Interest rates
Kashkari explains his sole FOMC dissent
Minneapolis chief reminds his colleagues the Fed treats 2% inflation as a target, not a ceiling; urges FOMC to publish plan for shrinking balance sheet
Cambodia ‘caps microfinance interest rates’ – local media
85% of the country’s borrowers use microfinance institutions, the survey estimates
BoE’s Forbes dissents as inflation looms
MPC member votes for 25bp hike as inflation looks set to exceed target until “at least” 2020; other members sitting on the fence, for now
Fed delivers 25bp hike
Fed makes rate hike that many FOMC members have been hinting at for weeks; committee gives bullish signals on the outlook
Pace of Brazil's monetary easing could increase, minutes show
Copom says evolution of economic performance and the level of the structural interest rate will dictate pace of easing cycle; fiscal policy could reduce structural interest rate
Iran needs to overhaul monetary operating framework – IMF
Absence of policy rate and emergency lending facilities is creating instability, fund warns; central bank council “dominated” by representatives from other government agencies
RBNZ’s Wheeler: policy now has ‘neutral bias’
Risks to future rate movements “equally weighted”, governor says, though plenty of domestic and global risks could knock the outlook off course
Fed could shrink balance sheet to end “twist” on yield curve – Bullard
Allowing some bonds to run off the balance sheet could permit a more natural yield curve, St Louis Fed president says; San Francisco Fed’s Williams says a March rate hike expectation is “on the table”
BoE paper raises risk of ‘bubbly growth traps’
Asset bubbles can direct resources to low-productivity sectors, which could explain the long hangover from recent crises, author says
Plummeting inflation prompts Bank of Zambia action
Central bank cuts policy rate by 150bp, in addition to a cut to the overnight lending rate and reserve ratio; inflation falls from over 18% to 7% in a matter of months
Riksbank sees need for expansionary policy, despite rising inflation
Inflation in Sweden is now close to target, and expected to overshoot, but the central bank is holding policy steady with an eye on political uncertainty
Economics in central banking: Leo Krippner
His work on term structure modelling has helped central bank policy-makers to track the effects of unconventional policies and it raises many interesting possibilities for future research
US uncertainty puts Bank of Mexico on edge
Central bank hikes rate by 50bp as uncertainty from the US threatens inflation; international fuel prices are also a concern
Fed officials emphasise risks despite improving outlook
“Risk management” approach to policy needed despite improving outlook, say Evans and Kashkari; Bullard notes balance sheet adjustment also an option for tightening
IMF gives thumbs up to Indonesia’s new monetary operating framework
Interest rate corridor and switch to new policy rate has improved monetary policy transmission, early data shows, but further reforms could strengthen framework further
RBI highlights bad debts as it holds rates
Surprise hold as committee sees “very sticky” core prices and global effects; central bank may create a ‘bad bank’ to tackle NPA problem
Fed paper flags risk of low rates misallocating capital
Where firms rely heavily on intangible capital, lower rates could harm firms’ investment and contribute to secular stagnation, economists warn
Kazakhstan’s Akishev sets sights on lower inflation
Governor hails success with inflation targeting and says central bank now plans to push inflation even lower; NBK also working on new banking supervision framework
Kenya’s monetary policy framework under threat – IMF
New interest rate caps are “constraining” the central bank’s ability to conduct monetary policy while negatively affecting banks’ profitability, but action plan could see them eliminated
BoE signals extra slack as it revises growth outlook upwards
Mark Carney indicates the MPC is willing to keep rates on hold, although risks may emerge as details become clear about the UK’s EU departure; UK government publishes a white paper on Brexit
Only ‘gradual’ increases in interest rates on the cards at the Fed
FOMC members think only “gradual” adjustments to monetary policy are warranted; current pace will strengthen the labour market and see inflation rise
Central Bank of Kenya halts reference rate calculation
Rate made redundant by interest cap, Njoroge explains, as banks prepare for the new arrangement; central bank maintains interest rates at 10%
Tight policy keeping a lid on inflation – Central Bank of Iceland
“Steep” pay increases and rising house prices keep the central bank on alert; report warns the situation could easily change
Yellen: Fed asset holdings provide automatic policy tightening
Downward pressure on long-run rates is expected to diminish, making the need to hike short-term rates less pressing, the Fed chair says