Unemployment
Yellen bats away calls for simple rules-based policy
Fed chair tells Committee on Financial Services a monetary policy rule based on two economic variables is inappropriate as ‘the world is more complicated than that’
Yellen expects 'lift-off' later this year
Janet Yellen expects the Fed to raise the federal funds rate "at some point" in 2015 with full employment "coming closer into view" and inflation on track to return to 2% in the next few years
Research calls on Fed to replace ‘dot plot’
Working paper published by the IMF suggests publishing a baseline forecast compiled by staff and 'endorsed' by the FOMC as a replacement for individual and anonymous projections
Fed officials still back 2015 rate hike
Median of latest projections suggests federal funds rate will reach 0.625% by the end of the year; FOMC delivers more upbeat assessment as its keeps policy unchanged
Cleveland Fed economists cautious over use of Taylor rule
Research emphasises the difficulty in measuring potential output and the natural rate of unemployment accurately and urges policy-makers to ‘take care’ when using the rule
Fed’s Brainard sees scope for ‘watchful waiting’
Governor says there may be room to ‘support further healing’ in the labour market before raising interest rates, but notes first hike could still come this year
Kocherlakota sets out path back to maximum employment
Minneapolis Fed president says the FOMC should set policy in a way that allows for at least three more years ‘as good as 2014’ if the labour market is to achieve highs last seen in 2006
Kuroda sees little difference between major central banks
Despite the different wording of the major central bank mandates there is ‘little practical difference’ between them, BoJ governor says
Minneapolis Fed essay suggests new focus for FOMC comms
Sam Schulhofer-Wohl argues the FOMC should talk more about what it is trying to accomplish with its monetary policy; Minneapolis Fed staff rewrite January statement to illustrate point
Household expectations help flesh out inflation picture, research finds
Research published in the latest Bank of Canada review argues that looking at the behaviour of expectations since the crisis helps in understanding evolution of inflation
San Fran Fed president sees light at end of tunnel
John Williams says when short-term volatility is discounted, the US economy is nearing full employment, with an inflation trend running around 1.5%
Chicago Fed research charts fall in natural rate of unemployment
Group of economists say an ageing population and rising education attainment could push the natural rate – currently at or below 5% – as low as 4.5% by 2020
Jobs data recovers in the US as Dudley looks to help small businesses thrive
Non-farm payroll employment increases by 223,000 in April after a difficult March; NY Fed president considers how small businesses can access credit and expand
Fed presidents still divided on timing of rate hike
Heads of the Federal Reserve Banks in Atlanta, Boston and Cleveland offer different takes on current economic conditions; all united in desire for more data
Chilean paper analyses unemployment’s impact on wages
The impact of unemployment spells on wages is high, but the volatility ‘increases much more during recessions’, research finds
Expectations have variable impact, finds ECB paper
Working paper suggests there have been ‘significant changes’ in the degree to which expectations have driven unemployment, with a particularly large effect during 2008 financial crisis
Hellwig warns against expanding financial stability mandate too far
Martin Hellwig presents his thoughts on how to strike a balance between the macroeconomic and financial stability objectives of monetary policy
Yellen sees potential benefits in ‘tight’ labour market
Fed chair Janet Yellen says allowing unemployment to fall below its longer-run level for a short time could help return inflation to target quicker and boost productivity
ECB forecasts ‘gradual’ increase in US inflation
Economic bulletin published by ECB agrees with FOMC that inflation will increase gradually as labour market conditions improve and impact of low oil prices and high dollar fades
Fed keeps options open as countdown to lift-off begins
FOMC drops the reference to being ‘patient’ before normalising policy, signalling a rate hike could arrive as early as June, but tempers expectations with more cautious economic assessment
ECB paper models Philips curve from professional forecasts
Working paper finds the curve consistent with professional forecasts has flattened since the financial crisis, with the relationship between inflation and unemployment weakening
US banks hold up under Fed stress tests
Latest annual stress tests show 31 largest bank-holding companies would lose $490 billion under the Fed’s severely adverse scenario, which has been tightened compared to 2014
French paper models flattening Philips curve
Working paper develops a two-country, new-Keynesian model to replicate the flattening of the curve in developed countries over the past 25 years, a trend widely attributed to globalisation
Fed officials debate research on equilibrium real rates
Research presented at US Monetary Policy Forum says uncertainty around equilibrium rate means the Fed should delay tightening policy; Loretta Mester and William Dudley discuss findings