Chicago Fed Letter
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In response to the massive challenges presented by the global financial crisis, in late 2007 the Federal Open Market Committee (FOMC) began a series of large reductions in its traditional policy tool, the overnight interest rate in the federal funds market. By December 2008 the Committee had lowered the target to its effective lower bound (ELB) of 0 to 25 basis points. Later, in an attempt to provide additional monetary stimulus, the FOMC implemented nontraditional policy tools, such as large-scale asset purchases and forward guidance about how long the fed funds rate would stay at very low levels.
This article presents evidence that Detroit’s economy is doing noticeably better than before the city filed for bankruptcy in July 2013. In order to track the city’s economic recovery following its bankruptcy, we use a new index that quantifies Detroit’s overall economic performance from 1998 to the present.
This Chicago Fed Letter investigates the evolution of longer-run economic projections made by participants of the Federal Reserve’s monetary policy committee, the Federal Open Market Committee (FOMC), in its Summary of Economic Projections (SEP), and by the private sector. Over the past few years, the FOMC’s longer-run projections for economic growth, unemployment, and the federal funds rate have fallen quite dramatically. We verify that these views are shared by the private sector and show that the declines are not unprecedented in magnitude, but the projections have reached historical lows. We point to some reasons for these developments and touch on some implications for monetary policy.
Prices for key agricultural products have fallen from their peaks in recent years, while input costs have not fallen as much. Consequently, many farm operations in the Midwest have had lower revenues and thinner profit margins—and some even losses. On November 29, 2016, the Federal Reserve Bank of Chicago held a conference to examine the agricultural downturn in the Midwest and discuss future directions for farming.