Monetary Policy
Boston Fed president preaches patience
Eric Rosengren says it is too soon to know whether weaker economic activity at start of year is down to temporary factors or ‘broader changes in the economy’
IMF pushes Belarus to adopt new policy framework
International Monetary Fund tells National Bank of Belarus to adopt monetary targeting framework ‘without further delay’; staff and national authorities disagree over exchange rate
St. Louis Fed’s Bullard makes case for NGDP target
Working paper questions appropriate monetary policy response at zero lower bound and explores the mechanics of a ‘special upward adjustment’ in the price level on credit market
Five problems with floating rate exchange regimes
Robert Aliber bemoans the dangers of sharp moves in major currencies that are the result of floating rate currency regimes, and answers five rhetorical questions related to monetary stability
Kocherlakota sets out path back to maximum employment
Minneapolis Fed president says the FOMC should set policy in a way that allows for at least three more years ‘as good as 2014’ if the labour market is to achieve highs last seen in 2006
Central bank liquidity surge is not without historical precedent
Major central banks have injected $14 trillion of liquidity into the global economic system, but such surges are not without historical precedent
Book notes: Monetary policy and financial repression in Britain 1951–1959, by William A Allen
A fascinating and coherent account of British monetary policy in the 1950s
Book notes: Smart Money, by Andrew Palmer
An important attempt to show how financial innovation is “reshaping our world for the better” all the more important
Swiss National Bank open to buying foreign assets
IMF article IV report suggests buying foreign assets to address deflationary pressures; Swiss National Bank says it is an option but wants to see how outlook develops before easing further
Central Bank of Iceland prepares for ‘substantial’ interest rate increases
Minutes show MPC grappling with uncertainty around pay increases but board members agree interest rates will soon have to move upwards sharply; one member dissented from rate hold
Fischer sees limits to Fed’s global responsibility
Federal Reserve vice-chair says the most important contribution the central bank can make to health of world economy is keeping its own house in order
Kuroda sees little difference between major central banks
Despite the different wording of the major central bank mandates there is ‘little practical difference’ between them, BoJ governor says
Pakistan completes shift to new policy rate
New target rate and tighter corridor aims to improve the transmission of monetary policy; central bank slashes rates as inflation continues to fall
Mester wants new models to get to grips with policy nexus
Cleveland Fed president sets out the kind of structural general equilibrium models needed to help understand interactions between monetary and macro-prudential policy
IMF staff tell BoJ to 'stand ready' to ease further
Statement at conclusion of IMF article IV warns inflation expectations 'broadly flat' in recent months; calls on BoJ to prepare for more easing and improve communication
Riksbank deputy debates inflation target change
Cecilia Skingsley weighs up case for both lowering and increasing target; notes it would be easier to change target if several central banks did it at the same time
Mario Draghi urges reform to ‘unleash’ eurozone potential
ECB president highlights importance of the credibility and type of structural reforms, as well as their interaction with other policies; Stanley Fischer points to ‘missing fiscal framework’
BoE’s Weale warns MPC may have underestimated oil price impact
A failure to grasp the full importance of ‘tail events’ may have caused the monetary policy committee to underestimate the strength and duration of the oil shock’s impact on inflation, Weale says
Balance sheet policies may not be enough to lift expectations, Dutch research finds
Working paper analyses the impact of credit and quantitative easing policies on inflation expectations, finding central banks may need to do more to lift them
ECB research finds Greenspan's Fed responded aggressively to uncertainty
Working paper finds the Federal Reserve under Alan Greenspan took stronger action as economic uncertainty rose. In fact, risk seems to have been more significant than ‘conventional’ variables
Noyer says ECB ‘ready to go further’
Banque de France governor says monetary policy is doing its job and requires time to take effect, but more easing is available if necessary
BIS committees highlight broad monetary effects of regulation
Committees offer suggestions for mitigating the impact of new regulations on the conduct of monetary policy, but say the effects will largely be ‘limited and manageable’
Poloz sees full capacity and 2% inflation in 18 months
Bank of Canada governor describes the destination the Canadian economy is moving towards, as well as the roadmap for getting there
Historic BoE minutes shed light on troublesome money supply targets
Court minutes from the era of money supply targeting highlight the central bank’s struggle to control inflation amid unclear indicators and an occasionally fractious relationship with government