United States
Interview: Edward Prescott
The Nobel Prize-winner speaks to Daniel Hinge about time inconsistency and real business cycle theory, and explains why there is no ‘productivity puzzle’
US income inequality boosted by top 0.01% – research
Income via “pass-through businesses” is a great contributor to top inequality
Paper highlights disparity in which fields of economics women enter
New York Fed study examines female participation rates in economics through conference case study, suggesting there may be barriers for women entering finance
CCPs say central bank access needed to avoid liquidity crisis
Uniform access to deposit accounts and overnight liquidity vital, say market participants
Communication technology helps explain productivity puzzle – Fed paper
Properly accounting for ICT services produces “very large” boost to US labour productivity figures, authors say
Fed’s Powell: banks still have important role in payments
Fintech is disrupting the sector, but banks still form a major part of payments infrastructure, so they must be included in work on faster payments, says governor
Low-paid jobs may explain flat Phillips curve – research
As recovery continues, this phenomenon should dissipate, authors say
The candidates knocking at Yellen’s door
Leading academics and economists weigh the competency of the top candidates for the Fed job – and how likely they are to win Trump’s favour
Williams: weak productivity, population growth keep rates low
The “new normal” implies a federal funds rate at 2.5%, says San Francisco’s John Williams
US Treasury hands CCP resolution powers to FDIC
Mnuchin regulatory review explicitly refers to FDIC as receiver under a Title II resolution
Fed’s Powell: normalisation will be ‘manageable’ for emerging markets
Fed governor says current capital flows appear to be in line with fundamentals; corporate debts a vulnerability but “situation is not alarming”
FOMC split over inflation forecasts, minutes show
Participants expressed concern that low inflation this year might reflect not only transitory factors
Fed should have adopted BoE approach to mortgage lending – Tarullo
BoE’s approach to leveraged lending aimed to prevent “hard stop”, Cunliffe says; caps on mortgage lending were enforced by UK central bank in 2014
People: Quarles confirmed for Fed role; Nigerian deputy nominated
Randal Quarles approved for Fed supervisory role; banker and gender equality activist picked for Nigerian deputy position
Markets upbeat on strengthening US wage growth figures
Non-farm payrolls drop slightly but wages appear to be gathering pace; figures impacted by hurricanes Irma and Harvey
Disagreement over inflation expectations weakens monetary policy – Bundesbank paper
Research uses data from Fed’s survey of professional forecasters from 1968 to 2017
Theory of inflation dynamics is not good enough, warns Tarullo
Former Fed governor says economists have “almost paradoxical” mix of scepticism towards and reliance on shaky concepts
Yellen defends contentious FSOC decision on AIG
Top regulators narrowly vote to remove AIG’s designation as systemic, exposing sharply contradicting views on the Financial Stability Oversight Committee
Neural network can beat conventional forecasts – Kansas City Fed research
Deep learning model outperforms Survey of Professional Forecasters at all horizons
US economy would have performed better without rate hikes – Kashkari
Minneapolis Fed president says Fed should not raise rates until 2% inflation target has been reached; removal of accommodation has negatively affected inflation expectations
Fed paper constructs ‘loan frontier’ for mortgages
Method mimics literature on estimating production frontiers, allowing authors to study credit provision around the 2008 crisis
Fed fines HSBC $175m for unsafe forex practices
The London-headquartered bank has been ordered to improve its practices by a Fed cease-and-desist order
‘We still don’t do the basics well’ – Chris Gale on cyber security
Central banks are doing “aggressive” and “pretty cool” things to shore up cyber defences, says former Boston Fed VP; notes more could be done in the realm of information sharing
Don’t underestimate the Fed’s balance sheet unwind – Fischer
Stanley Fischer offers advice to colleagues in his final scheduled speech before leaving in October: “never say never”