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Briefing
Of Soft, Hard and Aborted Landings
In this article, we compare two rate cycles from the 1980s (one of which resulted in a soft landing) with our current rate cycle. We describe the type of landing that resulted from each rate cycle through changes in the federal funds target rate, inflation, unemployment and consumption growth. Importantly, since monetary policy is not carried out in a vacuum, we underscore the importance of external shocks in affecting the economy and, ultimately, in determining (along with monetary policy) the rigidity of the landing.
Briefing
Redlining and U.S. Residential Mortgage Market Pricing
Does redlining have implications for mortgage pricing today? This article summarizes our research assessing long-lasting implications from the "residential security maps" developed by the Home Owners Loan Corp. in the 1930s that color/letter-coded U.S. neighborhoods. The study finds (1) that the average levels of mortgage rates and fees are modestly higher for all borrowers on the historically targeted (redlined, that is, C-coded or D-coded) side of a neighborhood color boundary; (2) that mortgage rates and fees are modestly higher for minorities on either side of the boundary; (3) that these ...