Expectations
Bank of Russia increases policy rate 100bp
Central bank announces fourth rate hike of year amid rising inflation expectations
The ‘golden age’ of central banking has passed
Central banks face multi-faceted challenges and weakened autonomy amid highly polarised inflation expectations
Paper analyses eurozone consumers’ inflation expectations
Short-term views, trust and Covid-19 shaped medium-term expectations – Bank of Finland paper
Communications often involved at early stages of central bank policy
Most central banks say comms teams are involved in early planning stage of policy decisions
Fintech communication is most challenging for central banks
Central banks view fintech as greatest challenge, but rate monetary policy communication highly
Charles Goodhart on inflation targets, financial stability and the role of money
The LSE professor says inflation targets should have been 0%, the Fed’s move to AIT is a mistake, independence is under threat from inflation, big balance sheets support liquidity, AI can help supervisors and climate stress tests are unconvincing
A return of the inflation monster?
There are fears that a shift in intellectual approach towards running economies ‘hot’ could herald a return of the money-eating inflation era
Firms are ‘inattentive’ to inflation and monetary policy – NBER paper
Authors present new survey data indicating firms’ expectations are “anything but anchored”
The future of forward guidance
BNP Paribas Asset Management explores the current landscape around forward guidance, focusing on how central banks’ methods of communication are likely to evolve in the future. By Richard Barwell
Fed plays down US economic rebound
Powell says economy still “a long way from our goals” as FOMC holds policy steady
The evolving ‘strategy function’ in central banks
Some institutions participating in a survey of 27 central banks still struggle to fully harness an effective ‘strategy function’, according to the ECB’s Jean-Charles Sevet and Alejandro de la Cuesta
A rebuttal of Philip Turner’s criticism of the BIS ‘house view’
Robert Pringle critiques the key findings raised in Philip Turner’s occasional paper, ‘The new monetary policy revolution: advice and dissent’
Central bank of the year: The Federal Reserve System
Overwhelming Fed interventions in March 2020 forestalled a damaging global financial crisis, as policy overhaul prompts introspection in Europe and Japan
Bundesbank paper looks at German inflation expectations
Social media forms less realistic picture of current price levels than traditional news – researchers
Firms and consumers form expectations differently – Irish paper
Confidence leads eurozone firms to expect higher inflation, but consumers to expect lower, says research
Lifetime achievement: Charles Goodhart
The LSE and BoE veteran economist has his own ‘law’, and played a key role in the establishment of monetary policy in the UK, Hong Kong’s peg and the ‘New Zealand model’, which influenced a generation of central bankers
Expectations play key role in policy transmission – BoE paper
Authors use high-frequency data to assess importance of term premia and expectations
The Bank of Japan must adjust its monetary policy
Sayuri Shirai says the central bank needs to make its policy more sustainable. The BoJ is running out of ways to generate further monetary stimulus
Bank of Italy paper uses Twitter to track inflation expectations
New method’s data gives a “good real-time proxy” for consumers’ expectations – researchers
Adding QE can fix New Keynesian models – BoE paper
“Mild adjustments” to balance sheet are enough to avoid paradoxical results, authors find
The Covid crisis, central banks and the future
Crisis responses have had positive initial outcomes, but also exacerbated significant underlying challenges that raise concerns related to exit strategies and the future for central banks
Ulrich Bindseil on the launch of the digital euro
The ECB’s director-general for market infrastructure and payments speaks about the functionality, tiering approaches, privacy policies, ledger technology and ecosystem impact of the eurozone's planned CBDC
RBI paper tracks impact of rising transparency on expectations
Research uses text mining to study changing degree of transparency at the RBI
ECB says new data highlights stabilising effect of inflation expectations
Analysts argue that new approach to analysing surveys has “important practical advantages”