𝗡𝗲𝘄 𝗥𝗲𝘀𝗲𝗮𝗿𝗰𝗵: 𝗠𝗜𝗟𝗔 (𝗠𝗼𝗻𝗲𝘁𝗮𝗿𝘆-𝗜𝗻𝘁𝗲𝗹𝗹𝗶𝗴𝗲𝗻𝘁 𝗟𝗮𝗻𝗴𝘂𝗮𝗴𝗲 𝗔𝗴𝗲𝗻𝘁) We introduce MILA—a new AI-driven solution for analyzing central bank communication. MILA operates on individual sentences by using the macro and in-document context. 1/n

Guten Morgen aus #Frankfurt! Wir begrüßen Sie auf unserem offiziellen Bluesky-Kanal!👋 Ab heute halten wir Sie hier über alles Wissenswerte rund um die #Geldpolitik, #Bankenaufsicht und #Finanzstabilität sowie über viele weitere Aufgaben der #Bundesbank auf dem Laufenden. #HerzlichWillkommen

How to measure the broader monetary policy stance in the euro area? In our latest @bundesbank.de report, we present the proxy monetary policy rate, which combines information from the risk-free yield curve and risk assets. 1\ #EconSky @plieberk.bsky.social

At @bundesbank.de, we have developed 𝗠𝗜𝗟𝗔 (𝗠𝗼𝗻𝗲𝘁𝗮𝗿𝘆-𝗜𝗻𝘁𝗲𝗹𝗹𝗶𝗴𝗲𝗻𝘁 𝗟𝗮𝗻𝗴𝘂𝗮𝗴𝗲 𝗔𝗴𝗲𝗻𝘁) - an AI tool designed to evaluate ECB communication, assessing individual sentences from monetary policy statements and speeches given in-document as well as the macro context. \1 #EconSky

The script has flipped 🌎 - Euro area macro drives euro yields aka Bunds up - US macro drives these yields down.

US Treasuries: slide. 🛝 Bunds: hold my beer. 🍺

Yesterday I delivered a speech with the title “No longer convenient? Safe asset abundance and r*” at the @bankofengland.bsky.social's #2025BEARconference. Let me summarise the main messages in a 🧵. 1/16

This is an important observation by @isabelschnabel.bsky.social: Typically, tight monetary policy transmits also by increasing risk premia on financial markets. Without it, transmission is notably weaker. During the recent hiking cycle, we did not observe this feature. bsky.app/profile/flxg...

In my interview with @financialtimes.com published today I explained my current thinking about the @ecb.europa.eu ’s monetary policy and gave some personal reflections on the upcoming update of our monetary policy strategy. Let me briefly summarise the main points in a 🧵. 1/16

As we can no longer be confident that our monetary policy is restrictive, the direction of travel is less clear, Executive Board member @isabelschnabel.bsky.social tells @financialtimes.com. We are nearing the point where we may need to pause or halt our rate cuts. www.ecb.europa.eu/press/inter/...

Many #ECB watchers have waited for this article. Chart A shows the huge model uncertainty surrounding the estimates. Adding parameter and filter uncertainty, data revisions and considering all models (not just those available for Q4 2024), you can see what we know about r* ... very little.

To all econ students on the market and advisors: I am thinking about filling an additional postdoc position at the University of Mannheim working on portfolio choice, wealth inequality, and labor markets. Interested? If yes, please let me know! sites.google.com/site/kuhneco...

It's high time to have another look at interesting papers like this one! "Anticipation effects of protectionist U.S. trade policies" by Norbert Metiu. Article in the Journal of International Economics: www.sciencedirect.com/science/arti... Working paper: papers.ssrn.com/sol3/papers....

🧵As 𝘁𝗲𝗿𝗺 𝗽𝗿𝗲𝗺𝗶𝘂𝗺𝘀 took center stage these days - Chart depicts dynamics for US and EA 1/n ➡️99-12: strong co-movement ➡️12-20: EA term premium collapses relative to US ➡️22-24: de-compression more pronounced in EA ➡️since mid-24: degree of US term premium rise is only partly matched by EA #EconSky

An executive order to defeat inflation: "I hereby order the heads of all executive departments and agencies to deliver emergency price relief, consistent with applicable law, to the American people and increase the prosperity of the American worker." www.whitehouse.gov/presidential...

