Interest rates
IMF deputy warns ‘leakages’ could undermine macro-prudential policy
Mitsuhiro Furusawa says macro-prudential tools could force financial activities into a less regulated sector or country, but adds little is known about benefits of ‘leaning against the wind’
IMF tells Fed to wait until 2016 to hike rates
Fund says keeping rates lower for longer would provide ‘valuable insurance’ against disinflation; encourages Fed to hold more press conferences and publish quarterly monetary policy report
Fed’s Brainard sees scope for ‘watchful waiting’
Governor says there may be room to ‘support further healing’ in the labour market before raising interest rates, but notes first hike could still come this year
PBoC takes ‘one of final steps' toward interest rate liberalisation
China's central bank allows companies and individuals to invest in CDs exempt from deposit rate cap; major move toward interest rate liberalisation, analysts say
Draghi warns high volatility here to stay
Government bond yields continue to climb as Draghi says ‘we should get used to periods of higher volatility’ with interest rates on the floor; ECB keeps policy unchanged
Hungarian central bank to adopt new policy rate
From September it will use the rate on a new deposit facility with a longer maturity, to encourage banks to park funds with the government instead of the central bank
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’
Book notes: Monetary policy and financial repression in Britain 1951–1959, by William A Allen
A fascinating and coherent account of British monetary policy in the 1950s
Riksbank risk survey flags concern over easing impact
Respondents warn of a slight deterioration in the outlook for financial stability after launch of further monetary easing, including higher levels of risk and lower liquidity
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
Pakistan completes shift to new policy rate
New target rate and tighter corridor aims to improve the transmission of monetary policy; central bank slashes rates as inflation continues to fall
Mester wants new models to get to grips with policy nexus
Cleveland Fed president sets out the kind of structural general equilibrium models needed to help understand interactions between monetary and macro-prudential policy
Poloz sees full capacity and 2% inflation in 18 months
Bank of Canada governor describes the destination the Canadian economy is moving towards, as well as the roadmap for getting there
Rajan suggests IMF as watchdog for unconventional policy
RBI governor says central banks should not discard international responsibilities in favour of domestic mandates; says IMF could police unconventional monetary policy
China may have financial reforms backwards, economists argue
Interest rate liberalisation should take precedence over capital account opening, observers say at roundtable discussion in Hong Kong ahead of IFF China report release
Minutes show RBA could still ease further
Board members feel the decision to drop guidance that further easing ‘may be appropriate’ does not limit the ‘scope’ for them to cut rates further
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
RBA’s Lowe wary of structural adjustment in global interest rates
Australian deputy governor expects rates on offer to savers to pick up when confidence grows and businesses compete for funds again, but sees potential for structural shift as well
Mexican deputy cautious of data-dependent Fed policy
Manuel Sánchez sees potential for smooth tightening if markets are able to price in rate changes, but remains alert to risk Fed is pushed into acting faster than planned
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
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%
Riksbank minutes reveal instability fears
Board members were unanimously in favour of further easing but ‘several’ voiced concerns about financial stability risks resulting from the expansionary policy