The Bank of Canada announced Wednesday it would hold its key overnight rate at 4.5 per cent after eight consecutive interest rate increases – and experts said the pause could last throughout 2023 as the bank watches the economy responds to its policy moves so far.
Economists told BNNBloomberg.ca the months ahead will reveal how economic indicators – in particular, inflation and the labour market — react to the dramatic series of hikes that began last March at a pandemic-low interest rate of 0.25 per cent.
“The question now is how strongly Canada’s debt-saddled economy responds following months of aggressive monetary tightening,” Marc Desormeaux, principal economist of Canadian economics at Desjardins, told BNNBloomberg.ca in a Wednesday phone interview.
Leslie Preston, senior economist at TD Economics, said in a Wednesday phone interview that the Bank of Canada is in a “wait and see period” as the cumulative effect of the last year of monetary policy sets in.
CIBC chief economist Avery Shenfeld echoed the idea that the bank could take a hands-off approach to interest rate adjustments this year.
“What likely comes next for the Bank of Canada is a very long nap, in the sense that interest rates are unlikely to change over the balance of 2023 if the economy performs as we expect,” he said.
KEY DATA TO COME
The Bank of Canada (BoC) highlighted the still-tight labour market in its Wednesday statement on the rate decision, and referenced falling inflation that at 5.9 per cent still sits well above the central bank’s two per cent target.
Statistics Canada data on February’s employment numbers and inflation are expected in the coming weeks, and those numbers will be “relatively crucial in terms of where we go next,” said Doug Porter, chief economist of BMO Financial Group.
“For inflation to continue to come down, we’re going to need to see some softening in the labour market,” she said.
A Thursday speech by deputy governor Carolyn Rogers could give further clues about the thinking behind the BoC’s decision to hold, Porter added, while an upcoming summary of the bank’s deliberations has potential to shed further light on the policymaking process.
IMPACT ON CANADIANS
The fact that rates didn’t rise again on Wednesday offers “some relief” to borrowers, said Preston – but a pause doesn’t lessen the economic pain from higher rates that is already setting in.
Canada’s housing market has already started absorbing the higher interest rates, and Preston said that will continue as more people’s fixed-rate mortgages come up for renewal.
“That impact, as more and more people renew every quarter, is going to weigh on household spending for a couple of years,” she said.
People will also notice higher borrowing costs as they seek to finance other major purchases like cars and appliances, she said.
Desmoreaux said he’s anticipating a “short and shallow recession” in Canada this year as the economy slows down in response to the rate increases – which will in turn weigh on workers as jobs become more scarce.
Canadians will “feel the pinch” of rates in their mortgages, wages and job prospects in 2023, said Shenfeld, but people can also expect some relief while shopping for goods and services if inflation continues to come down.
“There’s some economic pain, particularly for those with big mortgages that are renewing at higher rates, but there is a broader benefit to consumers from not facing ever-escalating prices,” he said.
WHEN WILL THE CENTRAL BANK CUT RATES?
The central bank stressed on Wednesday that it is “prepared to increase the policy rate further” to get inflation down to its two per cent target.
Economists who spoke with BNNBloomberg.ca said they largely expect the BoC to leave its key interest rate at 4.5 per cent in the year ahead, even as it left the door open to more tightening.
Shenfeld said he expects the BoC’s language about its future direction will likely become clearer in the coming months.
“At some point, likely by this summer, the bank will be more definitive in its projection that they’re done with rate hikes,” he said, predicting that the key interest rate will remain unchanged through 2023 if the economy progresses as expected.
Preston and Desormeaux predicted rate cuts could start by the fourth quarter of this year, while Shenfeld and Porter said they think cuts are more likely to happen in 2024.
The BoC said Wednesday that it expects inflation could reach three per cent by the middle of this year, but economists said more rate hikes could be on the table if inflation rears its head again.
Porter said it would take a couple of months of disappointing inflation data or “indications that that the economy is still barreling forward” to prompt more tightening from the central bank – but the move clearly has not been ruled out.
“I don’t think the bank is in any way committed to staying on the sidelines,” he said. “They’re pretty clear that if they’re going to move on rates, it’s going to be up, not down in the year ahead.”
Most job search advice is cookie-cutter. The advice you’re following is almost certainly the same advice other job seekers follow, making you just another candidate following the same script.
In today’s hyper-competitive job market, standing out is critical, a challenge most job seekers struggle with. Instead of relying on generic questions recommended by self-proclaimed career coaches, which often lead to a forgettable interview, ask unique, thought-provoking questions that’ll spark engaging conversations and leave a lasting impression.
Your level of interest in the company and the role.
Contributing to your employer’s success is essential.
You desire a cultural fit.
Here are the top four questions experts recommend candidates ask; hence, they’ve become cliché questions you should avoid asking:
“What are the key responsibilities of this position?”
