Interest rates
Fed encouraged to act as FOMC members eye new data
Stanley Fischer reveals encouragement from emerging market officials to ‘just do it’ and raise rates; Dennis Lockhart singles out importance of consumer data in coming weeks
FOMC minutes spell out inflation concerns
Several members were concerned disinflationary pressure from low oil prices and a strong dollar could persist longer than anticipated and ‘delay or diminish’ the expected rise in inflation
Minneapolis Fed president open to cutting rates
Narayana Kocherlakota stresses room for improvement in US labour market, noting low inflation could give the Fed space to pursue more accommodative policy
BoE turns attention to risk-free rate as markets push out expectation of hike
MPC mulling the question of whether lower rate expectations will provide enough stimulus to overcome growing risks from emerging markets; rates stay on hold
RBA’s John Simon says low rate a ‘poor predictor’ of crises
Low interest rates of themselves did not cause the global financial crisis and have always been a poor predictor of economic instability, senior Reserve Bank of Australia economist argues
Failed normalisation could hold back growth, IMF warns
Flagship report presents different scenarios based on whether the normalisation of monetary and financial conditions progresses smoothly or not; process could stall if risks crystallise
SNB’s Zurbrügg says negative rates painful but necessary
Vice-chair concerned by financial stability impact of negative interest rates, but says they make sense from a monetary policy perspective; talks with industry have been ‘very heated’
Fed policy has ‘little impact’ on labour market, paper says
Paper published by Minneapolis Fed argues there is little the Fed can do to restore the level of employment relative to the population that prevailed before the crisis
Norges Bank unlikely to follow others into negative territory, says Olsen
Governor flags the dangers and distortions from very low rates, but says Norway has more room to manoeuvre than most; contrasts ECB and Riksbank liquidity policies
Colombia concerned by loosening inflation expectations
Unexpected increase in inflation spurs Colombian central bank into action, as it raises key rate by 25 basis points; observers divided over importance of growth risks
Chicago Fed president wants more evidence of inflation
Evans backs an ‘extra-patient approach’ to monetary policy as he airs concerns over inflation outlook and ‘asymmetric’ risks; assesses economy more cautiously than FOMC colleagues
Botswana research weighs impact of various instruments on credit
While interest rates may be more effective at influencing credit than reserve requirements, more ‘direct’ macro-prudential measures could be even better, Botswana article finds
Reserve Bank of India ‘front-loads’ easing with 50bp cut
Rajan points to deterioration in global outlook and desire to boost investment; RBI will now focus on improving the transmission of cumulative 125bp reduction in key rate
Charlie Bean expects natural rate to change course
Former BoE deputy believes evidence points to a gradual rise in the natural rate of interest; suggests government is better placed than central bank to solve zero lower bound problem
Norway signals further easing as it cuts again
Norwegian central bank looks to cut rates further with inflation set to fall back to 2% over the forecast horizon
Belgian paper explores link between monetary policy and risk-taking
Model suggests central banks should stabilise the path of the real interest rate more when there is a ‘risk-taking channel’ of monetary policy, to help reduce ‘welfare detrimental fluctuations’
Poloz expects Canada to manage adjustment well
Bank of Canada governor says the floating exchange rate will help the country to adjust to the resource price shock, while reducing the disinflationary risks that come with it
Limited case for leaning against the wind, says IMF report
Staff conclude the short-term costs of using higher interest rates to address financial risks exceed the longer-term benefits in most cases, but stress door should ‘remain open’
Fed presidents talk up prospect of 2015 hike
Richmond, St Louis and San Francisco reserve bank presidents offer thoughts in wake of last week’s decision to hold rates; all suggest a hike in October or December will likely be appropriate
Haldane weighs solutions to ZLB constraint
Andrew Haldane considers benefits and costs of adopting higher inflation targets, accepting QE as a conventional policy tool and creating central bank-issued digital currencies
Fed holds off rate increase but outlook largely unchanged
The majority of Fed governors and presidents still expect a hike this year, but concerns over global outlook and domestic inflation prompt FOMC to hold fire for now
RBA board holds off judging impact of volatility on trading partners
The board assessed the troubles in China and market volatility to have ‘increased the downside risks’ to the global outlook at its meeting this month, minutes show
BIS research finds US policy spillovers ‘significant’
Article examines the spillovers from short-term, long-term and policy rates in the US on a host of emerging and advanced economies; impact is economically and statistically significant
RBNZ cuts OCR again in face of ‘softening’
Graeme Wheeler reiterates ‘some further easing in the OCR seems likely’ as he reveals the third consecutive rate cut; RBNZ notes importance of Chinese demand to commodity prices