Liberty Street Economics

> A college degree is no longer a guaranteed path to a stable, well paying job. College never guaranteed anything. A college education may still be (statistically) a good investment: https://libertystreeteconomics.newyorkfed.org/2025/04/is-college-still… Aside from the financial arguments, the social and personal development opportunities of living and studying with your peers can be pretty great in my experience. I went to a decent school and was surrounded by a lot of very interesting and smart kids and I had some truly great professors. I was really pushed beyond what I thought I could do and my biggest regret is that I didn't take a little extra time for more courses in the humanities (specifically literature and art history).

The lifetime ROI of college is only 13%? https://libertystreeteconomics.newyorkfed.org/2025/04/is-college-still… Doesn't that mean over the working life of the person (40 years), they spend (1-0.13) * 40 = 34.8yrs paying for the cost of college from their additional earnings? I think my college was paid for with additional earnings inside of 5 years.

I've recently heard there's the IMF has been looking at the effect of supply side effects on inflation. The best summary I can find is in this NY Fed post (https://libertystreeteconomics.newyorkfed.org/2022/08/how-much-did-sup… "Our analysis of the relative importance of supply-side versus demand-side factors finds 60 percent of U.S. inflation over the 2019-21 period was due to the jump in demand for goods while 40 percent owed to supply-side issues that magnified the impact of this higher demand." I've always found it interesting that econ discourse usually takes such a rigid view for the causes of phenomenon, if this were another quantitative discipline I imagine there'd be a softer position. Anywho, just chiming in to opine that the models for economics folks argue about is likely more nuanced than portrayed.

The claim is "on average, those with college degrees out-earn those without college degrees." No it's not: instead it's the prescriptive advice that high school graduates should go to college. But if you follow up one of the references: "However, when we look at wages for the 25th percentile of college graduates, the picture is not quite so rosy. In fact, there is almost no difference in the wages for this percentile ranking of college graduates and the median wage for high school graduates throughout the entire period. This means that the wages for a sizable share of college graduates below the 25th percentile are actually less than the wages earned by a typical worker with a high school diploma." https://libertystreeteconomics.newyorkfed.org/2014/09/college-may-not-…

See eg https://www.nber.org/system/files/working_papers/w9857/w9857.pdf https://libertystreeteconomics.newyorkfed.org/2016/10/what-caused-the-… has more recent data. The headline of 'What Caused the Decline in Interstate Migration in the United States?' might be telling. See also https://www.brookings.edu/articles/u-s-migration-still-at-historically… > Annual movement within the U.S. is stuck at a postwar low rate of 11 percent. This 2016-2017 rate is not statistically different than the 11.2 percent rate of 2015-2016, the lowest mobility rate in any year since this annual series began in 1947-48 (see Figure 1). The decline in annual mobility rates, from over 20 percent during some years in the 1950s and 1960s down to almost half that today, is the result of long term trends, such as the aging of the population (older people move less than younger people) and rises in homeownership (owners move less than renters). Yet the downward mobility trend of the last decade can certainly be tied to the lasting effects of the Great Recession and housing bust which occurred over the 2007-2009 period.

Adjusted for the inflation on the items that the poorest tend to spend their money on? The inflation statistics I've seen have a few buckets for certain kinds of expenses, but don't break things down into baskets of goods based on income. https://libertystreeteconomics.newyorkfed.org/2023/01/inflation-dispar… : As there are no official estimates of inflation by demographic and income groups : In the first post of this series, we present disparities in inflation rates across racial and ethnic groups as well as across income groups between June 2019 and December 2022. We present evidence that during this period, Black, Hispanic, and middle-income households were most affected by rising inflation, experiencing steadily higher price increases relative to the overall average between early 2021 and June 2022. This pattern is largely because a greater share of these groups’ expenditures is devoted to transportation, particularly used cars and motor fuel, categories that led the 2021 inflationary episode. However, over the last five months, as transportation inflation has declined, these gaps have declined as well.

