The Federal Reserve's balance sheet has undergone significant changes since 2007, reflecting its response to major economic crises. From a modest *** trillion U.S. dollars at the end of 2007, it ballooned to approximately **** trillion U.S. dollars by May 2025. This dramatic expansion, particularly during the 2008 financial crisis and the COVID-19 pandemic - both of which resulted in negative annual GDP growth in the U.S. - showcases the Fed's crucial role in stabilizing the economy through expansionary monetary policies. Impact on inflation and interest rates The Fed's expansionary measures, while aimed at stimulating economic growth, have had notable effects on inflation and interest rates. Following the quantitative easing in 2020, inflation in the United States reached * percent in 2022, the highest since 1991. However, by *************, inflation had declined to *** percent. Concurrently, the Federal Reserve implemented a series of interest rate hikes, with the rate peaking at **** percent in ***********, before the first rate cut since ************** occurred in **************. Financial implications for the Federal Reserve The expansion of the Fed's balance sheet and subsequent interest rate hikes have had significant financial implications. In 2023, the Fed reported a negative net income of ***** billion U.S. dollars, a stark contrast to the ***** billion U.S. dollars profit in 2022. This unprecedented shift was primarily due to rapidly rising interest rates, which caused the Fed's interest expenses to soar to over *** billion U.S. dollars in 2023. Despite this, the Fed's net interest income on securities acquired through open market operations reached a record high of ****** billion U.S. dollars in the same year.

From January 2022 to July 2024, a global trend emerged as almost all advanced and emerging economies increased their central bank policy rates. This widespread tightening of monetary policy was in response to inflationary pressures and economic challenges. However, a shift occurred in the latter half of 2024, with most countries beginning to lower their rates, potentially signaling a new phase in the global economic cycle and monetary policy approach.

This project contains replica codes of most tables and figures presented in the paper "Tight Money-Tight Credit: Coordination Failure in the Conduct of Monetary and Financial Policies", in particular for Tables 3, 4 and 5, and Figures 2 to 7. Among these files, you will find those containing the model we used to conduct our analysis (compatible with Dynare version 4.5.x), as well as the solver algorithms to compute the model’s long-run equilibrium using Matlab’s parallel computing toolbox, and Andreasen, Fernández-Villaverde and Rubio-Ramírez (2017)’s pruning algorithm to solve the stochastic steady state of the model. You will also find some pre-loaded results in case you want to jump directly into replicating the paper’s figures and tables.

View the total value of the assets of all Federal Reserve Banks as reported in the weekly balance sheet.

The Volcker Shock was a period of historically high interest rates precipitated by Federal Reserve Chairperson Paul Volcker's decision to raise the central bank's key interest rate, the Fed funds effective rate, during the first three years of his term. Volcker was appointed chairperson of the Fed in August 1979 by President Jimmy Carter, as replacement for William Miller, who Carter had made his treasury secretary. Volcker was one of the most hawkish (supportive of tighter monetary policy to stem inflation) members of the Federal Reserve's committee, and quickly set about changing the course of monetary policy in the U.S. in order to quell inflation. The Volcker Shock is remembered for bringing an end to over a decade of high inflation in the United States, prompting a deep recession and high unemployment, and for spurring on debt defaults among developing countries in Latin America who had borrowed in U.S. dollars.

Monetary tightening and the recessions of the early '80s

Beginning in October 1979, Volcker's Fed tightened monetary policy by raising interest rates. This decision had the effect of depressing demand and slowing down the U.S. economy, as credit became more expensive for households and businesses. The Fed funds rate, the key overnight rate at which banks lend their excess reserves to each other, rose as high as 17.6 percent in early 1980. The rate was allowed to fall back below 10 percent following this first peak, however, due to worries that inflation was not falling fast enough, a second cycle of monetary tightening was embarked upon starting in August of 1980. The rate would reach its all-time peak in June of 1981, at 19.1 percent. The second recession sparked by these hikes was far deeper than the 1980 recession, with unemployment peaking at 10.8 percent in December 1980, the highest level since The Great Depression. This recession would drive inflation to a low point during Volcker's terms of 2.5 percent in August 1983.

