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  • Surging population growth from immigration may have little effect on inflation

    U.S. population growth increased sharply recently following a wave of immigration. This article examines what this surprise immigration surge could mean for the macroeconomy.

  • U.S. Economy

    Trimmed Mean PCE inflation rate

    The Trimmed Mean PCE inflation rate over the 12 months ending in May was 2.8 percent. According to the BEA, the overall PCE inflation rate was 2.6 percent on a 12-month basis, and the inflation rate for PCE excluding food and energy was 2.6 percent on a 12-month basis.

  • Not all price increases are equal; pandemic-era outliers drove inflation spike

    Many individual price changes make up widely used gauges of inflation. Their relative importance changes over time and may affect how consumers perceive inflation. Such perceptions can prompt households to update their inflation expectations, decreasing optimism about real economic activity.

  • Swap lines curbed global dollar shortages, appreciation during COVID-19 crisis

    During the initial weeks of the COVID-19 crisis, imbalances in the offshore dollar funding market led to safe-haven appreciation of the dollar. Fed swap lines between the U.S. central bank and counterparts abroad addressed these imbalances, subsequently helping reduce the cost of offshore dollar borrowing, reversing dollar appreciation and providing liquidity.

  • Lower interest rates don’t necessarily improve housing affordability

    The direct impact of higher mortgage rates on housing affordability has received much attention. We emphasize that housing affordability not only depends on mortgage rates but also on house prices, which have competing effects.

  • Disparate supply-side forces gave U.S. economy an edge

    The U.S. economy boasts robust growth and slowing inflation despite the highest interest rates in two decades. Such performance isn’t common globally, especially among other advanced economies, revealing crucial differences in the fundamental factors driving inflation and growth.

  • Revisiting the odd behavior of the Beveridge curve as unemployment stays low

    At first glance, it seems unlikely that the unemployment rate would remain stable if the number of job vacancies decreased. However, such a scenario played out recently as the number of firms seeking to fill positions by poaching employees from other firms increased, while the ranks of the unemployed remained relatively stable.

  • Inflation forecasts based on money growth proved accurate in 2021, though generally unreliable

    As money demand changes, and in particular as money velocity fluctuates with interest rates, this relationship can become unstable with money growth providing limited useful information for inflation forecasting.

  • U.S. 30-year mortgage predominance doesn’t seem to delay impact of Fed rate hikes

    After comparing economic data of the U.S. and other major advanced economies, we find tentative evidence that the slow adjustment of the outstanding mortgage rate in the U.S. has not played an important role in delaying the intended effects of the monetary tightening.

  • Texas among states feeling most stressed by inflation

    As consumer prices have climbed at a faster rate in Texas and surrounding states than nationally—food and shelter increasing even more—Texans are feeling especially stressed about rising prices.