Articles from
Dallas Fed Economics providing critical insights on trade, immigration, and other major international issues, along with in-depth analysis of monetary policy challenges affecting the U.S. economy and its deep financial and economic ties with Mexico.
Dallas Fed Economics
What Big Macs tell us about the disconnect between prices and exchange rates
The Economist’s Big Mac Index is a measure of the real exchange rate that instead of measuring the price of a basket of goods and services, measures the price of one good, the McDonald’s Big Mac. Recent empirical work finds that financial factors, and not monetary ones, underlay a very high correlation between nominal exchange rates and the Big Mac-based real exchange rate.
October 15, 2026
Dallas Fed Economics
Refinery outages pumping up fuel prices more than cost of crude oil
Even after the Iran conflict ends and the flow of crude oil through the Strait of Hormuz normalizes, U.S. fuel prices will likely remain unusually elevated relative to crude prices, owing to diminished refining operations. As a result, headline inflation measures could remain above where oil price trends would normally indicate for as long as a significant portion of global refining capacity stays offline.
October 08, 2026
Dallas Fed Economics
Tariffs increased in 2025; why did U.S. imports grow?
The U.S. average tariff rate increased from 2.9 percent in January 2025 to 14.8 percent in December, a rise of almost 12 percentage points. The surge—the largest such U.S. jump since the Smoot-Hawley tariffs at the onset of the Great Depression in 1930—led to a sharp increase in the tariff-inclusive prices that U.S. importers paid.
October 06, 2026
Dallas Fed Economics
Mitigating tariffs via USMCA may have limited 2025 price increases
Higher tariffs do not automatically show up one-for-one in consumer prices. Price effects depend on how firms respond. Foreign exporters may cut pre-tariff prices to preserve access to the U.S. market, while domestic importers or retailers may absorb part of the increase with lower margins.
August 18, 2026
Dallas Fed Economics
Does it matter who finances the government’s debt?
Government debt financed from domestic savings has a smaller effect on interest rates than government debt financed from foreign borrowing, and nations that are net international creditors can borrow more cheaply than net international debtors. These observations help explain massive government borrowing since 2008 while bond yields remained persistently low.
August 11, 2026
Dallas Fed Economics
How USMCA compliance cushioned the 2025 tariff shock
Despite regional sourcing and compliance costs, USMCA-based firms enjoy an edge over competitors outside North America facing higher U.S. tariffs.
August 04, 2026
Dallas Fed Economics
International comparisons show AI effect on productivity
Because AI use varies across countries, we can draw on international data to investigate the relationship between AI exposure and productivity growth at the sector level. The positive relationship in the U.S. fits a pattern visible among countries and appears related to high AI use.
July 07, 2026
Dallas Fed Economics
U.S. economy less vulnerable to geopolitical oil price shocks than in the past
Recent Federal Reserve Bank of Dallas research shows that the response of U.S. real (inflation-adjusted) GDP growth to the 2026 Iran war is only one-twentieth of what it would have been in 1980. Moreover, the response of U.S. real GDP growth today is only one-sixth of the decline in the rest of the world.
June 23, 2026
Dallas Fed Economics
Hormuz closure offsets tariff reversal; U.S. left with upside inflation risk
A pair of important and opposing trade shocks hit the U.S. economy during the first quarter of 2026. The U.S. Supreme Court struck down a portion of the tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The decision on Feb. 20 lowered average U.S. import tariffs by roughly 4.8 percentage points.
June 02, 2026
Dallas Fed Economics
Fed’s forecasting edge ebbed prepandemic, persisted in downside inflation surprises
We compare Federal Reserve Board staff forecasts with professional forecasts from Blue Chip Economic Indicators for headline Consumer Price Index inflation. The relevant question then is not whether inflation forecasts matter, but rather what their content reveals.
May 21, 2026