The legacy of the Volcker Shock

By the end of Volcker's terms as Fed Chair, inflation was at a manageable rate of around four percent, while unemployment had fallen under six percent, as the economy grew and business confidence returned. While supporters of Volcker's actions point to these numbers as proof of the efficacy of his actions, critics have claimed that there were less harmful ways that inflation could have been brought under control. The recessions of the early 1980s are cited as accelerating deindustrialization in the U.S., as manufacturing jobs lost in 'rust belt' states such as Michigan, Ohio, and Pennsylvania never returned during the years of recovery. The Volcker Shock was also a driving factor behind the Latin American debt crises of the 1980s, as governments in the region defaulted on debts which they had incurred in U.S. dollars. Debates about the validity of using interest rate hikes to get inflation under control have recently re-emerged due to the inflationary pressures facing the U.S. following the Coronavirus pandemic and the Federal Reserve's subsequent decision to embark on a course of monetary tightening.

The benchmark interest rate in the United States was last recorded at 4.50 percent. This dataset provides the latest reported value for - United States Fed Funds Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

Abstract (en): This research focuses on the longer-term monetary relationships in historical data. Charts describing the 10-year average growth rates in the M2 monetary aggregate, nominal GDP, real GDP, and inflation are used to show that there is a consistent longer-term correlation between M2 growth, nominal GDP growth, and inflation but not between such nominal variables and real GDP growth. The data reveal extremely long cycles in monetary growth and inflation, the most recent of which was the strong upward trend in M2 growth, nominal GDP growth, and inflation during the 1960s and 1970s, and the strong downward trend since then. Data going back to the 19th century show that the most recent inflation/disinflation cycle is a repetition of earlier long monetary growth and inflation cycles in the United States historical record. Also discussed is a measure of bond market inflation credibility, defined as the difference between averages in long-term bond rates and real GDP growth. By this measure, inflation credibility hovered close to zero during the 1950s and early 1960s, but then rose to a peak of about 10 percent in the early 1980s. During the 1990s, the bond market has yet to restore the low inflation credibility that existed before inflation turned up during the 1960s. The conclusion is that the risks of starting another costly inflation/disinflation cycle could be avoided by monitoring monetary growth and maintaining a sufficiently tight policy to keep inflation low. An environment of credible price stability would allow the economy to function unfettered by inflationary distortions, which is all that can reasonably be expected of monetary policy, and is precisely what should be expected. (1) The file submitted is the data file 9811WD.DAT. (2) These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

Graph and download economic data for 66) Over the Past Three Months, How Have the Terms Under Which Non-Agency Rmbs Are Funded Changed?| A. Terms for Average Clients | 3. Haircuts. | Answer Type: Tightened Somewhat (SFQ66A3TSNR) from Q4 2011 to Q1 2025 about change, funds, 3-month, average, and USA.

This paper investigates the causal effect of monetary policy on the British macroeconomy during the classical gold standard. Based on the narrative identification approach, I find that following a one percentage point monetary tightening, unemployment rose by 0.9 percentage points, while inflation fell by 3.1 percentage points. In addition, monetary policy shocks accounted for a third of macroeconomic volatility.

The U.S. federal funds effective rate underwent a dramatic reduction in early 2020 in response to the COVID-19 pandemic. The rate plummeted from 1.58 percent in February 2020 to 0.65 percent in March, and further decreased to 0.05 percent in April. This sharp reduction, accompanied by the Federal Reserve's quantitative easing program, was implemented to stabilize the economy during the global health crisis. After maintaining historically low rates for nearly two years, the Federal Reserve began a series of rate hikes in early 2022, with the rate moving from 0.33 percent in April 2022 to 5.33 percent in August 2023. The rate remained unchanged for over a year, before the Federal Reserve initiated its first rate cut in nearly three years in September 2024, bringing the rate to 5.13 percent. By December 2024, the rate was cut to 4.48 percent, signaling a shift in monetary policy in the second half of 2024. In January 2025, the Federal Reserve implemented another cut, setting the rate at 4.33 percent, which remained unchanged throughout the following months. What is the federal funds effective rate? The U.S. federal funds effective rate determines the interest rate paid by depository institutions, such as banks and credit unions, that lend reserve balances to other depository institutions overnight. Changing the effective rate in times of crisis is a common way to stimulate the economy, as it has a significant impact on the whole economy, such as economic growth, employment, and inflation. Central bank policy rates The adjustment of interest rates in response to the COVID-19 pandemic was a coordinated global effort. In early 2020, central banks worldwide implemented aggressive monetary easing policies to combat the economic crisis. The U.S. Federal Reserve's dramatic reduction of its federal funds rate - from 1.58 percent in February 2020 to 0.05 percent by April - mirrored similar actions taken by central banks globally. While these low rates remained in place throughout 2021, mounting inflationary pressures led to a synchronized tightening cycle beginning in 2022, with central banks pushing rates to multi-year highs. By mid-2024, as inflation moderated across major economies, central banks began implementing their first rate cuts in several years, with the U.S. Federal Reserve, Bank of England, and European Central Bank all easing monetary policy.

