Bank of Canada governor Tiff Macklem provided the clearest picture to date about how the central bank plans to reduce monetary stimulus, setting up expectations for a possible cut in government bond purchases in October and saying that the bank expects to start raising interest rates before it entirely winds down its quantitative easing program.
In a Thursday speech, Mr. Macklem said the bank is approaching the “reinvestment phase” of its federal government bond buying program, also known as quantitative easing (QE). Since the start of the pandemic, the bank has been buying billions of dollars worth of government bonds every week in an attempt to lower yields on benchmark bonds and bring down borrowing costs across the economy.
When the bank arrives at the “reinvestment phase,” it will try to match its weekly bond purchases to the pace at which bonds it already owns are maturing – effectively stabilizing the size of the bank’s balance sheet. That will require buying between $4-billion and $5-billion worth of government bonds a month, down from around $2-billion a week, Mr. Macklem said.
He said that once the bank stabilizes its asset purchases, it may look to raise interest rates before further reducing the pace of bond buying.
“Eventually, when we need to reduce the amount of monetary stimulus, you can expect us to begin by raising our policy interest rate. What this all means is it is reasonable to expect that when we reach the reinvestment phase, we will remain there for a period of time, at least until we raise the policy interest rate,” Mr. Macklem said, according to the prepared text of the speech.
The speech comes a day after a rate decision where the bank decided to leave monetary policy unchanged. Most analysts expect the bank’s next reduction in bond buying to come in October. The bank has trimmed the size of the QE program three times since last year, making it one of the most aggressive central banks in the world in terms of cutting back emergency stimulus measures.
Another key detail of the speech was that the bank intends to reduce its purchases of government bonds on both the primary and secondary market. The QE program works by buying assets owned by private financial institutions. Alongside this, the bank also buys bonds straight from the government, mainly to offset banknote liabilities, not as a form of stimulus.
Currently, around 25 per cent of the bank’s weekly government bond purchases are primary market purchases, while 75 per cent are secondary market purchases.
“Much of the focus has understandably been on our large-scale secondary market bond purchases associated with QE. But during the reinvestment phase, we will reduce both our primary market purchases at Government of Canada bond auctions and our purchases in the secondary market. This will keep our total holdings of Government of Canada bonds roughly stable over time,” Mr. Macklem said.
Royce Mendes, senior economist at CIBC Capital Markets, said that Mr. Macklem’s speech was intended to highlight two points.
“First, tapering should not be considered monetary tightening. Rather, having a stable balance sheet should be viewed as maintaining the monetary stimulus already provided via QE, just not increasing it further,” Mr. Mendes wrote in a note to clients.
“Second, the beginning of the reinvestment phase will not necessarily mean that the central bank has changed its view on how long to keep the policy rate pinned down,” Mr. Mendes wrote.
The bank’s key policy rate has been at 0.25 per cent since the start of the pandemic. The bank has promised not to raise the policy rate until slack in the economy is absorbed. It currently estimates this to happen in the second half of 2022.
Alongside new details about the QE program, Mr. Macklem also gave his assessment of the economy, which was in line with the bank’s Wednesday rate announcement.
“The Governing Council continues to expect the economy to strengthen in the second half of 2021, although the fourth wave of COVID-19 infections and ongoing supply bottlenecks could weigh on the recovery,” he said .
Mr. Macklem noted the unexpectedly bad economic growth data Statistics Canada published last week. Statscan determined the economy shrank by 1.1 per cent on an annualized basis in the second quarter, which was 3 percentage points below the central bank’s forecast.
“Growth in the second quarter was affected by disruptions to global supply chains as well as the impact of necessary public health measures,” Mr. Macklem said, noting problems with automobile production and shipping bottlenecks.
“We expect these global supply chain problems will gradually be resolved, but it could take some time.”
On the topic of inflation, he reiterated the view that the recent run-up in prices is largely the result of “transitory” factors, although he said that “their persistence and magnitude are uncertain and we will be monitoring them closely.”
The year-over-year increase in the Consumer Price Index has been above the bank’s target range since May, hitting a decade high of 3.7 per cent in July.
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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.
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