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Long-term rate hikes effects will be ‘more powerful’ than people think: Poloz

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OTTAWA — The full effects of interest rate hikes have yet to be felt — and will be “even more powerful” than many anticipate, said former Bank of Canada governor Stephen Poloz Thursday in a speech about ways Canada can chart a path toward economic growth during uncertain times.

Speaking at a conference hosted by Western University’s Ivey Business School in Ottawa on Thursday, the former governor warned today’s economy is more sensitive to interest rates than it was 10 years ago.

“Does anybody here think the sensitivity of the economy to interest rate movements is less today than it was five or 10 years ago?” Poloz asked. “I think it’s more sensitive today than it was before.”

Poloz estimates annual inflation will fall to about four per cent on its own as external factors, such as higher commodity prices, ease. Statistics Canada’s most recent annual inflation rate sat at 6.9 per cent in October.

He said policy action will need to do the rest of the work to get inflation back down to the central bank’s two per cent target.

“I think that the actions that are being taken to get us there will turn out to be even more powerful than a lot of people think,” Poloz said, citing higher debt loads in the Canadian economy as a vulnerability.

The former governor is the chair of the Lawrence National Centre for Policy and Management, an independent think tank hosted at Ivey.

Poloz began his remarks by sharing his thoughts on the drivers of high inflation and where prices are headed. His speech also offered a set of recommendations on how Canada can improve long-term economic growth during volatile times.

He said the think tank will offer a summary of the recommendations to Finance Minister Chrystia Freeland next week.

Poloz finished his seven-year term as Bank of Canada governor a few months into the COVID-19 pandemic. Since then, the central bank has dramatically shifted gears from the extraordinary stimulus measures of 2020 to rapid monetary policy tightening.

The Bank of Canada began raising interest rates in March to clamp down on rising inflation. Since then, the central bank raised its key interest rate six consecutive times, embarking on one of the fastest monetary policy tightening cycles in its history.

Its key rate currently stands at 3.75 per cent and is expected to rise again next month.

The aggressive rate hikes are expected to slow the Canadian economy significantly. And though many economists are cautiously optimistic that the slowdown won’t be severe or long-lasting, labour groups in particular have been concerned about the consequences of a potential recession.

Is the Bank of Canada overshooting with its rate hikes? “It’s impossible to say,” Poloz said in an interview.

Economists estimate interest rate hikes take one to two years to take full effect in the economy. That lag makes it difficult to judge whether rate hikes are too much or too little, the former governor said.

Poloz said trying to slow inflation with interest rate hikes is like trying to stop a car with bad brakes.

“It takes a long time to actually slow down and so you stand on the brake really hard. Well, then you’re going to cause an accident too,” he said.

Though high inflation has persisted longer than the Bank of Canada’s initial projections, Poloz defended the use of the word “transitory” to describe inflation pressures, noting in his speech that international contributors to inflation such as supply chain delays are already dissipating.

“In other words, the part of inflation that is externally driven, really is transitory. It’s OK to use the word transitory,” he said.

However, the former central bank governor says it takes time for that development to be reflected in the annual inflation rate.

Bank of Canada governor Tiff Macklem notably called inflation “transitory” — meaning temporary — when it first started rising.

Since then, he’s backed away from that characterization and has emphasized that the domestic economy is overheated and inflation won’t return to target without action from the central bank.

While high inflation has come to the forefront of economic policy discussions, many economists are concerned about what Canada is — or isn’t — doing to promote long-term growth.

During his speech, Poloz made the case for government policies that promote stability and clarity for businesses. The less uncertainty there is about trade policy and projects, for example, the more businesses will invest in their operations and improve their productivity, he said.

“Clarity is the obvious antidote to uncertainty.”

This report by The Canadian Press was first published Nov. 24, 2022.

 

Nojoud Al Mallees, The Canadian Press

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NASA astronauts won’t say which one of them got sick after almost eight months in space

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CAPE CANAVERAL, Fla. (AP) — Three NASA astronauts whose prolonged space station mission ended with a trip to the hospital last month declined to say Friday which one of them was sick.

