Spreads
Goodhart and Pradhan on the end of monetary independence
The unanchored central banker authors speak about how ageing populations, soaring healthcare costs and rising fiscal deficits will force central bankers to compromise on inflation targets and bail out indebted governments
Ukraine’s ESG lessons from a war zone
NBU governing council member Olena Shcherbakova speaks about how environmental, social and governance rules can be adapted for dual-use and defence requirements
MNB governor signals cautious optimism over euro adoption
Hungary has to overcome ‘pessimism’ if it wants to join currency union, says Varga
The Fed enters a new epoch
Chair Kevin Warsh takes his first steps to transform the US central bank
Resolution planning needs to be broader and more intense – report
Strengthening capital alone will not prevent bank failures, Bretton Woods Committee finds
Warsh declines to outline Fed’s reaction function
Chair tells Jackson Hole that ‘humble, never naïve’ approach will work and assesses US economy
MBS convexity hedging: back with a vengeance, or ghost story?
More bonds now sit with active hedgers but market is split on whether flows can move US rates again
Switzerland and Norway hold, Czech Republic and Moldova hike
SNB says inflation uptick is temporary, while CNB and Norges Bank highlight wage pressures
Zoltán Kurali on Hungary’s reserves strategy and euro adoption
Deputy governor speaks about portfolio positioning amidst geopolitical volatility, AI, CBDC and the future of the forint
Euro ‘more appealing’ for both invoicing and reserves, ECB finds
Bank’s annual report on currency’s use draws on findings from Central Banking’s benchmarking
Full ‘postmortem’ on QE yet to be written – Klaas Knot
Former DNB governor expects Fed to continue international monetary diplomacy under Warsh
Credit spread risk: the cryptic peril on bank balance sheets
Some bankers fear EU regulatory push on CSRBB has done little to improve risk management
ECB finds holes in banks’ credit spread risk nets
Banks censured for insufficient evidence to support exclusion of products from CSRBB perimeter
Stablecoins pose bigger risks to US than to EU – de Guindos
ECB vice-president also expresses hope that “populist movements in Europe do not prevail”
Yield spreads of bonds held by mutual funds decline in QE – ECB paper
Bond purchase programmes compress risk premia and boost demand, research finds
The battle for the future of central banks
Inflation-targeting institutions must not simply defend against overt interference, they must also resist a sly erosion of their authority, writes Biagio Bossone
Tobias Adrian on the integrated policy framework amid tariff shocks
The IMF’s financial counsellor speaks about policy reaction functions to supply and demand shocks, scenario-based analyses, Treasury market dynamics and emerging market resilience
Reflections on the international financial situation
Former IMF head Jacques de Larosière writes that markets are blind to Trump's policy shocks that are fragmenting the monetary ‘system’, causing strain in the eurozone and may result in stagflation
Maurice Obstfeld on the trade war’s damage to the monetary system
The former IMF chief economist speaks about Trump’s chaotic economic policies, the erosion of Fed independence and dollar stability, difficult policy trade-offs for central banks, and the threat to the Bretton Woods institutions
Inside the week that shook the US Treasury market
Rates traders on the “scary” moves that almost broke the world’s safest and most liquid investment
US Treasury volatility highlights repo market risks
Yields spiked overnight as tariffs came into effect, piling pressure on heavily leveraged hedge funds