Monetary Policy
BoJ’s Shirai hints deflation is partly out of the central bank’s hands
Sayuri Shirai says conquering deflation depends partly on demographic change, red tape and weak growth expectations, which the Bank of Japan has limited influence over
Fed presidents back unemployment offensive
Minneapolis and Boston Fed presidents call for aggressive monetary policy to tackle lethargic unemployment rate
Bernanke champions FOMC policy and Fed independence
Ben Bernanke, chairman of the Federal Reserve, gives his support to the ongoing accommodative policy of the FOMC; stresses importance of central bank independence
Further dispute among Fed presidents
Three more Federal Reserve bank presidents deliver their verdicts on the FOMC’s accommodative policy stance
UK monetary easing could be pointless, says HSBC
Top HSBC economist says lack of spare capacity in UK economy could make easing risky, with little upside; former MPC member Blanchflower takes 'almost exactly the opposite view'
Bank of Israel paper advocates inflation sacrifice when wages are rigid
Research says controlling inflation requires a greater sacrifice of economic output and employment when there are frictions in the labour market
IMF paper explores currency value at times of risk aversion
Research published by the International Monetary Fund says currency movements in periods of risk aversion are increasingly reliant on yield
Bank of Canada front-runner discusses interest rate rise
Tiff Macklem, tipped to be the next Canadian governor, reveals concern over household imbalances despite ‘signs of stabilisation’ and points to potential interest rate rise
Fed presidents clash over monetary policy
Presidents of the Federal Reserve banks of Kansas City and Minneapolis offer conflicting critiques of FOMC policy stance
Brazilian governor expects inflation drop
Alexandre Tombini says inflation spiked in last six months because of agricultural shocks, but it will resume a downward trend in 2013
Kenyan interest rate continues to plummet
Benchmark interest rate nearly halved since September; latest cut intended to increase uptake of expanding private sector credit
BoJ formally asked to double inflation target
Japanese government pressures Bank of Japan to increase short-run inflation target to 2%; no action likely before next monetary policy meeting on January 21–22
Draghi denies calls for rate cut as ECB holds again
European Central Bank's governing council holds rate, as inflation and growth remain steady; Mario Draghi optimistic about growing financial market confidence
Fed’s Lacker issues warning on bloated balance sheet
Jeffrey Lacker says latest round of quantitative easing is unlikely to give a significant boost to the economy and will ‘test the limits of our credibility’
French paper warns of forward guidance perils
Study published by Banque de France says efficient communication to an inattentive audience can only be achieved if supported by effective monetary policy
Krugman adds lustre to $1 trillion coin plan
Proposal to mint a $1 trillion coin to avoid 'fiscal cliff' in US wins Krugman backing and Republican opposition
Riksbank board members clash over inflation forecasts
Minutes from December monetary policy meeting show disagreement over impact of 25-basis point rate cut on inflation
Fed’s Bullard blasts ‘fiscalisation’ of ECB
James Bullard defends central bank independence while criticising the European Central Bank for mixing monetary and fiscal policy in its outright monetary transactions
Fed could stop asset purchases ‘well before end of 2013’
FOMC members express concerns over costs of quantitative easing as the Fed’s balance sheet expands; most members see purchases ending within a year
BoJ research warns of unintended policy consequences from Libor
Working paper says reference rates such as Libor can provide valuable information to markets but may also skew central bank policy-making by adding noise to credit spreads
Fed research asserts ‘potency’ of quantitative easing
Working paper finds large-scale asset purchases by the Federal Reserve equivalent to a cut in the Federal funds rate of more than 3%; estimates are higher than previous studies
Bank of Russia increases inflation target for 2013
Guidelines for monetary policy in Russia over the next three years include revised inflation goal for 2013; inflation overshoots target band in 2012
Irish research measures domestic and imported inflation
Paper studies balance of internal and external factors behind sharp deflation during financial crisis; finds domestic economy is important determinant
BoJ boosts easing amid mounting political pressure
Policy board votes to increase asset purchases by ¥10 trillion ($119 billion); close proximity to election raises questions of political influence in decision