Monetary Policy
BoJ should provide ‘more realistic’ projections – former policy board member
Claims constant overestimation of inflation expectations undermines credibility
ECB paper studies impact of Fed surprises on other countries
Researchers find similar effects on real economy but differences in financial impacts
BoJ cuts inflation forecast at a time of falling JGB purchases
Bank of Japan reduces forecast to 1.4% as bond purchases appear to be declining
Riksbank says own inflation forecasts are among least accurate
Study compares central bank’s forecasts with those of nine other institutions
Turkish central bank raises inflation forecast
Report suggests inflation will fall to 8.5% by the end of the year; monetary policy committee increased lending rate earlier this week citing ‘deterioration’ in outlook
SNB able to cut rates further, Jordan says
Thomas Jordan says Switzerland’s central bank could lower its deposit rate further into negative territory or buy foreign currency if necessary; Jean Studer defends governing board size
Should more attention be paid to house prices?
The Czech National Bank’s experiences offer insights into using a broader inflation measure with a greater weight on housing to address both monetary and macro-prudential policy requirements
Draghi stands firm on QE
Eurozone recovery seems stronger, ECB president says
Adopting a dual mandate will not solve South African unemployment – Kganyago
Unemployment problems are caused by structural issues, Sarb governor says; scope for reducing unemployment through monetary policy is “smaller” than people imagine
Bank of Lithuania tailors new website to different audiences
Central bank launches redesigned website with the aim of making it easier to use; includes new sections designed for specific audiences while data presentation received overhaul
Governors think unconventional tools may not stay – ECB survey
Advanced economies’ governors are more likely to favour keeping QE tools
Ukrainian inflation set to follow ‘erratic downward path’, NBU says
Central bank predicts inflation will only reach single digits in last quarter
Income inequality should be a concern for central banks – IMF panel
IMF panel debates impact of unconventional monetary policy on income inequality, concluding institutions should be more aware of policy effects on income disparities despite no specific mandate
BoE’s Saunders hints at willingness to raise rates
MPC member signals he sees the UK economy running somewhat hotter than the consensus view suggests
Paper takes novel approach to identifying monetary policy shocks
Researcher combines dynamic factor model with changes to financial instruments
Fresh exchange rate cap remains an option – CNB minutes
Minutes of extraordinary meeting say exchange rate commitment or other unconventional tools cannot be ruled out if deflation risks re-emerge
Book notes: Bankers, Bureaucrats and Central Bank Politics, by Christopher Adolph
An interesting, if slightly dated, analysis of those who made monetary policy decisions in advanced economies between 1950–2001, attempting to understand whether personal background influences decision-making
Bank of Jamaica outlines plans to become ‘modern’ central bank
Initiatives to implement inflation-targeting framework and liberalise forex rate already under way; IMF says strengthening autonomy will help
Balance sheet not an ‘active’ policy tool for normal times, says Fed’s George
Reductions in Fed’s balance sheet should be on “autopilot”, says George; establishing a “sound framework” will be important
Bank of Canada’s Vardy and Harrison on the move to ‘peacetime’ communications
Central bank has reshaped its communications approach post-crisis, embedding it into the policy process and encouraging markets to think for themselves
No ‘taper tantrum’ this time around – Fischer
Fed vice-chair says US central bank has learned from mistakes made in 2013; markets unlikely to face same disruptions as Fed unwinds balance sheet, says Fischer
Volatile housing market puts RBA under pressure
Variations in housing growth and prices ramp up risk to financial stability, RBA minutes show; regulator to consider further measures “if needed”
Brazil central bank steps up pace of rate cuts
Inflation outlook “favourable” with target likely to be achieved by 2018; government pursuing tough fiscal reform