s clear men’s rates overall are higher than women’s, possibly due to factors such as women’s less-harmonious attachment to the labor market and different gender composition across industries and occupations. Also, Whites overall enjoy a lower unemployment rate than Blacks, which is at least partly due to the differences in the industries and occupations Blacks and Whites tend to work in.
The movements in the unemployment rates also differ, and this is the puzzle we focus on here. Look closely

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One rate does not rule them all : Unemployment is uneven across U.S. counties

June 17, 2019

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The graph above shows the annual civilian unemployment rate from 1948 to 2018, and here are some highlights: Ten years ago, after the Great Recession, the U.S. unemployment rate peaked at 9.6%. (The only higher unemployment rate in this series was 9.7%, in 1982.) It gradually came down to 3.9% in 2018, the lowest in fifty years. (The rate in 1969 was 3.5%.)
But these national unemployment numbers mask the variation that exists across different regions in the U.S. Fortunately, we have GeoFRED to paint a clearer picture: The map below shows the unemployment rate for 2018 for 3,133 U.S. counties. The counties are split into two equally sized groups according to their unemployment rates: Those with lower unemployment are in blue, and those with higher unemployment are

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Fixing the “Textbook Lag” with FRED (Part II) : Monetary policy in a world of ample reserves

June 13, 2019

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Your economics textbook may still say the Federal Reserve uses open market operations to influence the federal funds rate. But in today’s economy, the Fed uses different policy tools.
In simple terms, this is how monetary policy currently works: The FOMC sets a target range for the federal funds rate (FFR) and uses interest on excess reserves (IOER) and the overnight reverse repurchase agreement (ON RRP) facility to keep the FFR rate in the target range. (See our previous post for an introduction to this topic.)
The Fed pays IOER to banks holding reserves at the Fed, which offers those banks a safe, risk-free investment option. Arbitrage ensures that the FFR doesn’t drift too far from the IOER rate. If the FFR drifts much below the IOER rate, banks then have an

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Fixing the “Textbook Lag” with FRED (Part I) : Monetary policy in a world of ample reserves

June 10, 2019

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Your economics textbook may still say the Federal Reserve uses open market operations to influence the federal funds rate. But in today’s economy, the Fed uses different policy tools.
Before September 2008, when reserves were scarce, the Federal Reserve bought and sold relatively small quantities of Treasury securities to adjust the level of bank reserves and influence the federal funds rate (FFR). But we now live in an environment of ample reserves. As such, the Federal Reserve can no longer effectively influence the FFR by making small changes in the supply of those reserves. Instead, the Fed uses its newer tools—paying interest on excess reserves (IOER) and the overnight reverse repurchase agreement (ON RRP) facility—to influence the FFR.
Since December 16,

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Comovements in monetary policy : Revealing international correlations with FRED

June 6, 2019

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Reporters and Fed watchers in the U.S. usually think about monetary policy in a domestic framework. But because business conditions, including commodity prices, are correlated internationally, central banks tend to move their policy rates up and down together and their inflation and interest rates tend to be correlated. FRED makes it easy to see these international comovements of macro and policy variables.
The first graph shows comovement in inflation rates from 1970 to the present for four economies: the U.S., Japan, the U.K., and the euro area. Inflation rose in the 1970s as central banks failed to combat the effects of commodity price increases on the general price level and inflation expectations became established.
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Before the Financial

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Oil prices and breakeven inflation rates revisited

June 3, 2019

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In an earlier FRED Blog post, we highlighted the simultaneous decline in the 5-year breakeven inflation rate and the price of oil in 2014. (The 5-year breakeven inflation rates are obtained from 5-year Treasury inflation-indexed constant maturity securities and are thought to represent the market’s expectation of CPI at a 5-year horizon.) At that time, we argued that markets might have believed that the drop in oil prices reflected a slowing in global demand that might result in a persistent decline in consumer prices. In this post, we make a longer comparison—from 2011 to 2019—between the same two series shown in the original graph.
The graph above shows that the correlation between the breakeven inflation rate and oil prices is not limited to the steep decline

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