> I find myself repeatedly trying to make a distinction between inflation in general and consumer price inflation specifically The issue I'm having with the distinction you're trying to make is that you're also trying to argue wages, which is only helpful in the context of consumer price inflation. Consumer price is also the best measure we have of inflation, since it is the only measure that is widely available and open to the public. > though it feels otherwise as a homeowner seeking a handyman Yes, part of what you're paying for is labor, but I guarantee that if the laborers actually got paid what you're getting charged, the world would be a very different place. The main difference between labor and any other good or service is that it does not exchange at its value, it necessarily has to exchange below its value, or else nobody would see profit (that value that people make that companies keep). This is necessary in a capitalist economy or it falls apart. This is why its hard for me to want to include it in our discussion about wages and inflation, because it is valued very differently from anything else, and again, is not something most everyday people are concerned about, which I've been very consistent about arguing about. I have not once talked about how inflation has affected corporations or businesses because I honestly don't care, so I don't see how a discussion about cost of labor is anywhere near relevant (if you say its "part of inflation" again I'm done…

I don't buy this argument. There are good arguments to the contrary which Jerome can bring up and has at previous hearings. Say demand quiets but the price of inelastic goods (gas and food) continues to skyrocket due to greater demand from developing nations who demand more resources to have a better standard of living. How will hiking to 10% fix anything? Sure you'll kill demand, but you'll also kill financing supply which will only exacerbates the issue over the long run. We need more drilling, more refining, more farming now that Russia is out of the picture and the Saudis are playing games. Hiking too far is actually a horrible policy choice, and Powell can make a cogent argument about it: he already has mentioned this in hearings. You can't address supply related constraints with higher rates. At some point, they might justify capping rates to finance the needed supply, and that argument smells like the yield curve control of the 1940s. I suspect this argument will become more palatable if we have high unemployment and high inflation. [0] I have a feeling whatever policy rate they pick will aim to be slightly sub neutral (negative real rates) as they pray inflation resolves itself, while constantly pointing out they have no control over whether Brazil has a successful wheat harvest. [0]: https://libertystreeteconomics.newyorkfed.org/2020/04/how-the-fed-mana…

> when wages haven't gone up in 50 years This argument is made time and time again as though it's a self-evident truth...except it's not true at all. The inflation-adjusted median personal income is higher than it's ever been. https://fred.stlouisfed.org/series/MEPAINUSA672N The median disposable income in the US is in the top 3 in the world: https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_inco… Since 1967, the middle class has been shrinking...because the upper class has been growing: https://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-middle… Yes, college has gotten more expensive (and there are a lot of reasons why), but it's also worth contextualizing: the median number of years to recoup the cost of a bachelors degree, adjusted for inflation, has gone down since the 1980’s, from about 22 years to about 10 years. https://libertystreeteconomics.newyorkfed.org/2014/09/the-value-of-a-c… This is all information you're not going to read in most news media today, because it's, well, pretty boring and doesn't generate revenue. Yes, there are always improvements that we need to make. Healthcare is indeed a bit of a mess. There are a number of ways to fix it (and not just the one proposal you keep hearing about). Does that mean society is crumbling? Absolutely not. We're living in just about the best time in human history. But climate change is very real, and just about the most catastrophic thing we have…

The decline in junior hiring began before ChatGPT had wide adoption, so AI is not a likely cause. https://www.employamerica.org/labor-market-analysis/dont-blame-ai-for-… The New York Fed has also released some research suggesting remote work has been a major factor differentially affecting early career workers. https://libertystreeteconomics.newyorkfed.org/2026/06/remote-work-leav… "But then people who work in actual tech companies come in and explicitly say they are not hiring any juniors anymore specifically because AI is good enough to do most of what juniors do, and that senior engineers can now write 3x as much code, etc." If you want an anecdote: the media company I work for just started hiring interns and juniors in software career tracks again after a lengthy hiatus.

This is already to some extent a solved problem. The top 10% of households in the US for example are 50% of spending, the "horses" to a large extent already don't matter to the economy. This is similar to the relationship between US consumers and workers in undeveloped nations during globalization. Historically this tends to be resolved when it creates an unsustainable level of political instability, but there are many new ways of managing this. https://libertystreeteconomics.newyorkfed.org/2026/05/tracking-the-k-s…

> interest you pay is insuring the bank against bad debtors I thought that was the govt: > Loans securitized by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac continue to dominate the market, comprising around 52 percent of all balances at roughly $6.5 trillion. Government-backed loans, such as those insured by the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA), account for 19 percent or $2.5 trillion. FHA loans are designed for first-time and lower-income buyers and make up 12 percent of balances, while VA loans that are available to U.S. military veterans comprise 8 percent. https://libertystreeteconomics.newyorkfed.org/2025/08/a-check-in-on-th…

> You could literally rewrite the quote to be about iron and about building railroads for trains and passengers that don't exist yet. See how silly that would be? Couldn't possibly happen with railroads! https://libertystreeteconomics.newyorkfed.org/2016/02/crisis-chronicle…

I mean sure, in some places it might be hard to find a starter home. Do you think that wasn't true in the 80s and 90s as well? I can't find the data going back to the 80s with a quick search, but here is one that shows it's been going down since 2000 https://libertystreeteconomics.newyorkfed.org/2025/08/who-is-still-on-… The narrative that millennials (of which I am one) are worse off economically than our parents is an attractive one to many people, but the fact is that it's not true, at least in the USA as a whole.

