Monetary Policy
RBA’s Lowe sees altered transmission mechanism behind low inflation
Inflation remaining stubbornly low despite record levels of monetary stimulus seems to be down to changes in the monetary transmission mechanism, deputy governor says
ECB reveals flexibility in QE programme
European Central Bank releases modalities of asset purchase programme; Draghi delivers upbeat press conference underpinned by positive staff projections
Ongoing reports of recovery add little to FOMC debate
Latest Beige Book shows economic activity expanding at a steady pace, while Esther George and Charles Evans take different sides in the FOMC’s inflation debate
BoJ’s Miyao extols virtues of open-ended QE
Outgoing policy board member says open-ended QE tends to have stronger effects than limited versions and may have additional impact via forward guidance and fiscal channels
RBI delivers second rate cut with inflation racing to target
The Reserve Bank of India surprised markets once again with an unscheduled rate cut of its key rate; analysts say this reduction shows trust in the government to maintain fiscal discipline
Fed officials debate research on equilibrium real rates
Research presented at US Monetary Policy Forum says uncertainty around equilibrium rate means the Fed should delay tightening policy; Loretta Mester and William Dudley discuss findings
Key rate hiked to 30% in Ukraine to stop currency slump
Ukraine’s central bank hikes interest rate to its highest level in 15 years, as part of a set of measures to combat the slump in the currency and battle inflation
Plosser and Conti-Brown debate Fed governance reforms
Peter Conti-Brown proposes giving the Fed’s board of governors the power to appoint and remove Reserve Bank presidents; Charles Plosser rejects arguments in his response
RBI gets formal inflation target
Reserve Bank of India tasked with getting inflation below 6% by January and handed a 4% target to chase from then; governor retains sole responsibility for setting monetary policy
Richmond Fed article questions use of dove and hawk to describe policy-makers
Article in Richmond Fed’s economic magazine argues the terms simplify the disagreements on the FOMC; says the idea of a split between two camps is ‘likely to persist’
PBoC steps up easing with another rate cut
China’s central bank cuts interest rates for the second time in less than four months, in a sign it is becoming more aggressive in combating economic weakness
BoJ’s Nakaso: More to be done to anchor expectations
Deputy governor points to ‘green shoots’ with regard to inflation and wage expectations but warns more work must be done to anchor them at the 2% target
Capital markets union must be carefully focused, say BoE researchers
Paper puts forward framework for analysing the myriad proposals under the umbrella of ‘capital markets union’, and argues they should be more targeted
Kuroda says oil shock has not thrown recovery off track
Inflation was nearing the target before being knocked down by the oil price collapse, BoJ governor says, insisting Japan’s ‘deflationary mind-set’ is still steadily fading
Kazakh central bank expects to hit inflation target if oil averages $50 or $60
National Bank of Kazakhstan publishes two forecasts with different assumptions about oil price; plans to limit market volatility by expanding monetary instruments
Czech paper finds mixed evidence of spillovers from ECB unconventional policies
Impact of spillovers depends on whether the policy is conventional or unconventional, and has a larger impact on inflation than on growth, working paper finds
IMF research looks to jumpstart market for Italian NPLs
Nadège Jassaud and Kenneth Kang discuss their strategy for fostering a market for non-performing loans with Central Banking, stressing the need for ‘decisive action’
Climate change on BoE research agenda
Bank of England says research could examine how central banking can ‘play a role’ in addressing systemic environmental risks; conference panellists consider issue
Yellen defends relationship with White House
Fed chair tells congressional committee she did not discuss monetary policy with Treasury secretary or executive branch of government, when quizzed on ‘near-weekly’ meetings
State Bank of Pakistan mulls new target rate
New proposals aim to establish a new ‘target rate’ within the existing interest rate corridor; advisory committee on monetary policy will decide whether to adopt them next month
Riksbank board uncertain about negative rate limits
Minutes from executive board meeting that led to negative rates and quantitative easing reveal uncertainty about where floor for repo rate might be
Poloz calls for ‘reinvention’ of central banking
Bank of Canada researching changes to its inflation targeting regime; Poloz asks how best how to incorporate financial stability into framework and avoid ZLB episodes
Forbes asks if BoE’s ‘Midas touch’ has been tarnished
MPC member says low interest rates carry various risks, including falling productivity and rising inequality, but argues the evidence is mixed and such factors are outside the BoE’s mandate
Yellen sheds light on lift-off communication
Fed chair discusses how the Federal Reserve will communicate its thought process on policy normalisation; rejects FOMC reform and Audit the Fed bill in congressional hearing