The 2016 Small Business Credit Survey: Report on Employer Firms showed that while many small businesses with employees were profitable and optimistic in 2016, a significant majority faced financial challenges, experienced funding gaps and relied on personal finances.
A number of financial stress measures were developed after the financial crisis of 2007–2009 in the hope that they could provide regulators with advance warning of conditions that might warrant a corrective response. The Cleveland Fed’s systemic risk indicator is one such measure. This Commentary provides a review of the SRI’s performance from 2001 to 2020 and finds that it has performed well, providing a reliable, valid, and timely signal of elevated levels of financial system stress.
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In responding to the COVID-19 crisis, the Federal Reserve has both lowered the federal funds rate and provided forward guidance. We study whether the forward guidance given with the April and June 2020 FOMC meetings altered the public’s expectations of future policy rates, GDP growth, and inflation. We find that forward guidance was effective in altering the public’s expectations about future policy rates if it was accompanied by an SEP but not expectations about economic fundamentals. We suggest that the difference might be explained by FOMC statements being interpretable in two different ways and the public not having a dominant view on which interpretation was intended.
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The Fed is seeking to modernize the Community Reinvestment Act in a way that significantly expands financial inclusion, and you can have a say in how it’s done.
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For National Financial Literacy Month, our April FedTalk will be a discussion with public policy and education experts about race and the financial lives of students and young adults.
The May FedTalk will feature the work of Julianne Dunn, as well as a panel of experts, who will discuss the evolution of supply chain disruptions since the beginning of the pandemic.
Offering the latest research on and best practices for promoting the economic mobility and resilience of low- and moderate-income individuals, families, and communities.
The Federal Reserve Bank of Cleveland and the Office of Financial Research will host their annual financial stability conference, Financial Stability: Planning for Surprises, Learning from Crises, which will be held virtually on November 17-19, 2021.