United States
Researchers propose new measure for US fixed-income market liquidity
Authors say it is the first index to apply financial stress indicator methodologies to both US government and corporate debt securities
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
Colombian paper sees role for international co-ordination of housing policy
This may be needed where national policies have “important” cross-border effects; discusses macro-prudential policy and capital controls
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
Traditional banks played leading role in creating US credit boom, paper finds
Traditional banks played a larger role than ‘shadow’ banks in originating US loans in the lead-up to the financial crisis, paper published by Deutsche Bundesbank says
Building a fast, flexible and free DSGE model
A team at the New York Fed is part way through translating its DSGE model into Julia, a fast, open-source mathematical programming language
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
ECB paper presents evidence of risk-taking channel in US
Working paper finds interest rates affect the quality of bank credit in the US; researchers exploit confidential data on banks’ internal ratings of loans
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
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
Paper explores reserve management in closed economies
Working paper published by IMF presents intertemporal optimisation model designed to help assess how closed economies should use their reserves when guarding against current account shocks
Fed liftoff pushed some rates down – Riksbank paper
Researchers find hike in policy rate lowered average interest rates on subprime lending, and narrowed spreads with the less risky section of the market, using novel "scraped" data set
Women feature heavily on new US dollar designs
Final designs to be announced in 2020, Treasury secretary announces; while security features are yet to be announced, multiple historic female figures will be incorporated into designs
Minneapolis Fed to explore resolution alternatives in TBTF initiative
Neel Kashkari adds alternative resolution mechanisms to the agenda as Minneapolis Fed looks for solutions to the too-big-to-fail problem; discusses outcomes from this month’s symposium
Fed should stay the course with gradual rate rises – Lacker
The Federal Open Market Committee should continue raising rates, suggests Richmond Fed president; oil price falls and financial markets volatility both stabilising, Lacker argues
Data dependence catching on, says San Fran Fed president
Market participants have become more responsive to economic news since 2015 in both the US and UK, research by Benjamin Pyle and John Williams finds
Summers: Fed is not ready for next crisis
Secular stagnation has left Federal Reserve short on firepower as the next recession looms, economist says; urges greater willingness to risk inflation overshoot and action by fiscal authorities
Some Fed officials concerned April hike would ‘signal a sense of urgency’
Minutes from March meeting reveal caution around prospect of a hike this month, given prevailing headwinds and risks; next meeting on April 26–27