Monetary Policy
Boston Fed president compares forthcoming rate hikes with past tightening cycles
Eric Rosengren finds this tightening cycle is likely to differ from those of 1994 and 2004, in that rates are set to rise more gradually and stop at a lower level
IMF urges central banks to retain easy monetary policy
Ahead of the G20 meeting in Turkey the IMF prepares a briefing on policy challenges; tells central banks to prevent real interest rates from ‘rising prematurely’
Carney says BoE can stay independent in face of globalisation
BoE governor says global factors ‘influence but do not dictate’ policy in speech at Jackson Hole; other economists argue central banks should do more to set policy with global dynamics in mind
Fischer upbeat on US inflation outlook at Jackson Hole
Fed vice-chair Stanley Fischer says there is ‘good reason’ to believe inflation will move higher as impact of rise in dollar and fall in oil prices dissipates
Case for higher inflation targets takes a knock at Jackson Hole
Thomas Jordan warns higher inflation ‘likely to be associated with considerable costs’ in longer run; academics see little benefit in the Federal Reserve targeting 4%
EAC officials highlight exchange rate pass-through concerns
Both central banks wary of potential for domestic inflation to increase in face of depreciating currencies; concerns over impact of external environment raised in EAC member statement
Fischer watched for rate views as Jackson Hole concludes
Symposium at Kansas City Fed closes with panel discussion featuring Carney, Constâncio, Fischer and Rajan on Saturday; one early session considers ‘international price system’
Indian central bank targets stronger rate transmission
Reserve Bank of India sees improvements in transmission of policy to money markets, but looks to strengthen credit channel as it transitions to inflation targeting framework
RBNZ cuts number of interest rate decisions
Starting next July the Reserve Bank of New Zealand will take three-month summer break from monetary policy announcements; ‘clear rule' to replace ‘long-running pattern' for release dates
National Bank of Denmark calls end to crisis measures
Central bank has moved from buying to selling foreign exchange in recent months, opening up room to return deposit limits to more normal levels and re-start government bond issuance
Eurozone QE has ‘significantly increased inequality’, Bundesbank paper argues
Asset price changes following the introduction of eurozone quantitative easing have largely benefited the wealthiest households, a Bundesbank working paper says
Turkish central bank eyes return to normality
Central bank plans to return to a simpler, more conventional monetary policy framework, but politics may yet get in the way
Canadian deputy says LTV and DTI limits ‘most effective’ macro-pru tools
Lawrence Schembri examines demand and supply factors underpinning rise in house prices; evaluates macro-prudential tools used in Canada and elsewhere
Capital controls ineffective at handling policy trilemma, ECB paper finds
Emerging market capital controls have a limited impact on monetary policy trilemma variables and come with spillover effects, the authors warn
Inflation targeting should be improved, not replaced, RBA paper says
Rather than a ‘fundamental re-engineering’ of inflation targeting, central banks should adopt a flexible approach that pays some heed to output, authors argue
East African governors say structural measures needed to stabilise currencies
Senior central bank officials from Burundi, Kenya, Rwanda, Tanzania and Uganda identify measures necessary to ensure long-term stability of their currencies
Lockhart still expects rate hike this year
Atlanta Fed president still expects Fed to start tightening ‘sometime’ this year but market expectations of a September hike have fallen
PBoC steps in with rate cuts
Central bank cuts interest rates and reserve requirements amid deepening crisis, and uses the opportunity to push liberalisation agenda
Carney asked to review MPC code
Andrew Tyrie asks BoE governor to review MPC code of conduct and ensure it prevents committee members from having, or appearing to have, a conflict of interest
RBA paper finds distribution matters when assessing impact of wealth effects
Example of car buying highlights how different households adjust consumption in response to housing wealth effects, although channels remain unclear
Riksbank’s af Jochnick defends monetary policy stance
Interest rates cannot at present respond to growing risks in the housing market, Riksbank first deputy says, but they are helping to drive rising inflation and economic recovery in Sweden
Tenge plunges as Kazakhstan moves to free float
Pressure on currency forces central bank to abandon peg, although the government casts it as the next step in the shift towards inflation targeting
Trawl through BoJ archives reveals emergence of current policy-making
Study of failures and successes of BoJ policy-making in the 1980s reveals the emergence of current thinking about how best to conduct monetary policy
FOMC inching towards rate hike, minutes hint
Minutes of July meeting show some members are still concerned that labour market and inflation data are not strong enough for a hike, but several think the economy is nearly ready