The Changing Investor Composition of U.S. Treasuries, Part 1: Foreign Treasury Sales Could Raise U.S. Yields
Although their market share has been falling steadily since 2010, foreign investors retain a large share of Treasuries outstanding. As a result, increased Treasury sales from this group could have substantial implications for yields. This Bulletin, the first in a two-part series, shows that a modest increase in liquidation among foreign investors could raise U.S. Treasury yields by 25 to 100 basis points. Even in the absence of outright sales, diminished purchasing of additional Treasury issuance is likely to drive up yields.
International
Banking and Finance
Economic Bulletin
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Karlye Dilts Stedman
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July 9, 2025
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The Changing Investor Composition of U.S. Treasuries, Part 2: Who’s Buying U.S. Treasuries?
Part 1 of this two-Bulletin series highlights the changing demand among foreign investors for U.S. Treasuries. In Part 2, we explore how the composition of Treasury investors has shifted toward more yield-sensitive domestic private investors—such as banks, money funds, and hedge funds. This shift in investor composition has not only increased yields but also raised volatility.
International
Banking and Finance
Economic Bulletin
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Rajdeep Sengupta
Joshua A. Jacobs
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July 9, 2025
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Changes in International Trade Could Disproportionately Affect Employment in Pockets of the Tenth District
Although all states within the Tenth Federal Reserve District have some exposure to international trade, some states are more dependent on international trade than the national average. Counties within the Tenth District that have an outsized exposure to oil and gas production or transportation equipment manufacturing are both more exposed to international trade and more reliant on a comparatively low number of trade partners. Employment in these areas is most at risk of changes in international trade.
Labor and Demographics
Regional
Economic Bulletin
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John McCoy
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July 7, 2025
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Some Segments of the Agricultural Economy Are Particularly Sensitive to Changes in the Foreign-Born Farm Labor Supply
For years, many segments of the U.S. agriculture sector have relied on foreign-born and undocumented workers to meet labor demand in farm operations. While farm operators may be able to partly reduce this reliance through investments in machinery and further hiring through the agricultural guest worker visa program, these alternatives would take time to deploy and could substantially increase costs.
Labor and Demographics
Economic Bulletin
Agriculture
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Alexandra Hill
Francisco Scott
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June 30, 2025
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Is It Time to Add Food-at-Home Inflation to Measures of Core Inflation?
Since the mid-1970s, the Federal Reserve has used core inflation to examine trends in underlying inflation. Core inflation is considered a more stable measure as it excludes energy and food, historically viewed as the most volatile components of inflation. However, core inflation can be a challenge for central bankers to communicate, as food inflation is highly salient to consumers. We argue that food-at-home inflation has become less volatile over time and could be added to measures of core inflation with few drawbacks.
Monetary Policy
Economic Bulletin
Agriculture
Inflation
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Francisco Scott
José Mustre-del-Río
Amaze Lusompa
Jalen Nichols
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June 6, 2025
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Data file for the paper "Is It Time to Add Food-at-Home Inflation to Measures of Core Inflation?"
Data file for the paper "Is It Time to Add Food-at-Home Inflation to Measures of Core Inflation?" by Francisco Scott, José Mustre-del-Río, Amaze Lusompa and Jalen Nichols, Economic Bulletin, Federal Reserve Bank of Kansas City, June 06, 2025.
Agriculture
Economic Bulletin
Inflation
Monetary Policy
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Amaze Lusompa
Jose Mustre-del-Rio
Jalen Nichols
José Mustre-del-Río
Francisco Scott
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June 6, 2025
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Data file for "Forecasting with Feelings: The Modest Link Between Consumer Sentiment and Spending"
Data file for the paper, "Forecasting with Feelings: The Modest Link Between Consumer Sentiment and Spending" by José Mustre-del-Río and Jalen Nichols, Economic Bulletin, May 16, 2025.
Data and Trends
Economic Bulletin
Macroeconomics
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Jose Mustre-del-Rio
José Mustre-del-Río
Jalen Nichols
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May 22, 2025
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Forecasting with Feelings: The Modest Link Between Consumer Sentiment and Spending
Recent declines in consumer sentiment have prompted concerns about an impending slowdown in spending growth. However, the link between consumer sentiment and growth in real household spending has been modest historically, suggesting changes in consumer sentiment are unlikely to significantly alter forecasts of household spending. Consistent with this interpretation, despite the downbeat tone from consumers, sentiment does not meaningfully alter near-term predictions of 2025 spending growth.
Macroeconomics
Data and Trends
Economic Bulletin
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José Mustre-del-Río
Jalen Nichols
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May 16, 2025
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Canadian Oil Important for Midwest Gasoline Prices
U.S. imports of Canadian oil—a heavy sour crude—have doubled over the past two decades. Most of this oil is sent to Midwest refineries that specialize in processing heavy sour crude. These refineries have limited flexibility to substitute other types of crude without incurring the cost of switching equipment. As a result, higher prices for Canadian crude, including from tariffs, could lead Midwest consumers to pay higher prices on refined petroleum products such as gasoline, holding other factors constant.
Natural Resources and Environment
International
Economic Bulletin
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Jason P. Brown
Bobby Beckemeyer
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May 9, 2025
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Community Banks Have Maintained Profitability in a High-Interest Rate Environment
Two-thirds of community banks have maintained their profitability—measured by net interest margins—since interest rates began increasing in 2022. More profitable banks have distinguished themselves by generating both higher asset returns and lower funding costs. Community banks with higher asset returns have achieved them primarily by rebalancing their asset holdings, while community banks with lower funding costs have more stable, low-cost deposit bases on average.
Monetary Policy
Banking and Finance
Economic Bulletin
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Mariia Dzholos
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April 16, 2025
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