Astronauts Matthew Dominick, Michael Barratt and Jeanette Epps publicly discussed their spaceflight for the first time since returning from the International Space Station on Oct. 25. They spent nearly eight months in orbit, longer than expected because of all the trouble with Boeing’s Starliner crew capsule and rough weather, including Hurricane Milton.

Soon after their SpaceX capsule splashed down in the Gulf of Mexico off the Florida coast, the three were taken to a hospital in nearby Pensacola along with Russian cosmonaut Alexander Grebenkin, who launched with them back in March.

One of the Americans ended up spending the night there for an undisclosed “medical issue.” NASA declined to say who was hospitalized or why, citing medical privacy.

When asked at Friday’s news conference which one had been sick, the astronauts refused to comment. Barratt, a doctor who specializes in space medicine, declined to even describe the symptoms that the unidentified astronaut had.

“Spaceflight is still something we don’t fully understand. We’re finding things that we don’t expect sometimes. This was one of those times and we’re still piecing things together on this,” said Barratt, the only member of the crew who had flown in space before.

Epps said everyone is different in how they respond to space — and gravity.

“That’s the part that you can’t predict,” she said, adding, “Every day is better than the day before.”

Dominick said little things like sitting comfortably in a hard chair took several days to get used to once he returned. He said he didn’t use the treadmill at all during his time in space, as part of an experiment to see what equipment might be pared on a long trip to Mars. The first time he walked was when he got out of the capsule.

The two astronauts who served as test pilots for Boeing’s Starliner — Butch Wilmore and Suni Williams — will remain at the space station until February, flying back with SpaceX. Starliner returned empty in September.

___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

The Canadian Press. All rights reserved.



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43 monkeys remain on the run from South Carolina lab. CEO thinks they’re having an adventure

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COLUMBIA, S.C. (AP) — Forty-three monkeys bred for medical research that escaped a compound in South Carolina have been spotted in the woods near the site and workers are using food to try to recapture them, authorities said Friday.

The Rhesus macaques made a break for it Wednesday after an employee at the Alpha Genesis facility in Yemassee didn’t fully lock a door as she fed and checked on them, officials said.

“They are very social monkeys and they travel in groups, so when the first couple go out the door the others tend to just follow right along,” Alpha Genesis CEO Greg Westergaard told CBS News.

Westergaard said his main goal is to have the monkeys returned safely with no other problems. “I think they are having an adventure,” he said.

The monkeys on Friday were exploring the outer fence of the Alpha Genesis compound and are cooing at the monkeys inside, police said in a statement.

“The primates are exhibiting calm and playful behavior, which is a positive indication,” the police statement said, adding company workers are closely watching the monkeys while keeping their distance as they work to safely recapture them.

The monkeys are about the size of a cat. They are all females weighing about 7 pounds (3 kilograms).

Alpha Genesis, federal health officials and police all said the monkeys pose no risk to public health. The facility breeds the monkeys to sell to medical and other researchers.

“They are not infected with any disease whatsoever. They are harmless and a little skittish,” Yemassee Police Chief Gregory Alexander said Thursday.

Authorities still recommend that people who live near the compound about 1 mile (1.6 kilometers) from downtown Yemassee shut their windows and doors and call 911 if they see the monkeys. Approaching them could make them more skittish and harder to capture, officials said.

Eve Cooper, a biology professor at the University of Colorado Boulder who has studied rhesus macaques, said the animals have the potential to be dangerous and urged people to keep their distance.

Rhesus macaques monkeys can be aggressive. And some carry the herpes B virus, which can be fatal to humans, Cooper said.

However, Alpha Genesis states on its website that it specializes in pathogen-free primates. Cooper noted that there are pathogen-free populations of rhesus macaques that have been quarantined and tested.

“I would give them a wide berth,” Cooper said. “They’re unpredictable animals. And they can behave quite aggressively when they’re afraid.”

