Monetary Policy
SNB’s Zurbrügg: negative rates having ‘desired effect’
Governing board member says negative interest rates are influencing the money and capital markets as intended, noting the exchange rate has also started to normalise since the January decision
Poloz: volatility not a reflection of central bank credibility
Canadian governor – greater volatility is a ‘natural reaction’ to central banks gearing up to normalise monetary policy; highlights cost of using forward guidance
Greek governor paints bleak picture of life without the euro
Yannis Stournaras insists leaving the eurozone is ‘not an option’ for Greece, as it would impose ‘huge costs’ on the financial system and real economy alike
Prasarn pledges loose monetary policy until structural shift bears fruit
Governor urges infrastructure push to catapult Thailand out of middle-income trap; monetary policy to 'remain accommodative' until changes become effective
BIS paper weighs effectiveness of FX intervention strategies
Intervention to reduce volatility or to lean against exchange rate movements each come with distinct costs and benefits, working paper finds
Fed’s Evans harbours ‘serious concerns’ over inflation
Chicago Fed president wants to see stronger wage growth and a recovery in ‘long-term inflation compensation’ demanded by investors before sanctioning rate hike
Hungary adopts 'tolerance band' around inflation target
Band gives policy-makers greater flexibility and reflects willingness to tolerate temporary deviations from target; central bank cuts rates to resist negative inflation
UK inflation hits zero
For the first time ever, consumer prices were unchanged in the year to February, although the 0% figure masks substantial variation among sectors; BoE hints at easing possibility
Kalyalya: Bank of Zambia will revamp communications
New governor tells press the central bank will look to establish ‘more structured and regular’ communications with the public; sets out economic challenges and opportunities
Fischer sees shocks disrupting future path of rates
Fed vice-chair Stanley Fischer says smooth upward path for the federal funds rate will ‘almost certainly not be realised’ given the likelihood of shocks in the US economy
IMF tells SNB to consider asset purchases
In the face of slowing growth and deepening deflation the Swiss National Bank should ease monetary policy, which could be done via purchases of foreign currency assets, IMF says
Forward guidance can help QE succeed, Finnish research says
Article in Bank of Finland bulletin considers whether eurozone is at risk of Japanese-style deflation, finding the ECB’s asset purchases reduce the odds of this outcome
Noyer says ECB can cope with solvency risks
Banque de France governor flags risks from balance sheet expansion, but says the ECB is ‘fully protected’ against solvency risks
Cleveland Fed’s Mester sees guidance as 'comms device'
Loretta Mester believes the Fed should stop using forward guidance as a policy tool when economic conditions have normalised and stick to setting out its reaction function
ECB closely watching impact of QE on financial stability
Mario Draghi tells Econ committee the central bank is aware of the potential for QE to inflate asset prices and invite excessive risk taking, but risks are ‘contained’ at present
Central banks told to handle financial inclusion with care
Greater inclusion benefits the poor but could damage monetary policy or financial stability if it is not kept under control, BIS research and IMF officials warn
Kuroda says QQE bringing ‘landmark’ changes to Japan
BoJ governor sets out evidence that extraordinary monetary easing is bearing fruit, with inflation expectations rising and workers demanding higher wages
ECB forecasts ‘gradual’ increase in US inflation
Economic bulletin published by ECB agrees with FOMC that inflation will increase gradually as labour market conditions improve and impact of low oil prices and high dollar fades
Stevens says RBA has discussed further easing
Australian governor says central bank is trying to manage difficult mix of low inflation and rising asset prices against longer-term backdrop of falling terms of trade
Haldane warns expectations could drag down wages
Lower inflation expectations putting downward pressure on wages, and could contribute to greater persistence of low or falling inflation, BoE chief economist says
Third TLTRO sees extra €98 billion borrowed from ECB
Latest allocation of cheap loans pushes total amount borrowed to €310 billion; measures aimed at repairing transmission mechanism and encouraging loans to real economy
Fed keeps options open as countdown to lift-off begins
FOMC drops the reference to being ‘patient’ before normalising policy, signalling a rate hike could arrive as early as June, but tempers expectations with more cautious economic assessment
SNB balance sheet could not have coped with peg defence, says Jordan
Chairman says decision to abandon Swiss franc ceiling avoided huge losses and monetary policy impairment; central bank slashes inflation forecast but does not follow Riksbank’s rate cut
BoE minutes highlight risks from sterling strength
MPC members raise concerns over divergence of monetary policy and the resulting strength of the UK’s currency, which has the potential to hold inflation lower for longer