We expect growth to remain moderate, picking up only gradually in the second half of this year and in 2013. The moderate pace reflects continuing obstacles facing the economy. — John Fernald » Read more in FedViews • May 10 Fed Asset Buying and Private Borrowing Rates • FRBSF Economic Letter 2012-16 Past rounds of large-scale asset purchases by the Federal Reserve have lowered yields not only on the targeted securities, but also on various private borrowing rates. In particular, yields on corporate bonds and primary mortgage rates decreased in response to Fed asset purchase announcements. Notably, however, the link between rates on mortgage-backed securities and actual mortgage rates has weakened in the wake of the financial crisis. Bauer • May 21, 2012 District Trends Beige Book • April 11, 2012 Economic activity continued to expand at a moderate pace. Despite higher energy prices, overall price pressures for final goods and services remained modest, as did wage gains. » Summary • 12th District • Full report 12L Economic Trends • April 2012 (pdf, 507kb) ETC: Economic Trends & Conditions • May 2012 (pdf, 109kb) |
Improving Fed Transparency Opening the Temple: An Essay by President and CEO John C. Williams Recent FOMC Communications Initiatives 
On January 25, the FOMC took two important steps to improve transparency about monetary policy in the U.S. First, the FOMC provided a statement that outlines its longer-run goals and monetary policy strategy. Second, the FOMC provided guidance about its expectations for future monetary policy in the form of quantitative projections of the federal funds rate. New in Research In the News Screw Your Analysis to the Sticky Point • taken from Conscience of a Liberal, by Paul Krugman • April 3, 2012 "... a new paper from the San Francisco Fed offers stunning evidence on downward nominal wage rigidity, a topic I’ve written about before." » Read more in "Why Has Wage Growth Stayed Strong?" • Daly, Hobijn, Lucking Want to add jobs? Subsidize employers - Fed paper • taken from Reuters, by Ann Saphir • March 19, 2012 "Subsidizing hiring would be the most effective way to boost jobs in the current economy, because subsidizing workers would do little more than increase the number of job seekers, according to research published on Monday by the Federal Reserve Bank of San Francisco." » Read more in "Job Creation Policies and the Great Recession" • Neumark Another Lost Decade for Stocks? • taken from Motley Fool • March 8, 2012 "...Last summer, a report from the Federal Reserve Bank of San Francisco examined the potential impact of baby boomers on the financial markets and came up with a similar conclusion: Earnings multiples for the stock market will continue to contract ..." » Read more in "Boomer Retirement: Headwinds for U.S. Equity Markets?" • Liu and Spiegel Fed's Williams Says Central Bank Should Keep Applying Stimulus ... • taken Savigroup • March 9, 2012 "Federal Reserve Bank of San Francisco President John Williams said the Fed should maintain an “extraordinarily supportive policy” to reduce an unemployment rate that will probably exceed 7 percent for years." » Read more in "The Economic Outlook and Monetary Policy" • Williams Roads to Prosperity or Bridges to Nowhere? Theory and Evidence on the Impact of Public Infrastructure Investment • Working paper 2012-04 Using a novel data set on highway spending measures, we construct a measure of government highway spending shocks that captures revisions in expectations about future government investment. We find that shocks to federal funding have a positive effect on local GDP both on impact and after 6 to 8 years. We show that an open-economy model of regions in a monetary and fiscal union, featuring productive public capital and time-to-build lags, can explain this qualitative pattern. Leduc • Wilson • April 2012 Upcoming Seminars Seminar (Micro) • Seik Kim (U of WA, Portland) • May 24 Seminar (Finance) • Katherine Samolyk (CFBP) • May 29 Seminar (International, Hale) • Mariassunta Giannetti • May 30
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