Information Regarding Recent Federal Reserve Actions
Comprehensive list of links to information related to recent Federal Reserve actions, including links to press releases, Federal Register notices, and other related information.
Read more
Federal Reserve, OCC, and FDIC release results of the Supervisory Capital Assessment Program
The results of a comprehensive, forward-looking assessment of the financial conditions of the nation’s 19 largest bank holding companies (BHCs) by the federal bank supervisory agencies were released on Thursday.
Read more
FOMC Statement
Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be somewhat slower.
Read more
Federal Reserve Releases Financial Statements
The Federal Reserve System on Thursday published the annual financial statements for the combined Federal Reserve Banks, the 12 individual Federal Reserve Banks, the limited liability companies (LLCs) that were created in 2008 to respond to strains in financial markets, and the Board of Governors for the years ended December 31, 2008 and 2007.
Read more
Cleveland, Pittsburgh Neighborhoods Similar, But Untangling Foreclosure Crisis May Prove Elusive
The neighborhoods of North Collinwood on Cleveland’s east side and Braddock, a Pittsburgh borough overlooking the Monongahela River, are statistically similar. Why, then, is the foreclosure rate in North Collinwood (20.75 percent) nearly four times as high as the foreclosure rate in Braddock (5.2 percent)? It may be differences in the state regulatory environments.
Read more
President Pianalto discusses steps toward a new financial regulatory architecture in Columbus speech
In remarks to Ohio bankers in Columbus, Ohio, Federal Reserve Bank of Cleveland President and CEO Sandra Pianalto explained her economic outlook and the Federal Reserve?s recent actions. She also proposed a new framework for categorizing financial institutions based on the degree of risk they pose to the financial system; and endorsed "macroprudential supervision."
Read more
5 Tips for Avoiding Foreclosure Scams
Reports of mortgage foreclosure scams are on the rise. Knowing what to watch for and where to turn for help is vital for families who are struggling to remain in their homes. March 1 to 9 is National Consumer Protection Week, and the Federal Reserve Board has compiled some tips to help protect consumers from becoming victims of foreclosure avoidance scams.
Read more
Successfully Resolving Financial Crises: Cleveland Fed Notes Lessons from Sweden
As policymakers worldwide focus on resolving the current financial crisis, they might look to Sweden as a useful model for effective financial crisis resolution, according to a study released today by the Federal Reserve Bank of Cleveland.
Read more
Cleveland Fed Offers Mortgage Foreclosure Resource Center
This online resource will serve both as a central portal for the Federal Reserve Bank of Cleveland’s work on foreclosure, as well as a means of sharing tools and resources available nationally and regionally with homeowners and community development groups dealing with this issue.
Read more
Involuntary Part-Time Workers and the Deficiencies of the Unemployment Rate
Yoonsoo Lee and Beth Mowry
The unemployment rate is often criticized for leaving some people out of the count. The rate is defined as the percentage of those in the labor force who are unemployed, and to be in the labor force, one needs to be employed or actively seeking work. Not included are people who are willing and able to work but who have stopped searching.
Read more
Replacing the Dollar with Special Drawing Rights--Will It Work This Time?
Owen F Humpage
The head of China’s central bank is calling for countries to replace the U.S. dollar as an international reserve currency with something called SDRs. Created by the IMF way back in 1969 for that purpose, SDRs never caught on. While SDRs may be declared an official international reserve asset today, they are not likely to become the world’s key international currency anytime soon. In the meantime, countries in China’s current predicament--acquiring more dollars than they think prudent--could avoid such risks in the future by allowing their currencies to appreciate.
Read more
(PDF)
Real GDP: First-Quarter 2009 Advance Estimate
Brent Meyer
Real GDP decreased at an annualized rate of 6.1 percent in the first quarter of 2009, slightly less negative than the fourth quarter’s −6.3 percent, but coming in worse than consensus expectations. The resulting four-quarter growth rate in real GDP fell to −2.6 percent, its lowest growth rate since the 1982 recession.
Read more
The Changing Composition of Consumption
Paul W Bauer and Michael Shenk
It is no secret that some households are being hit hard in the current recession. The ongoing job losses, lower housing wealth, and tight credit of this financial crisis have led to some abrupt shifts in household consumption behavior.
Read more
Mighty Bad Recessions
Owen F Humpage and Michael Shenk
No two recessions are exactly alike. Nevertheless, recessions often share basic characteristics that determine their severity and the pace of subsequent recoveries. The IMF has been studying two of these—association with a financial crisis and global reach—to see how they affect a recession’s contours. The implications for our current global economic malaise, which shares both of these characteristics, are sobering. They explain why the current global downturn is the worst since the Great Depression.
