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New York Fed
The Federal Reserve Bank of New York was incorporated in May 1914 and opened for business in November later that year. To commemorate the New York Fed’s centennial, take a look at the people and events that helped shape our history.

New York Fed

Who Pays the Tax on Imports from China?

Matthew Higgins, Thomas Klitgaard, and Michael Nattinger Tariffs are a form of taxation. Indeed, before the 1920s, tariffs (or customs duties) were typically the largest source of funding for the U.S. government. Of little interest for decades, tariffs are again becoming relevant, given the substantial increase in the rates charged on imports from China. U.S. businesses and consumers are shielded from the higher tariffs to the extent that Chinese firms lower the dollar prices they...

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Monetary Policy Transmission and the Size of the Money Market Fund Industry

Marco Cipriani, Jeff Gortmaker, and Gabriele La Spada In a recent post, we documented the transmission of monetary policy through money market funds (MMFs). In this post, we complement that analysis by comparing the transmission of monetary policy via MMFs to the transmission via bank deposits and studying the impact of the differential pass-through on the size of the MMF industry. To this purpose, we focus on rates on certificates of deposit (CDs) offered to banks’ retail customers...

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Real Inventory Slowdowns

Richard K. Crump, David O. Lucca, and Casey McQuillan Inventory investment plays a central role in business cycle fluctuations. This post examines whether inventory investment amplifies or dampens economic fluctuations following a tightening in financial conditions. We find evidence supporting an amplification mechanism. This analysis suggests that inventory accumulation will be a drag on economic activity this year but provide a boost in 2020. As detailed in the NIPA Handbook,...

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Just Released: Racial Disparities in Student Loan Outcomes

Andrew F. Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw Total household debt balances increased by $92 billion in the third quarter of 2019, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. The balance increase reflected nearly across the board gains in various types of debt, with the largest gains of $31 billion in mortgage balances (0.3 percent) and...

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The Side Effects of Shadow Banking on Liquidity Provision

Teodora Paligorova and João A.C. Santos Correction: When this post was first published, line labels in the panel showing Tier 1 capital ratios were reversed; the labels have been corrected. (November 13, 10:40 a.m.) Over the past two decades, the growth of shadow banking has transformed the way the U.S. banking system funds corporations. In this post, we describe how this growth has affected both the term loan and credit line businesses, and how the changes have resulted in...

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At the New York Fed: Fifth Annual Conference on the U.S. Treasury Market

Michael J. Fleming, Peter Johansson, Frank M. Keane, and Justin Meyer The New York Fed recently hosted the fifth annual Conference on the U.S. Treasury Market. The one-day event was co-sponsored with the U.S. Department of the Treasury, the Federal Reserve Board, the U.S. Securities and Exchange Commission (SEC), and the U.S. Commodity Futures Trading Commission (CFTC). This year’s agenda featured a series of keynote addresses and expert panels focused on a variety of topics,...

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Trade Policy Uncertainty May Affect the Organization of Firms’ Supply Chains

Sebastian Heise, Justin R. Pierce, Georg Schaur, and Peter K. Schott Global trade policy uncertainty has increased significantly, largely because of a changing tariff regime between the United States and China. In this blog post, we argue that trade policy can have a significant effect on firms’ organization of supply chains. When the probability of a trade war rises, firms become less likely to form long-term, just-in-time relationships with foreign suppliers, which may lead to...

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Since the Financial Crisis, Aggregate Payments Have Co-moved with Aggregate Reserves. Why?

Thomas Eisenbach, Kyra Frye, and Helene Hall Fedwire Funds, a key payment system in the United States, is used by banks to wire money to one another throughout the day. Historically, the total value of payments sent over Fedwire has been roughly proportional to economic activity. Since the financial crisis, however, we have instead observed a strong co-movement between total payments and the level of aggregate reserves. This co-movement suggests that a fraction of every dollar of...

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Just Released: Introducing the SCE Public Policy Survey

Gizem Kosar, Kyle Smith, and Wilbert van der Klaauw Today, we are releasing new data on individuals’ expectations for future changes in a wide range of public policies. These data have been collected every four months since November 2015 as part of our Survey of Consumer Expectations (SCE). The goal of this post is to introduce the SCE Public Policy Survey and highlight some of its features. Households cope with considerable uncertainty in forming plans and making decisions....

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Optimists and Pessimists in the Housing Market

Haoyang Liu and Christopher Palmer Given momentum in house prices over business cycles, research on consumer beliefs since the financial crisis has honed in on the potential importance of extrapolative beliefs—myopically assuming trends in asset prices will continue. Extrapolation is frequently cited as a central reason for excessively optimistic expectations about future asset prices, featuring prominently, for example, in the irrational exuberance narrative of Shiller. Other...

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