Federal Reserve System
Fed minutes shed light on balance sheet shrinkage plan
System of caps would allow gradual reductions in the reinvestment of securities held under the QE programme
Tackling the ‘human agency’ problem
Central banks are readying their communication strategies to mitigate a populist backlash against their post-crisis policies
Kohn worried about weight of expectations on Federal Reserve
The weight of expectations on the US Fed may be too high; the US is not as well placed as the UK to tackle another major crisis, says the former Fed vice-chair
Fed report finds many people left behind by growth
Survey finds nearly a quarter of Americans struggling to pay their bills; problems concentrated in less-educated segments of the population and minority groups
Fed should make sure it does not ‘fall behind’ – Mester
US central bank should “remain vigilant” as employment reaches full capacity and the balance sheet begins to unwind; the Cleveland Fed president sees more rate hikes this year
Former Fed vice-chair Kohn on populism, top central bankers
Donald Kohn speaks to Christopher Jeffery about his fears for the Fed amid mounting populism, why he has few policy regrets and his experiences working with some of the world’s top central bankers
Kashkari: Fed should not seek to deflate asset bubbles
Spotting bubbles is too difficult and the costs of failure too great, the Minneapolis Fed chief warns, although he concedes raising interest rates remains an emergency option
Increasing female participation in workforce will help US growth – Yellen
Fed chair examines barriers women still face when entering the workforce; increasing participation rate could help increase US output by 5%
People: US assembles bank regulation team; Mrva reappointed
US administration begins assembling banking regulation team with OCC appointment; Slovakian board member appointed for fourth term; and more
John Williams backs move to price-level targeting
San Francisco Fed chief says inflation targeting is losing its effectiveness in the face of a very low natural rate
ECB paper studies impact of Fed surprises on other countries
Researchers find similar effects on real economy but differences in financial impacts
The myth of independence
The US Federal Reserve stresses independence from government as central to its ability to fulfil its dual mandate. But much of the academic evidence that independent central banks generate better policy outcomes is fundamentally flawed, argues Thomas…
Fed greenlights Wells Fargo revamp, lifts growth limits
Bank’s 2015 plan contained “deficiencies” that have now been corrected, US agencies say, although a further hurdle is coming this year
Long-run rates have been lower – Chicago Fed economists
Economists note the long run downward trend among G7 countries has reversed in the past, suggesting it could do so again
Fed fines Deutsche Bank on Volcker rule breach
Bank hit with fines for “unsound” practices in forex markets and violation of Volcker rule; Fed’s Powell admits the rule may need simplifying
Volcker fights back as prop-trading ban comes under attack
Former Fed chair tells Risk.net that calls for total overhaul of eponymous rule are misplaced
Thinking on global capital flows is muddled – BIS’s Shin
BIS head of research says policies to guard against excess global liquidity should look at underlying causes, not symptoms such as capital flows; Fed’s Fischer acknowledges policy spillovers
Fed paper seeks better forecasts from information inefficiencies
Paper finds it is difficult to build a better forecast on the basis of deviations from rationality in surveys, implying such inefficiencies are not “economically meaningful”
No ‘taper tantrum’ this time around – Fischer
Fed vice-chair says US central bank has learned from mistakes made in 2013; markets unlikely to face same disruptions as Fed unwinds balance sheet, says Fischer
Little EME volatility spillover from Fed/ECB balance sheets
Central bank policies had little impact on volatility in EMEs’ real markets – researchers
Central banks could intervene on repo market function – BIS study
Markets still in a “state of transition” but some central banks might want to take action to mitigate adverse effects, CGFS report says
‘Our independence is under threat’ – Yellen
Fed chair cites two legislative bills that could significantly harm the central bank’s ability to make independent monetary policy decisions; US economy is being allowed to “coast”
Congress urged to curb Fed’s regulatory powers
House hearing revives the debate on consolidating US regulatory agencies
FOMC mulls ‘predictable’ balance sheet wind-down
One FOMC member says a “minimum pace” should be set for the reduction in mortgage-backed securities; committee will inform the public about its future plans for the balance sheet when the time comes