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...
read moreCANADIAN REAL ESTATE PRICES EXPECTED TO DROP 24%, CAN CRASH 40%
Canadian real estate prices might be in for a bit of a dip if one of the world’s leading forecasters is right. Oxford Economics’ latest forecast shows home prices falling 24% by mid-2024. Higher interest rates and anti-speculation policies are forecast to begin the price declines this fall. If these measures fail to correct prices and they rise further, a crash of 40% and a financial crisis is expected. Canadian Real Estate Prices Are Expected To Fall 24% The firm sees a substantial decline in...
read moreANNUAL 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...
read moreTHE 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...
read moreBANK 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 ...
read moreINFLATION 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...
read moreBANK OF CANADA TELLS SENATE INFLATION WILL BE HIGH FOR YEARS, END OF EMERGENCY POLICIES
Canada’s central bank increasingly sounds like it doesn’t believe its transitory narrative. In a speech to the Senate committee today, the Bank of Canada (BoC) Governor updated lawmakers on monetary policy. He repeated mostly highlights from last week’s meeting, including the end of stimulus. He also warned households to prepare for higher rates, as they try to control inflation. Here are the key takeaways from today’s speech. Canada Is Ending Its Emergency Stimulus Policies The Governor...
read moreTHE BANK OF CANADA DIDN’T RAISE RATES, IT RAISED ITS INFLATION FORECAST
It’s only January, but Canada’s central bank has already given up on its New Year’s resolution. As forecast, the Bank of Canada (BoC) held its overnight rate in today’s announcement. However, it was an odd move considering how hot inflation has been running. The reason is actually pretty straightforward — the central bank is embracing higher inflation. The latest monetary policy report accompanying the announcement shows a big upward revision. The Bank Of Canada Is Fueling A 30-Year High For...
read moreMACKLEM IN YEAR-END INTERVIEW PROMISES TO REIN IN INFLATION, BUT NOT CHOKE THE RECOVERY
Nothing short of a recession will stop the Bank of Canada from raising interest rates early in the new year, perhaps as soon as Jan. 26, the day officials conclude their next round of policy deliberations. “The aim is to bring inflation back to target in a way that doesn’t choke off the recovery,” governor Tiff Macklem said in a year-end interview on Dec. 15. “That recovery is now well advanced and inflation is well above target. We’re not comfortable with where inflation is. It’s well above...
read moreU.S. INFLATION RATE SPIKES TO 6.8% – HIGHEST LEVEL IN ALMOST 40 YEARS
The cost of living is increasing at its fastest pace in almost 40 years right now, with data out of the U.S. on Friday showing the country’s inflation rate hit 6.8 per cent last month. The U.S. Bureau of Labour Statistics said Friday that higher costs for gasoline, shelter, food and new and used vehicles were the biggest factors in pushing the rate to its highest point since June of 1982. Canadian data for November is not yet available, but it, too, is expected to rise from the 18-year...
read more