moreover, even in a strong economy, unforeseen life events and risks in local real estate markets make highly leveraged borrowers vulnerable. it was ultimately very destructive when, in the early part of this decade, dubious underwriting practices and mortgage products inappropriate for many borrowers became more common. in time, these practices and products contributed to problems in the broader financial services industry and helped spark a foreclosure crisis marked by a tremendous upheaval in housing markets. now, more than 20 percent of borrowers owe more than their home is worth and an additional 33 percent have equity cushions of 10 percent or less, putting them at risk should house prices decline much further. with housing markets still weak, high levels of mortgage distress may well persist for some time to come. in response to the fallout from the financial crisis, the fed has helped stabilize the mortgage market and improve financial conditions more broadly, thus promoting economic recovery. what may be less well known, however, is what the fed has been doing at the local level. as the foreclosure crisis has intensified, federal reserve staff in our research, community development, and supervision and regulation divisions have actively collaborated to support foreclosure prevention at the local level and promote neighborhood stabilization initiatives. a key initiative developed under the leadership of federal reserve bank of chicago president charles evans has been the mortgage outreach and research effort, known as more. more involves all 12 federal reserve banks and the board of governors in a collaboration that pools resources and combines expertise to inform and engage policymakers, community organizations, financial institutions, and the public at large. the fed is particularly well suited to such an effort. our community development experts are working on the ground to promote fair and equal access to banking services and improve communities. further, federal reserve staff members are conducting empirical research on mortgage - and foreclosure - related topics, and are reaching out to industry experts as well. we are focusing on the hardest - hit cities and regions of the country. a new publication released this week offers details about the more effort. copies are available here today, and it is available online at the website of the federal reserve bank of chicago. 1 the report identifies approaches the fed has taken to mitigate the foreclosure crisis, and i ’ d like to share some highlights of that work. we have helped many of our community development partners organize day - long “ mega events ” that have served thousands of troubled borrowers. moreover, we ’ ve

. this slide has been compounded by three other factors. first, because manufacturing is capital intensive, interest rate increases over the past couple of years raised capital costs in this sector. as monetary policy eases across countries, this effect may unwind. also, higher energy costs after russia ’ s attack on ukraine have hurt manufacturing more than other sectors. and lastly, china ’ s push to reduce its reliance on imports and expand its global market share in sectors such as autos has had a big impact across oecd economies. while the manufacturing sector is a see, for example, robert j. barro and francesco bianchi ( 2023 ), “ fiscal influences on inflation in oecd countries, 2020 - 2023, ” nber working paper series 31838 ( cambridge, mass. : national bureau of economic research, november ; revised january 2025 ), https : / / www. nber. org / papers / w31838 ; domenico giannone and giorgio primiceri ( 2024 ), “ the drivers of post - pandemic inflation, ” nber working paper series 32859 ( cambridge, mass. : national bureau of economic research, august ), https : / / www. nber. org / papers / w32859 ; and karen dynan and doug elmendorf ( 2024 ), “ fiscal policy and the pandemic - era surge in us inflation : lessons for the future, ” piie working papers 24 - 22 ( washington : peterson institute for international economics, december ), https : / / www. piie. com / publications / working - papers / 2024 / fiscal - policy - and - pandemic - era - surge - usinflation - lessons - future. - 6smaller share of economic activity in the united states than in some other oecd countries, we shall see whether the weakness in global manufacturing is affected by the prospect of changes in trade policy in the u. s. and elsewhere. the extent and timing of tariffs are highly uncertain, as are the effects. overall, the evolution of manufacturing adds uncertainty to the forecasts of central bankers ’ outlooks. a short - to - medium - term challenge that is and will remain widespread among oecd countries is geopolitical risk. indexes of geopolitical risk suggest that risks are elevated, but not nearly as high as they were when russia invaded ukraine in february 2022. today however,