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Bank of Canada maintains policy rate, continues quantitative tightening

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The Bank of Canada today held its target for the overnight rate at 4½%, with the Bank Rate at 4¾% and the deposit rate at 4½%. The Bank is also continuing its policy of quantitative tightening.

Inflation in many countries is easing in the face of lower energy prices, normalizing global supply chains, and tighter monetary policy. At the same time, labour markets remain tight and measures of core inflation in many advanced economies suggest persistent price pressures, especially for services.

Global economic growth has been stronger than anticipated. Growth in the United States and Europe has surprised on the upside, but is expected to weaken as tighter monetary policy continues to feed through those economies. In the United States, recent stress in the banking sector has tightened credit conditions further. US growth is expected to slow considerably in the coming months, with particular weakness in sectors that are important for Canadian exports. Meanwhile, activity in China’s economy has rebounded, particularly in services. Overall, commodity prices are close to their January levels. The Bank’s April Monetary Policy Report (MPR) projects global growth of 2.6% this year, 2.1% in 2024, and 2.8% in 2025.

In Canada, demand is still exceeding supply and the labour market remains tight. Economic growth in the first quarter looks to be stronger than was projected in January, with a bounce in exports and solid consumption growth. While the Bank’s Business Outlook Survey suggests acute labour shortages are starting to ease, wage growth is still elevated relative to productivity growth. Strong population gains are adding to labour supply and supporting employment growth while also boosting aggregate consumption. Housing market activity remains subdued.

As more households renew their mortgages at higher rates and restrictive monetary policy works its way through the economy more broadly, consumption is expected to moderate this year. Softening foreign demand is expected to restrain exports and business investment. Overall, GDP growth is projected to be weak through the remainder of this year before strengthening gradually next year. This implies the economy will move into excess supply in the second half of this year. The Bank now projects Canada’s economy to grow by 1.4% this year and 1.3% in 2024 before picking up to 2.5% in 2025.

CPI inflation eased to 5.2% in February, and the Bank’s preferred measures of core inflation were just under 5%. The Bank expects CPI inflation to fall quickly to around 3% in the middle of this year and then decline more gradually to the 2% target by the end of 2024. Recent data is reinforcing Governing Council’s confidence that inflation will continue to decline in the next few months. However, getting inflation the rest of the way back to 2% could prove to be more difficult because inflation expectations are coming down slowly, service price inflation and wage growth remain elevated, and corporate pricing behaviour has yet to normalize. As it sets monetary policy, Governing Council will be particularly focused on these indicators, and the evolution of core inflation, to gauge the progress of CPI inflation back to target.

In light of its outlook for growth and inflation, Governing Council decided to maintain the policy rate at 4½%. Quantitative tightening continues to complement this restrictive stance. Governing Council continues to assess whether monetary policy is sufficiently restrictive to relieve price pressures and remains prepared to raise the policy rate further if needed to return inflation to the 2% target. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is June 7, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on July 12, 2023.

 

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S&P/TSX composite gains almost 100 points, U.S. stock markets also higher

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TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.

The S&P/TSX composite index closed up 93.51 points at 23,568.65.

In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.

The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.

The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.

The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.



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Opinions on what Tagovailoa should do next vary after his 3rd concussion since joining Dolphins

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MIAMI GARDENS, Fla. (AP) — Nick Saban has a message for Tua Tagovailoa: Listen to experts, then decide what happens next.

Antonio Pierce had another message: It’s time to retire.

Saban, Pierce and countless others within the game were speaking out Friday about Tagovailoa, the Miami Dolphins quarterback who is now dealing with the third confirmed concussion of his NFL career — all coming within the last 24 months. He was hurt in the third quarter of the Dolphins’ 31-10 loss to the Buffalo Bills on Thursday night, leaving the game after a scary and all-too-familiar on-field scene.

“This has to be a medical decision,” Saban said on ESPN, where the now-retired coach works as an analyst. “I mean, you have to let medical people who understand the circumstances around these injuries, these concussions — and when you have multiple concussions, that’s not a good sign.

“I think Tua and his family and everyone else should listen to all the medical evidence to make sure you’re not compromising your future health-wise by continuing to play football.”

That process — gathering the medical facts — was getting underway in earnest on Friday, when Tagovailoa was set to be further evaluated at the team’s facility. He was diagnosed with a concussion within minutes of sustaining the injury on Thursday and there is no timetable for his return.

“I’ll be honest: I’d just tell him to retire,” Pierce, the coach of the Las Vegas Raiders, said Friday. “It’s not worth it. It’s not worth it to play the game. I haven’t witnessed anything like I’ve seen that’s happened to him three times. Scary. You could see right away, the players’ faces on the field, you could see the sense of urgency from everybody to get Tua help. He’s going to live longer than he’s going to play football. Take care of your family.”

Concern — and opinions — have poured in from all across the football world ever since Tagovailoa got hurt. It is not a surprising topic — the questions of “should he? or shouldn’t he?” continue to play — nor is this the first time they have been asked. Tagovailoa himself said in April 2023 that he and his family weighed their options after he was diagnosed twice with concussions in the 2022 season.

But Dolphins coach Mike McDaniel said it’s not his place, nor is it the time, to have discussions about whether Tagovailoa should play again.

“Those types of conversations, when you’re talking about somebody’s career, it probably is only fair that their career should be decided by them,” McDaniel said.

The Dolphins said Friday that they will bring in another quarterback, and for now are entrusting the starting job to Skylar Thompson. McDaniel said the team will not rush to any other judgments, that the only opinions that truly matter right now come from two sides — Tagovailoa and his family, and the medical experts who will monitor his recovery.

“The thing about it is everybody wants to play, and they love this game so much, and they give so much to it that when things like this happen, reality kind of hits a little bit,” Jacksonville coach Doug Pedersen said Friday. “It just shows the human nature, or the human side of our sport.”

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AP Sports Writer Mark Long in Jacksonville, Florida, contributed to this report.

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AP NFL:

The Canadian Press. All rights reserved.



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Canada’s Sarah Mitton captures shot put gold at Diamond League in Brussels

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BRUSSELS – Canadian shot putter Sarah Mitton rebounded from a disappointing performance at the Paris Olympics by capturing Diamond League gold on Friday.

Mitton, of Brooklyn, N.S., won the competition, the final Diamond League event of the season, with a heave of 20.25 metres on her third throw.

Chase Jackson of the U.S. placed second with a throw of 19.90, while German’s Yemisi Ogunleye, the Olympic gold medallist, claimed bronze with a toss of 19.72.

Mitton, the runner-up of last year’s world championship, failed to qualify for the top eight in Paris.

Edmonton runner Marco Arop, who won silver for Canada in the men’s 800 metres at the Paris Games, was scheduled to race in the 800 on Saturday.

Olympic bronze-medallist Alysha Newman, of London, Ont., also competes Saturday in the women’s pole vault.

This report by The Canadian Press was first published Sept. 13, 2024.

The Canadian Press. All rights reserved.



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