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Who Is Borrowing and Lending in the Eurodollar and Selected Deposit Markets?
Gara Afonso, Gonzalo Cisternas, and Will Riordan A recent Liberty Street Economics post discussed who is borrowing and lending in the federal funds (fed funds) market. This post explores activity in...
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The Disparate Outcomes of Bank‑ and Nonbank‑Financed Private Credit Expansions
Nina Boyarchenko and Leonardo Elias Long-run trends in increased access to credit are thought to improve real activity. However, “rapid” credit expansions do not always end well and have been shown in...
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Has Treasury Market Liquidity Improved in 2024?
Michael Fleming Standard metrics point to an improvement in Treasury market liquidity in 2024 to levels last seen before the start of the current monetary policy tightening cycle. Volatility has also...
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End‑of‑Month Liquidity in the Treasury Market
Henry Dyer, Michael Fleming, and Or Shachar Trading activity in benchmark U.S. Treasury securities now concentrates on the last trading day of the month. Moreover, this stepped-up activity is...
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International Stock Markets’ Reactions to EU Climate Policy Shocks
Julian di Giovanni, Galina Hale, Neel Lahiri, and Anirban Sanyal While policies to combat climate change are designed to address a global problem, they are generally implemented at the national level....
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The Dueling Intraday Demands on Reserves
Adam Copeland and Sarah Yu Wang A central use of reserves held at Federal Reserve Banks (FRBs) is for the settlement of interbank obligations. These obligations are substantial—the average daily total...
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Do the Fed’s International Dollar Liquidity Facilities Affect Offshore Dollar...
Linda Goldberg and Fabiola Ravazzolo At the outbreak of the pandemic, in March 2020, the Federal Reserve implemented a suite of facilities, including two associated with international dollar...
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The Making of Fallen Angels—and What QE and Credit Rating Agencies Have to Do...
Viral V. Acharya, Ryan Banerjee, Matteo Crosignani, Tim Eisert, and Renée Spigt Riskier firms typically borrow at higher rates than safer firms because investors require compensation for taking on more...
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How Is the Corporate Bond Market Responding to Financial Market Volatility?
Nina Boyarchenko, Richard Crump, Anna Kovner, and Or Shachar The Russian invasion of Ukraine increased uncertainty around the world. Although most U.S. companies have limited direct exposure to...
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What Is Corporate Bond Market Distress?
Nina Boyarchenko, Richard Crump, Anna Kovner, and Or Shachar Corporate bonds are a key source of funding for U.S. non-financial corporations and a key investment security for insurance companies,...
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The U.S. Dollar’s Global Roles: Revisiting Where Things Stand
Linda S. Goldberg, Robert Lerman, and Dan Reichgott Will developments in technology, geopolitics, and the financial market reduce the dollar’s important roles in the global economy? This post updates...
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The Fed’s Inaugural Conference on the International Roles of the U.S. Dollar
Ricardo Correa, Linda S. Goldberg, Robert Lerman, and Bo Sun The U.S. dollar has played a preeminent role in the global economy since the second World War. It is used as a reserve currency and the...
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The Global Dash for Cash in March 2020
Jordan Barone, Alain Chaboud, Adam Copeland, Cullen Kavoussi, Frank Keane, and Seth Searls Editors’ note: When this post was first published the x-axis labels on chart 2 and 3 were incorrect, and the...
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The Bond Market Selloff in Historical Perspective
Tobias Adrian and Michael Fleming Treasury yields have risen sharply in recent months. The yield on the most recently issued ten-year note, for example, rose from 1.73 percent on March 4 to 3.48...
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How Can Safe Asset Markets Be Fragile?
Thomas Eisenbach and Gregory Phelan The market for U.S. Treasury securities experienced extreme stress in March 2020, when prices dropped precipitously (yields spiked) over a period of about two weeks....
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Short‑Dated Term Premia and the Level of Inflation
Richard Crump, Charles Smith, and Peter Van Tassel Since the advent of derivatives trading on short-term interest rates in the 1980s, financial commentators have often interpreted market prices as...
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Measuring the Ampleness of Reserves
Gara Afonso, Gabriele La Spada, and John C. Williams Over the past fifteen years, reserves in the banking system have grown from tens of billions of dollars to several trillion dollars. This...
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What Is Atomic Settlement?
Michael Lee, Antoine Martin, and Benjamin Müller Distributed ledger technologies (DLTs) have garnered growing interest in recent years and are making inroads into traditional finance. One purported...
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How Liquid Has the Treasury Market Been in 2022?
Michael Fleming and Claire Nelson Policymakers and market participants are closely watching liquidity conditions in the U.S. Treasury securities market. Such conditions matter because liquidity is...
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How Is the Corporate Bond Market Functioning as Interest Rates Increase?
Nina Boyarchenko, Richard Crump, Anna Kovner, and Or Shachar The Federal Open Market Committee (FOMC) has increased the target interest rate by 3.75 percentage points since March 17, 2022. In this post...
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