How Soon? How Fast? Interest Rates and Other Monetary Policy Decisions in 2010
With the economic recovery taking hold and the Bank of Canada’s conditional commitment to keep the overnight rate at 0.25 percent expiring soon, a number of questions about the conduct of monetary policy need to be considered. The author argues the Bank should keep its conditional commitment, but should thereafter raise the overnight rate sharply by 50 basis points at every announcement date until mid-2011. In addition, the Bank should publish conditional statements about the future path of the policy rate to help shape market expectations and avoid surprises that disrupt financial markets, output, and employment. Further, the Bank should withdraw its injection of excess reserves at a future preannounced date and should gradually wind down credit easing measures.
|Date of creation:||Feb 2010|
|Publication status:||Published on the C.D. Howe Institute website, February 2010|
|Contact details of provider:|| Postal: 67 Yonge St., Suite 300, Toronto, Ontario M5E 1J8|
Phone: (416) 865-1904
Fax: (416) 865-1866
Web page: http://www.cdhowe.org
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:cdh:ebrief:92. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristine Gray)
If references are entirely missing, you can add them using this form.