Bank of Canada
Bank of Canada Interest Rate Doubled to 1.0%, More Hikes and Balance Sheet Reduction to Come
April 13, 2022
Today’s 50-basis point rate hike, although widely expected, was an historic move. Such represents the first hike of that much by a Group of Seven central bank and the Bank of Canada’s largest incremental rise since 2000. Officials had only recently ended its pandemic relief program of bond purchases to support liquidity and now has […] More
Overnight Canadian Policy Interest Rate Undergoes First Post-Pandemic Hike
March 2, 2022
A trio of 50-basis point rate cuts in March 2020 had lowered the overnight rate to an effective low of 0.25%. From April 2020 through the end of October 2021, monetary easing was supplemented by a program of bond purchases, and maturing bonds have until now continued to be reinvested. As widely expected, the policy […] More
Watching Developments in Ukraine and Awaiting Round One of Fed Chairman Powell’s Semi-Annual Humphrey-Hawkins Testimony
March 2, 2022
The high point of last night’s U.S. State of the Union address were the inspiring remarks about Russia’s invasion of Ukraine and challenge such poses to democracy around the world. On domestic policy issues, President Biden took a deconstructed approach to the bundled package that failed to pass congress, and he cited several broad issues […] More
Bank of Canada Drops Exceptional Forward Guidance that Had Committed Keeping Policy Rate at 0.25% Until Around Mid-2022
January 26, 2022
While keeping the central bank’s overnight policy rate at 0.25%, Bank of Canada officials today made a substantial modification in the forward-looking part of their released statement. Previous statements including that after last year’s final policy review on December 8 had promised to “hold the policy interest rate at the effective lower bound until economic […] More
Quieter Day: Omicron Developments Still Encouraging
December 8, 2021
Omicron news continues to be reassuring. Booster shots appear to reduce rate of transmission, and the symptoms of this Covid variant seem less severe than with the Delta Variant. The most notable financial market development today has been a large rise in Continental European ten-year sovereign debt yields, for instance, of 10 basis points in […] More
Bank of Canada Ends Bond Purchase Stimulus and Signals Slightly Earlier Interest Rate Lift-Off Timing
October 27, 2021
Canada’s policy interest rate has been at 0.25% since a trio of 50-basis point reductions in March 2020. While significant progress has been achieved toward economic and labor market recovery, that task has not yet been sufficiently completed. Various areas of the labor market are not yet all the way back to pre-pandemic conditions. Canada’s […] More
Dollar Firms Modestly Against Backdrop of Concern over Outlook for Equities
September 8, 2021
It’s normal at any time to encounter predictions of an imminent drop in equities, and the prevalence of Casandrian warnings has increased lately. The Covid pandemic keeps chugging along and preventing a full return of economic activity to the promised land and monetary policies to a semblance of normalcy. In the United States, new cases […] More
Further Scale-Back of Canadian Bond Buying by Bank of Canada
July 14, 2021
The central bank’s Governing Council kept the overnight rate target at 0.25% and indicated in its statement that such is unlikely to be raised until sometime in the second half of 2022. But the weekly pace of government bond purchases was reduced by a billion Canadian dollars to C$ 2 billion. Such had been cut […] More
G7 Meetings, ECB Press Conference, and Released CPI and Industrial Production Share Spotlight
June 10, 2021
Climate change and challenges from China and Russia headline the agenda of this year’s Group of Seven summit in Cornwall, U.K.. This is U.S. President Biden’s first summit. The Governing Council of the European Central Bank, as expected, did not modify its accommodative monetary stance nor forward guidance regarding future policy. Key interest rates (a […] More
Bank of Canada Reduces Pace of Bond Purchases and Adjusts Forward Guidance Slightly
April 21, 2021
As expected, Canada’s overnight interest rate target, which has been 0.25% since a trio of half-percentage point cuts in March 2020, was left unchanged. However, the targeted weekly amount of quantitative stimulus was lowered from “at least 4 billion” to $3 billion, according to a released statement. Governing Council members assert a continuing need for […] More
