Monetary Policy
Minneapolis Fed president open to cutting rates
Narayana Kocherlakota stresses room for improvement in US labour market, noting low inflation could give the Fed space to pursue more accommodative policy
Swap line availability not assured, warns Bill Allen
It is ‘not certain’ the Federal Reserve will be able to provide liquidity in the same manner in the future, Allen tells Central Banking
ECB watching oil and euro closely for inflation risks
Deflation has become less likely in the eurozone since the implementation of quantitative easing, but falling oil prices are pressing on inflation expectations, governing council says
BoE turns attention to risk-free rate as markets push out expectation of hike
MPC mulling the question of whether lower rate expectations will provide enough stimulus to overcome growing risks from emerging markets; rates stay on hold
Three eurozone central banks to trial reverse auctions of securities
The central banks of France, the Netherlands and Lithuania will hold reverse auctions of securities under the public sector purchase programme; trial will run for one month
Boston Fed conference lays bare uncertainty over macro-prudential policy
Central bankers raise concerns over theoretical and practical barriers to exercise of macro-prudential policy in the US and the appropriate role for monetary policy
SNB’s Zurbrügg says negative rates painful but necessary
Vice-chair concerned by financial stability impact of negative interest rates, but says they make sense from a monetary policy perspective; talks with industry have been ‘very heated’
Czech exchange commitment will ‘probably’ run beyond July 2016
Czech National Bank likely to use exchange rate as a monetary policy tool until July 2016 or later; formal extension and negative interest rates discussed but judged unnecessary
Weak jobs report sends dollar tumbling
Report shows nonfarm payrolls increased by just 142,000 in September, while July and August totals have been revised down; dollar drops by almost 1% against euro
Fed policy has ‘little impact’ on labour market, paper says
Paper published by Minneapolis Fed argues there is little the Fed can do to restore the level of employment relative to the population that prevailed before the crisis
Norges Bank unlikely to follow others into negative territory, says Olsen
Governor flags the dangers and distortions from very low rates, but says Norway has more room to manoeuvre than most; contrasts ECB and Riksbank liquidity policies
Romania euro entry ‘no longer feasible’ for 2019, central bank governor says
National Bank of Romania governor says it is ‘no longer technically possible’ to join the single currency by January 2019; had previously warned of need for structural reforms
Carney sees ‘clear interest’ in preparing for transition to lower-carbon economy
While central bankers will not determine response to climate change, they should ensure markets adjust efficiently, according to Carney, which means boosting transparency
Colombia concerned by loosening inflation expectations
Unexpected increase in inflation spurs Colombian central bank into action, as it raises key rate by 25 basis points; observers divided over importance of growth risks
Global factors harming domestic policy transmission in Asia, IMF research finds
Authors find global factors help to explain why bank funding in Asian economies has such a limited role in transmitting monetary policy
Chicago Fed president wants more evidence of inflation
Evans backs an ‘extra-patient approach’ to monetary policy as he airs concerns over inflation outlook and ‘asymmetric’ risks; assesses economy more cautiously than FOMC colleagues
Reserve Bank of India ‘front-loads’ easing with 50bp cut
Rajan points to deterioration in global outlook and desire to boost investment; RBI will now focus on improving the transmission of cumulative 125bp reduction in key rate
Kuroda unfazed by ‘somewhat stagnant developments’
Japan’s economy has been through a summer lull but the BoJ chief insists it will bounce back, with inflation set to rise as expectations shift and low oil prices pass through
‘Little support’ from data for theories of disconnect between trade and exchange rates, IMF report says
Data largely supports conventional economic wisdom linking movements in trade flows with levels of exchange rates, according to WEO chapter; Japan may be an exception
Charlie Bean expects natural rate to change course
Former BoE deputy believes evidence points to a gradual rise in the natural rate of interest; suggests government is better placed than central bank to solve zero lower bound problem
Taiwan cut seen as start of easing cycle
Prompted by negative inflation and stalling growth amid China slowdown, the central bank cuts rates for first time since 2011
Norway signals further easing as it cuts again
Norwegian central bank looks to cut rates further with inflation set to fall back to 2% over the forecast horizon
Micro-data matters for unemployment, says BoE’s Broadbent
Deputy governor becomes latest economist to stress importance of micro data for macro policy, warning overreliance on ‘simple aggregates’ may lead central bankers astray
Bundesbank board member wary of flexibility in fiscal rules
Carl-Ludwig Thiele calls for more "balance" between liability and control in the eurozone, stressing the importance of enforcing fiscal rules