The Federal Reserve's balance sheet ballooned following its announcement to carry out quantitative easing to increase the liquidity of U.S. banks in early 2020. The balance sheet continued to grow in the following period as well, with a downward trend in 2023. As of February 29, 2024, the Fed's balance sheet amounted to roughly 7.6 trillion U.S. dollars. The most drastic increase in the observed period took place in the first half of 2020. This measure was taken to increase the money supply and stimulate economic growth in the wake of the damage caused by the COVID-19 pandemic. The Federal Reserve was not the only institution that implemented an expansionary monetary policy in response to the pandemic. For instance, the European Central Bank expanded its money supply in March 2020 and kept doing so over the following months. How do central banks increase the amount of money in circulation? Central banks can increase the money circulating in the economy in many ways. For instance, they can decrease banks’ reserve requirements to stimulate lending or decrease the interest rates to reduce the cost of borrowing for commercial banks. Alternatively, central banks can engage in open market operations (OMO) and buy securities such as government bonds from commercial banks or institutions. By conducting open market operations, the Federal Reserve expanded its balance sheet by seven trillion U.S. dollars between 2007 and 2023. All these measures aim to increase bank loans to entrepreneurs and consumers in order to stimulate employment and economic growth. Impact of COVID-19 on the U.S. economy The COVID-19 pandemic had a tremendous impact on national economies worldwide, and the United States was no exception. During the early months of the crisis, many lost their jobs, mostly those in lower-income categories. As a consequence, many Americans found it difficult to pay their rent and cover basic household expenses. Furthermore, in April 2022, most small business owners claimed that the pandemic had a large or moderate negative effect on their businesses. Overall, the gross domestic product (GDP) of the United States decreased by roughly 2.2 percent in 2020. In the following years, however, it increased notably, surpassing 25 trillion U.S. dollars in 2022.

This paper provides aggregate-level evidence from a set of 31 advanced and emerging economies that supports the existence of supply-side effects for monetary policy, i.e., the cost channel. Our methodology employs sign restrictions and historical decompositions to first separate inflation and loan rates into their demand-driven and supply-driven components. These supply-driven components (here called the supply inflation and supply loan rate, respectively) are then used to test for the cost channel. Analytically, a monetary policy tightening, by reducing banks’ loan supply, increases the supply loan rate and raises the borrowing costs faced by firms. Such an adjustment in loan rates also produces a contraction in the aggregate supply that ultimately raises supply inflation. Our estimates show that a monetary tightening increases supply inflation in all countries, but more significantly in emerging economies. Larger supply inflation occurs due to the greater responses of supply loan rates to policy rates and of supply inflation to supply loan rates. According to our stylized New Keynesian model, both reactions are potentially related to the higher pass-through of banks’ and firms’ costs to rates and prices, respectively. Finally, we find out that, on average, the size of the cost channel in emerging economies outweighs the downward inflationary pressures expected from the aggregate demand contraction. Our interpretation is that rising inflation expectations are responsible for this result.

B2B Money Transfer Market Outlook

As of 2023, the global B2B money transfer market size is valued at approximately USD 250 billion, and it is projected to grow at a compound annual growth rate (CAGR) of 6.5%, reaching around USD 416 billion by 2032. This impressive growth trajectory is driven by factors such as the increasing globalization of businesses, advancements in financial technologies, and the rising demand for efficient and secure payment solutions in the corporate sector.

One of the primary growth factors in the B2B money transfer market is the rapid globalization of trade and commerce. With businesses increasingly expanding their operations across borders, the demand for seamless and efficient international money transfer solutions has surged. Companies are looking for ways to streamline their transaction processes, reduce costs, and mitigate risks associated with currency fluctuations. This growing need for efficient cross-border transactions is driving the adoption of innovative B2B money transfer solutions.

