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Finance

BANK OF CANADA EXPECTED TO ANNOUNCE ANOTHER SUPERSIZED INTEREST RATE HIKE TO HELP TEMPER INFLATION

Posted in Finance, Industry Trends, Inflation, Newsworthy

BANK OF CANADA EXPECTED TO ANNOUNCE ANOTHER SUPERSIZED INTEREST RATE HIKE TO HELP TEMPER INFLATION

The Bank of Canada is expected to announce another oversized interest rate increase this week, part of its effort to push Canadian borrowing costs rapidly higher in the hope of slowing the pace of consumer price growth. The central bank is in the middle of its fastest rate hike cycle in decades. After keeping its benchmark interest rate near zero for two years, the bank’s governing council announced back-to-back rate hikes in March and April – the second being an unusually large...

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FINANCE MINISTER CHRYSTIA FREELAND DEFENDS BANK OF CANADA AMID POILIEVRE ATTACKS

Posted in Finance, Inflation, Newsworthy

FINANCE MINISTER CHRYSTIA FREELAND DEFENDS BANK OF CANADA AMID POILIEVRE ATTACKS

Canadian Finance Minister Chrystia Freeland on Friday defended the central bank as inflation spikes to a three-decade high and the frontrunner to take over the opposition Conservative Party pledges to fire the Bank of Canada governor if elected. “It is clear to us all that we are living through a period of global volatility. We have COVID. We have the Russian invasion of Ukraine. We have China’s zero-COVID policy,” Freeland told reporters by teleconference from Munich, Germany after a G7...

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TIFF MACKLEM ACKNOWLEDGES MISJUDGING INFLATION, PLEDGES TO ACT ‘FORCEFULLY’ TO BRING IT DOWN

Posted in Coronavirus, Employment, Finance, Industry Trends, Inflation, Newsworthy

TIFF MACKLEM ACKNOWLEDGES MISJUDGING INFLATION, PLEDGES TO ACT ‘FORCEFULLY’ TO BRING IT DOWN

Bank of Canada Governor Tiff Macklem acknowledged he and his lieutenants misjudged the strength of inflation at the start of the year, and pledged to act “as forcefully as needed” to make up for the mistake. “(We’re coming) out of the deepest recession we’ve ever had,” Macklem said during testimony at the Senate banking committee late on April 27. “We got a lot of things right. We got some things wrong, and we are adjusting.” To the surprise of many on Bay Street, the Bank of Canada opted...

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WHAT MATTERS TO BUSINESS IN TRUDEAU’S BUDGET

Posted in Finance, Housing, Industry Trends, Newsworthy, Politics

WHAT MATTERS TO BUSINESS IN TRUDEAU’S BUDGET

The numbers The federal government’s economic outlook is based on the forecasts of economists at 13 financial institutions and research outfits. The average of their forecasts sees economic growth of 3.9 per cent in 2022 and 3.1 per cent in 2023, and a jobless rate of about 5.5 per cent over the next two years, which would be historically low. Finance supplemented those estimates with a scenario analysis of what could happen if the war in Ukraine gets worse, and what might happen if Russia...

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ANNUAL INFLATION RATE HIT 5.7 PER CENT IN FEBRUARY AMID BROAD-BASED PRICE INCREASES

Posted in Finance, Industry Trends, Inflation, Newsworthy

ANNUAL INFLATION RATE HIT 5.7 PER CENT IN FEBRUARY AMID BROAD-BASED PRICE INCREASES

The cost of living jumped in February at a rate not seen in over 30 years on the back of rising prices for gasoline and groceries, which economists warn are set to become more expensive and push inflation rates even higher. The annual rate of inflation climbed to 5.7 per cent in February, Statistics Canada said Thursday, the highest level since August 1991 and the second straight month it’s been over five per cent. Tu Nguyen, an economist with accounting firm RSM Canada, said inflation...

