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1 02, 2023

The Hill, Wednesday, February 1, 2023

2023-02-02T10:21:49-05:00February 1st, 2023|Press Clips|

The Fed can’t fix inflation alone. Here’s why

By Karl Evers-Hillstrom

The Federal Reserve continues to hike interest rates in its fight to bring an end to historic inflation. The central bank has driven up borrowing costs and slowed the economy in an effort to reduce demand for goods and services, which leads to lower prices….“We’re not done by any stretch. But inflation has cooled and more quickly than I and others who were so upset when the Fed was late intervening,” said Karen Petrou, managing partner at policy research firm Federal Financial Analytics……Existing home sales have fallen for eleven straight months, according to the National Association of Realtors.Home price growth has slowed dramatically from the extreme gains in recent years and has turned negative in some parts of the U.S….“Mortgages are where the Fed has the heaviest foot in terms of slamming on the brakes and having very little lag time between what it does and how a market cools,” Petrou said.


31 01, 2023

Banking with Interest, Tuesday, January 31, 2023

2023-01-31T09:52:33-05:00January 31st, 2023|Press Clips|

Are the FHLBs Dangerously Off Mission?

Host Rob Blackwell

While the Federal Housing Finance Agency conducts a historic review of the Federal Home Loan Banks’ mission, several critics are questioning whether the housing government-sponsored enterprises have lost sight of their original purpose. Karen Shaw Petrou, managing partner of Federal Financial Analytics details the controversy, and how the FHLBs should be reformed.

10 01, 2023

American Banker, Tuesday, January 10, 2023

2023-01-11T11:01:42-05:00January 10th, 2023|Press Clips|

Silvergate Bank loaded up on $4.3 billion in FHLB advances

By  Kate Berry

When depositors began pulling money out of Silvergate Capital Corp. following the collapse of cryptocurrency exchange FTX, the California bank shored up its liquidity by tapping a quasi-government agency not typically known as a lender of last resort.  Silvergate received $4.3 billion from the Federal Home Loan Bank of San Francisco late last year, company filings show….”What the $4.3 billion to Silvergate went to in terms of mission is a very intriguing question,” said Karen Petrou, managing partner at Federal Financial Analytics. “The housing mission of the Home Loan banks is apparently long gone, since this has nothing to do with housing. It has to do with supplementing wholesale funding sources for banks that can’t happen any other way or at greater cost.”


9 01, 2023

Marketplace, Monday, January 9, 2023

2023-01-10T09:36:48-05:00January 9th, 2023|Press Clips|

Why big banks are “canaries in the economic coal mine”

Mitchell Hartman

This will be a big week for economic news. The consumer price index will come out Thursday and tell us whether inflation continues to moderate under the influence of continuing Federal Reserve rate hikes. And the kickoff of corporate earnings season will also help fill in the near-term picture for interest rates and a potential economic slowdown…But Zandi doesn’t think that’ll last, which might be welcome news for savers. “I do think banks will need to pay their depositors more to hold on to deposits. They are starting to lose deposits.” What happens to banks’ balance sheets in 2023 will tell us a lot about recession risk, said Karen Petrou at Federal Financial Analytics.

Listen here.



6 01, 2023

Bloomberg, Friday, January 6, 2023

2023-01-06T09:52:34-05:00January 6th, 2023|Press Clips|

Crypto Panic at Silvergate Spawns a New Breed of Bank Run

By Yueqi Yang and Hannah Levitt

When US banks fell like dominoes during the Great Depression, the cause was often a classic run: Depositors withdrew cash en masse amid fears that lenders were amassing huge losses on bad loans and investments. The cryptocurrency era just put a new twist on that — with the depositors running into trouble first….“This is unprecedented, it’s very unusual,” said Karen Petrou, a managing partner at Federal Financial Analytics, a Washington-based research firm. “Because they were so dependent on crypto funding, they were vulnerable for a run. Given the crypto market has been unstable, they got it.” Bank regulators, she said, will take a closer look at such situations.

13 12, 2022

PIIE, Tuesday, December 13, 2022

2022-12-15T11:50:57-05:00December 13th, 2022|Press Clips|

Can Regulation Save Crypto?

Turmoil in the crypto sector, with the collapse of several high-profile platforms, has raised fundamental questions about the sustainability of unregulated crypto markets. What are the options for formal regulatory regimes? And can they save the crypto sector from itself?

Joining this episode of Financial Statements were: Host Nicolas Véron (PIIE), Guests: Matthew Elderfield (Former Deputy Governor, Central Bank of Ireland) and Karen Petrou (Federal Financial Analytics)

Watch the episode at:



12 12, 2022

The Hill, Monday, December 12, 2022

2022-12-13T11:17:39-05:00December 12th, 2022|Press Clips|

Fed eyes inflation report, with rate increase plan in mind

By Sylvan Lane

The Federal Reserve is hoping to slow its interest rate hikes and give Americans some relief from rising mortgage and car payments. A crucial inflation report could make or break those plans.
The Labor Department is set to release new consumer price index (CPI) data for November on Tuesday, a day before the Fed is expected to increase rates for the final time this year….“The oil prices are a really big, big improvement, and we’re seeing a significant slowdown in mortgage purchasing and a little bit of softening in rents, which is good,” said Karen Shaw Petrou, managing partner at research firm Federal Financial Analytics, in a Monday interview. “But then you look at other key sectors like food, health and consumer goods and inflation is still rip-roaring away.”…

7 12, 2022

American Banker, Wednesday, December 7, 2022

2022-12-08T15:12:24-05:00December 7th, 2022|Press Clips|

The need for nonbank regulation is a consensus issue for the Fed

By  Kyle Campbell
A consensus is emerging within the Federal Reserve about the need to address the risks nonbanks pose to the financial sector, with champions on opposite ends of the Board of Governors’ ideological spectrum….Karen Petrou, managing partner at Federal Financial Analytics, said there are elements of truth to both perspectives and they must be squared with one another to properly address the issue of nonbank systemic risk. “Both Barr and Bowman are right,” Petrou said. “Banks need to be regulated because they are systemically special, but to the extent you do that, it’s not just the activities that migrate but also the systemic risk. And it is the signal failure of financial policy since 2008, not to have done much but talk about that.”…


29 11, 2022

NPR, Marketplace Morning Report: Tuesday, November 29, 2022

2022-11-29T15:11:24-05:00November 29th, 2022|Press Clips|

Your move, Federal Reserve

Host Sabri Ben-Achour

Today is the eve of Fed Chair Jerome Powell’s speech, where he’s expected to lay out the current economic landscape and offer hints as to what the Fed might do with it in a couple of weeks. For more, we talk with Karen Petrou of Federal Financial Analytics.

Listen here:

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