Thursday, July 29

Bank of Canada

Bank of Canada, Economy

Carolyn Rogers named senior deputy governor of the Bank of Canada

Breadcrumb Trail Links News Economy Currently serves as Secretary General of the Basel Committee on Banking Supervision Author of the article: Kevin Carmichael Carolyn Rogers, who currently is in the middle of a three-year term as secretary general of the Basel Committee on Banking Supervision, will replace Carolyn Wilkins. Photo by HO-Financial Institutions Commission-Maryam Morrison /THE CANADIAN PRESS Article content Finance Minister Chrystia Freeland appointed Carolyn Rogers, a Canadian who has been climbing the ranks of international banking regulation, as senior deputy governor of the Bank of Canada. Advertisement This advertisement has not loaded yet, but your article continues below. Article content Rogers, currently in the middle of a three-year te...
Bank of Canada, Canadian Economy, Economy

Canadian businesses and consumers are brimming with confidence about the economy

Breadcrumb Trail Links News Economy Business sentiment gauge from Bank of Canada rises to record as separate consumer surveys find optimism at or near all-time highs Author of the article: Bloomberg News Shelly Hagan High consumer confidence could indicate that households and business will be in a spending mood as pandemic restrictions are lifted. Photo by Ernest Doroszuk/Toronto Sun/Postmedia files Article content Canadian consumers and businesses are entering the second half of the year brimming with confidence about the nation's economic prospects, a signal of what could be an imminent boom. Advertisement This advertisement has not loaded yet, but your article continues below. Article content A gauge of business sentiment released by the Bank of ...
Bank of Canada, Economy

The Bank of Canada is supposed to be independent, but it might not hurt if it knew what Finance was up to

Article content continuedThe finance minister stole the Bank of Canada's thunder and violated etiquette by directly commenting on monetary policy. “There was broad international agreement that, with interest rates approaching zero, monetary policy is running out of bullets,” Freeland said, reflecting on the recent annual meetings of the International Monetary Fund and World Bank. "That puts the onus squarely on fiscal policy to grow our way out of this recession."That's not the message Macklem sent earlier in the day, when he said that monetary policy still had lots of pop. “There is scope to do more, and if we need to do more we will do more,” he said.Central banks aren't “out of bullets,” leaving governments with no choice but to spend like mad. For example, the Reserve Bank of Austra...
Bank of Canada, FP Comment, inflation

Opinion: Inflation may be back sooner than you think

Article content continuedFirst, the bank's three different measures of core inflation, which abstract from the more volatile components of the consumer price index, are already running at close to two per cent. In fact, the so-called “CPI-median” measure, currently at 1.9 per cent, has not dipped below 1.8 per cent since the beginning of the pandemic. All three measures suggest the weakness of headline inflation may be temporary. Its fall has been driven by big drops in a few items, most notably energy, that make up a large portion of the CPI basket.Second, the MPR included a substantially lower estimate of the economy's potential output since the bank's last estimates in April 2019. By the end of 2022, the bank thinks potential output will be three per cent lower than it had expected i...
Bank of Canada, Economy

Bank of Canada signals record low rates here to stay until 2023

Article content continued“As the economy recuperates, it will continue to require extraordinary monetary policy support,” the Bank of Canada said in a statement on Oct. 28.The previous commitment — made in July after Macklem oversaw his first round of policy deliberations as governor — was to keep the central bank's key interest rate pinned near zero until the two-per-cent-inflation target was “sustainably achieved.” Forecasts indicated that meant the benchmark rate would remain at a record low for at least a couple of years, and Macklem said as much in a television interview with BNNBloomberg at the time.Policy-makers decided there was value in removing whatever ambiguity remained around their intentions, betting that by erasing the risk of a surprise spike in borrowing costs down the ...
Bank of Canada, Economy

Bank of Canada maintains interest rate: Read the official statement

Article content continuedWe apologize, but this video has failed to load.Here's the official statement from the Bank of Canada's interest rate decision on Wednesday, Oct. 28, 2020:The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of 0.25 per cent, with the Bank Rate at 0.5 per cent and the deposit rate at 0.25 per cent. The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program. The Bank is recalibrating the QE program to shift purchases towards longer-term bonds, which have more direct influence on the borrowing rates that are most important for households and businesses. At the same time, total purchases will be gradually reduced to at least $4 billion a week. The Gove...
Bank of Canada, Carolyn Wilkins, Economy

Wilkins’ next job may be up in the air, but she’s got plenty to do before leaving Bank of Canada

Article content continued"We've made a lot of progress. The hope is that we'll be able to collect all of that by the end of the year," she said. "That's really going to be putting us in good stead next year, the first part of the year, to think about recommendations."Wilkins' review is the most comprehensive since the inflation target was adopted in 1991, as a wish list of alternatives is being tested against the current approach in sophisticated models. She has also made an unprecedented effort to engage the public, including an ongoing survey designed to gauge attitudes about inflation.The work with regular folk has generated some surprises. The Bank of Canada discovered that a critical mass of people is highly skeptical of the Consumer Price Index, the central bank's preferred measur...
Bank of Canada, Canadian Economy, FP Comment

Opinion: In the pandemic fog, some welcome clarity from the Bank of Canada

Article content continuedWe would like to see one more piece of information to complete the portrait of the bank's pandemic strategy. Since the emergency cuts to the overnight rate, the deposit rate — the interest rate banks receive for holding positive settlement balances with the Bank of Canada — has been set equal to the rate banks get when lending to each other overnight. This reduces banks' incentives both to lend to each other and to expand their loan portfolios to households and firms. The bank could be more explicit about whether this situation will continue and , if it does, how the bank intends to encourage the financial sector to meet an increased demand for borrowing in an environment of exceptionally low interest rates.In uncertain times, clarity from public officials is va...