Search Results
Journal Article
Large-dollar payment flows from New York
Working Paper
A federal funds rate equation
This paper presents evidence that indicates that U.S. interest rate policy during most of the 1980s can be described by a reaction function in which the federal funds rate rises if real GDP rises above trend GDP, if actual inflation accelerates, or if the long-term bond rate rises. Money growth when included in the reaction function is significant, indicating that money also influenced policy. The results presented here however indicate that in recent years the Fed has discounted the leading indicator properties of money. In contrast, the bond rate has been a key determinant of the funds rate ...
Journal Article
Has Forward Guidance Been Effective?
A. Lee Smith and Thealexa Becker compare forward guidance announcements with changes in the effective federal funds rate and find the two policy measures have had similar macroeconomic effects.
Speech
Remarks on the role of central bank interactions with financial markets
Remarks at New York University's Stern School of Business, New York City.
Journal Article
Federal funds, tax increase help Owensboro shore up its economy
An unprecedented amount of aid was extended by the Treasury, Fed and FDIC to companies, agencies and individuals. This aid was necessary and, in many cases, will return a profit to taxpayers.
Discussion Paper
The Effect of Fed Funds Rate Hikes on Consumer Borrowing Costs
The target federal funds rate has hovered around zero for nearly a decade, and observers are questioning what effect an increase could have on both the financial markets and the real economy. In this post, we examine the historical reaction of loan rates to target rate increases. Specifically, we examine the interest rates that banks offer on residential mortgages and home equity lines of credit (HELOCs).
Working Paper
Modelling Overnight RRP Participation
We examine how market participants have used the Federal Reserve?s overnight reverse repurchase (ON RRP) exercise and how short-term interest rates have evolved between December 2013 and November 2014. We show that money market fund (MMF) participation is sensitive to the spread between market repo rates and the ON RRP offering rate as well as Treasury bill issuance, government sponsored enterprise (GSE) participation is more heavily driven by calendar effects, dealers tend to only participate when rate spreads are negative, and banks generally do not participate. We also find that the effect ...
Working Paper
Effects of Changing Monetary and Regulatory Policy on Overnight Money Markets
Money markets have been operating under a new monetary policy implementation framework since the Federal Reserve started paying interest on bank reserves in late 2008. The regulatory environment has also evolved substantially over this period. We develop and test hypotheses regarding the effects of changes in the monetary and regulatory policy on dynamics of key overnight funding markets. We find that the federal funds rate continued to provide an anchor, albeit weaker, for unsecured funding rates amid substantial decline in activity and changing composition of trades, while its transmission ...
The Impact of the Additional Appropriations on Federal Spending in the Fourth District
Headlines regularly report large changes in federal spending. But despite recent additional appropriations, it appears that the federal funds flowing into the Fourth District in 2023 have returned to their prepandemic levels relative to the District’s gross domestic product.
Speech
The national and regional economy
Remarks at the Whitman School of Management at Syracuse University, Syracuse, New York.