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Discussion Paper
Honey, Who Shrunk the U.S. Income Surplus?
Foreign holdings of U.S. financial assets are immense, with official estimates putting their current market value at $69 trillion. U.S. holdings of foreign assets are also impressive but much smaller, at $41 trillion. The shortfall in U.S. foreign assets relative to foreign liabilities has been mounting for decades. Yet U.S. investment income receipts—in profits, dividends, and interest—comfortably exceeded income payments until recently. We show that the fading of the net investment income surplus stems from the upward shift in interest rates in the aftermath of the pandemic along with ...
Journal Article
Community Banks Have Maintained Profitability in a High-Interest Rate Environment
Two-thirds of community banks have maintained their profitability—measured by net interest margins—since interest rates began increasing in 2022. More profitable banks have distinguished themselves by generating both higher asset returns and lower funding costs. Community banks with higher asset returns have achieved them primarily by rebalancing their asset holdings, while community banks with lower funding costs have more stable, low-cost deposit bases on average.
Speech
Money Market Developments: Views from the Desk
Remarks at the Annual Primary Dealer Meeting, Federal Reserve Bank of New York, New York City.