Recession
US facing new challenges as Covid cases surge – Powell
Powell warns of public confidence hit as US infections soar past previous peak
Bank of Canada stimulus to continue for ‘very long period’ – Macklem
Economic recovery will be “prolonged and bumpy”, governor Tiff Macklem warns
US economy entering ‘bounce back’ phase – Powell
Fed chair forced to defend move to follow through with corporate bond purchases in Senate hearing
Trends in reserve management: 2020 survey results
Covid-19 expected to dent the risk appetite of central bank portfolio managers; socially responsible investing gains ground
Should the BoE go negative?
Much research into negative rates suggests central banks should have little to fear, but there are plenty of caveats
Iran’s race towards monetary policy reform faces high hurdle reality
The Majlis Research Center’s Tohid Atashbar says positive outcomes from the Iranian central bank’s fast-tracking of monetary policy reform – made in response to Covid-19 and US sanctions – may prove difficult to deliver
High US inflation should not be ruled out
A prolonged health crisis raises the risk that supply-side factors, monetary expansion and rising personal savings could stoke hidden inflationary pressures
Fed policy is too tight given FOMC projections – former Fed economist
“An outlook that bad for that long is a clear sign that policy is too tight,” Joseph Gagnon says
UK GDP growth plunges to -20% in April
Figure is worst on record, but may be somewhat better than earlier official estimates
Fed promises to keep buying assets at current rate
Fed will hold accommodation in place for “however long it takes”, chair Jerome Powell says; FOMC releases first projections this year
Bank of Spain paper presents ‘global weakness index’
System uses non-linear factor models to spot recessions in real time, researchers say
Fed makes last-minute changes to ‘Main Street’ programme
Programme will be open “soon”, despite plans to launch in May
Mass bankruptcies should feature in Fed stress tests – former officials
Crowding of bankruptcy courts can effectively double loss given default, says Jeremy Stein
Central banking enters a new era
Central banks face a delicate balancing act to preserve their reputations as they evolve into ‘buyers of last resort’ and some of their actions appear functionally equivalent to ‘monetary financing’
US needs aggressive fiscal policy and negative rates – St Louis Fed economist
Policy response must be powerful enough to overshoot previous growth trend for a period, researcher says
What would yield curve control mean for Fed’s asset purchases?
Policy may imply shift in rationale from crisis to recovery, and potentially more volatility in purchases
Nigeria slashes rates by 100bp
Central bank thinks stimulus package can still prevent the economy from entering recession
Fed could exploit helicopter money with digital currency system – former officials
Simon Potter and Julia Coronado propose recession insurance bonds, consumer QE and Fed-backed digital currency as crisis tools
ECB’s Enria unsure banks will dip into capital buffers
Anxiety over investor and rating agency reaction may limit banks’ use of Covid relief measures
Banxico forecasts Mexican economy could fall by 8.8% in 2020
Central bank stresses the profound uncertainty to which the economy is subject
Record hiring needed to reach pre-crisis unemployment by end-2021 – paper
Hiring four times faster than most robust pace in Great Recession still not enough, researchers find
The complex art of reserve management
The coronavirus lockdown represents another inflection point for central banks seeking to optimise the management of their $12 trillion in FX reserves
Economists challenge standard notion of labour market recovery
Paper on post-crisis recoveries questions demand shortfall narrative
Covid-19 should serve as warning for climate change – BIS official
Policy-makers need “holistic approach” to global risks, says Luiz Awazu Pereira da Silva