Understanding the Recent Rise in Municipal Bond Yields
In late March, investors sold off municipal bonds at a rapid pace, depressing municipal bond prices and driving up their yields relative to U.S. Treasuries. We find that this initial investor run on the municipal bond market was likely due to increased liquidity demand rather than credit concerns, making the Federal Reserve’s early actions to relieve liquidity stress effective. Going forward, however, municipal bond prices will likely reflect increased credit concerns.
Women Take a Bigger Hit in the First Wave of Job Losses due to COVID-19
The temporary shutdown orders and social distancing measures taken to fight the COVID-19 outbreak have caused substantial job losses in the United States. Women, especially those without a college degree, have taken a bigger hit in the first wave of job losses. This imbalance could lead to prolonged damage to women’s employment and labor market attachment if job losses deepen and persist in the coming months.
COVID-19 Stuns U.S. and Tenth District Economies, but Both Show Signs of Stabilization
COVID-19 and attempts to slow its spread have led to a decline in economic activity unprecedented in both severity and speed. Although every part of the United States experienced dramatic decreases in activity, states in the Tenth Federal Reserve District, with lower COVID-19 cases as a percentage of the population, have fared slightly better. More recently, national and regional measures of business and consumer activity have improved but remain well below pre-pandemic levels.
Pandemic Relief Has Aided Low-Income Individuals: Evidence from Alternative Financial Services
Although low-income individuals are more likely to have lost their jobs due to the COVID-19 pandemic, pandemic relief efforts may have helped prevent them from experiencing increased financial distress. Consumer interest in payday loans, title loans, and pawn loans have all declined since the onset of the pandemic, suggesting low-income individuals have been able to access credit and meet basic financial needs without the use of these alternative financial services.
Cell Phone Data Suggest Persistent Differences in Work from Home by Income, Race, and Education during the Pandemic
Social-distancing policies to combat the spread of COVID-19 led to an initial spike in work from home. We use high-frequency cell phone geolocation data to assess how work from home has evolved since then. We show that work from home declined as restrictions eased but remains above pre-pandemic levels. In addition, we find that differences across income, race, and education in work from home that emerged with the pandemic persist a year later.
The Outlook for Farmland Values amid Higher Interest Rates
In 2018, the spread between returns to farmland owners and benchmark interest rates narrowed to its lowest level in more than a decade in the Tenth Federal Reserve District. At the same time, farmland sales increased in some states for the first time in several years. Together, the reduced spread and indications of increased sales in some regions suggest the potential for lower farmland values moving forward.
The G-Spread Suggests Federal Reserve Restored Calm to Treasury Markets
In March, the coronavirus pandemic led to a sell-off in Treasury markets and a subsequent period of financial stress. I use one measure of Treasury market pressure, the G-spread, to gauge how liquidity in Treasury markets changed in response to the pandemic and the Federal Reserve’s interventions. I find that timely Federal Reserve interventions restored calm to the Treasury market, and that these interventions stand out in speed and scale compared with interventions in the early days of the 2007–08 financial crisis.
Women Are Driving the Recent Recovery in Prime-Age Labor Force Participation
The labor force participation rate of prime-age individuals (age 25 to 54) in the United States declined dramatically during and after the Great Recession. While the rate remains below its pre-recession level, it has been increasing steadily since 2015. We examine how different demographic groups have contributed to this rebound and find that college-educated women have made the largest contribution to the recent recovery in the prime-age labor force participation rate.
The Evolving Relationship between COVID-19 and Financial Distress.
During most of the COVID-19 pandemic, regions with high financial distress saw disproportionately more infections and deaths than regions with low financial distress. As of February 2021, cumulative infections appear more evenly distributed. However, total deaths remain higher in financially distressed regions.
Hybrid Officing Will Shift Where People and Businesses Decide to Locate
Many businesses are likely to shift to hybrid officing following the pandemic, with employees working remotely several days per week. The reduced frequency of commutes and associated decrease in traffic may fuel residential construction in outlying suburbs, especially in the largest metropolitan areas. At the same time, suburban employers may move their offices closer to city centers due to reduced space needs, eased parking constraints, and less frequent commutes.