News from the Fed

  • Since the end of the financial crisis, banks have been steadily increasing their exposure to interest rate risk, but large and small banks are doing so in different ways, say Federal Reserve Bank of Cleveland researchers William Bednar and Mahmoud Elamin
  • At small banks, interest rate risk has risen well past pre-recession levels. The increased exposure comes from a dramatic increase in the maturities of small bank assets -- both loans and securities ? and a decline in the maturities of liabilities, a worrisome combination, according to the researchers. Read more
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  • Although bank net income is now beyond where it was before the financial crisis, Federal Reserve Bank of Cleveland researcher Mahmoud Elamin says the crisis has affected the income-generating capacity of large and small banks differently
  • Since the end of the financial crisis, net income has been increasing at banks both large and small, and net noninterest income has transitioned to a lower level. Read more
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  • Loan portfolios at regional banks may have become less risky, say Federal Reserve Bank of Cleveland Fed researchers Vinod Venkiteshwaran and Patricia Waiwood
  • Regional banking organizations (RBOs) -- generally considered to be bank holding companies with between $10 billion and $50 billion in assets -- operate in all 50 states, and in 2012, were responsible for more than $1.7 trillion in lending. Read more
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  • Labor market slack: Has unemployment rate reached its long-run normal level? Cleveland Fed study
  • Choosing the best measure of slack in the labor market depends on the question being asked, say Federal Reserve Bank of Cleveland researchers Murat Tasci and Randal Verbrugge, who note that different concepts of slack provide useful?but different?information. Read more
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The Economic Outlook, Monetary Policy, and Getting Back to Normal

Speaking in downtown Cleveland for the first time since becoming president and CEO of the Federal Reserve Bank of Cleveland, Loretta J. Mester shared with members of the Cleveland Association for Business Economics, CFA Society Cleveland and the Risk Management Association, Northern Ohio Chapter, her economic outlook and views on returning to a more normalized approach to monetary policy.
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  • Credit Easing
  • CFSI
  • Inflation Expectations
  • Inflation Nowcasting
  • Median CPI

Credit Easing Policy Tools

Compare the amounts of different assets on the Federal Reserve balance sheet, from T-bills to mortgage-backed securities. 

Median Consumer Price Index

Cleveland Financial Stress Index
 
10/16: 0.309

0.381 increase
over the past seven days   

Chart.

Estimates of Inflation Expectations

Estimates of inflation expectations, the real interest rate, and the inflation risk premium. 

Median Consumer Price Index

Inflation Nowcasting

Forecasts of today's inflation rates in the CPI and the PCE price index. 

 

  Quarterly annualized percent change  
Nowcast quarter CPI Core CPI PCE Core PCE Updated
2014:Q31.161.311.311.4310/17/2014
2014:Q40.581.570.851.4210/17/2014

Median Consumer Price Index

A more accurate measure of the underlying inflation trend. 

Median Consumer Price Index

Latest Economic Research

  • Banks’ Ability to Generate Income after the Crisis 
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  • Has the financial crisis affected banks’ ability to generate income? Has it forced them to generate income in new ways? To answer these questions, we look at banks’ net income and two components of net income, net interest income and net noninterest income. We find that although net income has recovered and is now beyond where it was before the crisis, the crisis has affected the income-generating capacity of large and small banks differently. Read more  
  • Regional Bank Health: Trends in Net Charge-Offs 
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  • According to a survey by the American Bankers Association, regional banking organizations (RBOs) operate in all 50 states, and in 2012 they were responsible for more than $1.7 trillion in lending to the communities in which they operated. Even though no one regional bank is likely to be so large as to be systemically important—RBOs are generally considered to be bank holding companies with between $10 billion and $50 billion in assets—their collective impact on the US economy could be substantial. For this reason, we want to assess the health of RBOs’ loan portfolios by analyzing their net charge-off behavior over the past two years. Read more  
  • Interest Rate Risk and Rising Maturities 
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  • Banks have been steadily increasing their exposure to interest rate risk since the end of the financial crisis, though large and small banks are doing so in different ways. This Commentary examines the maturity structure of assets and liabilities to identify the underlying factors responsible for the rise in interest rate risk and the differences between large and small banks. Read more  (PDF)  

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