Le faux choix de l’inflation ou de l’emploi – La Presse Op-Ed
On ne peut choisir une combinaison d’emploi et d’inflation, comme on mélange à sa guise l’eau chaude et l’eau froide dans sa douche. Si la Banque du Canada veut maximiser l’emploi de manière durable, elle doit d’abord maîtriser l’inflation autour de 2 %, sa mission première.
Même aux États-Unis, où la Fed a officiellement le double mandat de stabiliser les prix et de maximiser l’emploi « de manière durable », en pratique, l’objectif de l’emploi est subordonné à la lutte contre l’inflation.
Il ne s’agit pas d’une tromperie ou d’un choix idéologique, mais d’un constat empirique : sauf à court terme, on ne peut accroître l’emploi par des taux d’intérêt bas lorsque l’inflation est élevée. Cette politique…
S4 E15: The Future of the Bank of Canada’s Balance Sheet
The Bank of Canada’s balance sheet has ballooned under COVID-19. The C.D. Howe Institute’s Jeremy Kronick and Steve Ambler join host Michael Hainsworth to discuss why, why it won’t be coming down any time soon, and what the implications are for monetary policy as interest rates skyrocket.
Bank of Canada should now pause rate hikes and reflect – Financial Post Op-Ed
The Bank of Canada continued its tightening cycle on Wednesday by announcing a 50-basis-point increase in its target for the overnight rate. That came as a surprise to those who expected a 75-basis point increase, but it’s still a hefty hike.
It continues the Bank’s front-loading of its rate increases, which is intended to reduce the scale of future rate hikes. In our view, this latest increase was needed – both to reduce the harm of further increases and to re-anchor inflation expectations – but now the time has come to pause and reflect.
Since the Bank’s September 7th rate boost, the consumer price index (CPI) numbers for August and September have been published. Headline inflation ticked…
Michael Bordo — History Unlearned Dogs the Federal Reserve’s Inflation Fight
This Memo is extracted from Michael Bordo’s address at the C.D. Howe Institute’s annual David Laidler lecture last month. To: Monetary Policy Observers From: Michael Bordo Date: October 31, 2022 Re: History Unlearned Dogs the Federal Reserve’s Inflation Fight Many of the monetary policy issues long thought resolved are back with a vengeance in 2022. And when one […] C.D. Howe Institute Monetary Policy Council Calls for Bank of Canada to Raise Overnight Rate to 3.75 Percent
October 17, 2022 – The C.D. Howe Institute’s Monetary Policy Council (MPC) recommends that the Bank of Canada raise its target for the overnight rate, its benchmark policy interest rate, by 50 basis points to 3.75 percent on October 26, and maintain the current pace of reduction in its holdings of Government of Canada bonds. The Council recommended that the Bank raise the overnight rate target again in early 2023, before lowering it back to 3.75 percent in a year’s time.
The MPC provides an independent assessment of the monetary stance consistent with the Bank of Canada’s 2 percent inflation target. William Robson, the Institute’s CEO, chairs the Council.
Council members make…
Bank of Canada Should Retire CPI-common
The Bank of Canada targets 2 percent annual increases in the Consumer Price Index (CPI). However, some of the CPI’s components are volatile, making it difficult to determine inflation’s underlying trend – critical in the proper setting of monetary policy. The Bank has created a series of core inflation measures as a result. One of […] Ambler, Kronick – How Fast to Move? Assessing the Bank’s Way Forward.
From: Steve Ambler and Jeremy M. Kronick To: Canadian Inflation Observers Date: September 20, 2022 Re: How Fast to Move? Assessing the Bank’s Way Forward. The Bank of Canada continued its tightening cycle this month with a 75-basis-point increase in its overnight rate target. That target is now above the top end of the Bank’s estimate of the “neutral […]How high should interest rates go and how fast? – Financial Post Op-Ed
The Bank of Canada continued its tightening cycle last week by announcing a 75-basis-point increase in its overnight rate target. That target is now above the top end of the Bank’s estimate of the “neutral rate” of two to three per cent. But how fast will the rate go from here?
The neutral rate is the rate the Bank thinks would be appropriate for an economy producing at full capacity, with inflation running at two percent. Most economists and market-watchers believe the overnight rate needs to go beyond neutral in order to fight inflation. Despite a one-month drop in the year-over-year increase in the CPI from 8.1 per cent in June to 7.6 per cent in July, inflation is a long way above the top end of the one-to-three per cent…
Koeppl, Kronick – Assessing the Impact of Unconventional Monetary Policy
To: Bank of Canada Governing Council From: Thorsten Koeppl and Jeremy M. Kronick Date: September 8, 2022 Re: Assessing the Impact of Unconventional Monetary Policy For much of the past two decades, interest rates have fallen in Canada (and elsewhere) but are now headed in the opposite direction. Where we land over the long haul is unclear. However, it […]C.D. Howe Institute Monetary Policy Council Calls for Bank of Canada to Raise Overnight Rate to 3.25 Percent
September 1, 2022 – The C.D. Howe Institute’s Monetary Policy Council (MPC) recommends that the Bank of Canada raise its target for the overnight rate, its benchmark policy interest rate, by 75 basis points to 3.25 percent on September 7th, and maintain the current pace of reduction in its holdings of Government of Canada bonds.
The MPC provides an independent assessment of the monetary stance consistent with the Bank of Canada’s 2 percent inflation target. William Robson, the Institute’s CEO, chairs the Council.
Council members make recommendations for the Bank of Canada’s upcoming interest-rate announcement, the subsequent announcement, and the announcements six months and one year ahead. The Council’s…
Lessons from the Yield Curve: Evaluating Monetary Policy in Different Interest Rate Environments
Bank of Canada Policy Must Adapt to Changing Interest Rate Environments The Bank of Canada needs to take into account prevailing interest rate environments and adjust its monetary policy tools accordingly, finds a new report from the C.D. Howe Institute. In “Lessons from the Yield Curve: Evaluating Monetary Policy in Different Interest Rate Environments,” authors […]