Federal Reserve System
Fed’s Yellen defends Brainard against congressman’s charges of political bias
No sign of political bias from FOMC members, Yellen says, amid accusations Lael Brainard might be looking for a job in a Hillary Clinton administration
Fed members differ on monetary policy, as Trump again attacks Yellen
Rosengren calls for “modest, gradual tightening”, while Kashkari sees slack in labour market; Republican candidate questions Fed’s political impartiality
Fed’s Tarullo: stress testing needs to evolve
Fed is planning to toughen its stress-testing framework with better alignment with regulation and incorporation of dynamic “amplification” effects – though more research is needed
ECB says it has learned lessons from simulated cyber attack
Federal Reserve, eurozone central banks and private firms took part in exercise to test Target2 payment system
Fed holds but two more dissenters call for hike
Case for hike is building, says Janet Yellen, but economy has “a little longer to run”; two more FOMC members join Esther George in voting for hike
BIS paper examines impact of money market deregulation and integration
Integration of money markets and ability of banks to raise funds using variety of substitutable instruments has implications for monetary policy, paper says; deregulation results in larger open market operations
Mexico inflation could be affected by exchange rate and US events
Mexico’s board to closely monitor exchange rate pass-through on consumer prices, quarterly review says; outcome of US election and the normalisation of the Fed's interest rate also a concern
FOMC members disagree over need for rate hike
Lael Brainard argues labour market suffers from slack and monetary policy is weak when dealing with weak demand; Dennis Lockhart confident of recovery, despite “frustrating” inflation data
Yellen ‘should be ashamed’ – Trump
Republican nominee for US presidency attacks Fed chair Yellen and says interest rates must be raised
IMF’s Singh urges central banks to beware of collateral impact of policy
Senior economist says asset purchase programmes have drained quality collateral from the system, damaging the economy’s “financial plumbing”
Falling natural rates impacted by common global factors – Fed paper
Research by Kathryn Holston, Thomas Laubach and John Williams finds no sign of natural rate decline reversing; advanced economies jointly affected by global factors
Fed finalises rules for countercyclical capital buffer
US central bank promises it will only adjust the buffer gradually and will seek comment before doing so, after consultation flagged concerns
George and Lacker push back against calls for Fed governance reform
Presidents say mixed public-private funding and governance helps protect the independence of the regional Feds, though others warn private banks are having too much say in policy
Asset managers becoming key drivers of policy transmission – BIS research
Asset managers in the eurodollar futures market play a role in helping, or hindering, the transmission of policy, and have begun to respond more to Fed announcements than the macroeconomy
Jackson Hole: economists flag costs and benefits of bloated balance sheets
Economists including Christopher Sims, Ricardo Reis and Jeremy Stein unpack the economics of central bank balance sheets, identifying both dangers and potential benefits
Yellen: future policy-makers may need new tools to tackle recessions
Fed chair says equilibrium rates may not be high enough for rate cuts to deal with all eventualities, so US policy-makers may need to think more laterally about their options
Overhaul of Federal Reserve structure is needed, paper says
Former adviser to Bernanke co-authors paper stressing need to end private control of 12 regional Fed banks; diversity and transparency need improvement, authors argue
US inflation target within ‘hailing distance’, says Fischer
The Fed is “close” to its targets says vice-chair; despite recent weak GDP figures, Fischer expects investment to recover in coming months
Federal Reserve Board seeks comms boost with Facebook page
Fed adopts its fifth form of social media in an effort to reach a greater audience, joining many other central banks expanding their communications in a similar direction
CFTC charges Deutsche Bank with reporting code violations
US regulator files legal complaint against Deutsche Bank for swap reporting violations; complaint is latest blow to German giant’s US operations
FOMC minutes show divisions on monetary policy
Kansas Fed president Esther George voted for an immediate rate rise at the FOMC meeting in July; other members were also hawkish but some preferred to keep monetary policy loose, minutes show
Bullard backs new approach to forecasting
Idea of economy converging to a single steady state has “likely outlived its usefulness”, St Louis Fed president says; instead reserve bank will now focus on regime-based forecasts
Atlanta Fed president ‘not prepared to rule out’ further rate rise this year
Despite “troubling” headline GDP growth figures, “final real sales” figures point to US economy maintaining momentum and heading for third-quarter growth, Dennis Lockhart says
San Francisco Fed chief calls for policy target re-think
John Williams calls for central banks to consider raising their inflation targets or replacing them with nominal GDP targets; lower natural interest rates seem “poised to stay”, he argues