A nascent international financial channel of China’s monetary policy transmission
China is the world’s second-largest economy, and its monetary policy can affect global demand and trade. Using granular mutual fund data, this column finds that
The bank collateral channel of monetary policy: Evidence from securities losses
Sharp increases in interest rates can reduce the market value of banks’ securities holdings and threaten financial stability. Using euro area data for 2022-2023, this
Dollar dips ahead of US inflation data, supported by rate outlook
Reuters poll forecasts U.S. headline inflation at 3.8%. The dollar remained in sight of 13-month highs on Tuesday ahead of U.S. inflation data, which will
Exchange rate communication in practice: Evidence from two decades of ECB press conferences
Evidence is mixed on whether central banks can influence exchange rates simply by talking about them. This column explores this question by analysing more than
Hedging interest rate risk when it matters: Evidence from Italian banks
Valuation losses can build quickly in response to higher interest rates, as demonstrated by the collapse of Silicon Valley Bank. This column shows that Italian
When trust in official statistics declines
Trust in official economic statistics has become an increasingly salient policy issue, including in the US where the Commissioner of the Bureau of Labor Statistics
When central banks over-deliver, markets listen differently
Financial markets pay close attention to monetary policy, and surprise policy decisions can strongly affect asset prices and the real economy. This column shows that
Should the European Central Bank slow down quantitative tightening?
The ECB could slow down QT in response to currently tight financial conditions, but should communicate its intentions with care. Since early 2023, the European
One global shock, many inflation paths: Inflation persistence after the Great Moderation
The post-COVID inflation surge was global, but inflation persistence was not. This column argues that the key difference lies in how strongly external shocks fed
Market-implied inflation expectations during the Iran shock
Real-time assessments of inflation expectations can be valuable for assessing the inflation outlook. This column decomposes inflation swaps for the US, UK, and euro area
