The Fed's research week: steady inflation hopes, a 150-year verdict, and $214 billion

One week, five papers

The Federal Reserve published a stack of its own research in one week, and the papers do not agree with each other so much as they fill in different corners of the same picture. Households expect inflation to stay put but fear losing their jobs. Gold moving between central banks looks like risk management, not a vote against the dollar. A 150-year look back says monetary policy only got good recently. And a study of pandemic jobless aid counts $214 billion in payments that should not have gone out. Read together, they describe an economy where expectations are steady, nerves are not, and the last crisis is still being audited. m:…6089 m:…3236 m:…9060 m:…8410 m:…1720

Households: calm on prices, nervous on jobs

The New York Fed's October 2026 household survey is the steadiest part of the picture. Median inflation expectations were unchanged at 3.9 percent one year ahead, 3.3 percent three years ahead and 3.0 percent five years ahead. The labor market answers point the other way. Mean unemployment expectations rose 1.4 percentage points to 45.3 percent. The mean perceived chance of losing a job rose to 13.9 percent, while the perceived chance of finding one rose to 46.5 percent. Households also put the chance of missing a minimum debt payment at 13.8 percent. Earnings growth expectations were unchanged at 2.6 percent, expected household income growth slipped 0.1 point to 3.0 percent, and expected spending growth fell 0.2 points to 5.3 percent. m:…6089

Gold: a risk story, not a dollar story

A FEDS Note on gold takes up a question that follows every relocation announcement: when a central bank moves its gold, is it leaving the dollar? The note looks at the Netherlands, France and Germany, which have publicized gold reserve relocations since 2013, and finds the moves are better explained by risk management. Where gold is held can reflect the perceived risk of sanctions or expropriation in the custody jurisdiction, and proximity to international gold markets is a second factor. The note's conclusion is that relocations do not necessarily signal a change in US dollar reserve allocations. A gold move, in this telling, is a statement about where a central bank feels safe, not about which currency it trusts. m:…3236

Oil: the open question

A second FEDS Note asks a question with no tidy answer yet: do oil price shocks and geopolitical uncertainty create passing inflation or lasting inflation in advanced economies? The note offers new evidence on whether the underlying inflation process has changed, and it folds heightened geopolitical uncertainty into the analysis of core inflation. The published summary does not spell out the note's detailed findings, so the honest reading is that the question is open and the Fed's researchers are still working through it. For anyone watching prices, the note matters as a frame: the next oil shock will be judged on persistence, not just size. m:…1720

150 years: improvement came late

The longest view comes from a New York Fed blog post by Barnichon and Mesters, who measure 150 years of US monetary policy against a best feasible benchmark. Their finding is that meaningful improvement came only in the last thirty years, in the post-Volcker era. Before that, the systematic response to macroeconomic shocks showed little material improvement. In the early Fed period, from 1913 to 1941, adverse financial shocks were followed by higher policy rates, tightening when the economy needed support. After the war, policy reacted too weakly to supply shocks, including energy prices, productivity and inflation expectations, the weakness behind the Great Inflation. The largest gains came in responding to financial shocks, and the required correction to the policy path fell to around 30 percent in the post-Volcker period, compared with over 100 percent in earlier periods. m:…9060

Jobless aid: $214 billion

The Philadelphia Fed's study of pandemic unemployment insurance is the week's audit. Researchers found $214 billion in potentially improper payments during the 2020 and 2021 expansion. About half of those payments were detectable before they went out through better federal-state data sharing, and geographic variation in improper payments is partly explained by state policy decisions. The study's simulations found that means-tested, lump-sum transfers would have provided better insurance at lower administrative cost than the PUA program, and that shifting toward automatic transfers would have increased social welfare compared with opt-in programs. The lesson is administrative, not moral: the study says about half could have been caught before payment with better data sharing between federal and state systems. m:…8410