Monetary policy
Surprise policy announcements impact cash demand and consumption - paper
Unanticipated policy announcements can significantly reduce a consumer's monthly ATM withdrawals
Wage growth remains a concern for Australia – Lowe
Governor warns low wage growth is hindering household consumption; there are some signs the labour market is recovering, with employment growth registering stronger in recent months
BoJ’s Sakurai defends aggressive monetary easing
A member of the policy board says yield-curve control allows flexibility for the central bank to implement monetary easing
Chinese monetary policy now more in line with G3 central banks – BIS paper
“Liberalisation and transformation” of the Chinese economy has led to changes in the PBoC’s monetary policy rule, and an improvement in inflation performance, authors say
Chile’s economy on sound and stable footing – report
Following earlier action in the year, central bank is unlikely to move interest rates again; growth forecasts revised following copper mine strike
Fed paper warns on helicopter money risks
Tool appears much less powerful when less realistic elements of the New Keynesian framework are removed; other options could work better, authors say
Inflation is preventing interest rates from rising faster, says Powell
Labour market progress points towards a faster pace of normalisation for the Fed, but below-target inflation is preventing rates from rising above the current “gradual pace”
Policy rate forecasts influence expectations – Riksbank paper
New data allows researcher to assess the “potency” of rate forecasts, which do appear to influence expectations
Pace of monetary easing may slow, says Central Bank of Brazil
Committee unanimously cut interest rates to 10.25%, but political uncertainty could slow the future pace of easing; economist praises approach to monetary policy communication
Brainard turns cautious on inflation concerns
Lack of wage growth and lower than expected inflation data could slow further monetary easing, says Fed governor; interest rates are likely to rise “soon”
Book notes: Crash Bang Wallop, by Iain Martin
A comprehensive study of the City of London and how it became the world’s leading financial centre prior to the financial crisis and the UK’s vote to leave the European Union
Irish paper tracks monetary policy’s effects on mortgage default
Researchers use “quasi-natural experiment” based on data from two types of loan
Long-standing Uzbek central bank chairman dies
Fayzulla Mullazhanov led the central bank since its formation following the collapse of the Soviet Union
Kohn worried about weight of expectations on Federal Reserve
The weight of expectations on the US Fed may be too high; the US is not as well placed as the UK to tackle another major crisis, says the former Fed vice-chair
Authors struggle to cut ‘price puzzle’ from Australian data
Authors find various approaches to removing the puzzle from VAR models fail for Australian data, calling into question the usefulness of the models
Sarb should leave monetary policy alone – IMF
South Africa’s current monetary policy stance is bringing inflation under control, fund mission says, advising the central bank to leave government reforms to do the legwork following downgrade
Colombia’s Echavarría says monetary policy has been a challenge
Monetary policy has had to adapt to external headwinds that have caused macroeconomic imbalances for Colombia, central bank governor says; effects are now showing signs of abating
Central Bank of Egypt battles to contain devaluation impact
Inflation has rocketed since Egypt aligned official and black market exchange rates, forcing the central bank to take action
Fed should make sure it does not ‘fall behind’ – Mester
US central bank should “remain vigilant” as employment reaches full capacity and the balance sheet begins to unwind; the Cleveland Fed president sees more rate hikes this year
Bank of Mexico tightens policy for sixth time in a row
Hike should stop temporary rises in inflation from passing through, says central bank board; leaves door open for further rate hikes, with one eye on inflation and the other on the Fed
Former Fed vice-chair Kohn on populism, top central bankers
Donald Kohn speaks to Christopher Jeffery about his fears for the Fed amid mounting populism, why he has few policy regrets and his experiences working with some of the world’s top central bankers
Riksbank proposes changes to inflation target
Central bank plans to use a variable that avoids short-term distortions, and to reinstate a band around the target
Digital currency could remove need for positive inflation target, economists argue
Proposed digital framework eliminates the need for “inflation buffer” and promotes transparency of the balance sheet
PBoC deepens interest in fintech with new committee
Fintech committee will be charges with investigating the pros and cons of financial innovation and producing guidelines where appropriate; China’s central bank deepens cooperation with IMF