Research

The Federal Budget: Constraints Limit the Options

Tuesday, May 26, 2015

If we are to understand why the federal budget is structured the way it is and why fiscal policy choices are constrained, we must look at history to see how we got to where we are today. The nature of fiscal policy is such that decisions made by earlier generations affect the options of future generations. This was true in the past and it is true today—our choices will shape the opportunities of future generations.

In the end, we believe the future economic health of the nation depends on building agreement around the budget facts. This report is one step on that path.

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Everyday Prices Stabilize

Friday, May 22, 2015

The Everyday Price Index (EPI) was unchanged in April after increasing 0.8 percent in March. The Consumer Price Index (CPI), on the other hand, recorded a 0.2 percent gain.

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Inflation

Thursday, May 14, 2015

Scorecard
Inflation in March stayed sluggish, still substantially below the Fed’s 2 percent target. Our latest Inflation Pressure Scorecard points to an overall easing for the months ahead: Nine indicators show rising inflationary pressure, 12 suggest falling pressure, and two are stable. 

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Policy

Thursday, May 14, 2015

Monetary Policy
Not surprisingly, no action was taken at the April meeting of the policy-making Federal Open Market Committee (FOMC), in line with the public expectation fostered by the Fed officials before the gathering. While much attention focused on whether the Fed would give any additional signals about the timing of an expected interest rate increase, none emerged. Instead, the Fed left its forward guidance on rates unchanged from its March statement.

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Investing

Thursday, May 14, 2015

Fixed Income
Many factors contribute to the difference, or spread, between corporate bond yields and those on U.S. Treasury securities. Since Treasurys are generally regarded as free of default risk, the yield gap between corporates and Treasurys can largely be attributed to those characteristics that affect corporate default risk.

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