Implementing yield curve control
实施收益率曲线控制
BCW 2025 shows that yield curve control (“YCC”) need not be inflationary. However, BCW 2025 does not tell us how YCC is implemented in practice. I understand this involves the central bank (i) expressly announcing a target long-term yield, and (ii) buying (or selling) the relevant bond to keep the yield at target. This is similar to how the central bank achieves its policy rate target through open market operations.
In normal open market operations to keep the policy rate at target, the central bank buys (or sells) government securities of any duration. If the central bank does not announce specific targets for the yield curve, bond traders would assume that the central bank is simply engaging in normal open market operations to control the policy rate (for overnight cash).
For YCC to work in practice, it seems necessary for the central bank to announce a yield target for a specific government security (e.g., 10 year bonds), and not merely engage in open market operations for that security. Communication plays a role in guiding bond traders expectations. In fact, simply announcing a credible yield target could be sufficient to induce immediate changes in the yield curve. If the central bank does not follow up with an active program for buying (or selling) a specific government security, it would eventually lose credibility with bond traders. However, communicating a target seems to reduce the size of the program needed to remain credible. [Note 1]
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Reference: Cahill et al 2013, “Duration Risk vs Local Supply Channel in Treasury Yields: Evidence from the Federal Reserve’s Asset Purchase Announcements; Bernanke 2020, “The New Tools of Monetary Policy”.
Note 1: I am not aware of any academic paper explaining how communication plays a role in implementing YCC. However, Cahill et al 2013 conducts event studies showing that unexpected announcements by the Federal Reserve’s Open Market Committee (“FOMC”) about which securities are targeted do affect the relative yield of individual securities. See also Bernanke 2020’s discussion of Cahill et al’s paper. According to FOMC minutes (June 9-10, 2020), some FOMC participants believe that a YCC policy could reduce the size of an asset purchase program.
BCW 2025 表明收益率曲线控制（“YCC”）不一定会导致通胀。但是，BCW 2025并没有告诉我们在实践中是如何实现的。对我所理解，这涉及中央银行（i）明确宣布以长期收益率为目标；（i i）购买（或售出）相关债券以保持收益率达到目标。这类似于央行通过公开市场操作实现其政策利率目标的方式。
在正常的公开市场操作中，为了将政策利率保持在目标水平，央行会买入（或卖出）任何期限的政府证券。如果央行没有宣布收益率曲线的具体目标，债券交易者会认为央行只是在进行正常的长期公开市场操作来控制政策利率（隔夜现金）。
为了YCC在实践中发挥作用，央行似乎必要宣布制定政府债券（如10年期债券）的收益率目标。沟通在引导债券交易者的预期方面发挥着作用。事实上，仅仅宣布一个可信的收益率目标就足以立刻引起收益率曲线的变化。如果央行不采取积极的方案来购买（或出售）特定的政府债券，它最终会失去债券交易者的信任。然而，传达目标似乎会减少保持可信度所需的方案规模。[注1]
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参考： Cahill等人2013《国债收益率的持续时间风险与本地供应渠道：美联储资产购买公告的证据》；Bernanke 2020《货币政策的新工具》
注1: 我不知道有任何学术论文解释沟通在实施YCC中的作用。然而，Cahill等人2013进行的几个事件研究表明，美联储公开市场委员会（“FOMC”）关于哪些证券成为目标的意外公告确实会影响单个证券的相对收益率。另请参阅Bernanke 2020 对 Cahill等人论文的讨论。根据FOMC会议纪要（200年6月9日至10日），一些FOMC参与者认为YCC政策可能会减少资产购买方案的规模。