Monetary Policy
US monetary policy weakened by fees and interest changes, paper finds
Research finds payment of interest on excess reserves and higher fees on uncollateralised overdrafts boosted efficiency but damaged the Federal Reserve’s monetary policy
BoE MPC members scramble to reaffirm low rates
Ben Broadbent, David Miles and Paul Tucker deliver speeches stressing their commitment to forward guidance and assuring markets the committee is ‘not in a rush’ to tighten policy
Dallas Fed’s Fisher criticises FOMC decision
Richard Fisher vociferously opposed keeping asset purchases at $85 billion each month; warned the committee that doing so would damage the Federal Reserve’s credibility
Buffett’s ‘greatest hedge fund’ claim puts spotlight on the Fed
Warren Buffett's claim the Fed is ‘the greatest hedge fund in history’ fuels bloated balance sheet and politicisation debate; Fed veteran Gary Stern says 'sage of Omaha’s' comments are ‘misguided’
NY Fed trials new reverse repo facility
Federal Reserve Bank of New York tests new overnight reverse repo facility; William Dudley believes it will bolster the Fed’s control over short-term money market rates
Fedwire data can give accurate picture of interbank fed funds market, paper shows
NY Fed researchers find Fedwire-derived data on fed funds borrowing are strongly correlated with the figures subsequently reported by banks
BoJ’s Shirai says Japanese forward guidance is different from BoE and Fed's
Sayuri Shirai emphasises differences between Bank of Japan’s forward guidance and that employed by the Fed and Bank of England; refutes BoE claim that BoJ’s guidance is ‘open-ended’
IMF paper discerns East African transmission mechanisms
Transmission mechanism ‘functions best' when signals are clear and the monetary regime simple and coherent; non-monetary factors are ‘main drivers' of macroeconomic outcomes in examined countries
Rajan unveils rate hike - and cut - as QE lingers on
RBI raises repo rate but cuts MSF rate as focus shifts from defending the rupee to keeping inflation in check; Rajan warns Fed taper ‘only postponed'
BoJ's Kuroda reports ‘steady progress' on QQE
Year-on-year rate of change in Japan's consumer price index accelerated to 0.7% in July, after having turned positive to 0.4% in June; survey evidence indicates rising inflation expectations
US fiscal stance is creating inflation, says Riksbank paper
Researchers show the existing unsustainable levels of US federal debt are generating inflationary pressures, but these are difficult to spot as they are being dwarfed by Fed policy and economic slack
IMF's Lagarde backs Fed over asset purchases
The IMF’s managing director believes the Fed should take a 'gradual' approach to reversing its asset purchases and rate cuts; stresses the importance of unemployment figures
Rosengren paper tackles role of banks in monetary transmission
Boston Fed president presents evidence on the effectiveness of the bank lending channel and provides observations about likely consequences of changes associated with the financial crisis
SNB reiterates commitment to franc price ceiling and zero interest rate
Swiss National Bank is ready to buy unlimited quantities of foreign exchange and take other measures if required to hold the franc down; inflation should turn positive next year, it says
Canadian economy rowing to safety, says Poloz
Stephen Poloz says central bank's job is to fill the crater left by the burst bubble with liquidity - but when the economy has rowed itself to safety, the bank can reduce the injections
Bernanke defends Fed communication after QE surprise
Ben Bernanke says FOMC communication in June was justified as Fed shocks markets by ploughing on with asset purchases; economists question why markets were focused on September meeting
BIS papers probe LatAm currency interventions
Working papers written by economists from each of five Latin American central banks and published by the BIS investigate the efficacy of various currency intervention strategies
Panellists hit out at Fed’s forward guidance in CBP debate
Federal Reserve gets mixed scorecard for its extraordinary monetary policy and communication performance, according to panellists in Central Banking On Air debate
BoE appraises forward guidance as economy picks up
Bank of England MPC believes that market participants demonstrated an ‘increased understanding’ of the link between monetary policy and unemployment in the run up to its September meeting
Robert Pringle’s Viewpoint: Looking for a game-changer for the financial system
The world may need to look to central bank governors in countries such as China and India to champion reform of the global monetary architecture
Publishing minutes is vital for central bank comms, say markets
Market participant survey gives Fed highest score for policy and communication in the wake of the financial crisis; ECB scores worse in the absence of published minutes
IMF backs counter-cyclical fiscal activism in times of crisis
Fiscal stimulus had powerful effects in the wake of the financial crisis, but monetary policy is better suited to keeping the economy on an even keel in normal times, says IMF
RBA looks to exchange rate
The Reserve Bank of Australia keeps the door open for further rates cuts but emphasises that a weaker currency ‘would be helpful’ in boosting demand
A sad ending to Summers versus Yellen
The politicisation of the debate over who should be the next chair of the Federal Reserve may be a sign of the times, but it is a sad day for central banking, argues Thomas Cargill