"Low-For-Long" Interest Rates and Portfolio Shifts in Advanced Foreign Economies
For the past several years, interest rates in many advanced economies have been at historic lows. Although low interest rates have helped support recovery in these economies, persistently low rates have also raised concerns about increased incentives for risk-taking by investors to achieve higher yields.
How Do Liquidity Conditions Affect U.S. Bank Lending?
The recent financial crisis underscored the importance of understanding how liquidity conditions for banks (or other financial institutions) influence the banks' lending to domestic and foreign customers.
China's Footprints on the Global Economy : Remarks delivered at the Second IMF and Federal Reserve Bank of Atlanta Research Workshop on the Chinese Economy
This note explores some key aspects of China?s economic rise and the spillovers to the rest of the world that this rise has created. It then examines, using the Federal Reserve Board?s large-scale global model (SIGMA), the potential consequences for the global economy were China?s economy to slow sharply. Although the probability of such an event is low, a sharp slowdown of Chinese economic growth could have significant consequences for the global economy.
What's Driving the Recent Slump in U.S. Imports?
In this post, we explore what has been driving the recent slump in U.S. imports of non-oil goods.
International Spillovers of Monetary Policy
This note presents a broad-brush overview of some of the salient issues on this topic and provides our sense of the answers to some key questions. We start by sketching out a simple framework for understanding how monetary policy actions spill over to other economies. The note then describes some back-of-the-envelope estimates of how U.S. monetary policy actions are transmitted overseas that we corroborate using a large-scale policy model (SIGMA). Finally, we discuss the implications of monetary policy spillovers for global economic stability, including the challenges posed by those ...
Causes of the Global Trade Slowdown
This note analyzes the striking slowdown in world trade in recent years. After documenting key features of this slowdown, we assess its causes, including to what extent it reflects recent cyclical weakness in global growth versus underlying long-term structural shifts in the world economy.
Measuring Monetary Policy Uncertainty : The Federal Reserve, January 1985-January 2016
In this note we focus on the U.S. over the period January 1985 to January 2016, but have also constructed measures over a longer time period and for other central banks/economies.
"Low-for-Long" Interest Rates and Net Interest Margins of Banks in Advanced Foreign Economies
This note explores the empirical evidence between changes in interest rates and NIMs for different interest rate environments to discover the potential adverse effects of a low interest rate on bank NIMs. Using cross-country evidence can be insightful to assess a situation that is not so common in any individual country. Overall, the new empirical analysis shows that low rates are contributing to weaker NIMs and identifies an adverse effect that is materially larger when interest rates are low. It suggests that these effects can be material for banks in some key advanced foreign economies ...
What Equity Markets Said About Brexit-Related Costs to U.S. Banks
In this note, we use data on stock prices and betting market odds of Brexit for the period leading to and including the vote to estimate the magnitude of markets-implied costs of Brexit for U.S. banks.
Emerging Market Capital Flows and U.S. Monetary Policy
Accordingly, in this note we analyze the drivers of EME capital flows, focusing in particular on the role of U.S. monetary policy and other potential factors in the decline in capital flows to EMEs since 2010.