Monetary Policy
FOMC’s Brainard: Fed may need to raise rates in near future
“Drag” on US economy from foreign and domestic factors decreasing, FOMC member says; Brainard also calls for shrinking Fed’s balance sheet as rates rise
Interest rate effects weaker at low levels – Borio and Gambacorta
Supply of loans becomes less responsive to policy rate movements when interest rates are already very low, likely due to impact on bank profits, authors say
Fed could shrink balance sheet to end “twist” on yield curve – Bullard
Allowing some bonds to run off the balance sheet could permit a more natural yield curve, St Louis Fed president says; San Francisco Fed’s Williams says a March rate hike expectation is “on the table”
Kazakhstan’s long path to inflation targeting
After a slow start, the National Bank of Kazakhstan’s implementation of inflation forecast targeting is beginning to mature. By Warren Coats
Fed needs quarterly monetary policy report, Bullard says
St Louis president argues for better Fed communication when it comes to monetary policy decisions; a quarterly report would align the US with international best practice
Bank of Italy paper looks at impact of monetary policy shocks
The impacts of eurozone and US shocks have diverged since the onset of the financial crisis, the working paper says
Shafik calls for candidness on uncertainty in her final speech
Outgoing Bank of England deputy says central banks must do more than just increase transparency if they are to restore trust
Fed could raise rates ‘fairly soon’ – minutes
Minutes show committee members will be watching labour and inflation data very closely; raising rates would offer “flexibility” in responding to economic changes
Basel III LCR affects RBI monetary operations – paper
Liquidity coverage ratio affects the central bank’s operational target via its impact on the unsecured overnight money market
PBoC’s hike signals policy management shift
The decision by China’s central bank to raise a suite of interest rates around Chinese New Year marks a shift towards market-based tightening, argues Hui Feng
Plummeting inflation prompts Bank of Zambia action
Central bank cuts policy rate by 150bp, in addition to a cut to the overnight lending rate and reserve ratio; inflation falls from over 18% to 7% in a matter of months
Uncertainty about momentum in the labour market – RBA minutes
“Mixed” picture in Australian labour market shows unemployment increasing alongside full-time employment; spare capacity likely to persist “for some time”
Fed’s Mester says public should not hold policymakers to ‘unrealistic account’
Monetary policy cannot and should not be used to spur productivity growth, says FOMC member; unwinding of Fed’s mortgage portfolio may help guard it against calls to enter the realm of fiscal policy
IMF praises BCEAO’s latest policy actions
Latest round of measures will result in stronger banking sector, mission chief says; rejuvenation of interbank market will help monetary policy effectiveness
Bank of Uganda cuts rate as inflation outlook improves
The near-term inflation outlook worsens, but latest forecasts shows recovery within the target band; the IMF’s Lagarde praises the central bank for its “prudent” approach
Rosengren warns Fed may have to increase pace of tightening
Data suggests that the US labour market is tightening, Eric Rosengren argues
Website of the year: Central Bank of Kenya
The East African central bank has embraced responsive design to cater for an increasingly mobile audience, eclipsing the websites of many peers
Yellen calls for “sustainable” fiscal policy
Bank lending has grown since passage of Dodd-Frank Act, Fed chair tells Congress
Riksbank sees need for expansionary policy, despite rising inflation
Inflation in Sweden is now close to target, and expected to overshoot, but the central bank is holding policy steady with an eye on political uncertainty
Transparency: Bank of Canada
Communications embedded in the policy process, fresh thinking on shared content and an expanded senior team show the central bank’s commitment to staying at the leading edge of transparency
Market ‘tightness’ affects QE success – Riksbank paper
Model accounting for the demand and supply of bonds allows authors to reveal new insights into the price and liquidity impact of asset purchases
Nigeria’s central bank is in the eye of the storm
The Central Bank of Nigeria’s flawed foreign exchange policies worsened a recession in 2016. It now needs to rebuild its credibility, argues former CBN deputy governor Kingsley Moghalu
Canada’s Schembri highlights new inflation communication method
Bank of Canada has adopted three-pronged core inflation approach but now only publishes forecasts of headline inflation in its reports
US uncertainty puts Bank of Mexico on edge
Central bank hikes rate by 50bp as uncertainty from the US threatens inflation; international fuel prices are also a concern