Quantitative easing
ECB to reduce monthly asset purchases to €30 billion
Central bank extends QE by nine months until September 2018, and keeps rates unchanged
Low inflation partly down to luck – CEPR report
David Miles and co-authors argue advanced economies’ luck on inflation could run out; recommend central banks prepare
ECB likely to extend QE despite stronger growth, analysts say
Central bank expected to prolong programme by six months at reduced monthly rate of €30 billion
The optimal size for central bank balance sheets
As the Fed seeks to reduce the assets on its balance sheets, Charles Goodhart examines the role between monetary and fiscal policy, central bank and debt office, and the optimal size of a central bank’s balance sheet
QE and negative deposit rates have increased lending – ECB
Sub-zero deposit rate has created small boost, but only 10% of banks report higher lending volumes due to negative rates
Japan’s ineffective efforts at monetary easing
A study of the natural rate of interest indicates the Bank of Japan’s QQE may not have been as accommodative as claimed, Sayuri Shirai argues. The failings appear to be related to effectiveness, rather than scale
Eurozone rate rises would have mixed impact on banks, ECB says
Keeping rates at the same level would decrease net interest income absent credit growth
EMs should work to avoid ‘macro-prudential war’ – BIS article
Use of macro-prudential policies should be co-ordinated internationally for maximum effect, say Luiz Pereira da Silva and Michael Chui
ECB taper unlikely to upset major European equity investors
Norway’s sovereign wealth fund is boosted by its €200 billion investment in European stocks
FOMC triggers balance sheet wind-down
Fed will begin allowing securities to roll off its balance sheet from October; Janet Yellen stresses changes will proceed gradually
Cleveland Fed’s Mester upbeat on prospects for US economy
Loretta Mester backs continued gradual rate rises and the commencement of balance sheet normalisation “in the near future”
ECB will take ‘bulk of decisions’ on asset purchases in October – Draghi
ECB staff revise eurozone inflation decisions downwards despite higher expected growth
The Treasury could make QE exit faster and smoother
Swapping longer-term bonds for Treasury bills or floating-rate bonds would expedite the process of reducing bloated central bank balance sheets
St Louis Fed explains Fed’s plans to unwind balance sheet
Fed expected to stop replacing maturing securities to reduce $4.5 trillion balance sheet
Draghi’s ‘whatever it takes’ is not credible – Nobel laureate
Chris Sims says ECB cannot be sure it will be able to stop a run on the euro until it is backed by a central eurozone fiscal authority
QE has positive spillovers into south-eastern Europe, ECB paper says
Some countries experience stronger inflationary effects than eurozone - researchers
QE has not increased eurozone inequality - ECB’s Constâncio
Low-income households benefit most from stimulus, ECB vice-president says
German court refers ECB bond purchases to ECJ
“Doubtful” whether PSPP is authorised by German and European law, says court
The changing composition of central bank balance sheets
Quantitative easing may have been necessary, but it has created worrying distortions and has probably discouraged structural change, while deflecting attention away from ever-greater levels of debt leverage
Fed paper: corporate bond buying can misallocate capital
Capital misallocation effects can mean corporate bond purchase schemes underperform QE based on sovereign bonds, say economists
Brexit drives a wedge between BoE and markets
Market expectations of future UK interest rates appear out of line with views expressed by the Bank of England’s Monetary Policy Committee. It comes at a time when Brexit ‘news’ often trumps economic data
Fed can no longer ‘wait and see’, says Williams
Waiting to unwind the balance sheet could “overheat the economy”, says San Fran president, who believes the US has “fully recovered” from the recession
Piecing together a financial theory of stagnation
Ideas presented at recent BIS annual meetings reveal an emerging framework that explains how the financial system may be dragging down the real economy; Hélène Rey was the latest to contribute
Fed to begin shrinking balance sheet ‘relatively soon’
Rates remain on hold as the FOMC eyes below-target inflation, while the wording change implies that action on the balance sheet could begin sooner than previously expected