adplus-dvertising
Connect with us

News

Ukraine war may slow, but won’t stop, Bank of Canada interest rate hikes: experts – Global News

Published

 on


The Bank of Canada is likely to forge ahead with its first interest rate increase in years on Wednesday, economists predict, though uncertainty tied to the war in Ukraine could put the pace of future rate hikes into question.

The central bank said in January that its special guidance around the COVID-19 pandemic, which kept its key overnight rate at 0.25 per cent for much of the past two years, has ended.

Senior bank officials strongly signalled rates need to rise in an effort to tamp down on inflation, which hit 5.1 per cent in Canada last month a high not seen in 30 years.

Read more:

‘Pressing need’ for Bank of Canada to raise interest rates amid inflation surge

Economists who spoke to Global News expect a series of increases from the Bank of Canada this year, likely starting with 25 basis points on Wednesday, though the length of the conflict in the Ukraine could affect that roadmap later in the year.

Beata Caranci, chief economist with TD Bank, told Global News on Tuesday that she still expected the telegraphed 25 basis point hike on Wednesday.


Click to play video: 'How Russia’s military strategy is shaping how the West reacts'



3:05
How Russia’s military strategy is shaping how the West reacts


How Russia’s military strategy is shaping how the West reacts

Though Russia’s invasion has already hit markets hard, sending prices soaring on commodities such as oil and wheat, Caranci said the long-term impact of the war isn’t yet known and won’t affect the Bank of Canada’s immediate decision making.

Should the conflict persist into the second quarter of the year, the bank will have to start baking the war’s economic impact into its outlook, she said.

“If we continue to see high financial market stress as we get into April and May, at that point, that’s where it starts to become a greater economic drag,” Caranci said in an interview.

50-basis-point hike ‘off the table’

While some chatter in economic circles pegged the first hike of the year at 50 bps, BMO’s managing director of Canadian rates Benjamin Reitzes told Global News last week that such a hike was “unlikely” to begin with and is now “off the table” amid Russia’s invasion.

“The Bank of Canada has provided no signal that they are looking at a 50 basis point move, and they’ve made it pretty clear that they want to be as transparent as possible and they do not want to cause any volatility. And an unexpected 50-basis-point move would cause some volatility,” he said.

Both Reitzes and Caranci say a prolonged conflict in Russia could affect the pace or overall magnitude of the bank’s decision making.


Click to play video: 'How a Bank of Canada interest rate hike could affect you'



4:14
How a Bank of Canada interest rate hike could affect you


How a Bank of Canada interest rate hike could affect you

The bank could hike rates at every other scheduled announcement, or hold off on increasing rates beyond one per cent while officials re-evaluate the effect the conflict and other inputs are having on Canadian consumers.

“The current conflict and the fact that oil prices are moving the way they are — and will likely hurt consumers if they stay up here — means that the bank might actually pause for maybe longer,” Reitzes says.

War keeps inflationary pressure high

As a major crude exporter, the Canadian economy is likely to see a slight bump thanks to the record high prices on oil, which topped $100 USD per barrel last week.

But economists warn that Canadians will also faces those higher prices at the pump, without a similarly strong dollar to soften the blow.

Reitzes noted that while the Canadian dollar used to be tied closely to the value of oil, that “correlation has all but broken down” as global demand for crude has waned in recent years.

Pedro Antunes, chief economist at the Conference Board of Canada, told Global News that the central bank had likely hoped to see inflation wane ahead of its March decision as supply chain issues looked to be easing.

Read more:

Rising interest rates worry Canadians already struggling to get by

But inflationary pressure remains high as food prices are hit by the expensive global costs of wheat as well as of oil, which underpins North America’s trucking-based transportation industry.

How high prices go, the effect on the global economy and how the Bank of Canada reacts will remain to be seen in the months ahead, Antunes said, adding consumer relief will not come quickly no matter how the central bank moves on Wednesday.

“How long this lasts and how much this adds to inflationary pressures over the year, I think is still a question mark, obviously, but there’s no doubt we’re going to see (inflation rates) upwards of five per cent in coming months.”

— with files from Global News’s Anne Gaviola


Click to play video: 'The financial ripple effects of the war in Ukraine'



5:33
The financial ripple effects of the war in Ukraine


The financial ripple effects of the war in Ukraine

© 2022 Global News, a division of Corus Entertainment Inc.

Adblock test (Why?)

728x90x4

Source link

Continue Reading

News

B.C. Conservatives promise to end stumpage fees, review fire management if elected

Published

 on

VANDERHOOF, B.C. – British Columbia Conservatives are promising changes they say will bring more stability to the province’s struggling forest industry.

Leader John Rustad announced his plan for the sector a week before the official launch of the provincial election campaign, saying a Conservative government would do away with stumpage fees paid when timber is harvested and instead put a tax on the final products that are produced.

Rustad said Saturday that under a provincial Conservative government, a small fee may be charged upfront, but the bulk would come at the end of the process, depending on what type of product is created.

He also promised to review how wildfires are managed, as well as streamline the permit process and review what he calls the province’s “uncompetitive cost structure.”

“British Columbia is by far the highest cost producers of any jurisdiction in North America. We need to be able to drive down those costs, so that our forest sector can actually be able to do the reinvestment, to be able to create the jobs and make sure that they’re still there to be able to support our communities,” he said.

The governing New Democrats meanwhile, say eliminating stumpage fees would inflame the softwood lumber dispute with the United States and hurt forestry workers.

