Federal Reserve System
Fed should prepare to communicate inflation overshoot – IMF
IMF urges Fed to continue on “very gradual” path in raising benchmark rate; central bank should tolerate inflation overshoot to stop expectations drifting down
Discontinuation of Libor would result in ‘significant systemic risk’, Powell says
Fed’s Powell discusses future of Libor; discontinuing the benchmark rate could entail “substantial losses”, he says
Yellen pushing for diversity at Fed and beyond
Fed chair expresses concern at uneven distribution of job gains in US, with African-American unemployment much higher than average; initiatives under way to boost diversity at Fed
Yellen says July hike ‘not impossible’ as Fed holds
Fed keeps policy unchanged as widely anticipated; expected path of interest rate hikes becomes more gradual while the long-run level is revised down again
Japanese inflation target a partial success – Fed paper
Authors show adopting inflation target during a liquidity trap can have powerful effects, but in the Japanese case it seems to have been weakened by other factors
Kocherlakota: Fed should talk openly about negative rates
Former Minneapolis Fed president says central bank should talk about its policy options in a recession ahead of time, to avoid sending a bad signal if they have to be used
Yellen upbeat but concerned by weak jobs data
Janet Yellen expects continued progress to Fed’s objectives; says latest labour market report is “concerning” but warns against reading too much into it
US jobs report puts Fed hike expectations on ice
Small increase in non-farm payrolls leads market to all but write off prospect of a rate hike later this month; Lael Brainard and Eric Rosengren keen to see more data
Divergent monetary policies are top concern for reserve managers in 2016
Reserve managers view divergent monetary policies among the world’s top central banks as the most pressing challenge they face in 2016; asset and currency diversification continues
Philadelphia Fed president sees potential for two or three hikes in 2016
Patrick Harker warns of needs to avoid “aggressive policy actions” in the future; expects both inflation and expectations to rise in the medium-term
Fischer: improve estimates of long-run equilibrium rate
Fed vice-chair speaks at conference honouring US economist Michael Woodford; stresses need for "faster potential growth" as US nears full employment
June hike an option but Fed officials split on prospect
Minutes from FOMC meeting in April show “most” participants happy to hike next month if incoming data continues to improve, but some suspect gains may not come fast enough
Central bankers may talk too much, economist warns
The public's limited attention span might distort the intended message, publication warns; central bankers might consider talking less and delivering a more succinct message when they do
Mester favours ‘error band’ around FOMC projections
Cleveland Fed president Loretta Mester would like to some kind of “error band” introduced around FOMC projections, to reflect the uncertainty the committee is grappling with
Meltzer criticises Burns and Bernanke over Fed independence
Allan Meltzer criticises the former Fed chairs for giving independence away; wants to incorporate a rule into policy-making, while Peter Conti-Brown favours governance reforms
Fed board gets financial stability division
The office of financial policy and research, established in 2010 to co-ordinate work across the board, is reclassified as a financial stability division; Fed cites “growth in responsibilities and staffing”
Book notes: The power and independence of the Federal Reserve, by Peter Conti-Brown
Conti-Brown offers a call to action to fix the legitimacy of the Federal Reserve System, which is looking increasingly dated
Fed presidents get to grips with weaker productivity data
John Williams and Neel Kashkari discuss short- and long-term factors that could be depressing productivity growth; latest data reveals further slide in quarterly figures
US data can help nowcast Canadian growth, paper finds
Working paper published by Fed board introduces US data into dynamic factor model used for nowcasting the quarterly real GDP growth rate
Fed presidents navigate ‘mixed signals’
Dennis Lockhart is putting more weight on positive employment picture than disappointing growth stats; both he and Robert Kaplan see potential for labour force to expand
People: Fed appoints new director; Ghana and Uzbekistan add deputies
Matthew Eichner named director of reserve bank operations and payment systems at the Fed board; Bank of Ghana and Central Bank of Uzbekistan name new deputy governors
Book notes: Lehman Brothers: a crisis of value, by Oonagh McDonald
McDonald's book offers a useful synopsis of the multiple failings at Lehman Brothers running up to 2008, but ultimately fails to add significantly to what was already known
Fed holds and drops reference to global risks
Federal Open Market Committee holds federal funds rate as widely expected; suggests growth in economic activity has slowed but concerns about global developments have eased
Hoenig warns reliance on long-term debt could represent systemic vulnerability
FDIC vice-chairman warns of danger of substituting long-term debt for equity and comments on disagreement with Fed over ‘living wills’