Overnight Moves: The Bank of Canada Should Start to Raise Interest Rates Now
AbstractWhen the Bank of Canada will begin raising interest rates is looking very different than when it should even though the risks of postponement are growing. If more “no-change” decisions are made by the Bank of Canada regarding its policy interest rate, inflation expectations might begin to slip loose of their 2 percent anchor. Further, with the Fed continuing to hold a near-zero rate, the US dollar is likely to continue its steady slide. If the Canadian dollar moves at least partially with the US dollar, because the Bank of Canada keeps its interest rate close to the federal funds rate, the higher inflation rates of energy and other commodity prices that are currently deemed temporary might start to look permanent.
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Bibliographic InfoArticle provided by C.D. Howe Institute in its journal C.D. Howe Institute Backgrounder.
Volume (Year): (2011)
Issue (Month): 139 (July)
Monetary Policy; Bank of Canada; interest rates; inflation rate;
Find related papers by JEL classification:
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
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