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Monetary policy

  • Speeches and essays

    The banking system and the demand for reserves

    When it comes to the balance sheet, as with all of the Fed’s work, the focus needs to be on how we can best serve the public and support a strong economy and financial system.

  • Dallas Fed Economics

    Options for reducing the size of the Fed’s balance sheet

    Some observers have argued that the Federal Reserve’s balance sheet is too large and complicates the central bank’s operations. We catalog options for reducing the Fed’s major liabilities, which help determine the size of the balance sheet, as well as a framework for assessing the costs and benefits of those options.

  • Dallas Fed Economics

    Break-even employment declines as unauthorized immigration outflows continue

    For policymakers, interpreting labor market conditions increasingly requires looking beyond headline payroll growth and incorporating timely measures of immigration and labor supply.

  • Dallas Fed Economics

    Lessons from the destabilization of inflation in the 1970s

    Interest has recently increased in the question of whether the destabilization of inflation during the 1970s might repeat itself in the 2020s.

  • Dallas Fed Economics

    Domestic banks are inelastic providers of marginal funding to repo markets

    As system liquidity declines and rates of return rise, new types of participants enter repo markets as lenders, although some may not be able to reliably deploy cash in the early morning when markets are most active. The short tenor and early-morning timing of most private market repo transactions make domestic banks especially inelastic lenders in response to unanticipated demands for lending.

  • Dallas Fed Economics

    How AI debt financing impacts duration supply and interest rates

    Financing needs related to AI data center investments are likely to be large and persistent. While the overall economics of such investments remains a topic of much debate, the duration supply implications for U.S. interest rate markets have received less attention.

  • Working Paper

    Weak Instrument Bias in Impulse Response Estimators

    This paper approximates the finite-sample distribution of impulse response function (IRF) estimators that are just-identified with a weak instrument using the conventional local-to-zero asymptotic framework.

  • Dallas Fed Economics

    Global Institute presentation: Steve Kamin on the dollar’s status

    During a presentation and discussion hosted by the Global Institute last month, Steve Kamin discussed how tariffs, volatility and evolving payment technologies are challenging—but not yet dislodging—the dollar’s position as a reserve currency at the center of the global financial system.

  • Dallas Fed Economics

    A simple measure of monetary policy transmission

    The Federal Open Market Committee adjusts the stance of monetary policy primarily by changing its target range for the federal funds rate. A new measure examines rate transmission efficacy across interest rates in a variety of money markets.

  • Working Paper

    Optimal Foreign Reserve Intervention and Financial Development

    This paper documents evidence of a U-shaped relationship between financial development and the adjustments of foreign exchange reserve holdings in response to a U.S. interest rate increase.