The folks obsessively posting about egg prices for the past few years have gone strangely quiet just as egg prices hit an all-time high.

🧵In our latest report of @bundesbank.de, we examine how 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀' 𝗿𝗶𝘀𝗸 𝗮𝗽𝗽𝗲𝘁𝗶𝘁𝗲 in the euro area interacts with 𝗺𝗼𝗻𝗲𝘁𝗮𝗿𝘆 𝗽𝗼𝗹𝗶𝗰𝘆 𝘁𝗼 𝘀𝗵𝗮𝗽𝗲 𝗺𝗮𝗰𝗿𝗼𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗼𝘂𝘁𝗰𝗼𝗺𝗲𝘀. Key takeaways ⬇️1/n #EconSky

🥹❤️ only in Frankfurt! #SGE | #SGEBVB

Das ZEW hat ausgerechnet, welche Einkommensgruppen von den Wahlprogrammen der Parteien jeweils am stärksten profitieren: www.sueddeutsche.de/projekte/art...

In case you were wondering how things are going in Germany & on X, after Elon Musk announced his support for the far-right "Alternative für Deutschland" (AfD) in the upcoming Federal election: The chart below shows sums of tweets x impressions by members of parliament over the past 7 days...🧵⤵️

Great paper showing why the US economy keeps surprising to the upside despite high policy rates. ➡️Financial conditions may be loose with high stock valuations and compressed risk spreads ➡️For the economy these conditions matter ➡️By targeting financial conditions, Fed may reduce output volatility

Financial noise disrupts markets and the real economy. Monetary policy that targets financial conditions can stabilize the economy by recruiting arbitrageurs to trade against noise, from Ricardo J. Caballero, Tomás E. Caravello and Alp Simsek https://www.nber.org/papers/w33206

Account of the monetary policy meeting of the Governing Council of the ECB on 11-12 December 2024 www.ecb.europa.eu/press/accoun...

New paper: "𝗧𝗵𝗲 𝗘𝗺𝗼𝘁𝗶𝗼𝗻𝘀 𝗼𝗳 𝗠𝗼𝗻𝗲𝘁𝗮𝗿𝘆 𝗣𝗼𝗹𝗶𝗰𝘆". We measure the facial and vocal expressions of the ECB presidents at a high frequency. With @jens-klose.bsky.social, @sinemkandemir.bsky.social, Mamadou-Lamine Barry, Brenton J. Bruns and Victor Smirnov. The paper: lnkd.in/eR4AXeiz

Chief Economist Philip R. Lane tells @derstandard.at how we have made significant progress on our inflation target and that we need inflation to be sustainably at 2 per cent. Read his interview www.ecb.europa.eu/press/inter/...

You are pursuing a PhD in economics or finance? You are particularly interested in banking and finance? You have strong empirical skills? You should apply for an RA position in the Research Centre @bundesbank.de ! Deadline: January 12th !!! 👇 #econsky www.bundesbank.de/en/career/jo...

Worth thinking about! "Coordinating the Message: Media Coverage of Fed News and Market Reactions" by Sylvérie Herbert, Klodiana Istrefi, and Béatrice Sagna. www.banque-france.fr/en/publicati...

Looking at 88,717 European food and beverage manufacturers over the 2013-2022 period, they find no evidence of #greedflation. Mark-ups in fact declined. HT @bachmannrudi.bsky.social www.sciencedirect.com/science/arti...

Pretty striking findings! www.parisschoolofeconomics.eu/app/uploads/...

1/5) Should we be worried about the deterioration in US labour market conditions? One important concept has been the #Sahm-Rule#. We look at it and argue in #MonthlyReport that US recessionary risks remain contained. publikationen.bundesbank.de/publikatione...

