Monetary policy
FOMC divided on how to proceed with policy
Strong jobs growth, but below-target inflation leaves some members emphasising room to be patient, while others warn of a potential overshoot
Bank of Colombia forecasts stronger growth as oil shock fades
The central bank expects higher GDP growth in 2018, as inflation remains within target and the peso’s exchange rate with the dollar stays stable
Bank of Colombia paper charts fiscal multipliers in developing countries
Stronger fiscal-monetary co-ordination in developing economies during periods of expansion would extract more value from stimulus; fiscal multipliers higher in fixed exchange rate regimes
Swedish inflation above target, but tightening unlikely
The Scandinavian economy recorded a 4% year-on-year expansion in the second quarter of 2017, but a strong krona and the ECB’s loose policy stance make an immediate rate rise difficult
“What would Allan say?”
Central Banking Publications founder Robert Pringle finds pearls of wisdom in his email correspondence with the late Allan Meltzer
Where have all the women gone?
The number of women working at central banks has increased substantially, but a glass ceiling appears to remain for those reaching for senior management positions
Negative rates have not hurt Swedish/Danish profits – paper
But developments in housing markets deserve caution, say researchers
San Francisco’s Williams: monetary policy has reached ‘limit’
Monetary policy has done all that it can to foster growth, says San Fran president, calling on fiscal policy to now “step up”
Fiscal multipliers significantly higher at effective lower bound, paper says
Researchers use data from 17 advanced economies for the period of 1960–2015
Czech central bank raises interest rates for first time in nine years
Legacy of currency defence may cause future problems, analyst argues
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
QE could create balance sheet problems – Irish deputy governor
Eurozone’s asset purchase programme increases the interest rate risk for central banks, Donnery and co-authors write
Piecing together a financial theory of stagnation
Ideas presented at recent BIS annual meetings reveal an emerging framework that explains how the financial system may be dragging down the real economy; Hélène Rey was the latest to contribute
Swedish GDP growth beats forecast, adding to bank’s concerns
Inflation remains below the 2% target, despite lower unemployment, leaving the Riksbank reluctant to change course and raise rates before the summer of 2018
Central banks must exit asset purchase programmes with care, paper finds
Bundesbank paper uses model of eurozone to judge effects of asset purchases
Philip Turner urges RBNZ to focus analysis on ‘new normal’
Former BIS official gives positive review of RBNZ’s monetary policymaking process, but recommends the central bank focus its efforts on understanding changing economic structure
Mozambique central bank praised for monetary framework overhaul
IMF staff approve of changes made towards interest rate corridor, but say the central bank should remain vigilant with regard to prudential regulation
Bank of Japan cuts inflation forecast as policy remains on hold
The BoJ cuts its forecast for prices as it struggles to hit its inflation target; keeps policy steady
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
China's president hands PBoC stronger role in tackling financial risks
China will set up a financial stability and development committee to co-ordinate financial supervision, and the central bank will play a stronger role in financial regulation, Xi Jinping said at a national financial work conference.
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
Policy mix has important implications for spillovers – Fed’s Brainard
Fed governor says degree of divergence between central banks and choice of policy tool affects the exchange rate impact and therefore spillovers
BoJ ups asset purchases to curb bond market pressure
The Bank of Japan has increased the size of JGB purchase operation and announced unlimited purchases of 10-year JGBs at a fixed rate of 0.11%