Ambler, Kronick – Reintegrate Money into Monetary Policy Analysis
From: Steve Ambler and Jeremy M. Kronick To: Bank of Canada Governing Council Date: July 5, 2022 Re: Reintegrate Money into Monetary Policy Analysis Headline inflation, which has reached 7.7 percent, has become decidedly unsettled. Until the 1980s, most economists believed there was a significant relationship between money and inflation in both the short and long runs. However, […] Jeremy Kronick on BNN – BoC’s policy rate must go much farther to get inflation back down
Jeremy Kronick, Associate Director of Research at the C.D. Howe Institute, joined BNN Bloomberg to explain how stimulus spending during the pandemic has created an overhang in the economy and prices have to play catch-up with the money now sloshing around in the system. Kronick says the slowdown in the rates of money growth and in the housing market are positive signs for taming inflation.
William B.P. Robson – A Recession Lurks in our New Inflation Numbers
From: William B.P. Robson To: Canadians Concerned about the Economy Date: June 28, 2022 Re: A Recession Lurks in our New Inflation Numbers The May consumer price index was up 7.7 percent year-over-year in Statistics Canada’s inflation report last week. That’s alarming for two reasons. The obvious one: our money’s purchasing power is falling faster than at any time […]Double whammy: The latest surge in inflation means a recession is likely – Globe and Mail Op-Ed
Wednesday’s inflation report from Statistics Canada showed that the consumer price index was up 7.7 per cent year-over-year in May. That’s alarming for two reasons. The obvious one: our money’s purchasing power is falling faster than at any time since the early 1980s. The other reason will take time to sink in: We are headed for a recession.
Getting inflation back to its 2-per-cent target would inevitably have been a challenge for the Bank of Canada. The fiscal and monetary stimulus at the beginning of the COVID-19 pandemic went on too long, and now it has combined with pent-up saving by households who could not travel, eat out or enjoy in-person entertainment for two years to unleash a torrent of spending. Demand is above the…
Rosalie Wyonch – Inflation and Healthcare: A Long and Bumpy Road Ahead
From: Rosalie Wyonch To: Canadian Inflation Watchers Date: June 13, 2022 Subject: Inflation and Healthcare: A Long and Bumpy Road Ahead Everything seems to be getting more expensive – inflation at 6.8 percent is at a 31-year high, and has been above Canada’s 2-percent target since April 2021. Food and shelter are up by 8.8 and 7.4 percent […] Ambler, Kronick – Monetary Policy Is Looser Now Than it Was in February
From: Steve Ambler and Jeremy M. Kronick To: Canadians Worried About Inflation Date: June 9, 2022 Re: Monetary Policy is Looser Now than it was in February The Bank of Canada continued its tightening cycle last week with a 50-basis-point increase that brings its target for the overnight interest rate to 1.50 percent. That met market expectations and means […]William B.P. Robson – Lower Inflation is Key to Ending Controversy over the Bank of Canada
From: William B.P. Robson To: Canadians Concerned about Inflation and the Bank of Canada Date: June 6, 2022 Re: Lower Inflation is Key to Ending Controversy over the Bank of Canada For the first time in years, the Bank of Canada is under attack. Before the COVID-19 pandemic, the Bank kept inflation well under control – remarkably close to […]Monetary policy is looser now than it was in February – Financial Post Op-Ed
The Bank of Canada continued its tightening cycle on Wednesday by announcing a 50-basis-point increase that brings its target for the overnight interest rate to 1.50 per cent. That met market expectations and means the total increase since February has been 1.25 percentage points. Expect more hikes to come.
By the end of last year, the Bank of Canada had recognized that inflation had overshot projections and was going to be more persistent than previously forecast. The bank passed on an opportunity to raise rates in January, but has done so three times since, including two highly unusual hikes of 50 basis points — something not seen for over 20 years.
Does this mean monetary policy has tightened since the end of last year…
John D. Baker – Monetary Policy and Inequality in Canada: A New Chapter
The C.D. Howe Institute put out a call late last year for Intelligence Memos from next-generation policy leaders. The purpose of the program is to provide a platform for new or soon-to-be graduates to raise their profiles, showcase their ideas, and build their professional networks. This week we are releasing the work of the top […]Munn, Kronick – A Monetary Policy Primer for All Seasons
To: Canadians Concerned About Inflation From: Duncan Munn and Jeremy M. Kronick Date: May 30, 2022 Re: A Monetary Policy Primer for All Seasons Canada has an inflation problem. It demands action. Constantly rising prices hurt everyone. Effective action requires an understanding of how monetary policy works. Misdirected Bank of Canada bashing threatens the future of inflation control since […]High Inflation Deteriorates Labour Relations
Surging inflation over the past year has Canadians on edge. In addition to the unsettling and even frightening erosion of purchasing power, experience suggests higher inflation may bring strikes and lockouts in its wake. Harmful enough on their own, work stoppages would also worsen the production and supply-chain problems that have contributed to inflation in the […] C.D. Howe Institute Monetary Policy Council Calls for Bank of Canada to Raise Overnight Rate to 1.50 Percent Next Week and 2.00 Percent in July, and Sell Bonds
May 26, 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 1.50 percent on June 1st. The MPC recommends further increases over the coming year: to 2.00 percent in July, and 2.50 by December. It also recommends that the Bank accelerate its planned 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…