Research Department Working Papers
Bubbling Up? What Consumer Expectations Reveal About U.S. Housing Market Exuberance
This paper investigates the presence of speculative bubbles in the U.S. housing market after the global financial crisis. Unlike standard approaches that rely on observed economic fundamentals, the method used in this paper leverages subjective price expectations from the University of Michigan Survey of Consumers to test for exuberance without imposing a specific model of intrinsic housing values.
May 21, 2025
Surveys
Banking Conditions Survey
Loan volume grew slightly while loan demand was unchanged in May. Credit tightening continued, but loan pricing declined.
May 19, 2025
Texas Economy
Growth resumes in Texas service sector, but company outlooks deteriorated further
Texas service sector activity grew slightly in April, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, rose three points to 3.8, indicating a small increase in revenue.
April 29, 2025
Texas Manufacturing Outlook Survey
Texas factory activity continued to rise in April. The production index, a key measure of state manufacturing conditions, was largely unchanged. Other measures of manufacturing activity signaled contraction, however.
April 28, 2025
Research Department Working Papers
Tempting FAIT: Flexible Average Inflation Targeting and the Post-COVID U.S. Inflation Surge
In August 2020, the Federal Reserve replaced Flexible Inflation Targeting (FIT) with Flexible Average Inflation Targeting (FAIT), introducing make-up strategies that allow inflation to temporarily exceed the 2% target. Using a synthetic control approach, this paper estimates that FAIT raised CPI inflation by about 1 percentage point and core CPI inflation by 0.5 percentage points, suggesting a moderate impact net of food and energy and a largely temporary effect. The findings are consistent with the hypothesis of a steeper-than-expected post-pandemic Phillips curve in the New Keynesian model.
April 09, 2025
Surveys
Banking Conditions Survey
Loan volume and demand growth decelerated sharply in March. Credit tightening continued, but loan pricing declined.
April 07, 2025
Globalization Institute Working Paper
Living Up to Expectations: The Effectiveness of Forward Guidance and Inflation Dynamics Post-Global Financial Crisis
This paper studies the effectiveness of forward guidance when central banks face private agents with heterogeneous expectations allowing for a degree of bounded rationality.
April 03, 2025
Texas economic outlook downbeat as uncertainty increases
The Texas economy grew slightly below trend through the first quarter of 2025. While job growth appears just off its long-term annual trend rate of about 2.1 percent, the Dallas Fed Texas Business Outlook Surveys (TBOS) point to slowing activity in both the services and manufacturing sectors.
April 03, 2025
Texas Economy
Growth decelerates in Texas service sector as company outlooks worsen
Texas service sector activity stalled in March, according to business executives responding to the Texas Service Sector Outlook Survey.
April 01, 2025
Texas Manufacturing Outlook Survey
Texas factory activity rose in March after declining in February, according to business executives responding to the Texas Manufacturing Outlook Survey.
March 31, 2025