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How sensitive are interest rates to higher federal debt?
The U.S. faces a historically high federal debt-to-GDP ratio, a measure of debt relative to economic output. But how sensitive are interest rates to higher debt?
What the closure of the Strait of Hormuz means for the global economy
The ongoing military conflict between Iran and the United States and Israel has raised concerns about a major disruption of global oil supplies driven by geopolitical events. This conflict has involved attacks on oil infrastructure in neighboring countries, including Saudi Arabia, Kuwait and the United Arab Emirates.
Implications of the Iran war for U.S. inflation
Recent research quantifies the impact of 2026 Iran war on U.S. inflation and household inflation expectations under a range of scenarios. Under a plausible scenario, 2026 fourth-quarter-over-fourth quarter headline personal consumption expenditures inflation would increase by 0.6 percentage points.
U.S. economy less vulnerable to geopolitical oil price shocks than in the past
Recent Federal Reserve Bank of Dallas research shows that the response of U.S. real (inflation-adjusted) GDP growth to the 2026 Iran war is only one-twentieth of what it would have been in 1980. Moreover, the response of U.S. real GDP growth today is only one-sixth of the decline in the rest of the world.
COVID-19’s Unprecedented Impact Alters U.S. Labor Market
A staggering 22.03 million initial claims for unemployment benefits were filed from mid-March to mid-April as the COVID-19 pandemic and ensuing stay-at-home policies took hold across the country.
The Production Process Drives Fluctuations in Output and Uncertainty
If economic developments drive most of the changes in uncertainty—rather than the reverse—then the direct effect of a change in uncertainty on economic activity is much smaller than previous research has shown.
Entry, Exit of Firms Amplify the Business Cycle
When new businesses are created, they generate new jobs. When unprofitable businesses close, employees lose their jobs. Given the connection between firm entry and exit and changes in employment, it is natural to ask how this entry and exit affects the broader business cycle.
Pandemic Disproportionately Affects Women, Minority Labor Force Participation
Data showing changes in labor force participation rates for several demographics reveal that women with children, especially Black women, have been disproportionately affected by the pandemic.
Consumer Surveys Suggest Economic Conditions Remain Healthy but Growth Is Slowing
The current divergence between two prominent consumer confidence indexes suggests that policymakers need to be mindful of a U.S. economy in transition.
Changes in Labor Force Participation Help Explain Recent Job Gains
The U.S. labor force participation rate declined following the Great Recession to a low of 62.3 percent in 2015.