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THE BANK OF CANADA MAY HAVE MADE ITS GRAVEST POLICY ERROR SINCE INFLATION TARGETING BEGAN

Posted in Finance, Industry Trends, Inflation, Newsworthy

THE BANK OF CANADA MAY HAVE MADE ITS GRAVEST POLICY ERROR SINCE INFLATION TARGETING BEGAN

We’re potentially seeing the gravest central bank policy error since the dawn of inflation targeting. And mortgage holders could pay the price. Canada is now dealing with not only one pandemic, but two. COVID and inflation, the latter being a virus that spreads just as fast. Canadian families know full well how contagious inflation has become, permeating all aspects of their lives and feeding on itself for months. The Bank of Canada’s response thus far? One measly 25 basis point rate hike. Its...

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BANK OF CANADA ANNOUNCES QT, REVERSE OF THE PROGRAM THAT BOOSTED REAL ESTATE PRICES

Posted in Finance, Industry Trends, Inflation, Newsworthy

BANK OF CANADA ANNOUNCES QT, REVERSE OF THE PROGRAM THAT BOOSTED REAL ESTATE PRICES

Canada’s central bank finally acknowledged inflation is a monetary policy issue. Bank of Canada (BoC) governor Macklem dumped the transitory inflation narrative today. In a speech to Toronto’s CFA Society, he explained rising interest rates are just one monetary policy tool they’ll use going forward. The other is quantitative tightening (QT), a program designed to roll back an experimental tool that helped home prices soar. What the F- is QT, though? Quantitative Ease To understand QT, first ...

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CANADA’S ECONOMY PEAKED WAY BEFORE THE PANDEMIC WHEN MEASURED PER CAPITA

Posted in Finance, Industry Trends, Newsworthy

CANADA’S ECONOMY PEAKED WAY BEFORE THE PANDEMIC WHEN MEASURED PER CAPITA

There’s a good reason you might be feeling Canada’s economic recovery, and that’s because of how it’s measured. Canada’s gross domestic product (GDP) ripped higher in Q3 2021 and it’s just shy of the pre-2020 peak. Aggregate GDP measures are only useful for the size of an industry, not how it impacts people. For the latter, we should be looking at GDP per capita, adjusting for the size of population. Canada’s GDP per capita shows the economy contracted before 2020, and growth is slower than...

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INFLATION SURGES PAST FIVE PER CENT, ADDING PRESSURE ON THE BANK OF CANADA TO RAISE INTEREST RATES

Posted in Finance, Industry Trends, Inflation, Newsworthy

INFLATION SURGES PAST FIVE PER CENT, ADDING PRESSURE ON THE BANK OF CANADA TO RAISE INTEREST RATES

Canada’s main inflation gauge is now glowing an even brighter shade of red, guaranteeing that interest rates will rise in a couple of weeks, and raising the possibility the Bank of Canada will have to accelerate its plans to cool the economy. The consumer price index (CPI) increased 5.1 per cent in January from a year earlier, marking the first time the index has exceeded five per cent since September 1991, Statistics Canada reported on Feb. 16. Inflation at that pace ends whatever doubt...

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LEADING CANADIAN PENSION PLANS REPOSITIONING ASSET ALLOCATIONS, INCREASING IN-HOUSE ASSET MANAGEMENT ACCORDING TO NEW RESEARCH FROM CIBC MELLON

Posted in Finance, Industry Trends, Newsworthy

LEADING CANADIAN PENSION PLANS REPOSITIONING ASSET ALLOCATIONS, INCREASING IN-HOUSE ASSET MANAGEMENT ACCORDING TO NEW RESEARCH FROM CIBC MELLON

Canada’s sophisticated pension funds are at the forefront of a trend to shift asset management functions in-house – along with associated requirements for investment operations and systems. Even amid rising focus on in-house management, plan sponsors are also becoming increasingly strategic about selection of, allocations to and oversight on external managers, according to a new survey of 50 leading Canadian pension funds entitled, “In Search of New Value: How Canadian Pension...

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