FEDS Notes (Federal Reserve)

Pandemic Period Wage and Income Expectations

Federal Reserve economists Corinne Salter and Daniel Villar published a research note examining consumers' wage and income growth expectations before, during, and after the Covid-19 pandemic period. The analysis utilizes two surveys to track whether consumers' expectations of future wage growth followed similar movements to actual inflation expectations and realized wage growth. The study finds that while price inflation, inflation expectations, and wage growth moved substantially during the pandemic period, consumers' expectations about their own future wage growth showed very little discernible movement, raising questions about how workers and consumers form income expectations.

Detecting Tariff Effects on Consumer Prices in Real Time – Part II

Federal Reserve economists published Part II of a methodology study detecting tariff effects on consumer prices using publicly available data. The study confirms that tariffs implemented in 2025 led to statistically significant price increases for tariff-exposed consumer goods. The authors estimate that tariffs implemented through November 2025 raised core goods PCE prices by 3.1 percent through February 2026, contributing to a 0.8 percent boost in core PCE prices overall.

Mind the Gap: Announced versus Implied Tariff Rates in Recent Trade Policy Episodes

The Federal Reserve published FEDS Notes research analyzing the gap between announced U.S. tariff rates (effective tariff rate) and realized tariff rates calculated from Census data. Authors Sydney Eck, Trang Hoang, Carter Mix, and Madeleine Ray performed mathematical decomposition comparing 2018-2019 and 2025 tariff episodes. The analysis found the current tariff rate gap is substantially larger than in 2018-2019, driven by faster substitution toward lower-tariff products, increased frontloading, and greater tariff manipulation by importers.

Stablecoins 2025: Developments and Financial Stability Implications

Federal Reserve researchers published an analysis finding stablecoin market capitalization grew approximately 50% in 2025, with transaction volume and DeFi protocol usage also surging. The note identifies three structural developments reshaping the stablecoin landscape: increasingly complex intermediation chains, strategic vertical integration, and accelerating retail adoption through digital wallet partnerships. Researchers warn these trends may amplify financial stability vulnerabilities including run risk, reduced market transparency, and amplified interconnections between traditional finance and digital asset ecosystems.

India and the Global Economy

The Federal Reserve published a FEDS Notes article analyzing India's position as the world's fastest growing economy and 5th largest by GDP. The research notes that India's share of global GDP (3%) remains far below its 20% share of world population, and examines how India's services-driven growth model differs from earlier Asian economies' manufacturing export strategies.

Monitoring AI Adoption in the US Economy

The Federal Reserve Board released FEDS Notes research by Jeffrey S. Allen examining AI adoption trends in the U.S. economy through 2025. Census Bureau data shows approximately 18 percent of firms have adopted AI by year-end 2025, with work-related Generative AI adoption at 41 percent and 78 percent of the labor force working at AI-adopting firms. The research highlights significant heterogeneity across firm size and industry cohorts, with professional services and financial sectors showing particularly strong adoption rates.

Near-zero labor force growth affects breakeven employment, GDP

Federal Reserve economists Seth Murray and Ivan Vidangos published a FEDS Notes analysis on April 2, 2026, examining how projected near-zero labor force growth in the United States will affect breakeven employment levels and potential GDP growth. The paper highlights that the labor force is expected to grow at near-zero rates starting in 2026, driven by weak population growth from low net immigration and declining labor force participation due to population aging. The research notes that this would represent an unprecedented shift in U.S. labor market dynamics.

Payment Stablecoins and Cross Border Payments Benefits and Implications for Monetary Policy

The Federal Reserve published a FEDS Notes analysis examining the Genius Act stablecoin regulatory framework passed by Congress in July 2025. The document analyzes how payment stablecoins backed by safe assets (deposits, Treasury securities, central bank reserves) may affect central bank balance sheets and monetary policy implementation. It provides regulatory context without imposing new compliance obligations.

Post-pandemic Inflation Differences Across Advanced Economies

Federal Reserve economists published research examining whether post-pandemic inflation dynamics differ from historical patterns in the US, euro area, Canada, and UK. The analysis finds that inflation remains unusually widespread across categories, the historical relationship between aggregate CPI inflation and diffusion indexes has weakened, and persistent wage growth in services may be contributing to these shifts. No regulatory actions or compliance requirements result from this research publication.

AI Adoption and Firms' Job-Posting Behavior

The Federal Reserve's FEDS Notes published research indicating that AI adoption has not yet led to a reduction in overall job postings by firms. The study analyzed job posting data and found that while specific occupations may be affected, firms are balancing this with other hiring priorities. This research is part of an ongoing monitoring process for AI's labor market impacts.

China's Trade Dominance and Industrial Policies

The Federal Reserve published a FEDS Notes article detailing China's record $1.2 trillion trade surplus in 2025, which exceeded 6% of its GDP. The analysis highlights China's broad export expansion across sectors, the resulting loss of market share by advanced economies, and the role of industrial policies in contributing to China's trade surplus.

Tariffs Gradually Raised Retail Prices in 2025

The Federal Reserve's FEDS Notes published an analysis finding that tariffs gradually increased retail prices in 2025, with the greatest impact on goods imported from China. The analysis indicates that tariff pass-through to consumers for Chinese goods was at least 30% by December 2025.

Banks' Lending Standards Expectations Measured via Loan Officer Survey

The Federal Reserve published a FEDS Notes article analyzing how banks form expectations about future credit supply using data from the Senior Loan Officer Opinion Survey. The analysis explores factors influencing these expectations, including macroeconomic forecasts and bank characteristics, and identifies expectation shocks.

Assessing Bank Resilience to a Funding Shock

The Federal Reserve published a FEDS Notes analysis assessing bank resilience to a hypothetical funding shock. The analysis uses the FLARE stress testing model, incorporating a shock to uninsured deposits, to project impacts on bank profitability and capital ratios under various scenarios.