Read more
The Yield Curve, April 2009
Kent Cherny and Joseph G Haubrich
Since last month, the yield curve has twisted steeper, with short rates dropping and long rates rising. The difference between short and long rates, the slope of the yield curve, has achieved some notoriety as a simple forecaster of economic growth.
Read more
An Overview of the Healthcare System
Michael Shenk
Despite much of policymakers’ time being devoted to the ongoing financial crisis and the resulting recession, there seems to be a great deal of resolve to tackle the pressing issue of healthcare reform. With this in mind, it is a good time to take a look at the healthcare industry.
Read more
The Employment Situation, March 2009
Beth Mowry and Murat Tasci
Payroll employment continued its sharp drop in March, declining by 663,000. Revisions left February’s losses unchanged at 651,000, but January’s losses increased to 741,000 (from 655,000 reported last month). Job losses were spread across all major industry groups, with the lone exception of healthcare. The unemployment rate continued to rise, increasing 0.4 percentage point to 8.5 percent, the highest rate since 1983.
Read more
New Policy Moves and the Term Asset-Backed Securities Loan Facility
Andrea Pescatori
At its recent meeting on March 18, the Federal Open Market Committee (FOMC) acknowledged that the economy is continuing to contract as “job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending.” Because current economic conditions have rendered the Fed’s traditional interest rate channel no longer viable for stimulating the economy, the FOMC has turned to the use of credit-easing to support to the real economy and the financial system.
Read more
China, SDRs, and the Dollar
Owen F Humpage and Michael Shenk
China wants a new international reserve currency that is “disconnected from economic conditions and sovereign interests of any single country.” It has recommended Special Drawing Rights for the job. But the private sector will only adopt the SDR if it offers network benefits, comparable to the dollar, but that could take decades. In the meantime, countries worried about their expanding dollar portfolios might take a different tack: Allow their currencies to float and adopt a domestic monetary policy focused on long-term price stability.
Read more
Real GDP: Fourth-Quarter 2008 Final Estimate
Brent Meyer
The final estimate of real GDP in the fourth quarter of 2008 came in at −6.3 percent (annualized rate), 0.1 percentage points lower than the preliminary estimate and whopping 2.5 percentage points below the advance estimate.
Read more
U.S. Real Estate: Looking for Progress in Price Stability and Financing
You can still find our federal funds rate predictions here, but we have replaced the fed funds chart on our home page with one that shows assets on the Fed’s balance sheet. With the FOMC’s target for the funds rate set to a range of 0 to 1/4 percent, the predictions are not as informative as when interest rates are higher and more variable. Our new balance-sheet chart is intended to clarify the monetary policy tools (referred to collectively as “credit easing”) that have been introduced to deal with the financial crisis and the zero-interest-rate environment.
Read more
Understand and Follow the Fed’s New Credit-Easing Tools with our Balance-Sheet Charts
The Federal Reserve has introduced a number of new monetary policy tools to restore credit market functioning. These tools have changed the size and the composition of the assets on the Fed’s balance sheet. We have created a set of charts that show the growth of different assets over time, both traditional ones and those that have been added as new tools have been introduced.
Read more
Effective Practices in Crisis Resolution and the Case of Sweden
Kent Cherny and Ozgur Emre Ergungor
The current financial crisis is a painful reminder that the developed world is not yet immune to these devastating shocks. But while we haven’t learned to prevent them, we have learned some lessons about what is necessary to contain them once they begin and to limit the damage that follows. As policymakers worldwide focus on resolving the current financial crisis, they might look to Sweden as a useful model for effective strategies.
Read more
(PDF)
Adjustable-Rate Mortgages and the Libor Surprise
Mark E Schweitzer and Guhan Venkatu
Adjustable-rate mortgages have typically been tied to either of two indexes, one based on U.S. treasuries, the other on the London interbank offered rate, or Libor. The index is used to determine a mortgage’s new interest rate when it is reset, and up until recently, the choice would have made little difference. But since 2007, the rates on which the indexes are based have diverged sharply, and borrowers with Libor-based adjustable-rate mortgages are likely to pay more than they would have had their mortgages been tied to treasuries. Moreover, the proportion of Libor-based ARMs has increased significantly, especially for subprime loans.
Read more
(PDF)