Federal Reserve District Monitor

Research & Analysis from Federal Reserve Banks | 30-Day Review: December 7, 2025 - January 6, 2026

Executive Summary

18 publications tracked across 5 Federal Reserve districts. Key themes emerging from district research: tariff policy uncertainty and deflationary pressures, sovereign debt dynamics in developing markets, labor market reemployment programs, and interest rate shock transmission mechanisms. Notable focus on trade policy impacts as districts analyze historical parallels to current tariff shifts—the largest in the modern era.

Investment Implications: Fed research signals growing concern about demand-side effects of tariff uncertainty, with historical analysis pointing to unemployment increases and deflationary outcomes rather than inflation. This contrasts with conventional tariff narratives and suggests monetary policy may face downward pressure on rates if trade tensions escalate. Sovereign debt research highlights renegotiation dynamics for EM exposures.

Thematic Analysis

1. Trade Policy & Tariff Impacts

2. Sovereign Debt & Emerging Markets

3. Labor Markets & Reemployment

4. Monetary Policy Transmission

New York Fed (Liberty Street Economics)

Are Banks Equipped to Weather Commercial Real Estate Losses?

January 5, 2026 | Authors: Stephan Luck, Yilin Ma, Matthew Plosser
The post analyzes banks' capacity to absorb commercial real estate loan losses. Banks with higher CRE concentrations hold significantly more capital buffers than regulatory minimums and maintain strong income generation, suggesting resilience to moderate CRE stress scenarios.

Why Aren't Young Adults Enrolling in College?

December 30, 2025 | Authors: Rajashri Chakrabarti, Maxim Pinkovskiy, Naser Hamdi
The analysis explores declining college enrollment among young adults post-pandemic. Key factors include strong labor market conditions offering immediate employment opportunities, rising college costs, and shifting perceptions of higher education's return on investment.

Gender Gaps in Unemployment Duration Across U.S. States

December 23, 2025 | Authors: Samuel Rosen-Pearlman, Dhiren Patki
This research examines variation in unemployment duration between men and women across states. The study finds significant geographic heterogeneity in gender gaps, with structural factors in local labor markets driving differential outcomes.

Concentration in Local Labor Markets: A New Look Using Administrative Data

December 16, 2025 | Authors: Jason Bram, Richard Audoly
Using comprehensive administrative data, this post measures employer concentration in local labor markets. Findings reveal higher concentration than previously estimated using survey data, with implications for wage-setting power and worker mobility.

The Evolution of Public Benefits Recipients' Housing Outcomes Following Hurricane Sandy

December 15, 2025 | Authors: Daniel Mangrum, Katherine Mach
This research tracks long-term housing outcomes for public benefits recipients affected by Hurricane Sandy. The study documents persistent displacement patterns and highlights vulnerabilities in disaster recovery for low-income populations.

Richmond Fed (Economic Briefs)

What Is Happening with the Employment of Older Workers?

December 2025 | Authors: Santiago Pinto, Pierre-Daniel Sarte
This brief examines employment trends among older workers. The analysis shows sustained labor force participation increases for workers 65+ driven by improved health, changing retirement norms, and financial necessity, with significant macroeconomic implications.

Can Higher Interest Rates Stimulate Investment?

December 2025 | Authors: Pierre-Daniel Sarte, Felipe Schwartzman
The brief explores conditions under which higher rates could stimulate rather than suppress investment. Through general equilibrium effects and income channels, rate increases may boost certain investment categories when wealth effects dominate substitution effects.

The Link Between Labor Market Tightness and Wage Growth

December 2025 | Authors: Andreas Hornstein, Marianna Kudlyak
This research quantifies the relationship between labor market tightness (vacancies-to-unemployment ratio) and wage growth. The brief documents weakening correlation in recent years, suggesting structural changes in wage-setting mechanisms.

Dallas Fed (Economics)

Globalization at High Skill Levels

January 6, 2026 | Authors: Andrés Rodríguez-Clare, Ignacio Flores, Muhammed A. Kahn
This paper analyzes globalization's impact on high-skilled labor markets. The research demonstrates that trade integration differentially affects skilled workers through task specialization, with implications for wage inequality and innovation.

Measuring Trade Costs with Trade-Cost Elasticities

December 27, 2025 | Authors: Mario J. Crucini, Motozu Toda
The study develops new methodology for measuring bilateral trade costs using elasticity estimates. Findings reveal substantial heterogeneity in trade costs across country pairs and sectors, informing trade policy analysis.

Drivers of the U.S. Fertility Decline

December 19, 2025 | Authors: Madeline Olson, Alexander Bick
This research decomposes factors behind declining U.S. fertility rates. Economic uncertainty, rising childcare costs, and changing social norms contribute to fertility declines, with long-term implications for labor force growth.

Credibility of the Central Bank and Inflation Expectations

December 16, 2025 | Authors: Enrique Martínez García
The paper examines how central bank credibility shapes inflation expectations formation. Strong credibility anchors expectations even during inflationary shocks, while credibility loss leads to expectations de-anchoring and persistence.

How Immigration Affects Trade

December 16, 2025 | Authors: Pia Orrenius, Madeline Zavodny
This study quantifies immigration's impact on bilateral trade flows. Immigrant networks significantly boost trade through information channels, preference effects, and reduced transaction costs, with effects varying by skill level.

San Francisco Fed (Economic Letters)

What Can History Tell Us About Tariff Shocks?

January 5, 2026 | Authors: Regis Barnichon, Aayush Singh
This analysis examines historical tariff rate changes comparable to 2025's shift—the largest in the modern era. The research indicates that prior tariff increases correlated with elevated unemployment and reduced economic activity alongside lower inflation. Uncertainty surrounding substantial tariff increases may suppress aggregate demand and produce deflationary pressure.

Minneapolis Fed (Staff Reports & Working Papers)

Final Report for the Enhanced Services Pilot of the Montana Reemployment Services and Eligibility Assessment Program

December 17, 2025 | Authors: Ayushi Narayan, Ryan Nunn, Maxine Xu
This report evaluates Montana's enhanced reemployment services pilot program. The research examines how expanded employment assistance affects worker outcomes and program effectiveness in the state.

The Role of Dispersed Information in Maintaining Low Interest Rates

December 12, 2025 | Authors: Marco Bassetto, Carlo Galli, Jason Hall
The paper investigates how scattered information across markets influences interest rate dynamics. It analyzes mechanisms through which decentralized knowledge affects monetary conditions and rate sustainability.

Default and Interest Rate Shocks: Renegotiation Matters

December 8, 2025 | Authors: Victor Almeida, Carlos Esquivel, Timothy J. Kehoe, Juan Pablo Nicolini
This study examines how debt renegotiation affects borrower responses to rate shocks and default risk. The research demonstrates that restructuring flexibility significantly influences economic outcomes during interest rate volatility.

Official Sovereign Debt

December 5, 2025 | Authors: Cristina Arellano, Leonardo Barreto
The publication analyzes government borrowing from official creditors and multilateral institutions. It explores how official debt structures differ from market-based financing and their policy implications.