C.D. Howe Institute Monetary Policy Council Calls for Bank of Canada to Cut Overnight Rate to 4.25 Percent Next Week and to 3.00 Percent in a Year
August 29, 2024 – The C.D. Howe Institute’s Monetary Policy Council (MPC) calls for the Bank of Canada to lower its target for the overnight rate, its benchmark policy interest rate, to 4.25 percent at its next announcement on September 4th. The MPC further calls for the Bank to lower the target to 4.00 percent at the following announcement in October and to 3.00 percent by September of 2025.
The MPC provides an independent assessment of the monetary stance consistent with the Bank of Canada’s 2 percent inflation target. MPC co-chair, William Robson, the Institute’…
Cancel the RRB Cancellation
Two years ago, the federal government ceased issuing Real Return Bonds, which are a valuable tool for Canadian savers to protect themselves from inflation. The government cited weak demand for RRBs as justifying the cancellation, without acknowledging that its approach to RRBs itself promoted a thin market that lessened the attractiveness of RRBs to potential […] Ripple Effects: The Impact of an Empty-Homes Tax on the Housing Market
The Canadian housing market is experiencing an unprecedented crisis. One solution being explored is the adoption of demand-side measures like Vancouver’s 2017 empty-homes tax. This E-Brief evaluates the tax’s impact on housing affordability and availability, helping policymakers balance efficient property use with ensuring a steady supply of new homes. We use the difference-in-difference (DID) method […] Kronick, Ambler – There’s Every Reason to Keep Going with Rate Cuts
To: Interest Rate Watchers From: Jeremy M. Kronick and Steve Ambler Date: July 30, 2024 Re: There’s Every Reason to Keep Going with Rate Cuts When headline inflation increased to 2.9 percent in May, up from 2.7 percent in April, there was much speculation that the Bank of Canada would pause its rate cuts. However, inflation ticked back down […] Graph of the Week: The 5-Year Fixed Interest Rate
Introducing Graph of the Week, a new series from the C.D. Howe Institute’s Graphic Intelligence that presents valuable and easily digestible data. Each Monday we will unveil one new captivating chart or graph with interesting insights, explaining it in two-to-three sentences. Dive into the data with us. The 5-year fixed interest rate is the most […] C.D. Howe Institute Monetary Policy Council Calls for Bank of Canada to Lower Overnight Rate to 4.50 Percent, Cut to 3.25 Percent by July 2025
July 18, 2024 – The C.D. Howe Institute’s Monetary Policy Council (MPC) calls for the Bank of Canada to lower its target for the overnight rate, its benchmark policy interest rate, to 4.50 percent at its next announcement on July 24th. The MPC further calls for the Bank to lower the target to 4.25 at the following announcement in September, on the way to a target of 3.25 percent by July of 2025.
The MPC provides an independent assessment of the monetary stance consistent with the Bank of Canada’s 2 percent inflation target. MPC co-chair, Jeremy Kronick, the Institute’s Associate Vice President and Director of the Centre on Financial and Monetary Policy, chaired this meeting. MPC members make…
Don Drummond – Rate Cuts Unlikely to Cut Mortgage Costs Any Time Soon
From: Don Drummond To: Canadian mortgage watchers Date: June 19, 2024 Re: Rate Cuts Unlikely to Cut Mortgage Costs Any Time Soon Media reports abound with speculation Bank of Canada interest rate cuts will lift the Canadian housing market. To be sure, there are caveats that rate cuts will likely be slow. Less mentioned is the likelihood they will […] Kronick, Ambler – More Rate Cuts Coming: How Far and Fast Are Now the Questions
To: Interest rate watchers From: Jeremy M. Kronick and Steve Ambler Date: June 10, 2024 Re: More Rate Cuts Coming: How Far and Fast Are Now the Questions The Bank of Canada finally pulled the trigger last Wednesday and reduced its policy rate by 25 basis points. Forecasters were split between a June or July cut, but overall, the […] Lester, Robson – What To Do About Canada’s Debt Problem
From: John Lester and William Robson To: Federal and Provincial Governments Date: June 7, 2024 Re: What To Do About Canada’s Debt Problem Participants in the C.D. Howe Institute’s recent conference on Canada’s debt problem had some pointed advice for our federal and provincial governments: Canada’s public debt should be about 10 percentage points of GDP lower to ensure its […]Kronick, Ambler – Predicting (and Confirming) Business Cycles in Canada
To: Recession forecasters From: Jeremy M. Kronick and Steve Ambler Date: May 24, 2024 Re: Predicting (and Confirming) Business Cycles in Canada A recent staff working paper by Temel Taskin and Franz Ulrich Ruch at the Bank of Canada uses a sophisticated model – a dynamic autoregressive (AR) probit model – and business cycle turning points published by the C.D. Howe […] Monetary Policy Council
The C.D. Howe Institute Monetary Policy Council is comprised of 12 of Canada’s most distinguished financial-market and monetary economists. Chaired by the Institute’s President and CEO Jeremy Kronick, the Council provides the Bank of Canada, financial-market participants, and economic policy commentators with a regular independent assessment of the appropriate stance of Canadian monetary policy as the […]