Interest rates
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
BoE: market pricing implies two rate rises in next three years
Markets project first rate rise in Q3 2018, but committee says tightening may need to come sooner; MPC sees mixed picture for labour market
RBI makes first rate cut of 2017
Inflation is at a record low, and growth is forecast to rebound, although the RBI is still concerned about weak transmission of the policy rate
UK economy vulnerable to consumption-led recession
Fragile consumer spending could take a toll on growth, former BoE officials warn, leaving the central bank with a tough job ahead
Stanley Fischer analyses the factors behind low real interest rates
The economist emphasises government policy uncertainty in the US regarding health care, regulation, taxes and trade, as well as higher savings and weak investment
Malaysia starts to feel effects of Fed rate hikes
Fed rate hike in June reversed flows into Malaysian financial markets, leading to an increase in yields, a deprecation of the ringgit and a fall in the stock market; Thailand appears less affected