Search Results
Blame higher U.S. equity prices for recent moves in U.S. external liabilities
The U.S. net foreign asset position—the value of foreign assets held by U.S. residents minus the value of U.S. assets held by foreign residents—has fallen sharply since the 2008 Global Financial Crisis.
Fed’s 1994 Rate Aggressiveness Led to Emerging-Market Turmoil; Is This Time Different?
As the Federal Reserve embarks on a monetary tightening cycle, only a few spots of vulnerability have appeared among emerging markets.
Treasuries’ allure as safe haven noted in short maturities, not in long bonds
The United States has a large negative net-foreign-asset position, especially in safe assets. In times of crisis, U.S. government debt, especially short-term Treasuries, are viewed as a safe haven. As a result, the U.S. is a net debtor. It is more leveraged and tends to hold more risky assets (mostly equities) and finance those positions by selling safe-asset debt to the rest of the world.
Emerging-market countries insulate themselves from Fed rate hikes
Earlier episodes of sizable Fed tightening preceded destabilizing currency devaluations in emerging markets, precipitating sovereign debt and banking crises in many of those economies
Dallas Fed, Latin American central banks explore financial stability risks
The COVID-19 pandemic, recent monetary tightening and a strengthening U.S. dollar were the themes explored during a recent conference organized by the Federal Reserve Bank of Dallas and the Center for Latin American Monetary Studies (CEMLA) and held at CEMLA’s Mexico City headquarters.
Refilling the Strategic Petroleum Reserve offers chance to recalibrate its size
A series of emergency drawdowns, exchanges and planned sales since 2020 have reduced crude oil inventories held by the U.S. Strategic Petroleum Reserve to a 40-year low. Calls to fully refill the SPR in recent months raise important questions.
Capital flowed from emerging markets as pandemic, economic cycle took hold
Fluctuations in the global financial cycle, reflecting impacts from the COVID crisis, account for roughly one-third of the movement in emerging-market inflows during 2020–23.
Disparate supply-side forces gave U.S. economy an edge
The U.S. economy boasts robust growth and slowing inflation despite the highest interest rates in two decades. Such performance isn’t common globally, especially among other advanced economies, revealing crucial differences in the fundamental factors driving inflation and growth.
U.S. 30-Year mortgage predominance doesn’t seem to delay impact of Fed rate hikes
After comparing economic data of the U.S. and other major advanced economies, we find tentative evidence that the slow adjustment of the outstanding mortgage rate in the U.S. has not played an important role in delaying the intended effects of the monetary tightening.
Mexican peso strength noteworthy among emerging markets during Fed tightening
Many emerging-market currencies have depreciated modestly during the Federal Reserve’s tightening cycle that began in March 2022. The Mexican peso, however, outperformed the group during the period.