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Institutional research & analysis

Source: Federal Reserve

CENTRAL BANK

Working PaperMay 13, 2026

FEDS Paper: A Tale of Demand and Supply for Central Bank Reserves

Sriya Anbil, Sebastian Infante, Zeynep Senyuz In an ample-reserves framework, administered rates anchor money markets but suppress information from unsecured interbank trading. We recover that information by isolating the small interbank segment of the federal funds market. Using high-frequency bank-level data, we employ deposit shocks as an instrument for bank borrowing demand. Our analysis reveals that non-bank lenders, such as Federal Home Loan Banks, supply funds elastically, whereas bank...

Federal Reserve1 min read
Working PaperMay 13, 2026

FEDS Paper: Does Banking Consolidation Harm Households?

Celso Brunetti, Jeffery H. Harris, Ioannis Spyridopoulos No, in the mortgage market. Using confidential micro-level data combining mortgage contracts with credit and repayment records for 44 million loans spanning 5,000 bank mergers over nearly three decades, we find no changes to mortgage rates, approval rates, or delinquency rates. Local mortgage markets remain remarkably competitive despite consolidation, averaging over 100 active lenders in each county every post-merger quarter. Our findi...

Federal Reserve1 min read
Working PaperMay 13, 2026

FEDS Paper: Anchored to the Dot Plot: Central Bank Projections and Interest Rate Expectations

Eric Engstrom In January 2012, the Federal Reserve began publishing the Summary of Economic Projections (SEP) "dot plot," revealing FOMC participants' projections for the federal funds rate. This paper documents a dual role for SEP projections in the formation of private interest-rate expectations. On one hand, SEP projections contain valuable information, achieving lower forecast errors than consensus surveys, VAR models, and several market-based measures at many horizons. Because the SEP is...

Federal Reserve1 min read
Working PaperMay 4, 2026

FEDS Paper: Pretend or Amend? On Evergreening in CRE

David Glancy Loan modifications can either amplify or mitigate credit losses depending on the strategy lenders employ. Using detailed supervisory data and a model incorporating various frictions that could encourage modifications (liquidity constraints, foreclosure costs, and loss recognition costs), I assess why banks extend CRE loans. I find that extensions predominantly address temporary payment frictions, both in normal times and following the Spring 2023 bank stress episode. Contrary to ...

Federal Reserve1 min read
Working PaperMay 1, 2026

FEDS Paper: Financial Well-being and Inclusion of Justice Involved Populations: Evidence from the SHED

Kabir Dasgupta, Jennifer Fernandez, and Alicia Lloro This study examines financial challenges faced by justice-involved individuals using 2023-2024 Survey of Household Economics and Decisionmaking data. Individuals with justice system contact experience substantially worse financial outcomes than those without criminal records, with disparities widening by severity of involvement. Compared to individuals with no prior records, those arrested but not convicted are 4 percentage points less like...

Federal Reserve1 min read
Working PaperMay 1, 2026

FEDS Paper: The Effect of the Federal Reserve on the Stock Market: Magnitudes, Channels and Shocks

Benjamin Knox and Annette Vissing-Jorgensen We survey and extend work on the Federal Reserve’s effect on the stock market, focusing on three empirical findings: The effect of monetary policy surprises in a narrow window around announcements from the Federal Open Market Committee (FOMC), the pre-FOMC announcement drift, and the FOMC cycle in stock returns. We discuss the magnitude of the Fed’s impact (directional effects or effects on average stock returns), the types of shocks coming from the...

Federal Reserve1 min read
Working PaperMay 1, 2026

FEDS Paper: Price-Segmented Beliefs and the U.S. Housing Boom

Margaret M. Jacobson This paper shows that expected capital gains in several MSAs were higher for relatively lower-priced, rather than higher-priced, houses during the U.S. boom of the 2000s. Because buyers of lower-priced houses tend to be more sensitive to credit conditions than buyers of higher-priced houses, this paper documents patterns that are consistent with an interaction of beliefs and credit conditions in a time period where direct evidence on house price beliefs is scarce. Documen...

Federal Reserve1 min read
Working PaperMay 1, 2026

IFDP Paper: Tariffs and Goods-Market Search Frictions

Pawel M. Krolikowski and Andrew H. McCallum We study tariffs in a general equilibrium dynamic model with search frictions between heterogeneous exporting producers and importing retailers. We show the model has a unique equilibrium and analytically characterize home unilateral import tariffs that maximize welfare given a passive foreign country. Search frictions add two terms to the standard optimal tariff expression: One lowers tariffs when contact rates are low; another when private export ...

Federal Reserve1 min read
Working PaperApril 1, 2026

FEDS Paper: Monetary Policy under Multiple Financing Constraints

Ander Perez-Orive, Yannick Timmer, Alejandro van der Ghote We revisit the credit channel of monetary policy when firms face multiple financing constraints. Our theory shows that the multiplicity of constraints dampens the transmission of expansionary policy to firm borrowing and investment notably but amplifies the transmission of policy tightening. This asymmetry arises because, when policy tightens (eases), the most (least) responsive constraint binds. Using U.S. firm-level data and exploit...

Federal Reserve1 min read