With inflation under control, the highest household debt of any country in the G7, and the economy potentially facing a severe recession, Canada’s central bank needs to change course
James Thorne is chief market strategist at Wellington-Altus Private Wealth Inc. in Toronto.
Canada’s economy is not as diversified as that of our southern neighbours, and having a real overnight policy rate in line or tighter than the Fed’s increases the probability of Canada’s economy experiencing a severe recession. Although the U.S. is well on its way to a soft landing, the same cannot be said for Canada. That’s why the BoC needs to change course forthwith and cut interest rates instead of raising them further.
The fears about the risk of the economy overheating and accelerating inflation are misplaced. Excluding the effects of the BoC’s interest rate hikes, which have contributed to 30 per cent of the most recent measure of the consumer price index, Canada’s inflation currently stands at 2 per cent, aligning with the mid-point of the central bank’s legislative target range. Inflation is under control, eliminating one of the primary concerns of an overheating economy.
Before the onset of the COVID-19 pandemic, deflationary forces were already present in the global economy. Factors such as demographics, extreme levels of debt, and technological innovation were already exerting downward pressure on prices. These forces have only been strengthened recently, making it even more crucial for central banks to tread carefully.
France Dernières Nouvelles, France Actualités
Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.
National Bank to buy Silicon Valley Bank’s Canadian loan portfolioNational Bank has agreed to buy the Canadian commercial loan portfolio of Silicon Valley Bank. Find out more here.
Lire la suite »
National Bank to buy Silicon Valley Bank’s Canadian loan portfolioNational Bank has agreed to buy the Canadian commercial loan portfolio of Silicon Valley Bank. Find out more here.
Lire la suite »
National Bank buys Silicon Valley Bank's Canadian commercial lending business | CBC NewsNational Bank says the deal to buy Silicon Valley Bank's loan portfolio will likely close in the coming weeks and is not expected to have a material impact on its results.
Lire la suite »
National Bank to buy Silicon Valley Bank’s Canadian loan portfolioNational Bank has agreed to buy the Canadian commercial loan portfolio of Silicon Valley Bank. Find out more here.
Lire la suite »
National Bank to buy Silicon Valley Bank's Canadian portfolio - BNN BloombergNational Bank of Canada has agreed to buy the Canadian commercial loan portfolio of Silicon Valley Bank as part of a broader strategy to expand its footprint in the nation’s tech sector.
Lire la suite »
National Bank strikes deal to buy Silicon Valley Bank’s Canadian loan bookNational Bank of Canada says the portfolio it will nab is made up of about $1-billion in loan commitments, of which $325-million are outstanding
Lire la suite »