1/6) Unser aktueller Ausblick auf die deutschen Staatsfinanzen: Bruch der Regierung erfordert keinen restriktiven Haushaltskurs. Bundeshaushalt 2024 entwickelt sich besser als geplant. Vorläufige Haushaltsführung erlaubt stetigen Kurs 2025. publikationen.bundesbank.de/publikatione...

Germany has fallen.

Distributional Wealth Accounts in the Euro Area ➡️still impressed by this quite new and highly valuable quarterly data set ➡️still impressed by the evolution of key metrics here: median net wealth at the country level 1/3

“We find an additional $1 spent auditing taxpayers above the 90th income percentile yields more than $12 in revenue, while audits of below-median income taxpayers yield $5.”

German bond investors bet on an end to Berlin’s ‘debt brake’ on.ft.com/4fFiVee

Here’s a crazy fact for you: Spain and Germany have now seen basically the exact same amount of economic growth post-2008. Would have been unthinkable to people during most of the 2010s. Spain has seen ~10 percentage points more cumulative growth since 2017.

Happy to accept this friendly amendment. I've written before about the broader set of steps Europe needs to take to be competitive in digital and agree that capital markets union and digital union are essential for industries that require scale. www.lemonde.fr/idees/articl...

The usual suspects are out there yelling "There are 23 million government workers! Fire most of them!" No awareness that most work for local governments, and most of *them* are schoolteachers. Federal employment hasn't grown since the 1950s

Forthcoming in the AER: "Mortgage Pricing and Monetary Policy" by Matteo Benetton, Alessandro Gavazza, and Paolo Surico. www.aeaweb.org/articles?id=...

full European PMIs well under 50, and now we have UK, which have also just slipped under 50 on the Composite, as both Manufacturing and Services miss expectations:

Unpopuläre Meinung: diese Parteisoldatenkampagnen gegen “Blackrock” Merz und “Goldman” Kukies sind abstoßend, geradezu widerlich. Was soll das? Beurteilt sie doch nach ihren Politiken. Beide hätten doch dort oder ähnlichwo bleiben und viel reicher werden können.

Most repos secured by Italian government bonds are traded between counterparties within the euro area, particularly counterparties from Germany. By contrast, repos with German government bonds often involve counterparties outside the euro area. Source: publikationen.bundesbank.de/publikatione...

Corporate insolvencies in Germany have risen further in 2024, but from low levels. Source: publikationen.bundesbank.de/publikatione...

Corporate insolvencies in Germany have risen further in 2024, but from low levels. Source: publikationen.bundesbank.de/publikatione...

Most repos secured by Italian government bonds are traded between counterparties within the euro area, particularly counterparties from Germany. By contrast, repos with German government bonds often involve counterparties outside the euro area. Source: publikationen.bundesbank.de/publikatione...

A new (ish) Fed study shows that ECB policy tightening disproportionately hurt Germany www.federalreserve.gov/econres/note...

Hi, can you help me? I want to develop a model that makes risk predictions. Use logistic regression. Can I use some more modern techniques, like AI? Use a neural network with single non-hidden feed forward layer that outputs to a single dimension using a sigmoid activation function.

➡️ 𝗙𝗿𝗲𝗻𝗰𝗵 𝘀𝗽𝗿𝗲𝗮𝗱𝘀 over risk-free OIS rates will likely to remain in this chart when monitoring EA spreads. ➡️Italian spread over Bunds trading lower than over OIS. This reflects regime change with 𝗕𝘂𝗻𝗱𝘀 𝘀𝗲𝗹𝗹𝗶𝗻𝗴 𝗼𝗳𝗳 𝗮𝗴𝗮𝗶𝗻𝘀𝘁 𝗢𝗜𝗦 recently. 2 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝘀𝗵𝗶𝗳𝘁𝘀 𝗶𝗻 𝗘𝗔 𝘀𝗼𝘃𝗲𝗿𝗲𝗶𝗴𝗻 𝘀𝗽𝗿𝗲𝗮𝗱 𝗱𝗿𝗶𝘃𝗲𝗿𝘀. #Econsky