Most likely, the job description answers this question. Therefore, asking this question indicates you didn’t read the job description. If you require clarification, ask, “How many outbound calls will I be required to make daily?” “What will be my monthly revenue target?”
“What does a typical day look like?”
Although it’s important to understand day-to-day expectations, this question tends to elicit vague responses and rarely leads to a deeper conversation. Don’t focus on what your day will look like; instead, focus on being clear on the results you need to deliver. Nobody I know has ever been fired for not following a “typical day.” However, I know several people who were fired for failing to meet expectations. Before accepting a job offer, ensure you’re capable of meeting the employer’s expectations.
“How would you describe the company culture?”
Asking this question screams, “I read somewhere to ask this question.” There are much better ways to research a company’s culture, such as speaking to current and former employees, reading online reviews and news articles. Furthermore, since your interviewer works for the company, they’re presumably comfortable with the culture. Do you expect your interviewer to give you the brutal truth? “Be careful of Craig; get on his bad side, and he’ll make your life miserable.” “Bob is close to retirement. I give him lots of slack, which the rest of the team needs to pick up.”
Truism: No matter how much due diligence you do, only when you start working for the employer will you experience and, therefore, know their culture firsthand.
“What opportunities are there for professional development?”
When asked this question, I immediately think the candidate cares more about gaining than contributing, a showstopper. Managing your career is your responsibility, not your employer’s.
Cliché questions don’t impress hiring managers, nor will they differentiate you from your competition. To transform your interaction with your interviewer from a Q&A session into a dynamic discussion, ask unique, insightful questions.
Here are my four go-to questions—I have many more—to accomplish this:
“Describe your management style. How will you manage me?”
This question gives your interviewer the opportunity to talk about themselves, which we all love doing. As well, being in sync with my boss is extremely important to me. The management style of who’ll be my boss is a determining factor in whether or not I’ll accept the job.
“What is the one thing I should never do that’ll piss you off and possibly damage our working relationship beyond repair?”
This question also allows me to determine whether I and my to-be boss would be in sync. Sometimes I ask, “What are your pet peeves?”
“When I join the team, what would be the most important contribution you’d want to see from me in the first six months?”
Setting myself up for failure is the last thing I want. As I mentioned, focus on the results you need to produce and timelines. How realistic are the expectations? It’s never about the question; it’s about what you want to know. It’s important to know whether you’ll be able to meet or even exceed your new boss’s expectations.
“If I wanted to sell you on an idea or suggestion, what do you need to know?”
Years ago, a candidate asked me this question. I was impressed he wasn’t looking just to put in time; he was looking for how he could be a contributing employee. Every time I ask this question, it leads to an in-depth discussion.
Other questions I’ve asked:
“What keeps you up at night?”
“If you were to leave this company, who would follow?”
“How do you handle an employee making a mistake?”
“If you were to give a Ted Talk, what topic would you talk about?”
“What are three highly valued skills at [company] that I should master to advance?”
“What are the informal expectations of the role?”
“What is one misconception people have about you [or the company]?”
Your questions reveal a great deal about your motivations, drive to make a meaningful impact on the business, and a chance to morph the questioning into a conversation. Cliché questions don’t lead to meaningful discussions, whereas unique, thought-provoking questions do and, in turn, make you memorable.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.
CALGARY – Canadian Natural Resources Ltd. reported a third-quarter profit of $2.27 billion, down from $2.34 billion in the same quarter last year.
The company says the profit amounted to $1.06 per diluted share for the quarter that ended Sept. 30 compared with $1.06 per diluted share a year earlier.
Product sales totalled $10.40 billion, down from $11.76 billion in the same quarter last year.
Daily production for the quarter averaged 1,363,086 barrels of oil equivalent per day, down from 1,393,614 a year ago.
On an adjusted basis, Canadian Natural says it earned 97 cents per diluted share for the quarter, down from an adjusted profit of $1.30 per diluted share in the same quarter last year.
The average analyst estimate had been for a profit of 90 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Oct. 31, 2024.
CALGARY – Cenovus Energy Inc. reported its third-quarter profit fell compared with a year as its revenue edged lower.
The company says it earned $820 million or 42 cents per diluted share for the quarter ended Sept. 30, down from $1.86 billion or 97 cents per diluted share a year earlier.
Revenue for the quarter totalled $14.25 billion, down from $14.58 billion in the same quarter last year.
Total upstream production in the quarter amounted to 771,300 barrels of oil equivalent per day, down from 797,000 a year earlier.
Total downstream throughput was 642,900 barrels per day compared with 664,300 in the same quarter last year.
On an adjusted basis, Cenovus says its funds flow amounted to $1.05 per diluted share in its latest quarter, down from adjusted funds flow of $1.81 per diluted share a year earlier.
This report by The Canadian Press was first published Oct. 31, 2024.
