Federal Reserve System
Falling natural rates impacted by common global factors – Fed paper
Research by Kathryn Holston, Thomas Laubach and John Williams finds no sign of natural rate decline reversing; advanced economies jointly affected by global factors
Fed finalises rules for countercyclical capital buffer
US central bank promises it will only adjust the buffer gradually and will seek comment before doing so, after consultation flagged concerns
George and Lacker push back against calls for Fed governance reform
Presidents say mixed public-private funding and governance helps protect the independence of the regional Feds, though others warn private banks are having too much say in policy
Asset managers becoming key drivers of policy transmission – BIS research
Asset managers in the eurodollar futures market play a role in helping, or hindering, the transmission of policy, and have begun to respond more to Fed announcements than the macroeconomy
Jackson Hole: economists flag costs and benefits of bloated balance sheets
Economists including Christopher Sims, Ricardo Reis and Jeremy Stein unpack the economics of central bank balance sheets, identifying both dangers and potential benefits
Yellen: future policy-makers may need new tools to tackle recessions
Fed chair says equilibrium rates may not be high enough for rate cuts to deal with all eventualities, so US policy-makers may need to think more laterally about their options
Overhaul of Federal Reserve structure is needed, paper says
Former adviser to Bernanke co-authors paper stressing need to end private control of 12 regional Fed banks; diversity and transparency need improvement, authors argue
US inflation target within ‘hailing distance’, says Fischer
The Fed is “close” to its targets says vice-chair; despite recent weak GDP figures, Fischer expects investment to recover in coming months
Federal Reserve Board seeks comms boost with Facebook page
Fed adopts its fifth form of social media in an effort to reach a greater audience, joining many other central banks expanding their communications in a similar direction
CFTC charges Deutsche Bank with reporting code violations
US regulator files legal complaint against Deutsche Bank for swap reporting violations; complaint is latest blow to German giant’s US operations
FOMC minutes show divisions on monetary policy
Kansas Fed president Esther George voted for an immediate rate rise at the FOMC meeting in July; other members were also hawkish but some preferred to keep monetary policy loose, minutes show
Bullard backs new approach to forecasting
Idea of economy converging to a single steady state has “likely outlived its usefulness”, St Louis Fed president says; instead reserve bank will now focus on regime-based forecasts
Atlanta Fed president ‘not prepared to rule out’ further rate rise this year
Despite “troubling” headline GDP growth figures, “final real sales” figures point to US economy maintaining momentum and heading for third-quarter growth, Dennis Lockhart says
San Francisco Fed chief calls for policy target re-think
John Williams calls for central banks to consider raising their inflation targets or replacing them with nominal GDP targets; lower natural interest rates seem “poised to stay”, he argues
Monetary expansion: Is the sky the limit?
Unconventional monetary policies in advanced countries have resulted in benefits and costs for the global economy and financial markets. Manuel Sánchez assesses if the benefits are worth the risks.
Philadelphia paper explores drivers of bankruptcy decisions
Working paper examines the extent to which the structure of a household’s balance sheet and income statement influences its decision to file for bankruptcy in the wake of an income shock
Fed holds as near-term risks ‘diminish’
FOMC says near-term risks to US outlook have diminished, while economic activity is expanding at a “moderate pace”; keeps policy unchanged, but statement sees increasing odds of a hike this year
Atlanta Fed paper demonstrates signalling mechanism in mortgage market
Lenders in mortgage market able to reveal quality of loans by delaying trade, authors find; loans sold five months after origination less likely to default
Atlanta Fed president wants to ‘let the picture clarify’
Dennis Lockhart likens the UK’s vote to leave the EU to a storm that has “clouded the economic waters”; the Fed must be patient in the aftermath, he says
Orphanides: governments should rein in ‘immense power’ of central banks
Central bank balance sheets give them power to dramatically affect the distribution of wealth, undermining democracy, former Central Bank of Cyprus governor argues
Technical issue affects Fed minutes release
Error in Federal Reserve equipment results in early release in some cases and late in others; minutes show Fed officials grappling with uncertainty amid slowing job growth and UK referendum fallout
US Phillips Curve “not broken” – IMF paper
Working paper finds economic behaviour since the crisis reflects different sources of disturbances, and not a change in the dynamics of the Phillips curve
Fed’s Tarullo looking for more evidence on inflation
Daniel Tarullo wants to see more convincing evidence that inflation is returning to target before tightening monetary policy; headline and core PCE inflation are still below target
Rate delay could deprive Fed of tools in future, warns Mester
Cleveland Fed president says there is a “non-negligible chance” unconventional tools will be deemed as “ultimately ineffective” by the public if the Fed is too slow to normalise policy