Monetary Policy
Inflation is preventing interest rates from rising faster, says Powell
Labour market progress points towards a faster pace of normalisation for the Fed, but below-target inflation is preventing rates from rising above the current “gradual pace”
BNM’s Ibrahim urges Asia to “re-engineer” global monetary system
Countries should reduce their reliance on the US dollar and promote a “multi-currency market” within Asean, says Muhammad bin Ibrahim
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”
Flexible exchange rate aids those hit by commodity shock, IMF report says
“Sacrifice ratio” is lower for those that allow local currency to depreciate; fixed exchange rates are becoming more expensive, IMF says
Fed minutes shed light on balance sheet shrinkage plan
System of caps would allow gradual reductions in the reinvestment of securities held under the QE programme
Bernanke urges BoJ to keep up its easing efforts
Former Fed chair recommends the central bank continue its aggressive easing, though he concedes “bad luck” could yet cause it to fail
Irish paper tracks monetary policy’s effects on mortgage default
Researchers use “quasi-natural experiment” based on data from two types of loan
Tackling the ‘human agency’ problem
Central banks are readying their communication strategies to mitigate a populist backlash against their post-crisis policies
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
Colombia’s Echavarría says monetary policy has been a challenge
Monetary policy has had to adapt to external headwinds that have caused macroeconomic imbalances for Colombia, central bank governor says; effects are now showing signs of abating
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
Fed should make sure it does not ‘fall behind’ – Mester
US central bank should “remain vigilant” as employment reaches full capacity and the balance sheet begins to unwind; the Cleveland Fed president sees more rate hikes this year
Bank of Mexico tightens policy for sixth time in a row
Hike should stop temporary rises in inflation from passing through, says central bank board; leaves door open for further rate hikes, with one eye on inflation and the other on the Fed
Former Fed vice-chair Kohn on populism, top central bankers
Donald Kohn speaks to Christopher Jeffery about his fears for the Fed amid mounting populism, why he has few policy regrets and his experiences working with some of the world’s top central bankers
Zambia cuts interest rates again
Monetary tightening has tamed inflation but squeezed financial sector – IMF
IMF expands access to disaster funds
Economies are offered more generous thresholds for funding in the face of severe natural disasters
Riksbank proposes changes to inflation target
Central bank plans to use a variable that avoids short-term distortions, and to reinstate a band around the target
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
Sterling depreciation will increase pace of tightening, BoE says
Inflation will overshoot target for longer period, reveals latest Inflation Report, but raising rates will not help, BoE says; “extraordinary circumstances” call for delicate balancing act