Question
Bank of Canada raises key interest rate, but inflation could prove 'difficult to tame' The Bank of Canada announced a widely-expected 25 basis point rate
Bank of Canada raises key interest rate, but inflation could prove 'difficult to tame'
The Bank of Canada announced a widely-expected 25 basis point rate hike, bringing its bench mark lending rate to half a per cent. This is the first time the bank has hiked, since it was forced to slash interest rates to emergency levels at the start of the pandemic. Anne Gaviola has more - Mar 2, 2022
Bank of Canada raises key interest rate to 0.5% | Watch News Videos OnlineWatch Bank of Canada raises key interest rate to 0.5% Video Online, on GlobalNews.caGlobal News
As Canada's inflation outlook worsens, investors are betting the country's central bank will begin hiking its key interest rate in half-percentage-point increments, with the first of the rarely used upsized moves possibly coming as soon as next month.
Money markets expect the Bank of Canada to raise interest rates by between 200 and 225 basis points in the six remaining interest rate announcements in 2022, up from about 140 basis points before a blockbuster employment report this month.
That bet implies that up to three of those meetings could result in hikes greater than the quarter-percentage-point increments usually favored by the central bank. The last time it pushed through a half-percentage-point hike was in May 2000.
"The Bank of Canada needs to aggressively tighten policy to keep inflation expectations for the consumer and also for businesses well anchored," said Simon Harvey, head of FX analysis for Monex Europe and Monex Canada.
"It's a case of do it now because later it will come at a greater cost to economic growth."
The Federal Reserve is alsoexpected to hike its benchmark overnight interest rateby 50 basis points at its May 3-4 policy meeting.
Interest rates could tick up half a percentage point in April, markets show - National | Globalnews.caThe Bank of Canada could take the rare step of raising its key interest rate target by 50 basis points in April, money markets are betting. Global News
Bank of Canada increases the policy interest rate
March 2, 2022
The Bank of Canada today increased its target for the overnight rate to %, with the Bank Rate at % and the deposit rate at %. The Bank is continuing its reinvestment phase, keeping its overall holdings of Government of Canada bonds on its balance sheet roughly constant until such time as it becomes appropriate to allow the size of its balance sheet to decline.
Read full press release:https://www.bankofcanada.ca/2022/03/fad-press-release-2022-03-02/
Instructions:
- Watch the included video (s) related to the current and forecasted interest rates for Canada
- Evaluate the effectiveness of monetary policy and actions to combat inflation, along with implications on economic growth and unemployment
- Post your conclusions and participate in the class discussion by contributing your own opinions n at least one more discussion
*Participants must 1. Make a thread (1) in order to view other threads in this forum and 2. participate in at least two (2) additional threads (minimum) to be subject to grade. (Total of 3 different posts) *incomplete participation (less than 3) will not receive a total or partial grade after the due date If participants are required to create threads in order to view other threads in the forum, they cannot delete or edit their own posts, and cannot post anonymously. Those options will be set for you automatically. Note: This is a great way to learn how to communicate with the professor and other students in the class, and you will earn points for it! Netiquette and Acceptable Use Policy Even though we are interacting in an electronic environment, it is still very important that we set some specific guidelines for how we communicate on this site. These guidelines are referred to as Netiquette. The number one rule of netiquette is to Remember the Human. I expect all interactions in this site to have a courteous and professional tone (not like a text message response). Here are some acceptable responses to Discussions:
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