Global risk conditions, along with monetary policy in major advanced economies, have historically been major drivers of cross-border capital flows and the global financial cycle. So what happens to these flows when risk sentiment changes? In this post, we examine how the sensitivity to risk of global financial flows changed following the global financial crisis (GFC). We find that while the risk sensitivity of cross-border bank loans (CBL) was lower following the GFC, that of international de...| Liberty Street Economics
Banks use central bank reserves for a multitude of purposes including making payments, managing intraday liquidity outflows, and meeting regulatory and internal liquidity requirements. Data on aggregate reserves for the U.S. banking system are readily accessible, but information on the holdings of individual banks is confidential. This makes it difficult to investigate important questions like: “Which types of banks hold reserves?” “How concentrated are they?” and “Does the distribu...| Liberty Street Economics
An update of the economic forecasts generated by the NY Fed's dynamic stochastic general equilibrium (DSGE) model--forecast and its change since March 2025.| Liberty Street Economics
A recent New York–Northern New Jersey business survey finds that most businesses passed on at least some of recent higher tariffs to their customers.| Liberty Street Economics
A puzzling feature of official U.S. employment statistics in recent years has been the increase in the gap between the nonfarm payroll and household employment numbers. This discrepancy is not trivial. From the end of 2021 though the end of 2024, net job gains in the payroll survey were 3.6 million larger than in the household survey. In this Liberty Street Economics post, we investigate one potential explanation for the emergence of this gap: a sharp rise in undocumented immigration during t...| Liberty Street Economics
The March 2025 update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model.| Liberty Street Economics