United States
Higher inflation in the US could accelerate Fed’s tightening
US Treasury yields rise as GDP growth accelerates and inflation expectations increase
Big data can give valuable labour market signal – Fed paper
High-frequency private payroll data is useful in forecasting the labour market, researchers find
Banking ‘deserts’ do not explain financial exclusion – NY Fed economists
Data shows absence of nearby banks fails to explain “unbanked” share of the population
Minneapolis Fed launches too-big-to-fail plan
The four-step plan proposes stricter capitalisation rules for big banks and looser regulation for smaller institutions
Dudley warns Trump tax plan leaves US finances ‘unsustainable’
New York Fed chief says policymakers may have to tighten rates harder to offset stimulus
Fed economists tackle question of optimal balance sheet size
Cutting balance sheet would significantly reduce interest rate risk, economists find, as Fed acknowledges lower profits due to interest payments
Low rates push investors to seek risk abroad – BIS paper
Authors find that low rates at home drive risk-taking overseas and the effect accelerates as rates approach zero
Bernanke says Fed likely to review policy framework
Former Fed chair says analysis on change to inflation targeting is likely; panel of experts presents wide range of views on what any change should be
Fed could use rates to counter instability – Mester
2015 exercise showed major problems in use of macro-prudential tools, says Cleveland Fed chief
Fed proposes expanding risk regime to foreign subsidiaries
New consultation suggests widening the scope of the August 2017 proposals to foreign-owned operations
Richmond Fed paper explores Fed’s monetary policy history
The author identifies a lack of consensus on the nature of the monetary regime as a policy weakness
People: Bank of England official to become FCA chair
Charles Randell to take over as FCA chair in April; BoE appoints its first job sharers at executive director level; Vietnam names deputy governor; Mark Mullinix to leave Fed; and more
New US tax plan promising for growth – Fed minutes
FOMC members revise the growth outlook upwards for next 12 months, as tax cuts promise to provide “some boost” to consumer spending
Fed paper studies inequality in three dimensions
Authors find examining three dimensions simultaneously gives new insights
Demographic changes reduce US labour participation rate
As the baby boomer generation retires, the recovery cannot offset their absence
Economists are misinterpreting ‘Triffin dilemma’, says BIS paper
Michael Bordo and Robert McCauley argue there was nothing certain about the collapse of Bretton Woods, but Triffin’s successful prediction led others to mistakenly reapply his theory
Some banks’ living wills have ‘shortcomings’ – US agencies
The latest assessment finds previous “deficiencies” have been corrected, but four banks show less serious “shortcomings”
Fed paper sets out model of financial panics
Mark Gertler, Nobuhiro Kiyotaki and Andrea Prestipino examine banking panics in a DSGE model
FOMC will lose two dissenting doves in 2018
Kashkari and Evans were the only members who voted against the last rate rise on December 13
Public spending cuts have bigger multiplier than fiscal stimulus – paper
Research weakens case for expansionary policies, say authors
Google’s Hal Varian on how technology is changing economics
Google’s chief economist talks to Christopher Jeffery about how big data and machine learning are facilitating changes in economic thinking; discusses the impact technical breakthroughs may have for central banks
Bank of Mexico hikes rates as inflation rises
Central bank resumes tightening path as Mexican economy faces trade and currency challenges
Fed backtracks on CCAR cleared swaps exposure
Regulator had also postponed plan to feed cleared client exposure into G-Sib rankings
Demography, tech reduce US natural unemployment rate – paper
Baby boomers remain active longer, and older workers record lower levels of unemployment