Interest rates
Stronger Canadian dollar weighing on policymakers' minds – Lane
Bank of Canada deputy says bank is paying ‘close attention’ to how markets respond to higher interest rates and stronger currency, which could threaten supply chains
Rate hikes could halt asset bubbles, research finds
Tighter policy can work if savings fall or holdings of bubble asset decline, paper says
Turkey keeps rates unchanged on high inflation
Central bank says tight stance will remain until prices approach 5% target
BoE’s Vlieghe: financial sector may have pushed rates down
MPC member suggests end of the gold standard seems to have lent a negative skew to growth; gives hawkish signals on future policy
Hawkish signs appear in BoE’s latest communication
Committee still split 7–2 in favour of keeping policy on hold, but members flag possibility of a hike at the November meeting
Cleveland Fed’s Mester upbeat on prospects for US economy
Loretta Mester backs continued gradual rate rises and the commencement of balance sheet normalisation “in the near future”
Bank of Canada rebuts ‘epic fail’ communication claim
Central bank’s head of comms rejects criticism from Bank of Montreal that policymakers failed to properly signal its recent rate hike
Riksbank: housing market is a ‘serious threat’ to stability
Swedish central bank welcomes amortisation proposals, but says further measures may be needed
Falling import prices and lower expectations hamper Fed, Brainard says
Long period of low inflation may affect households’ inflation expectations, Fed board member says
Fed rate hikes may be damaging the economy – Kashkari
Neel Kashkari says low inflation may be the result of tighter policy
Vietnamese government criticises central bank
Anti-corruption agency denounces inadequate banking supervision
The Treasury could make QE exit faster and smoother
Swapping longer-term bonds for Treasury bills or floating-rate bonds would expedite the process of reducing bloated central bank balance sheets
Big banks’ share prices more sensitive to rate moves – paper
Lower capital ratios diminish exposure to changes in the yield curve, says research
Norway’s oil fund recommends bond portfolio shake-up
NBIM managers recommend cutting riskier investments from bond benchmark index to improve flexibility and alignment with its goals
Bank of Mexico revises upwards its economic forecasts
Inflation is projected to return to the 3% target in 2018 and growth to be higher than expected, says governor
BoE’s Saunders says public is ready for rate hike
External MPC member denies hike would negatively impact household spending, noting inaction could leave the central bank behind the curve
Bullard: low unemployment does not mean high inflation
Recent research shows US unemployment could fall to 2.5%, while inflation would be 1.86%, says St Louis Fed president
Svensson launches fresh attack on leaning against the wind
Lars Svensson outlines “simple and transparent framework” he hopes will guide debate, as other papers challenge his results
Norway’s pension fund grows on rising equities
The world’s largest sovereign wealth fund grows, thanks to European equities, but low rates and oil prices remain long-term challenges
IMF’s Adrian sketches macro-financial model of term premium
Tobias Adrian outlines a new way of modelling financial cycles within a New Keynesian framework, which produces a good fit with empirical observations on the term structure
Argentine governor acknowledges rate cuts were too abrupt
Sturzenegger acknowledges central bank loosened monetary policy too abruptly in late 2016, but he says the bank still has tools to stimulate growth expanding access to credit
Zhou did not get what he wanted, but has not left empty-handed
The key five-year meeting in China has resulted in shift of focus to systemic risk and regulation, and away from liberalisation and innovation
San Francisco Fed economist explores methods to forecast interest rates
Michael Bauer aims to forecast interest rates based on the current level and long-run trend, and a narrative linking both
Brexit drives a wedge between BoE and markets
Market expectations of future UK interest rates appear out of line with views expressed by the Bank of England’s Monetary Policy Committee. It comes at a time when Brexit ‘news’ often trumps economic data