Federal Reserve System
Fed paper models monetary and fiscal policy interdependence
Working paper analyses interdependence between monetary and fiscal policy-making, testing policy experiments and finding a ‘non-negligible’ interaction between the two
US monetary policy weakened by fees and interest changes, paper finds
Research finds payment of interest on excess reserves and higher fees on uncollateralised overdrafts boosted efficiency but damaged the Federal Reserve’s monetary policy
Dallas Fed’s Fisher criticises FOMC decision
Richard Fisher vociferously opposed keeping asset purchases at $85 billion each month; warned the committee that doing so would damage the Federal Reserve’s credibility
Buffett’s ‘greatest hedge fund’ claim puts spotlight on the Fed
Warren Buffett's claim the Fed is ‘the greatest hedge fund in history’ fuels bloated balance sheet and politicisation debate; Fed veteran Gary Stern says 'sage of Omaha’s' comments are ‘misguided’
NY Fed trials new reverse repo facility
Federal Reserve Bank of New York tests new overnight reverse repo facility; William Dudley believes it will bolster the Fed’s control over short-term money market rates
BoJ’s Shirai says Japanese forward guidance is different from BoE and Fed's
Sayuri Shirai emphasises differences between Bank of Japan’s forward guidance and that employed by the Fed and Bank of England; refutes BoE claim that BoJ’s guidance is ‘open-ended’
Rajan unveils rate hike - and cut - as QE lingers on
RBI raises repo rate but cuts MSF rate as focus shifts from defending the rupee to keeping inflation in check; Rajan warns Fed taper ‘only postponed'
US fiscal stance is creating inflation, says Riksbank paper
Researchers show the existing unsustainable levels of US federal debt are generating inflationary pressures, but these are difficult to spot as they are being dwarfed by Fed policy and economic slack
IMF's Lagarde backs Fed over asset purchases
The IMF’s managing director believes the Fed should take a 'gradual' approach to reversing its asset purchases and rate cuts; stresses the importance of unemployment figures
Bernanke defends Fed communication after QE surprise
Ben Bernanke says FOMC communication in June was justified as Fed shocks markets by ploughing on with asset purchases; economists question why markets were focused on September meeting
Panellists hit out at Fed’s forward guidance in CBP debate
Federal Reserve gets mixed scorecard for its extraordinary monetary policy and communication performance, according to panellists in Central Banking On Air debate
Publishing minutes is vital for central bank comms, say markets
Market participant survey gives Fed highest score for policy and communication in the wake of the financial crisis; ECB scores worse in the absence of published minutes
A sad ending to Summers versus Yellen
The politicisation of the debate over who should be the next chair of the Federal Reserve may be a sign of the times, but it is a sad day for central banking, argues Thomas Cargill
Summers drops out of race for Fed chair
Larry Summers writes to Barack Obama to withdraw his name from consideration as the next chairman of the Federal Reserve, citing likely 'acrimonious' confirmation hearings
Dallas Fed highlights transformation of FOMC statements over past 20 years
Before 1994, markets were left in the dark over interest rate changes; statements have expanded seven-fold in the past 20 years, reflecting the evolution of monetary policy operations
Regional Fed presidents stand their ground on MMFs
Presidents of the regional Federal Reserve banks push the Securities and Exchange Commission to impose more stringent reforms on money market funds including requiring a floating net asset value
Regional Feds launch push for faster payments
The 12 Federal Reserve regional banks outline a broad 10-year plan for generating a faster, more efficient payment system; look to industry for specifics
Bank of Mexico deputy welcomes QE taper
Manuel Sánchez singles out downshift in yield curves pushing domestic interest rates for different maturities to all-time lows as the biggest effect of lax monetary conditions on emerging economies
San Francisco Fed president warns asset price bubbles are ‘here to stay’
John Williams discredits economic theory on asset price movements; says bubbles are inflated predominantly by expectations of future price increases
US jobs data disappoint raising doubts over September taper
Unemployment fell to 7.3% in August, but modest improvement in jobs data eclipsed by big negative revisions of June and July figures; analysts split over how numbers affect Fed's decision to taper QE
FOMC policy rate guidance pushes up US equity prices
Netherlands Bank research paper finds policy rate guidance also leads to significant reduction in implied volatility for US government bonds
Fed minutes ‘significantly affect’ US asset prices
New York Fed economic policy review finds that US asset price volatility increases when the Fed releases minutes from policy meetings, but less so since FOMC has become more transparent
Fed presidents opposed as September meeting nears
John Williams backs reducing asset purchases ‘later this year’ while Narayana Kocherlakota says the Fed should be providing ‘more stimulus… not less’
Implicit government guarantees leads to increased risk-taking at banks
Fed discussion paper argues that strengthening market discipline by reducing bank complexity is needed to address moral hazard