Forward guidance
Menon pledges tougher measures on AML controls in Singapore
Ravi Menon says central bank will conduct more intrusive probes of higher-risk institutions and take stronger actions where practices fall short; monetary policy likely on hold for 2016
BoJ paper models impact of guidance on expectations
Announcing forward guidance before reaching the effective lower bound can help to “positively influence” inflation and output growth, the author finds
Kansas Fed researchers bridge gap between forward guidance data and theory
Working paper identifies empirical effects of guidance at the zero lower bound, before finding a standard model of price rigidity largely replicates the results
Bank of Canada adds negative rates to toolkit
Central bank publishes new framework for monetary policy when interest rates are approaching zero, suggesting the overnight rate could be cut as low as -0.5%
Threshold-based forward guidance can work at the zero lower bound, BoE paper says
Private sector industries have to understand how threshold-based forward guidance will be used in order for it to be effective, BoE working paper notes
Heterogeneous beliefs may weaken effect of forward guidance, paper argues
Fixed-date and state-contingent guidance by the Federal Reserve led some market expectations to converge, but heterogeneous beliefs about inflation and consumption persisted
Dutch paper says theory of forward guidance must catch up with practice
Economists from the Netherlands Bank argue so-called Odyssean communication ‘does not exist in practice’ as central banks want to avoid committing themselves to a particular set of actions
Poloz: volatility not a reflection of central bank credibility
Canadian governor – greater volatility is a ‘natural reaction’ to central banks gearing up to normalise monetary policy; highlights cost of using forward guidance
Cleveland Fed’s Mester sees guidance as 'comms device'
Loretta Mester believes the Fed should stop using forward guidance as a policy tool when economic conditions have normalised and stick to setting out its reaction function
FOMC forward guidance adds to 'market confusion', say leading US economists
The Fed lacks 'clearly formulated' normalisation strategy, paper to be published by Central Banking argues; calls for adherence to 'disciplined inflation targeting rule'
Eichengreen says central banks should worry more about deflation than 'profits and losses'
The Berkeley professor on what last week's SNB move says about big central banks 'wrong-footing' markets and the Fed's problematic response to financial crisis
FOMC member says ‘very low' inflation provides ‘ample justification' for patience on rate hike
Eric Rosengren highlights ‘unusual set of conditions' as Fed looks to normalise policy stance; says low inflation globally may prompt an atypically gradual normalisation process
Fed signals rate hike despite drop in inflation
Minutes suggest Fed will tighten policy despite expecting inflation to remain below target for 'some time'; rate hike unlikely for 'at least the next couple of meetings'
Bank of Israel researchers propose exchange rate-based forward guidance
Researchers say forward guidance has a mixed track record, especially in small open economies, but linking guidance to external factors would help improve credibility
Cleveland Fed president sees forward guidance evolving in normal times
Loretta Mester suggests it will focus less on when policy will be changed and ‘more on the rationale for policy decisions’; sees FOMC summary of economic projections playing ‘central role’
Fisher ‘encouraged’ by FOMC guidance
Dallas Fed president Richard Fisher welcomes FOMC statement last week; believes ‘flight pattern’ of US economy is toward higher employment and inflation at the 2% target
Kocherlakota explains dissent from FOMC decision to end asset purchases
Minneapolis Fed president says downside risks to inflation outlook ‘arguably worse' than a year ago; says evidence from Japan and Europe shows need to act on 'an ongoing basis'
Poloz recommends dropping forward guidance as conditions normalise
Bank of Canada governor suggests there are better ways of communicating when conditions normalise; most respondents to CentralBanking.com poll agree
Debelle surprised markets take central banks at their word
Reserve Bank of Australia assistant governor suggests markets are ‘underestimating’ the possibility that central banks will change course in response to ‘unexpected’ data
Draghi distinguishes ECB forward guidance from Fed and BoE variants
ECB president compares forward guidance across major central banks; channels John Maynard Keynes and warns that ‘without reform, there can be no recovery’
Fed minutes reveal growing rifts over forward guidance
Minutes show increased debate over whether forward guidance is being used correctly; two dissenters object to phrasing of policy statement
FOMC to raise rates before shrinking balance sheet
Federal Reserve unveils principles for policy ‘normalisation' as members' calls for rate hike grow louder; normalisation not necessarily expected to 'begin soon'
The viability of a commercial approach to central bank communication
Will the prevailing trend for central bank communications to mimic those of commercial entities and political parties stand the test of time?
Philadelphia Fed's Plosser fears ‘risky' FOMC strategy on interest rates
Regional Fed president does not want to wait to increase rates until job market has ‘completely healed'; calls for overhaul of forward guidance