Ambler, Kronick, Robson – The Importance of Central Bank Independence
To: Bank of Canada Observers From: Steve Ambler, Jeremy M. Kronick and William B.P. Robson Date: May 16, 2022 Re: The Importance of Central Bank Independence Happy times prevail when inflation is low and few people are paying attention to central banking. These are not happy times. Inflation is high and the Bank of Canada is under scrutiny. People […]William B.P. Robson on Power & Politics – Poilievre Targets BoC Chief
Conservative Leadership candidate Pierre Poilievre is facing scrutiny over his claims that he would fire the Bank of Canada governor should he become Prime Minister. William B.P. Robson joins Power & Politics to discuss.
William White – The Weaponization of Finance and the Future of the International Monetary System
From: William White To: International Currency Watchers Date: May 10, 2021 Re: The Weaponization of Finance and the Future of the International Monetary System The recent use of financial sanctions by the US, against the central bank of Russia, initially raised fears that other countries might try to protect themselves by reducing sharply their reserve holdings of US dollars. […] Need for monetary-policy independence will be stronger than ever in months ahead – Globe and Mail Op-Ed
Periods when inflation is low and few people are paying attention to central banking are happy times.
In Canada, these are not happy times. Inflation is high and the Bank of Canada is under scrutiny. Unhappiness will increase as the bank increases its policy interest rate to get inflation back to its 2-per-cent target, because tighter monetary policy will pinch consumers and businesses before it reduces inflation.
That poses risks – notably that politics will interfere with monetary policy. Since politicians don’t like monetary-policy pinches, interference could result in inflation staying higher for longer. Odd as it may seem when the Bank of Canada has already let inflation get so far above target, continuing to protect…
Robson, Laurin – Ottawa’s Spending Addiction: $2 Billion More Each Month
From: William B.P. Robson and Alexandre Laurin To: Canadian Debt Watchers Date: April 29, 2022 Re: Ottawa’s Spending Addiction: $2 Billion More Each Month “Build back better!” We have heard that a lot since COVID hit – mainly from advocates for government spending, who saw pandemic-related fiscal stimulus, financed by central bank bond purchases, as suddenly making things […] Paul Jenkins – Interest Rates… Back to the Future
From: Paul Jenkins To: Borrowers, Savers, and Policymakers Date: April 28, 2022 Subject: Interest Rates… Back to the Future Interest rates, particularly rising interest rates, are on everyone’s mind these days. The focus is primarily alarm about rising inflation and the actions – actual or anticipated – by major central banks to bring inflation under […] Goodhart, Peiris, Tsomocos, Wang – Corporate Legacy Debt, Inflation, and the Efficacy of Monetary Policy
From: Charles A.E. Goodhart, M. Udara Peiris, Dimitrios P. Tsomocos and Xuan Wang To: Canadians Concerned About Inflation Date: April 27, 2022 Re: Corporate Legacy Debt, Inflation, and the Efficacy of Monetary Policy Corporate debt in Canada has been increasing, alongside other advanced and emerging economies, since 2007, and the pandemic has led to a further sharp increase (See […] High Inflation Disease Now Affects Two-thirds Of Canadian Economy
When the year-over-year increase in the CPI rose above the top of the Bank of Canada’s 1-to-3 percent target band a year ago, disrupted supply chains for specific products and base effects received a lot of attention. Since then, it has become clear that rapid price increases are much more widespread, and much less transitory. […] Ambler, Kronick – You Cannot Fight Inflation on the Downlow
From: Steve Ambler and Jeremy M. Kronick To: Canadians Worried About Inflation Date: April 25, 2022 Re: You Cannot Fight Inflation on the Downlow With inflation on the rise, the Bank of Canada kicked its tightening cycle into high gear with a 50-basis-point increase in the target for its overnight rate – the first non-25-point hike in more than […]John Lester – Who Will Pay for the Pandemic-Induced Debt?
From: John Lester To: Canadians Hoping for a Fiscally Responsible Federal Government Date: April 21, 2022 Re: Who Will Pay for the Pandemic-Induced Debt? “We are absolutely determined that our debt-to-GDP ratio must continue to decline,” said Finance Minister Chrystia Freeland in her budget speech this month. “Our deficits must continue to be reduced. The […] Don Drummond – The 2022 Federal Budget Measures Misaligned with Needs
From: Don Drummond To: Finance Minister Chrystia Freeland Date: April 20, 2022 Re: The 2022 Federal Budget Measures Misaligned with Needs A common reaction to the 2022 federal budget is “not as bad as expected.” What kind of evaluation is this? Faint praise simply because fears of massive new spending did not materialize? But that fear was stoked by […] The Bank of Canada’s rate hike: You can’t fight inflation on the QT – Financial Post Op-Ed
With inflation on the rise, the Bank of Canada kicked its tightening cycle into high gear Wednesday by announcing a 50-basis-point increase in its target for the overnight rate — the first non-25-basis-point hike in over 20 years. It also modified its stance concerning its over-sized holdings of Government of Canada bonds, which swelled its balance sheet during so-called Quantitative Easing (QE). Those days are over: it will now initiate Quantitative Tightening, or QT, by not replacing bonds on its balance sheet as they mature, thus reducing its bond holdings over time.
Some might be disappointed the bank didn’t go further on QT by announcing it would actually start selling its holdings of government bonds. Not to worry.…