Another significant driver is the advancements in financial technologies, particularly in the realm of digital payments and blockchain technology. Fintech innovations are revolutionizing the way businesses conduct transactions by offering faster, more secure, and cost-effective alternatives to traditional banking methods. Blockchain, for instance, provides a decentralized and transparent ledger system that can significantly reduce fraud and enhance the security of cross-border transactions. These technological advancements are attracting businesses to adopt modern B2B money transfer solutions, thereby fueling market growth.

The increasing focus on regulatory compliance and risk management is also contributing to the expansion of the B2B money transfer market. Regulatory bodies across the globe are tightening their frameworks to combat money laundering and other financial crimes. As a result, businesses are investing in compliant money transfer solutions that offer advanced features like real-time transaction monitoring, enhanced due diligence, and automated reporting. The need for compliance with international regulations is driving the demand for sophisticated B2B money transfer platforms that can ensure secure and compliant transactions.

The role of Currency Exchange Bureau Software is becoming increasingly pivotal in the B2B money transfer market. As businesses expand globally, managing currency exchange efficiently is crucial to minimize costs and mitigate risks associated with currency fluctuations. Currency Exchange Bureau Software provides businesses with real-time exchange rates, automated currency conversions, and robust reporting tools, enhancing the efficiency of international transactions. By integrating with existing financial systems, this software streamlines the currency exchange process, reducing manual errors and improving transaction accuracy. As the demand for seamless cross-border transactions grows, the adoption of advanced currency exchange solutions is expected to rise, further driving the growth of the B2B money transfer market.

Regionally, the market is witnessing varied growth patterns, with North America and Europe leading the charge due to their advanced financial infrastructures and high adoption rates of fintech solutions. However, the Asia Pacific region is poised for the fastest growth, driven by the rapid economic development in countries like China and India, increasing adoption of digital payments, and the expanding presence of multinational corporations. The region's economic dynamism and growing focus on financial inclusion are key factors propelling the growth of the B2B money transfer market in Asia Pacific.

Type Analysis

The B2B money transfer market is segmented by type into domestic and international transfers. Domestic transfers involve transactions within the same country, while international transfers span across borders. Both segments play crucial roles in the market but cater to different business needs and operational scales.

Domestic transfers are integral for businesses operating within a single country's borders. These transfers are often characterized by lower transaction fees and faster processing times compared to international transfers. Domestic B2B money transfers are widely used by small and medium enterprises (SMEs) for day-to-day transactions, payroll disbursements, and vendor payments. The increasing digi

Graph and download economic data for 66) Over the Past Three Months, How Have the Terms Under Which Non-Agency Rmbs Are Funded Changed?| A. Terms for Average Clients | 2. Maximum Maturity. | Answer Type: Tightened Considerably (SFQ66A2TCNR) from Q4 2011 to Q1 2025 about change, funds, 3-month, maturity, average, and USA.

This repository contains the data and code associated with the article in which we propose a measure of subjective models of the macroeconomy for firms and workers. Subjective models are highly heterogeneous across agents and their distribution is similar within the groups of firm managers and workers. At the same time, the beliefs of managers and workers who hold the same subjective models react differently to monetary shocks. The expected persistence of monetary policy tightening differs across managers based on their subjective models but not across workers. And, the expected effect of monetary tightening on short-term inflation differs across workers based on their subjective models but not across managers.

Fault Lines Widen in the Global Recovery

Economic prospects have diverged further across countries since the April 2021 World Economic Outlook (WEO) forecast. Vaccine access has emerged as the principal fault line along which the global recovery splits into two blocs: those that can look forward to further normalization of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising COVID death tolls. The recovery, however, is not assured even in countries where infections are currently very low so long as the virus circulates elsewhere.

The global economy is projected to grow 6.0 percent in 2021 and 4.9 percent in 2022.The 2021 global forecast is unchanged from the April 2021 WEO, but with offsetting revisions. Prospects for emerging market and developing economies have been marked down for 2021, especially for Emerging Asia. By contrast, the forecast for advanced economies is revised up. These revisions reflect pandemic developments and changes in policy support. The 0.5 percentage-point upgrade for 2022 derives largely from the forecast upgrade for advanced economies, particularly the United States, reflecting the anticipated legislation of additional fiscal support in the second half of 2021 and improved health metrics more broadly across the group.

