Inflation
High US inflation should not be ruled out
A prolonged health crisis raises the risk that supply-side factors, monetary expansion and rising personal savings could stoke hidden inflationary pressures
Researchers say hitting lower bound has little impact on expectations
Persistent deviation from inflation target can still undermine long-term expectations, authors say
Raising inflation targets may lower neutral rate – Boston Fed paper
A higher target might therefore be less effective than current research suggests, research says
Fed promises to keep buying assets at current rate
Fed will hold accommodation in place for “however long it takes”, chair Jerome Powell says; FOMC releases first projections this year
Bank of Uganda cuts rate and warns of lasting disruption
Central bank cuts rates and narrows target band, as impact of Covid-19 in Uganda continues to play out
Lane warns eurozone faces ‘substantially negative’ price pressures
Tighter financial conditions and falling inflation called for expanded QE, says ECB chief economist
Phillips curve flatter when inflation is low – researchers
Downward wage and price rigidities cause non-linearity in Phillips curve, says Peterson Institute paper
Central banking enters a new era
Central banks face a delicate balancing act to preserve their reputations as they evolve into ‘buyers of last resort’ and some of their actions appear functionally equivalent to ‘monetary financing’
ECB expected to sharply increase PEPP purchases
Central bank could start reinvesting PEPP securities and increase supranationals’ share
Bond purchases will not imperil independence – Brazilian governor
Roberto Campos Neto stresses temporary asset purchases face strict limits
RBA’s Lowe says fiscal policy must do more in the future
Governor says nations can no longer depend on monetary policy to keep inflation under control
Colombia cuts rates to record low
On-target inflation allows central bank to provide stimulus as economy faces sharp recession
US disinflation accelerated in April
Core inflation sees steepest drop since the 9/11 attacks
Campos Neto on reforming Brazil’s economy amid Covid-19 distress
The Central Bank of Brazil governor speaks about how Brazil is managing fallout from the coronavirus pandemic, the benefit of large reserves, his plans to deploy emergency asset purchases and why he favours extending the IMF’s SDR funding
National Bank of Poland cuts rates again but predicts recovery
“Significant fall” in activity likely to reverse in latter part of the year, policy-makers say
Bank of Korea cuts policy rate to new record low
Bank of Korea slashes key rate to record low of 0.5%; economy is expected to grow at the slowest pace in over two decades due to Covid-19
The complex art of reserve management
The coronavirus lockdown represents another inflection point for central banks seeking to optimise the management of their $12 trillion in FX reserves
Israel holds as exchange rate hampers exports and inflation target
Central bank left rates unchanged at 0.1%; government bond purchases support financial stability
Poloz calls for action to avoid deflationary spiral
It is critical to avoid deflation as it interacts “horribly” with debt, outgoing BoC governor says
Turkish central bank cuts rates again
CBRT makes ninth consecutive cut since July 2019 but analyst warns strategy is “unsustainable”
Covid-19 biggest threat to Fed mandate ‘in our lifetimes’ – Clarida
Fed may not provide further forward guidance until September, Richard Clarida says
Sarb carries out fourth consecutive rate cut
Sarb says banks can apply for looser prudential requirements on “case-by-case” basis as it cuts rates to record lows
Indian MPC cuts rates to record low in unscheduled meeting
RBI says Covid-19 is having a more severe economic impact than anticipated
Bailey confirms BoE is considering negative rates
“I have changed my position a bit,” governor tells lawmakers, as UK inflation falls drastically