In a statement issued by the NDP, Andrew Mercier, the party’s candidate in Langley-Willowbrook, said Rustad failed to support the industry when he was in government under the former BC Liberals.

“Not only will Rustad’s old thinking and recycled ideas fail to deliver, his proposal to eliminate stumpage would inflame the softwood lumber dispute — punishing forestry workers and communities,” Mercier said, accusing Rustad of ignoring the complexity of the challenges facing the industry.

The softwood lumber dispute between the U.S. and Canada stretches back decades. In August, the U.S. Department of Commerce nearly doubled duties on softwood lumber.

International Trade Minister Mary Ng has said Canada has taken steps to launch two legal challenges under the Canada-United States-Mexico Agreement.

Rustad said a provincial Conservative government would push hard to get a deal with the United States over the ongoing dispute “whether it’s with the rest of Canada or by itself.”

He said his party’s proposed changes are in the name of bringing “stability” and “hope” to the industry that has seen multiple closures of mills in rural communities over the last several years.

Most recently, Canfor Corp. decided to shutter two northern British Columbia sawmills earlier this month, leaving hundreds of workers unemployed by the end of the year.

According to the United Steelworkers union, Canfor has closed 10 mills in the province since November 2011, including nine in northern B.C.

Jeff Bromley, chair of the United Steelworkers wood council, said Saturday the idea of changes in favour of taxing the final product has been floated in the past.

He said the finer details of the Conservative plan will be important, but that the system needs to be improved and “new ideas are certainly something I’d be willing to entertain.”

“Something needs to happen, or the industry is just going to bleed and wither away and be a shadow of its former self,” Bromley said.

“Politics aside, if (Rustad) can come up with a policy that enables my members to work, then I would be supportive of that. But then I’m supportive of any government that would come up with policies and fibre for our mills to run. Period.”

When Canfor announced its latest closures, Forests Minister Bruce Ralston said the sector was a “foundational part” of the province and the current NDP government would work to support both local jobs and wood manufacturing operations.

This report by The Canadian Press was first published Sept. 14, 2024

The Canadian Press. All rights reserved.



Source link

Continue Reading

News

Christian McCaffrey is placed on injured reserve for the 49ers and will miss at least 4 more games

Published

 on

SANTA CLARA, Calif. (AP) — The San Francisco 49ers placed All-Pro running back Christian McCaffrey on injured reserve because of his lingering calf and Achilles tendon injuries.

The move made Saturday means McCaffrey will miss at least four more games after already sitting out the season opener. He is eligible to return for a Thursday night game in Seattle on Oct. 10.

McCaffrey got hurt early in training camp and missed four weeks of practice before returning to the field on a limited basis last week. He was a late scratch for the opener on Monday night against the Jets and now is sidelined again after experiencing pain following practice on Thursday.

McCaffrey led the NFL last season with 2,023 yards from scrimmage and was tied for the league lead with 21 touchdowns, winning AP Offensive Player of the Year.

The Niners made up for McCaffrey’s absence thanks to a strong performance from backup Jordan Mason, who had 28 carries for 147 yards and a touchdown in San Francisco’s 32-19 victory over the New York Jets. Mason is set to start again Sunday at Minnesota.

After missing 23 games because of injuries in his final two full seasons with Carolina, McCaffrey had been healthy the past two seasons.

He missed only one game combined in 2022-23 — a meaningless Week 18 game last season for San Francisco when he had a sore calf. His 798 combined touches from scrimmage in the regular season and playoffs were the third most for any player in a two-year span in the past 10 years.

Now San Francisco will likely rely heavily on Mason, a former undrafted free agent out of Georgia Tech who had 83 carries his first two seasons. He had at least 10 touches just twice before the season opener, when his 28 carries were the most by a 49ers player in a regular-season game since Frank Gore had 31 against Seattle on Oct. 30, 2011.

The Niners also have fourth-round rookie Isaac Guerendo and Patrick Taylor Jr. on the active roster. Guerendo played three offensive snaps with no touches in the opener. Taylor had 65 carries for Green Bay from 2021-23.

San Francisco also elevated safety Tracy Walker III from the practice squad for Sunday’s game against Minnesota.

___

AP NFL:

The Canadian Press. All rights reserved.



Source link

Continue Reading

News

Canada’s Newman, Arop secure third-place finishes at Diamond League track event

Published

 on

BRUSSELS – Canada walked away with some hardware at the Diamond League track and field competition Saturday.

Alysha Newman finished third in women’s pole vault, while Marco Arop did the same in the men’s 800-metre race.

Newman won a bronze medal in her event at the recent Paris Olympics. Arop grabbed silver at the same distance in France last month.

Australia’s Nina Kennedy, who captured gold at the Summer Games, again finished atop the podium. Sandi Morris of the United States was second.

Newman set a national record when she secured Canada’s first-ever pole vault medal with a bronze at the Olympics with a height of 4.85 metres. The 30-year-old from London, Ont., cleared 4.80 metres in her second attempt Saturday, but was unable conquer 4.88 metres on three attempts.

Arop, a 25-year-old from Edmonton, finished the men’s 800 metres with a time of one minute 43.25 seconds. Olympic gold medallist Emmanuel Wanyonyi of Kenya was first with a time of 1:42.70.

Djamel Sedjati, edged out by Arop for silver in Paris last month, was second 1:42.87

This report by The Canadian Press was first published Sept. 14, 2024.

The Canadian Press. All rights reserved.



Source link

Continue Reading

Trending