Inflation
Boston Fed president preaches patience
Eric Rosengren says it is too soon to know whether weaker economic activity at start of year is down to temporary factors or ‘broader changes in the economy’
IMF pushes Belarus to adopt new policy framework
International Monetary Fund tells National Bank of Belarus to adopt monetary targeting framework ‘without further delay’; staff and national authorities disagree over exchange rate
St. Louis Fed’s Bullard makes case for NGDP target
Working paper questions appropriate monetary policy response at zero lower bound and explores the mechanics of a ‘special upward adjustment’ in the price level on credit market
Swiss National Bank open to buying foreign assets
IMF article IV report suggests buying foreign assets to address deflationary pressures; Swiss National Bank says it is an option but wants to see how outlook develops before easing further
Central Bank of Iceland prepares for ‘substantial’ interest rate increases
Minutes show MPC grappling with uncertainty around pay increases but board members agree interest rates will soon have to move upwards sharply; one member dissented from rate hold
Kuroda sees little difference between major central banks
Despite the different wording of the major central bank mandates there is ‘little practical difference’ between them, BoJ governor says
Riksbank deputy debates inflation target change
Cecilia Skingsley weighs up case for both lowering and increasing target; notes it would be easier to change target if several central banks did it at the same time
BoE’s Weale warns MPC may have underestimated oil price impact
A failure to grasp the full importance of ‘tail events’ may have caused the monetary policy committee to underestimate the strength and duration of the oil shock’s impact on inflation, Weale says
Balance sheet policies may not be enough to lift expectations, Dutch research finds
Working paper analyses the impact of credit and quantitative easing policies on inflation expectations, finding central banks may need to do more to lift them
CPI not ideal for comparing inflation rates, research finds
Economist at Sveriges Riksbank says CPI is a good measure of inflation but is ‘not well suited’ to making international comparisons of inflation rates
ECB’s Cœuré says higher inflation target not solution to zero lower bound
Benoît Cœuré says raising the inflation target or abolishing the currency is not the right way to make monetary policy more effective; structural reforms a better use of political capital
Minneapolis Fed essay suggests new focus for FOMC comms
Sam Schulhofer-Wohl argues the FOMC should talk more about what it is trying to accomplish with its monetary policy; Minneapolis Fed staff rewrite January statement to illustrate point
Evans: Fed must keep rates low to protect target symmetry
Chicago Fed president sees no serious costs with ‘modestly overshooting’ 2%, but is concerned about potential damage to inflation expectations of tightening too soon
In search of a better measure of inflation
Hedonic adjustments offer a way of tackling bias in the CPI, albeit at a cost, but new research suggests even these may be misrepresenting inflation – with broad implications for the economy
Kuroda reviews QQE two years on
Bank of Japan governor says policy is working as intended, and even though inflation has fallen to zero, prices should soon ‘accelerate toward’ the 2% target
Household expectations help flesh out inflation picture, research finds
Research published in the latest Bank of Canada review argues that looking at the behaviour of expectations since the crisis helps in understanding evolution of inflation
RBNZ paper investigates changes to inflation expectations after oil price shocks
Research suggests changes in expectations following real oil price shocks have ‘little or nothing to do with actual inflation outcomes’
Iceland prepares to hike rates despite low inflation
Expectations of ‘very large’ pay increases combined with flat productivity and strong demand growth prompt MPC to signal a coming hike, despite inflation at 0% when house prices are stripped out
BoE unearths new evidence on UK productivity puzzle
Latest inflation report includes new research suggesting temporary ‘compositional’ factors may be dragging on productivity growth; inflation path revised up slightly and growth down
San Fran Fed president sees light at end of tunnel
John Williams says when short-term volatility is discounted, the US economy is nearing full employment, with an inflation trend running around 1.5%
Chicago Fed research charts fall in natural rate of unemployment
Group of economists say an ageing population and rising education attainment could push the natural rate – currently at or below 5% – as low as 4.5% by 2020
PBoC cuts interest rates for third time since November
Central bank also lifts cap on deposit rates; moves will do little to stimulate growth amid property glut, analysts predict
Romania slashes inflation forecast with VAT cut on horizon
Latest forecast has inflation falling to 0.2% at the end of the year, before rising to 1.9% a year later; Central bank cut key rate by 25bp earlier this week
Malta names Alfred Mifsud as deputy governor
Former chairman of Crystal Finance Investments joins the central bank as a deputy governor; he will ‘primarily’ focus on monetary policy during his five-year term