While National Newswatch does not keep an archive of external articles for longer than 6 months, we do keep all articles written by contributors who post directly to our site. Here you will find all of the contributed and linked external articles from Erik Hertzberg.
The Bank of Canada is likely to make a jumbo cut to interest rates, acknowledging that borrowing costs should fall more quickly as inflation wanes and economic growth stagnates.Markets and economists expect policymakers led by Governor Tiff Macklem will cut the policy rate by half a percentage point to 3.75% on Wednesday, the first reduction of that magnitude since the Covid-19 pandemic.
An ex-member of the Bank of Canada’s governing body said officials should cut borrowing costs by half a percentage point later this month.There are “good reasons” to move interest rates “back to as close to neutral as quickly as possible,” former Deputy Governor Paul Beaudry said, including boosting household and business optimism.Now that policymakers are more sure that wage growth, expectations and corporate pricing are going in the right direction, Beaudry sees borrowing costs moving lower faster as the bank eyes a sustainable return to 2% inflation.
Former Bank of Canada Governor Stephen Poloz is examining a list of ideas to get the country’s pension funds to invest more in the domestic economy – including the creation of a pooled fund that would make dealmaking easier for some of them.People in the industry have also told him the government may need to change regulations for pension funds – potentially opening the way for them to play a more activist role in companies they’ve invested in, the former central banker said in an interview with Bloomberg News.
Canada’s benchmark two-year yield briefly dropped below the 10-year for the first time in more than two years, as traders looked ahead to Federal Reserve cuts and Bank of Canada Governor Tiff Macklem made dovish comments to the Financial Times.
Economists see the Bank of Canada cutting interest rates for a third consecutive meeting next week, continuing what’s anticipated to be a steady downward trend in borrowing costs over the next year as inflation eases.
Prime Minister Justin Trudeau’s government has turned to raising taxes on businesses to help fund Canada’s budget, adding headwinds to an economy that’s already struggling to attract investment.
The Bank of Canada needs to wrap up its quantitative tightening program or fix distortions in short-term funding markets that are keeping effective interest rates higher, according to Canadian Imperial Bank of Commerce strategists.Canada’s central bank has been shrinking its balance sheet for more than two years, withdrawing the extraordinary stimulus it provided during the Covid-19 crisis. Assets have fallen to around $273 billion from a peak of more than $570 billion as officials have allowed the bonds on their books to mature without replacement, draining liquidity from the country’s financial system.
The leader of Canada’s Conservative Party has opened up a bigger lead among voters on the question of who would be the best economic manager, underscoring the political challenges faced by Prime Minister Justin Trudeau.About 30% of respondents in a recent Nanos Research Group survey for Bloomberg say they trust Pierre Poilievre the most among national party leaders to support economic growth. That’s a gap of more than 10 points over Trudeau, who’s the first choice of just 19%.It’s the widest lead yet for Poilievre on that question. In April 2023, he led Trudeau by just three points.
The Bank of Canada is doing a formal review of its pandemic-era policies, when it bought hundreds of billions in government bonds to suppress interest rates. It may represent a last chance for Governor Tiff Macklem to explain himself before one of his fiercest critics comes to power.
A Bank of Canada official defended the use of quantitative easing and extraordinary forward guidance during the pandemic, pushing back on criticisms that the policy actions were missteps that fueled inflation.
Finance Minister Chrystia Freeland’s upcoming budget has some in Canada’s business community concerned there will be tax increases to offset new government spending.Freeland and Prime Minister Justin Trudeau will almost certainly bring in a package of tools to boost housing supply in the April 16 budget, according to people familiar with the government’s plans, and may commit additional spending to industrial subsidies, defense, university research and drug plans.
Record-breaking immigration is muddying the economic picture for the Bank of Canada, distorting key statistics and making its battle against inflation more difficult.A surge of newcomers – largely driven by an unplanned spike in foreign students and temporary workers – has pushed Canada’s population growth rate to 3.2 per cent, one of the fastest in the world.