News Analysis OTTAWA—As widely expected, the Bank of Canada enacted its pause of interest rate hikes on March 8, but what may be the most compelling reason for the BoC to start raising rates again was not mentioned in its statement. Economists and investors have long said that there are limits on how much monetary…
Bank of Canada Hits Pause, Doesn’t Mention Risk of US Fed’s Further Rate Hikes
Bank of Canada Pauses Interest Rate Increases, Signals Readiness to Hike Further if Needed
OTTAWA—The Bank of Canada stayed true to its word from January that it would pause on interest rate hikes, but said it is “prepared to increase the policy rate further if needed to return inflation to the 2 percent target.” Canada’s central bank held its overnight rate target at 4.5 percent on March 8, saying…
Rate Hikes: Bank of Canada’s Pause Threatened by US Fed’s Ongoing Inflation Fight, Say Economists
News Analysis The Bank of Canada’s pause on raising interest rates is in jeopardy due to the likelihood of the U.S. Federal Reserve to keep raising its federal funds rate, economists say. CIBC deputy chief economist Benjamin Tal told The Epoch Times that the BoC can’t “divorce itself” from the Fed for too long. This…
More Government Spending ‘Wouldn’t Be Terribly Helpful’ in Fight Against Inflation, Macklem Tells Committee
Bank of Canada Governor Tiff Macklem told MPs on Feb. 16 that if the Liberal government increases spending in some areas it could hurt his current forceful approach to rein in inflation. Testifying before the House of Commons finance committee, Macklem took questions about the impact of government spending on his inflation fighting mission as…
Canadian Home Prices Could Drop 30%: Report
Housing prices in Canada will fall 30 percent this year from their peak in February last year, predicts Oxford Economics. Prices are already down 14 percent, and in a worst case scenario—which is unlikely, Oxford Economics says—they could drop 48 percent. “The seasonal pick-up in resale activity this spring will be a key litmus test…
Robust January Jobs Report Contradicts Bank of Canada Assessment
News Analysis Canada’s January jobs report showed considerable strength in a number of areas; however, private sector economists’ forecasts got it completely wrong, as did the Bank of Canada, resulting in another hit to the central bank’s credibility, says a former chief economic analyst at Statistics Canada. “They’ve had trouble with the labour markets throughout…
Nearly 40% of Canadians Borrowing Money to Cover Daily Expenses: Federal Research
Nearly 40 percent of Canadians are borrowing money to cover the rising costs of daily expenses like groceries and rent, says new federal research. “The percentage of Canadians who borrow money to cover daily expenses increased from 26% in 2020 to 38% in September 2022,” wrote the Financial Consumer Agency of Canada in a report published…
Tight Labour Market Persists as Canadian Economy Adds 150,000 Jobs in January
Employment growth in Canada blew past economists’ predictions in January, even as forecasters had expected higher interest rates to weigh on the labour market. The economy added a whopping 150,000 jobs last month, Statistics Canada said in its latest labour force survey released Friday. Meanwhile, more Canadians were working or looking for work as 153,000…
Bank of Canada Publishes Rate Hike Rationale for First Time
Canada’s central bank published on Feb. 8 a summary of internal deliberations that led to its latest policy rate hike of Jan. 25, a first for the institution in a bid to increase transparency. The account states that the Bank of Canada’s (BoC) governing council began its discussions on whether to maintain or raise the…
Liberal ‘Green Energy’ Plan Adding to Inflation: Bank of Canada Paper
The most persistent trend adding to inflation is the transition to “green energy,” which “raises costs,” according to a new Bank of Canada staff discussion paper. “The 2021–22 Surge in Inflation” says that Canada has undergone the most pronounced surge in inflation in the 2021–2022 fiscal year since the 1970s. A dollar in 1970 was equivalent…
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