Interest rates
Fed to begin shrinking balance sheet ‘relatively soon’
Rates remain on hold as the FOMC eyes below-target inflation, while the wording change implies that action on the balance sheet could begin sooner than previously expected
Favourable inflation prompts 100bp cut in Brazilian interest rate
Central bank continues easing cycle as political uncertainty not feeding through to inflation; analysts expect another large cut this year
Neutral rate down to around 3.5% in New Zealand – RBNZ deputy
Rate is challenging to estimate but central bank’s models and surveys suggest it has fallen in recent years to around 3.5%
Trump says Yellen still in the running for renewed term
US president says he would consider reappointing Janet Yellen, although Gary Cohn and “two or three others” are in contention
Flexible working may shift Nairu, ECB’s Mersch warns
Technology may increase insecurity and weaken collective bargaining, says senior ECB figure
Verbs matter in forward guidance – Italian paper
Researchers look at verbs used in ECB statements from 2002 to 2015
IMF praises Madagascar’s approach to monetary framework change
Madagascan central bank to introduce overnight deposit facility to form basis of an interest rate corridor; fund notes effects of vanilla bean shock still being felt by banks
The BoJ’s exit policy and balance sheet risks
The Bank of Japan will need to follow a meticulous sequencing of events as its ‘normalises’ monetary policy, making current concerns about negative equity appear premature
Australia’s neutral rate of interest is around 3.5% – RBA minutes
RBA minutes show hawkish slant compared with policy statement released earlier this month; central bank estimates neutral rate has fallen 150 basis points
Fed paper: portfolio holdings have ‘statistically significant’ effect on rates
Research studies composition of Fed’s Treasury portfolio and impact on yields from 1985-2016
Draghi, quo vadis?
Jesper Berg warns the eurozone's improved outlook creates a host of problems for the ECB, as it must balance competing demands
Credibility essential to Central Bank of Brazil success, says IMF
Further changes to the central bank’s inflation target could limit future policy space, fund advises, praising improved transparency of communications
Brainard cautious over further hikes in interest rates
Fed governor says she will be watching inflation “carefully” over the coming months, stating the unwinding of the balance sheet will begin ”soon”
St Louis’s Bullard on the future of the Fed and its monetary policy record
St Louis Fed president James Bullard rails against east coast dominance, favours aspects of the Choice Act and says Fed monetary policy was a “factor” that fuelled crisis
Divided Central Bank of Colombia votes to cut interest rates
Worries about inflation not returning to target spur board to cut interest rates to 5.75%; external conditions remain a concern despite slightly better inflation data
Household balance sheet adjustment a long process – Danish study
Research into patterns of consumption and saving before and after the 2008 crisis shows deleveraging can take a long time; consumption impact of rate hike is “modest”
Bank of Jamaica chooses overnight deposits for new policy rate
Bank of Jamaica continues to make changes to monetary policy framework with goal of fully fledged inflation targeting in mind
Carney comments lead to sterling wobbles
Pound leaps as markets interpret comments as sign Bank of England governor is contemplating a rate hike later this year
BoJ’s Iwata says expectations likely to shift as inflation returns
Deputy governor cites Milton Friedman in arguing that people will become more forward-looking when their wages are eroded by inflation
BoE’s Forbes points to bias among overworked MPC members
Senior Bank of England officials are overworked and heavily scrutinised, which may make it harder for them to take tough decisions, Kristin Forbes says in her final speech as an MPC member
Indonesian banks will switch to reserves averaging in July
Latest move in Bank Indonesia’s major overhaul of monetary policy transmission and efforts to deepen financial markets
RBA minutes point to dangers from debt
Growth in household debt exceeds growth in incomes, creating risks to consumption; board members say situation warrants “careful monitoring”
Kashkari chooses between ‘faith and data’
Minneapolis Fed president says FOMC should have waited to see if inflation rise was transitionary before raising rates in June
Bank of Japan strikes upbeat tone as it keeps policy on hold
The Bank of Japan decided to leave policy settings unchanged at its June meeting, but sounded more upbeat on the outlook