UK money supply trends remain encouraging despite the suspension of QE and ongoing weakness in bank credit. Consensus focus on the latter is misplaced since money leads the economy while credit is, at best, a coincident indicator. The monetary aggregates favoured here are broad money M4 and narrow money M1 excluding holdings of financial institutions – such holdings are volatile and can be difficult to interpret. Annual growth of the two measures rose further to new post-recession highs of 5.4% and 8.3% respectively in February – see first chart.

Regis Barnichon and Christopher J. Nekarda. This paper presents a forecasting model of unemployment based on labor force ?ows data that, in real time, dramatically outperforms the Survey of Professional Forecasters, historical forecasts from the Federal Reserve Board's Greenbook, and basic time-series models. Our model's forecast has a root-mean-squared error about 30 percent below that of the next-best forecast in the near term and performs especially well surrounding large recessions and cyclical turning points.

Trying to decode what the Eurogroup is saying into English is getting harder as policy becomes less distinct. However we have uncovered a small segment of the equivilent of the Rosetta stone. Plain English on the left and Eurogroup English on the right. We hope this helps.     Irish    (adj) - Not Greek     Portuguese    (adj) - Not Irish     Spanish    (adj) - Not Portuguese     Italian    (adj) - Not Cypriot     Cypriot    (adj) - Unique

Michael T. Kiley. Monetary policy actions since 2008 have influenced long-term interest rates through forward guidance and quantitative easing. We propose a strategy to identify the comovement between interest rate and equity price movements induced by monetary policy when an observable representing policy changes, such as changes in the interbank rate, is not available. A decline in long-term interest rates induced by monetary policy statements prior to 2009 is accompanied by a 6- to 9-percent increase in equity prices.