Interest rates
Policy rate forecasts influence expectations – Riksbank paper
New data allows researcher to assess the “potency” of rate forecasts, which do appear to influence expectations
Pace of monetary easing may slow, says Central Bank of Brazil
Committee unanimously cut interest rates to 10.25%, but political uncertainty could slow the future pace of easing; economist praises approach to monetary policy communication
Brainard turns cautious on inflation concerns
Lack of wage growth and lower than expected inflation data could slow further monetary easing, says Fed governor; interest rates are likely to rise “soon”
Debelle: central banks can benefit from lack of covered interest parity
Increase in the “basis” or deviation from CIP is not always a sign of trouble and can offer reserve managers increased returns, RBA deputy says
Sarb should leave monetary policy alone – IMF
South Africa’s current monetary policy stance is bringing inflation under control, fund mission says, advising the central bank to leave government reforms to do the legwork following downgrade
Central Bank of Egypt battles to contain devaluation impact
Inflation has rocketed since Egypt aligned official and black market exchange rates, forcing the central bank to take action
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
Peru cuts rates for first time in more than two years
Reversal in food prices prompts board into action, with inflation now expected to end the year within target band; central bank will remain attentive to external conditions
The BoJ’s risky yield curve control experiment
The Bank of Japan’s experiment with yield curve control could work if appropriate targets and communication strategies were applied. But its current policy objectives are muddled
BoJ cuts inflation forecast at a time of falling JGB purchases
Bank of Japan reduces forecast to 1.4% as bond purchases appear to be declining
Turkish central bank raises inflation forecast
Report suggests inflation will fall to 8.5% by the end of the year; monetary policy committee increased lending rate earlier this week citing ‘deterioration’ in outlook
RBNZ’s Krippner: term structure models can make for better policy
Central bank economist talks about his work on modelling monetary policy at the zero lower bound, and what comes next
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
BoE’s Saunders hints at willingness to raise rates
MPC member signals he sees the UK economy running somewhat hotter than the consensus view suggests
Brazil central bank steps up pace of rate cuts
Inflation outlook “favourable” with target likely to be achieved by 2018; government pursuing tough fiscal reform
Lower rates link to higher exchange rate impact – BIS paper
Working paper finds monetary policy’s impact on the exchange rate has grown as rates have fallen
RBI makes fresh amendments to liquidity framework
Central bank continues reforms begun under Raghuram Rajan and asks government for new tools; markets still face “liquidity overhang” from demonetisation
Icelandic leaders clash on possible peg
Prime minister challenges finance minister’s assertion that the krona needs to be pegged; government launches review of exchange rate policy
Uncertainty matters for forward guidance success – BoE paper
Authors show that introducing uncertainty generates significantly different macroeconomic effects, with implications for policymaking
Asset purchases could bring benefits in ‘normal’ times – paper
IMF working paper discusses whether asset purchases should be added to standard central bank toolkit; the policies seem more effective at combatting financial shocks than supply shocks
Bank of Israel revamps policy communications
New approach to communicating monetary policy decisions as committee moves to an eight-meeting cycle
End of ‘hiking cycle’ has been reached – Sarb’s Kganyago
South African Reserve Bank publishes improved inflation forecast as the MPC votes to leave interest rates at 7%; uncertainty around the exchange rate is still a concern
Fed presidents lay ground for extra rate hike
Evans, Rosengren and Williams all signal the possibility of a fourth rate hike in 2017 if economy runs hot
BoE paper: ‘imperfect common knowledge’ implies Taylor principle need not hold
It is not strictly necessary for a central bank to respond to temporary deviations of the economy from trend, paper finds; result challenges findings such as ‘Neo Fisherism’