Alpha Genesis provides primates for research worldwide at its compound about 50 miles (80 kilometers) northeast of Savannah, Georgia, according to its website.

Locally, it is known as “the monkey farm.” And there is more amusement than panic around Yemassee and its population of about 1,100 just off Interstate 95 about 2 miles from Auldbrass Plantation, a Frank Lloyd Wright house designed in the 1930s.

There have been escapes before, but the monkeys haven’t caused problems, said William McCoy, who owns Lowcountry Horology, a clock and watch repair shop.

“They normally come home because that’s where the food is,” he said.

McCoy has lived in Yemassee for about two years and while he plans to stay away from the monkeys, he has his own light-hearted plan to get them back.

“I’m stocking up bananas, maybe they’ll show up,” McCoy said.

The Alpha Genesis compound is regularly inspected by federal officials.

In 2018, the U.S. Department of Agriculture fined Alpha Genesis $12,600 in part after officials said 26 primates escaped from the Yemassee facility in 2014 and an additional 19 got out in 2016.

The company’s fine was also issued because of individual monkey escapes as well as the killing of one monkey by others when it was placed in the wrong social group, according to a report from the USDA.

The group Stop Animal Exploitation Now sent a letter Thursday to the USDA asking the agency to immediately send an inspector to the Alpha Genesis facility, conduct a thorough investigation and treat them as a repeated violator. The group was involved in the 2018 fine against the company.

“The clear carelessness which allowed these 40 monkeys to escape endangered not only the safety of the animals, but also put the residents of South Carolina at risk,” wrote Michael Budkie, executive director of the group.

The USDA, which has inspected the compound 10 times since 2020, didn’t immediately respond to the letter.

The facility’s most recent federal inspection in May showed there were about 6,700 primates on site and no issues.

In a 2022 review, federal veterinarians reported two animals died when their fingers were trapped in structures and they were exposed to harsh weather. They also found cages weren’t adequately secure. Inspectors said criminal charges, civil penalties or other sanctions could follow if the problems weren’t fixed.

Since then, Alpha Genesis has undergone six inspections with minor problems reported only once.

In January 2023, the USDA said temperatures were out of the 45 to 85 degree Fahrenheit (7.2 to 29.5 degree Celsius) required range at some of the compound’s monkey cages. The inspection found moldy food in one bin, sharp edges on a gate that could cut an animal and sludge, food waste, used medical supplies, mechanical equipment, and general construction debris on the grounds.

Supporters of medical research involving nonhuman primates said they are critical to lifesaving medical advances like creating vaccines against COVID-19 because of their similarities to people. Keeping a domestic supply of the animals is critical to prevent shortages for U.S. researchers.

Humans have been using the rhesus macaque for scientific research since the late 1800s. Scientists believe that rhesus macaques and humans split from a common ancestor about 25 million years ago and share about 93% of the same DNA.

These monkeys have been launched into space on V2 rockets, used for AIDS research, had their genome mapped and made stars of their own reality television show. They were in such high demand in the early 2000s that a shortage led to scientists paying up to $10,000 per animal.

Outside of rats and mice, rhesus macaques are one of the most studied animals on the planet, said Dario Maestripieri, a behavioral scientist at the University of Chicago who wrote the 2007 book “Macachiavellian Intelligence: How Rhesus Macaques and Humans Have Conquered the World.”

The animals are very family oriented, siding with relatives when fights break out. And they’re adept at building political alliances in the face of threats from other monkeys. But they can be painful to watch. Monkeys with lower status in the hierarchy live in a constant state of fear and intimidation, Maestripieri said.

“In some ways, they kind of represent some of the worst aspects of human nature,” Maestripieri said.

___

Lovan reported from Louisville, Kentucky, and Finley reported from Norfolk, Virginia.



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Freeland says she’s ready to deal with Trump |

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Finance Minister Chrystia Freeland speaks with reporters after chairing a special cabinet committee working on Canada’s plan to deal with the incoming Donald Trump administration. Freeland says she’s stood up for Canadian interests in the past and is ready to go another round. (Nov. 8, 2024)



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