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Discussion Paper
Coronavirus Outbreak Sends Consumer Expectations Plummeting
The New York Fed’s Center for Microeconomic Data released results today from its March 2020 Survey of Consumer Expectations (SCE), which provides information on consumers' economic expectations and behavior. In particular, the survey covers respondents’ views on how income, spending, inflation, credit access, and housing and labor market conditions will evolve over time. The March survey, which was fielded between March 2 and 31, records a substantial deterioration in financial and economic expectations, including sharp declines in household income and spending growth expectations. As ...
Discussion Paper
Introducing the FRBNY Survey of Consumer Expectations: Household Finance Expectations
In this fourth and final post in our series describing the new FRBNY Survey of Consumer Expectations (SCE), we present the final component of the survey, dedicated to household finance. The information collected in the SCE on household income, spending, and access to credit will provide a real-time picture of U.S. households? situation and perceptions as well as rich and unique data for use by policymakers, researchers, and the public. While other surveys, such as the triennial Survey of Consumer Finances, provide data on the finances of U.S. families, few data sources provide timely ...
Discussion Paper
Which Households Have Negative Wealth?
At some point in its life a household’s total debt may exceed its total assets, in which case it has “negative wealth.” Even if this status is temporary, it may affect the household’s ability to save for durable goods, restrict access to further credit, and may require living in a state of limited consumption. Detailed analysis of the holdings of negative-wealth households, however, is a topic that has received little attention. In particular, relatively little is known about the characteristics of such households or about what drives negative wealth. A better understanding of these ...
Report
An overview of the Survey of Consumer Expectations
This report presents an overview of the Survey of Consumer Expectations, a new monthly online survey of a rotating panel of household heads. The survey collects timely information on consumers? expectations and decisions on a broad variety of topics, including but not limited to inflation, household finance, the labor market, and the housing market. There are three main goals of the survey: (1) measuring consumer expectations at a high frequency, (2) understanding how these expectations are formed, and (3) investigating the link between expectations and behavior. This report discusses the ...
Discussion Paper
A “Reference Price Auction” to Buy or Sell Different Assets Simultaneously
In finance, auctions are often conducted to buy or sell simultaneously various assets with very different characteristics. These auctions raise a number of challenges that cannot always be addressed with standard auction designs. In this post, I discuss an alternative design—the “reference price auction”—and present evidence that it may dominate other methods often implemented in practice.
Discussion Paper
What Are Consumers’ Inflation Expectations Telling Us Today?
The United States has experienced a considerable rise in inflation over the past year. In this post, we examine how consumers’ inflation expectations have responded to inflation during the pandemic period and to what extent this is different from the behavior of consumers’ expectations before the pandemic. We analyze two aspects of the response of consumers’ expectations to changing conditions. First, we examine by how much consumers revise their inflation expectations in response to inflation surprises. Second, we look at the pass-through of revisions in short-term inflation ...
Journal Article
The Federal Reserve's Term Auction Facility
As liquidity conditions in the term funding markets grew increasingly strained in late 2007, the Federal Reserve began making funds available directly to banks through a new tool, the Term Auction Facility (TAF). The TAF provides term funding on a collateralized basis, at interest rates and amounts set by auction. The facility is designed to improve liquidity by making it easier for sound institutions to borrow when the markets are not operating efficiently.
Discussion Paper
Inflation Expectations and Behavior: Do Survey Respondents Act on Their Beliefs?
Surveys of consumers’ inflation expectations are now a key component of monetary policy. To date, however, little work has been done on 1) whether individual consumers act on their beliefs about future inflation, and 2) whether the inflation expectations elicited by these surveys are actually informative about the respondents’ beliefs. In this post, we report on a new study by Armantier, Bruine de Bruin, Topa, van der Klaauw, and Zafar (2010) that investigates these two issues by comparing consumers’ survey-based inflation expectations with their behavior in a financially incentivized ...
Discussion Paper
Introducing the FRBNY Survey of Consumer Expectations: Survey Goals, Design and Content
Starting in the first quarter of 2014, the Federal Reserve Bank of New York (FRBNY) will begin reporting findings from a new national survey designed to elicit consumers? expectations for a wide range of household-level and aggregate economic and financial conditions. This week, we provide an introduction to the new survey in a series of four blog posts. In this first post, we discuss the overall objectives of the new survey, its sample design, and content. In the posts that follow, we will provide further details and present preliminary findings from the survey on three broad categories of ...
Discussion Paper
Can Discount Window Stigma Be Cured?
One of the core responsibilities of central banks is to act as “lender of last resort” to the financial system. In the U.S., the Federal Reserve has been operating as a lender of last resort through its “discount window” (DW) for more than a century. Historically, however, the DW has been plagued by stigma—banks’ reluctance to use the DW, even for benign reasons, out of concerns that it could be interpreted as a sign of financial weakness. In this post, we report on new research showing that once a DW facility is stigmatized, removing that stigma is difficult.