Paper: https://libertystreeteconomics.newyorkfed.org/2026/03/sports-betting-i… Jacob Goss and Daniel Mangrum, “Sports Betting Is Everywhere, Especially on Credit Reports,” Federal Reserve Bank of New York Liberty Street Economics, March 25, 2026, https://doi.org/10.59576/lse.20260325

read from where? Because over 92% of tariff costs were born by domestic importers. Thats american companies who then offload that tax through higher purchasing costs. https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-fo…

Here is a source for you to use in the future: https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-fo… The number the New York Fed came up with is 90% was passed onto the consumer.

Well, lucky for us we've seen multiple, broader tariff studies, all concurring in their conclusions: https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-fo… https://www.nber.org/papers/w34620 https://www.kielinstitut.de/publications/americas-own-goal-who-pays-th… This one has even more egregious findings: > Pass-through at the border is incomplete, yet consumers paid more than the tariff revenue collected. Wonder how many other industries used tariffs as an excuse to further juice their profits. (Edit - turns out this study is looking at pre-2021 data, so we don't even know what they've done this time!)

Educated enough to recognize blatant and proven lies when they hear them. For example, the oft repeated lie that foreign country's would pay his illegal tariffs. Educated enough to know that calls from this adminstration to "punish" the NY Fed for pointing out this lie would be in direct violation of the 1st Amendment. https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-fo…

Will the collected tariffs now have to be repaid? If so how. According to the Fed 90% were paid for by the consumers. https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-fo…

FED related report: https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-fo…

Source post: https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-fo…

Source: https://libertystreeteconomics.newyorkfed.org/2025/09/are-businesses-s…

The personal debt to income ratio is actually not so terrible. I guess since rates are high it would make sense to fall since the cost of servicing the debt will rise. https://libertystreeteconomics.newyorkfed.org/2024/11/income-growth-ou…

A desperate attempt to pretend that the money isn't ultimately being taken from Americans. Last time he did this, it was equivalent to a yearly tax of $831 from each US household. [0] https://libertystreeteconomics.newyorkfed.org/2019/05/new-china-tariff…

Good overview of auto loan delinquencies (2 months old): https://libertystreeteconomics.newyorkfed.org/2024/02/auto-loan-delinq…

The treasury market is so big I would be surprised if that is a consideration but I could be wrong. There is $25tn notional outstanding and a lot of players in the market have been complaining about lack of liquidity for a while now so if Tether was to completely evapourate, having on large passive investor out of the picture should (I would think) make it better for everyone else if they notice at all. Here’s more detail from the NY fed about treasury liquidity overall https://libertystreeteconomics.newyorkfed.org/2023/10/how-has-treasury…

> HQLA assets in LCR calculation are priced at "fair value" (see your footnote 1 for example) which is the present market value Held-to-maturity securities' fair value, under GAAP, is amortized cost [1][2]. From an accounting perspective, this sort of makes sense. From a liquidity perspective, it does not. This is specific to the American implementation of Basel III because it incorporates GAAP. It's one of the closest things to a discrete bug in the code I've seen in our financial rules. [1] https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/loans_and_inv… [2] https://libertystreeteconomics.newyorkfed.org/2015/02/available-for-sa…

This piece is almost entirely about the cost of college. There is little about the benefits. As far as I can tell, all the statements about benefits are: > According to repeated analyses by economists at the Federal Reserve Bank of New York, a four-year degree generates an annual return of 14 percent over a 40-year career. > ...a weakening job market for new grads (true, but better than the market for non-grads)... The first quote links to a much better analysis: https://libertystreeteconomics.newyorkfed.org/2019/06/despite-rising-c… As someone who works with statistics, this is the oldest trick in the book: talk about the average when it tells the story you want to tell as opposed to the distribution. Given the massive variability in total cost to attend, the average loses meaning.

As others have pointed out, free cash balances should be OK. RH should have SPIC (SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.) For amounts above SPIC they may have additional insurance in place However (you knew that was coming, right?) none of these things, including the FDIC insurance, are instantaneous. But they are much faster, at least for retail, than days gone by. Lehman retail accounts were mostly transferred to solvent brokers within a week. Of course if you need to sell something (or buy to cover) every hour of waiting could be costly. ref: https://libertystreeteconomics.newyorkfed.org/2019/01/customer-and-emp…