Monetary Policy
Kazakhstan proposes sweeping changes to monetary policy framework
Central bank plans root-and-branch reform of its monetary policy with move to inflation targeting to be accompanied by revamped governance, communications, economic modelling and more
RBNZ paper investigates changes to inflation expectations after oil price shocks
Research suggests changes in expectations following real oil price shocks have ‘little or nothing to do with actual inflation outcomes’
Iceland prepares to hike rates despite low inflation
Expectations of ‘very large’ pay increases combined with flat productivity and strong demand growth prompt MPC to signal a coming hike, despite inflation at 0% when house prices are stripped out
Cœuré and Dudley question case for policy co-ordination
ECB board member says central banks can ‘free themselves’ from influence of global financial cycle; NY Fed president says Fed should focus on promoting growth and stability in US
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
NY Fed’s McAndrews warns negative rates could drag inflation down
Director of research highlights some of the more radical unintended consequences that could stem from negative rates, including new forms of currency and inflation moving in unexpected directions
Alexandre Lamfalussy: 1929–2015
Those who knew him pay tribute to the former president of the European Monetary Institute and general manager of the Bank for International Settlements
Plosser lays out four principles of sound central banking
Former president publishes a reflective essay in Philadelphia Fed’s annual report for 2014; advocates clear objectives, systematic rules, open communication and stable independence
Chicago Fed research charts fall in natural rate of unemployment
Group of economists say an ageing population and rising education attainment could push the natural rate – currently at or below 5% – as low as 4.5% by 2020
Serbia cuts rate amid IMF call for action on debt overhang
National Bank of Serbia cuts rate for third straight month, as IMF warns dangers may lurk beneath robust overall debt position
PBoC cuts interest rates for third time since November
Central bank also lifts cap on deposit rates; moves will do little to stimulate growth amid property glut, analysts predict
Romania slashes inflation forecast with VAT cut on horizon
Latest forecast has inflation falling to 0.2% at the end of the year, before rising to 1.9% a year later; Central bank cut key rate by 25bp earlier this week
Malta names Alfred Mifsud as deputy governor
Former chairman of Crystal Finance Investments joins the central bank as a deputy governor; he will ‘primarily’ focus on monetary policy during his five-year term
Riksbank paper warns forecasts often overestimate inflation
Forecasting error has grown in recent years and tends to overstate inflation, paper says, even as first deputy governor says expansionary policy has contributed to rising inflation
Atlanta Fed president focused on consumer spending
Dennis Lockhart says evidence of an increase in consumer spending would give him more confidence that growth is back on track in the United States
Ingves draws lessons from Sweden’s economic history
Riksbank governor emphasises the close link between financial stability and monetary policy, while promising to take further action ‘with force’ if necessary
Deeper markets in WAEMU could boost policy transmission
Research published by the IMF finds the transmission of monetary policy is impeded by ‘shallow’ financial markets in the West African Economic and Monetary Union
Gieve: BoE rate hike likely to hinge on election outcome
Former deputy governor John Gieve says victor in May 7 poll will impact BoE’s tightening decision; panellists warn of high uncertainty as no party likely to win outright majority
NBER paper challenges Rey’s monetary policy dilemma
Authors find evidence to support the continued existence of a traditional monetary policy trilemma, casting doubt on Hélène Rey’s theory that the trilemma has broken down
San Fran Fed research analyses link between inflation targeting and growth
In an economic letter, two researchers find developing economies tend not to experience the same short-term bump in growth rates as advanced economies after adopting a target
Australian dollar jumps despite RBA rate cut
Australian central bank cuts benchmark interest rate to 2%; governor Stevens says currency depreciation 'necessary' amid falling terms of trade
Japan shows signs of inflation rebound
Inflation creeps back into positive territory after hitting zero in February, as research by the Bank of Japan suggests inflation may have moved to a new, higher trend