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Journal Article
Do Low Survey Response Rates Threaten Data Dependence?
Monetary policy is forward-looking and dependent on policymakers’ economic outlook. When the outlook is deemed highly uncertain, policymakers may put more weight on incoming data when making monetary policy considerations. However, falling survey response rates suggest employment and inflation data may have become less reliable. Analysis of payroll employment and consumer price inflation data shows that data revisions over the past few years have been in line with their pre-pandemic averages. This suggests that these data have not been an outsized source of uncertainty in recent years.
Working Paper
German Inflation-Linked Bonds: Overpriced, Yet Undervalued
We document that German inflation-linked government bond yields contain a convenience or safety premium averaging 0.33 percent. Yet, the German Federal Finance Agency decided to cease all future issuance of these bonds in November 2023. We examine the market response to this announcement and find that neither the safety premia nor the trading conditions of these bonds have been negatively impacted. Hence, this bond market remains a rich source of information on real rates in the euro area in addition to offering investors a safe inflation-protected asset.
Journal Article
Do Local Economic Conditions Influence FOMC Votes?
Monetary policy in the United States is determined by the Federal Open Market Committee (FOMC), a decisionmaking body that includes regional representation. Evidence shows that the economic conditions in their respective regions have influenced how presidents of the 12 regional Federal Reserve Districts voted at the FOMC meetings in past decades. Specifically, a 1 percentage point higher unemployment rate in a District relative to the national average is associated with a 9 percentage point higher probability of dissenting in favor of looser policy during the FOMC vote.