Monetary Policy
Yellen signals growing confidence ahead of Fed decision
Fed chair expects some key headwinds to inflation to diminish next year; continued improvements in labour market and stable expectations help ‘bolster’ her confidence in a return to target
Turkish MPC has eyes on inflation and loan growth
The monetary policy committee of Turkey’s central bank notes year-on-year inflation fell due to drops in energy and food prices; cautious on currency depreciation and falling loan rates
BoJ deputy says underlying inflation has ‘steadily’ improved
Kikuo Iwata says CPI inflation, excluding energy and fresh food, has been making a positive contribution of around 1% recently; discusses latest projections
‘Gradual and low’ may be new normal for Fed, Brainard says
Lael Brainard says lower neutral interest rates and stubborn inflation make it likely the federal funds rate will need to be tightened ‘more gradually and to a lower level’ than in the past
South African review charts motivations behind resumption of tightening cycle
One of three chief considerations was the path of exchange rate and the risks it posed to inflation, which increased as the year went on
Historical data supports fiscal theory of the price level, Bundesbank paper argues
Data from the US, Germany and Italy give policy-makers useful data on the long-term influence of fiscal policy on inflation, a Bundesbank discussion paper argues
Rajan weighs currency movements while RBI holds rates
Governor Raghuram Rajan spells out challenges posed by divergence of dollar and euro in press conference after Reserve Bank of India keeps key rate at 6.75%
UK authorities extend Funding for Lending Scheme again
Bank funding scheme will now be tapered over two years, with new banks offered the chance to be involved; lending to SMEs up over the year
Colombia reinforces inflation target as it tightens policy
Central Bank of Colombia board expects to reach inflation target within two years; raises policy rate by 25bp to 5.5% as expectations increase
Egypt central bank ‘kept eyes on inflation’ as it devalued currency
Head of risk at Central Bank of Egypt says the institution considered wider impact of devaluations on the economy; staff welcomed new governor last week
ECB should not expand QE programme in December, Lautenschläger says
Sabine Lautenschläger tells German audience ECB’s loose monetary policy is necessary but asset purchases should not be expanded; only structural reform will bring about European recovery
Policy-makers must drop ‘obsession’ with competitiveness, Cœuré says
Policy-makers must drop their ‘obsession’ with competitiveness and focus on increasing productivity instead, Benoît Cœuré says; researchers need to question assumptions of ‘conventional’ theory
Researchers find ‘strong evidence’ of ECB policy spillovers to CEE countries
Working paper examines the spillover effects of the ECB’s ‘non-standard’ measures since 2007 on the Czech Republic, Hungary, Poland and Romania
Nigeria cuts rates to encourage growth in ‘bold’ decision
The central bank lowers the policy rate by 200bps as part of a package of measures aimed at supporting growth and easing credit conditions
BoE advised to publish record of joint MPC/FPC meetings
Treasury Committee advises Bank of England to publish material from joint meetings of the MPC and FPC
Stevens calls for end to obsession with central forecasts
RBA governor emphasises the uncertainty around forecasting; says he considered abolishing the central line in fan charts
High expectations could be holding Japanese inflation down, Shirai warns
Study of US and Japanese households reveals, somewhat counterintuitively, that high inflation expectations may be a factor behind lower actual inflation
BIS paper presents interbank money market model
Researchers produce ‘search-based’ model designed to reflect interbank markets in the presence of a central bank corridor system, allowing them to compute the effective interest rate
Economists outline improved DSGE forecasting method
Bank of England working paper attempts to improve forecast performance by using a multi-step approach to estimating parameters, delivering what the authors say are ‘significant’ improvements
Central bankers must research QE’s effects on inequality, Italian deputy governor says
Central banks must improve their understanding of how expansionary monetary policy affects inequality in developed economies, says Fabio Panetta
Sweden faces ‘economic crisis’ unless government calms housing market, governor warns
Sweden’s government needs to take urgent action to calm rapidly rising house prices or face a possible economic crisis, Stefan Ingves warns; attacks lack of clarity over macro-prudential policy
‘We will do what we must’ to hit target, says Draghi
ECB governor hints at further easing at next month’s monetary policy meeting
Policy-makers must be prepared to handle Fed rate rise, Fischer says
Emerging market central bankers must be sure US rate rises do not have ‘major consequences’, Fed vice-chairman says; shift to more consumer-led Asian growth may benefit other economies
Trinidad and Tobago aims to stay a step ahead of the Fed
Jwala Rambarran tells Central Banking the central bank must remain ‘ahead of the curve’ and ensure a ‘strong enough’ rate differential between assets denominated in local and US currency