Federal Reserve System
Book notes: American default, by Sebastian Edwards
Edwards’ book is fascinating, well written and enjoyable, and provides an account of one of the US’s forgotten chapters of history
Central bank digital currency a ‘terrible idea’, US Congress told
Move to central bank cryptocurrency would make Fed “overwhelming credit allocator” - researcher
US expansion set to continue despite trade disputes – Powell
Protectionism may still negatively affect economy, Fed chair concedes
Trump tariffs could force Fed’s hand – IMF
US central bank could be forced to raise rates more quickly if tariffs force prices higher
Monetarist perspective affects normalisation forecasts – Chicago Fed paper
Incorporating money demand into projections affects forecasts of remittances and money multiplier
Fed signals solid growth in report to Congress
FOMC members support gradual normalisation of monetary policy
Protectionism triggers ‘rising level of concern’ in US – Powell
Fed chair thinks it is difficult to predict the effect of trade barriers on the economy
High reserves and low yields force central banks to focus on returns – survey
Equities become more important in reserve portfolios, accounting for 90% of returns in 2017
Fed paper builds dynamic factor model for nowcasting
Model produces “reasonably good” estimates of Ecuadorian GDP and outperforms other models
Book notes: Unfinished business, by Tamim Bayoumi
Anand Sinha praises Bayoumi’s analysis of how the euro crisis and US housing crash were, in fact, intertwined
‘Low for long’ endangers stability, warns BIS committee
Some banks could face solvency issues if faced with a “snapback”, warns Philip Lowe
Banks stumble in second round of Fed stress tests
Fed demands Deutsche Bank take remedial action; two others told not to increase dividends
Fed’s Quarles defends FSB from US critics
Supervision chief says FSB is not a threat to sovereignty and helps solve collective problems
Policy normalisation puts EMs in ‘perilous’ situation – Mexico’s Calafell
Deputy governor says monetary policy may tighten faster than markets expect
Money matters for macro fluctuations – Fed paper
Working paper says previous research by Schularick and Taylor may have been flawed
Major banks pass Fed stress tests
All banks assessed reached minimum capital requirements in more adverse scenario
Bank of Mexico hikes rates amid fears of rising inflation risks
Uncertainty over Nafta negotiations clouds economic outlook, experts say
Fed policy’s global effects differ in booms and busts – BIS paper
Monetary policy appears to impact global bank lending differently depending on the “regime”
Leading governors analyse evolving inflation-employment relationship
Powell, Draghi, Lowe and Kuroda assess causes keeping wage growth low across the world
‘Living wills’ have reduced implicit subsidy – Fed paper
Higher cost of capital implies resolution measures have reduced ‘too big to fail’ subsidy, authors say
Fed paper questions value of debt as crisis indicator
Asset prices and current account balance more important, author finds
Argentina falters at ‘historic’ moment for BCRA
Replacing Federico Sturzenegger with a finance minister with close ties to the president sends a confused signal about central bank independence
IMF forecasts lower US growth than Fed, Congress and White House
Stimulus expected to yield higher growth in the short term, but the benefits are likely to fade away from 2020
Fed acts to limit largest banks’ mutual exposures
Largest banks in the US face limits on their exposures, but smaller banks are exempt for now