Tausi Insider

Bank of Canada governor Tiff Macklem says rising interest rates will slow spending which will have an effect on employment rates. Macklem says the labour market right now is unsustainably tight and needs to rebalance but he does not expect the level of job losses seen in past economic downturns. The Canadian Press https://www.tausiinsider.com/video-jobs-market-needs-rebalance-to-rein-in-inflation-macklem-says/?feed_id=427294&_unique_id=649b11e2561a4

The Bank of Canada is expected to increase interest rates once more this week, capping off a tumultuous year for the central bank. Justin Tang/The Canadian Press The Bank of Canada is expected to cap its tumultuous year with another interest-rate increase this week, although private-sector forecasters are split on how big the bank will go as it appears to be approaching a turning point for monetary policy. Central bank Governor Tiff Macklem has been clear over the past month that he’s not done raising borrowing costs for Canadians. But he has started arguing that the bank needs to balance the risk of doing too little to fight inflation against the risk of doing too much and crashing the economy. Financial markets are betting on a quarter-point rate hike on Wednesday, which would bring the bank’s benchmark interest rate to 4 per cent for the first time since early 2008. Bay Street economists are more divided, with some backing the market view and others arguing for another half-point ...

Bank of Canada Governor Tiff Macklem has demonstrated a preference in the past to institute shifts in policy direction via a series of gradual steps. Sean Kilpatrick/CP In a handful of words Wednesday, the Bank of Canada signalled that it is about to end one of the most tumultuous interest-rate-hiking cycles in the central bank’s history. The only thing it left out is precisely when. In the final paragraph of a five-paragraph statement announcing the bank’s decision to raise its key rate by another half a percentage point, to 4.25 per cent, the bank said that its Governing Council “will be considering whether the policy interest rate needs to rise further.” In the previous rate announcement in October, the bank said that Governing Council “expects that the policy interest rate will need to rise further.” Indeed, “will need to rise further” has been the bank’s operative phrase in every rate decision since it began raising rates last March. Canadian dollar holds near one-month low as B...

The Bank of Canada's Tiff Macklem walks outside the building in Ottawa. BLAIR GABLE/Reuters The Bank of Canada signalled earlier this month that it’s looking for an exit from its dizzying interest-rate-hiking cycle. Wednesday’s inflation report is not it. The Consumer Price Index (CPI) data for November delivered little to guide the central bank toward its next decision on interest rates, scheduled for late January. The figures – headlined by a tiny decline in the overall year-over-year inflation rate, to 6.8 per cent from October’s 6.9 per cent – were good enough to give hope and disappointing enough to foment doubt. The dip in the inflation rate was, at least, in the right direction, though it was smaller than economists had expected. Month-over-month price growth slowed. Prices for durable goods – the big-ticket items that typically rely on borrowing – declined in November and are down over the past several months, evidence that the Bank of Canada’s steep interest-rate hikes a...

Ask many economists and they’ll tell you mortgage rates – both fixed and variable – are likely coming down in 2023. Ask the Bank of Canada and it would probably say, “Don’t get too optimistic.” Year-over-year inflation is still “way too high,” Tiff Macklem, the bank’s Governor, warned this week, and the latest inflation report shows it coming down too slowly. The Bank of Canada is likely not even remotely contemplating rate cuts, despite the bond market fully pricing in two cuts of 25 basis points each within 12 months. (A basis point is one-hundredth of a percentage point.) So, what if the Bank of Canada is right and the bond market is wrong? Could borrowers hold out at today’s rates, which remain near 14-year highs? Borrower liquidity is key Recession notwithstanding, it’s possible that rates could get stuck near today’s levels – for much longer than we think. Or worse, rates could surprise the market and climb to new highs – just like they surprised the world in 1979. What would c...

The Bank of Canada has raised its key interest rate by a quarter of a percentage point and said it expects this to be the last rate hike of the cycle. The rate increase marks the eighth consecutive hike since March as the central bank fights off decades-high inflation. The Canadian Press https://www.tausiinsider.com/video-bank-of-canada-raises-interest-rates-says-it-will-take-a-conditional-pause/?feed_id=322366&_unique_id=63d78ed14c5dc