Beating the “pros” with a semi-structural model of their own inflation forecasts Staff working paper 2026-11 Sergio A. Lago Alves, Waldyr Dutra Areosa, Carlos Viana de Carvalho How can Surveys of Professional Forecasters (SPF) be used to improve inflation forecasts? By using US historical quarterly data on SPF forecasts, we provide better understanding of how we can use forecast disagreement to improve our own forecasts. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C11, C5, C53, E, E3, E31, E37 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
The Usage of Security Lending Facilities under Unconventional Monetary Policy: Evidence from Sweden Staff working paper 2026-9 Marianna Blix Grimaldi, Fabienne Schneider, David Vestin This paper examines the interaction between quantitative easing (QE) and the securities lending facility (SLF) using a detailed dataset on Riksbank QE purchases, Swedish DMO SLF transactions and OTC repo deals. A theoretical model further shows how excess demand for assets and search frictions shift the SLF from a backstop to a first-resort tool. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E5, E52, E58, G, G2, G21 Research Theme(s): Financial markets and funds management, Market functioning, Market structure, Financial system, Financial institutions and intermediation, Monetary policy, Monetary policy tools and implementation
Macro News in Market Moves: Classifying News through Asset Co-movements Staff analytical paper 2026-7 Bruno Feunou, Jean-Sébastien Fontaine, Rishi Vala This paper introduces CLONE, a method that decomposes asset price movements into aggregate demand, productivity, inflation, and monetary policy news, using stocks, bonds, and inflation swaps. CLONE simplicity and forward-looking focus helps guide policymakers in determining the economic drivers behind asset price movements. Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E3, E32, E4, E44, G, G1, G12, G14 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Monetary policy framework and transmission
MSTest: An R-Package for Testing Markov Switching Models Staff working paper 2026-7 Gabriel Rodriguez Rondon, Jean-Marie Dufour We present the R package MSTest, which implements hypothesis testing procedures to determine the number of regimes in Markov switching models. The package provides several testing frameworks, including Monte Carlo likelihood ratio tests, moment-based tests, parameter stability tests, and classical likelihood ratio procedures. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C12, C15, C18, C6, C63, C8, C87 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Economic models, Monetary policy, Real economy and forecasting
Do Monetary Policy Shocks Affect the Neutral Rate of Interest? Staff working paper 2026-6 Danilo Leiva-Leon, Rodrigo Sekkel, Luis Uzeda Can monetary policy influence the neutral real interest rate (r-star)? Using a new statistical model, we show that interest rate hikes tend to lower r-star and long-run growth, but that monetary policy explains only a small share of the long-run decline in r-star. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C3, C32, C5, C51, E, E3, E32, E4, E44 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
The aggregate and heterogeneous effects of responding to shelter inflation Staff analytical paper 2026-5 Michael Irwin, Matías Vieyra This note examines how monetary policy responses to shelter inflation affect both the overall economy and different households. We find that the aggregate macroeconomic effects of responding to shelter inflation are modest, whereas the redistributive consequences across households are substantially larger. Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E2, E3, E4, E5, G, G5 Research Theme(s): Monetary policy, Monetary policy framework and transmission
AI Paradox: Promise vs. Reality—What It Means for Monetary Policy Staff analytical paper 2026-4 Joshua Brault, Maryam Haghighi, Jing Yang This note reviews the emerging evidence on AI’s labour-market and productivity effects, highlighting early task-level impacts, sizable micro level productivity gains, and the macroeconomic challenges these pose for monetary policy during the transition. Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E2, E24, E3, E31, E5, E50, E52, E58 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission, Structural challenges, Digitalization and productivity
Monetary Policy Under Okun’s Hypothesis Staff working paper 2026-3 Felipe Alves, Giovanni L. Violante The current monetary policy framework of the Fed intends to be more ’inclusive’ by running the economy hot for longer during expansions. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E24, E3, E31, E32, E5, E52, J, J2, J24, J6, J64 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
Assessing the Buy Canadian movement one year later Sparks at Bank article Olga Bilyk, Jacob Dolinar Canada and the United States have both benefited from decades of free trade. But US tariffs significantly changed this relationship, and Canadians reacted. In our research, we explore the Buy Canadian sentiment one year after it emerged and measure how much it has shifted travel patterns and spending in grocery stores. Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting, Structural challenges, International trade, finance and competitiveness
Channels of Transmission: How Mortgage Rates Affect House Prices and Rents in Canada Staff analytical paper 2026-2 Nishaad Rao, Tao Wang We use Canadian data to examine how monetary policy affects house prices and the consumer price index for rent through exogenous changes in the mortgage interest rates. It finds that the price and rent impacts operate through various channels and that these impacts vary by region. Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E3, E31, E5, E52, R, R2, R21 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission