Economy

Stocksak – Top Bank of Canada officials talk after rate decision


© Stocksak. FILE PHOTO. Tiff Macklem, Bank of Canada Governor takes part in a news conference at Ottawa, Ontario Canada, April 13, 2022. REUTERS/Blair Gable

(Stocksak). Below are key quotes from a Bank of Canada Governor Tiff Maklem and Senior Vice Governor Carolyn Rogers (NYSE) on Wednesday, after the central bank raised the key interest rate by 50 basis point to 3.75%.

MACKLEM ON THE ECONOMIC OUTLOOK

“We expect roughly zero growth over the next few quarters, and to be more precise, the last quarter and first half next year. After that, we expect growth to pick-up. With growth at a near zero rate for the next few quarters, it is just as likely that there will be some small negatives than we get small positives. We could see some contraction in GDP. However, we could also see very modest growth in GDP. We don’t think we will see a severe contraction.

MACKLEM ON RATE HIKES PACE OF RATE

“This tightening stage will end. We are closer to that point but not yet. We expect interest rates to rise further, and we will decide the pace based upon developments in the future.”

MACKLEM ON GLOBAL PERFORMANCES

“Recently, there has been some reduction in global energy costs, but global supply chains have been improving. However, there is still much uncertainty worldwide. There could be new disruptions in the global energy market and an increase in energy prices. We could see disruptions in global supply chains. The bottom line is that we cannot rely upon global developments to bring down inflation in Canada.

MACKLEM SIGNS IN SIGNIFICANT LOWERING OF THE ECONOMY

“We have growth stagnating for the next several quarterly… To be more precise: growth is close to zero during the fourth quarter of this year and the first two-quarters, the first half, next year. That means that there is a possibility of a couple, two, or three quarters with slightly negative growth. However, it is equally likely that there will be two or three quarters with slightly positive growth. It is not a severe contraction but it is a significant slowing down of the economy.

MACKLEM ON THE EVIDENCE ECONOMY LOWING

“We also see clear evidence that the economy slows.”

MACKLEM ON SIZE OF THE FUTURE RATE-HIKES

“At our previous to meetings, in July and Sept, we increased interest rates by 100 (bps), while they were 75. This meant that interest rates were already significantly higher when we arrived at this meeting. This, combined with the fact there are clear signs of a slowing economy, led us to believe that it was appropriate for us to slow down the pace at which we raise our policy rates.

MACKLEM ON LOW PACE RATE HIKES

“Looking forward, it was also stated that we expect interest rates to rise further. This suggests that, while that could be another large step than usual, we may be able move to smaller, more normal steps. We are moving closer to the end. But we aren’t there yet.

News Source and Credit

Stocksak Editorial

We are a financial blog that covers topics such as investing, saving, spending, and earning more money. Please feel free to peruse our site and read any of the articles that catch your interest.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button