Bank of Canada (BoC)
Canada’s GDP revisions ‘raise questions over monetary policy’
However, experts disagree on whether central bank’s modelling was flawed and if it cut rates too quickly
Policy tightening reduces labour productivity and presence – paper
Lower participation and labour supply have inflationary effects, Bank of Canada authors find
Bank of Canada cuts policy rate by 50bp
Governor says further cuts likely as bank puts emphasis on keeping inflation stable
Bank of Canada pivots away from retail CBDC
Decision to scale back research follows similar move by Australian central bank
BoC paper offers monetary policy ‘decision synthesis’
Authors say model combination method helps capture complexities of decision-making
Honey, I shrunk the Fed. (Not a sci-fi fantasy)
Promoting the discount window may be the Fed’s key to shrinking its $7trn balance sheet, says Bill Nelson
Sovereign debt in default fell by 1% in 2023 – BoC study
Research finds shift in lending away from Paris Club creditors towards China
CBDCs amplify contractionary effects of monetary shocks – BoC paper
However, research finds no substantial change to transmission mechanism
Well-designed CBDC can fulfil role of cash – BoC paper
Researchers argue digital retail public money is necessary to avoid fragmentation
Automated market-makers create market integrity and stability risks – research
Canadian research warns of real economy impact, depending on level of interconnection
Canadian rate hikes may have lasting effects – research
Bank of Canada researchers find disposable income could decrease by up to 5% by 2027
Bank of Canada reduces rates by 25bp
Macklem says runway for a soft landing is in sight and policy is working
Banknotes: April to June 2024
A round-up of news and salient issues that have affected central bankers in the past three months
Are low-level inflation targets still fit for purpose?
Geostrategic shifts make the case for a narrow price target less compelling
Bank of Canada conducts large-scale survey of indigenous-owned firms
Indigenous firms have higher inflation expectations and use alternative funding sources
Use machine learning to protect payment systems – research
Tool could also be used to warn of money laundering and bank runs, researchers say
Neutral interest rate likely to rise, paper finds
Several factors are pushing rate upwards, Bank of Canada researchers say
Neutral interest rates at pre-pandemic levels, Bank of Canada finds
Nominal neutral interest rates in both countries sit between 2.25% and 3.25%
US news has a large impact on global bond yields – research
Bank of Canada research finds US news affects expectations in other countries
Bank of Canada holds rates for sixth consecutive time
Central bank optimistic that rate cuts are ahead and inflation will gradually fall
New measurement shows ‘historically high’ Canadian financial stress
Financial fragility is concentrated among renters and some mortgage holders, paper says