Forward guidance
IMF paper praises Chilean central bank’s forward guidance
Central bank’s monetary policy predictability and efficacy was “quite high”
Abandoning forward guidance has helped market communication – Poloz
Governor underscores the importance of language and says forward guidance can sometimes confuse markets
Bank of Canada to incorporate US tariffs in economic projections
Next monetary policy meeting could be affected by protectionism
RBA governor dispels view board ‘does nothing’
Central bank board votes to leave rates on hold, extending period to 21 months with no change; Lowe says next move is likely to be up
Forward guidance essential in times of stress – Fed’s Evans
Chicago Fed president says central banks should plan for inevitable future scenarios now, in order to best prepare the public and to ensure policies are understood
Communication key to convey policies and objectives to public, central bankers say
Yellen, Draghi, Kuroda and Carney reflect on reaction of markets and public to policy communication
Norwegian policy normalisation is feasible – analysts
Uncommon combination of higher oil prices and weak currency offsets subdued consumer prices
Low inflation partly down to luck – CEPR report
David Miles and co-authors argue advanced economies’ luck on inflation could run out; recommend central banks prepare
Verbs matter in forward guidance – Italian paper
Researchers look at verbs used in ECB statements from 2002 to 2015
Asset purchase programme is key to central bank credibility – ECB paper
Researchers analyse market reactions to unconventional monetary policy decisions
Wheeler hits out at commercial bank for unforgiving commentary
RBNZ governor says commentary threatens its integrity, damaging the central bank and financial markets; former RBNZ official says Wheeler overreacting
Governors think unconventional tools may not stay – ECB survey
Advanced economies’ governors are more likely to favour keeping QE tools
No ‘taper tantrum’ this time around – Fischer
Fed vice-chair says US central bank has learned from mistakes made in 2013; markets unlikely to face same disruptions as Fed unwinds balance sheet, says Fischer
Uncertainty matters for forward guidance success – BoE paper
Authors show that introducing uncertainty generates significantly different macroeconomic effects, with implications for policymaking
BoJ economists seek best escape route from liquidity traps
Some policies are more effective than others, but a combination can generate stronger effects, researchers find
Carney faces grilling from parliament in wake of tenure decision
Regardless of Brexit timetable, BoE governor will leave on June 30, 2019; he warns firms could trigger plans to leave London in late 2017 if Brexit deal proves unsatisfactory
BoE seen as ‘boxed in’ ahead of MPC vote
Forward guidance from MPC members has laid the ground work for a rate cut or other form of easing; even if the effect of a cut is minimal, a hold decision would be worse, says former committee member
Menon pledges tougher measures on AML controls in Singapore
Ravi Menon says central bank will conduct more intrusive probes of higher-risk institutions and take stronger actions where practices fall short; monetary policy likely on hold for 2016
BoJ paper models impact of guidance on expectations
Announcing forward guidance before reaching the effective lower bound can help to “positively influence” inflation and output growth, the author finds
Kansas Fed researchers bridge gap between forward guidance data and theory
Working paper identifies empirical effects of guidance at the zero lower bound, before finding a standard model of price rigidity largely replicates the results
Bank of Canada adds negative rates to toolkit
Central bank publishes new framework for monetary policy when interest rates are approaching zero, suggesting the overnight rate could be cut as low as -0.5%
Threshold-based forward guidance can work at the zero lower bound, BoE paper says
Private sector industries have to understand how threshold-based forward guidance will be used in order for it to be effective, BoE working paper notes
Heterogeneous beliefs may weaken effect of forward guidance, paper argues
Fixed-date and state-contingent guidance by the Federal Reserve led some market expectations to converge, but heterogeneous beliefs about inflation and consumption persisted
Dutch paper says theory of forward guidance must catch up with practice
Economists from the Netherlands Bank argue so-called Odyssean communication ‘does not exist in practice’ as central banks want to avoid committing themselves to a particular set of actions