Recent price pressures for the most part reflect unusual pandemic-related developments and transitory supply-demand mismatches. Inflation is expected to return to its pre-pandemic ranges in most countries in 2022 once these disturbances work their way through prices, though uncertainty remains high. Elevated inflation is also expected in some emerging market and developing economies, related in part to high food prices. Central banks should generally look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics. Clear communication from central banks on the outlook for monetary policy will be key to shaping inflation expectations and safeguarding against premature tightening of financial conditions. There is, however, a risk that transitory pressures could become more persistent and central banks may need to take preemptive action.

Risks around the global baseline are to the downside. Slower-than-anticipated vaccine rollout would allow the virus to mutate further. Financial conditions could tighten rapidly, for instance from a reassessment of the monetary policy outlook in advanced economies if inflation expectations increase more rapidly than anticipated. A double hit to emerging market and developing economies from worsening pandemic dynamics and tighter external financial conditions would severely set back their recovery and drag global growth below this outlook’s baseline.

Multilateral action has a vital role to play in diminishing divergences and strengthening global prospects. The immediate priority is to deploy vaccines equitably worldwide. A $50 billion IMF staff proposal, jointly endorsed by the World Health Organization, World Trade Organization, and World Bank, provides clear targets and pragmatic actions at a feasible cost to end the pandemic. Financially constrained economies also need unimpeded access to international liquidity. The proposed $650 billion General Allocation of Special Drawing Rights at the IMF is set to boost reserve assets of all economies and help ease liquidity constraints. Countries also need to redouble collective efforts to reduce greenhouse gas emissions. These multilateral actions can be reinforced by national-level policies tailored to the stage of the crisis that help catalyze a sustainable, inclusive recovery. Concerted, well-directed policies can make the difference between a future of durable recoveries for all economies or one with widening fault lines—as many struggle with the health crisis while a handful see conditions normalize, albeit with the constant threat of renewed flare-ups.

Graph and download economic data for 70) Over the Past Three Months, How Have the Terms Under Which Cmbs Are Funded Changed?| A. Terms for Average Clients | 3. Haircuts. | Answer Type: Tightened Considerably (ALLQ70A3TCNR) from Q4 2011 to Q1 2025 about change, funds, 3-month, average, and USA.

Graph and download economic data for 62) Over the Past Three Months, How Have the Terms Under Which Agency Rmbs Are Funded Changed?| A. Terms for Average Clients | 2. Maximum Maturity. | Answer Type: Tightened Somewhat (ALLQ62A2TSNR) from Q4 2011 to Q1 2025 about change, funds, agency, 3-month, maturity, average, and USA.

Graph and download economic data for 62) Over the Past Three Months, How Have the Terms Under Which Agency Rmbs Are Funded Changed?| A. Terms for Average Clients | 2. Maximum Maturity. | Answer Type: Tightened Considerably (SFQ62A2TCNR) from Q4 2011 to Q1 2025 about change, funds, agency, 3-month, maturity, average, and USA.

The U.S. bank prime loan rate has undergone significant fluctuations over the past three decades, reflecting broader economic trends and monetary policy decisions. From a high of 10.1 percent in 1990, the rate has seen periods of decline, stability, and recent increases. As of April 2025, the prime rate stood at 7.5 percent, marking a notable rise from the historic lows seen in the early 2020s. Federal Reserve's impact on lending rates The prime rate's trajectory closely mirrors changes in the federal funds rate, which serves as a key benchmark for the U.S. financial system. In 2023, the Federal Reserve implemented a series of rate hikes, pushing the federal funds target range to 5.25-5.5 percent by year-end. This aggressive monetary tightening was aimed at combating rising inflation, and its effects rippled through various lending rates, including the prime rate. Long-term investment outlook While short-term rates have risen, long-term investment yields have also seen changes. The 10-year U.S. Treasury bond, a benchmark for long-term interest rates, showed an average market yield of 2.13 percent in the second quarter of 2024, adjusted for constant maturity and inflation. This figure represents a recovery from negative real returns seen in 2021, reflecting shifting expectations for economic growth and inflation. The evolving yield environment has implications for both borrowers and investors, influencing decisions across the financial landscape.