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If it ain’t broke: Canadians want central bank to keep policy framework

Published

3 years ago

November 9, 2021

The Bank of Canada should not change its three-decade old monetary policy framework, which is flexible enough to deal with bouts of price increases, particularly as tweaking it could trigger more public anxiety over hot inflation, analysts say.

The inflation target renewal, done jointly with the federal government every five years, is due by year-end and comes at a time when central banks around the world are grappling with how to manage an uneven rebound from the COVID-19 pandemic.

Under its current inflation-targeting framework, the Bank of Canada targets the 2% midpoint of a 1%-to-3% control range. For the first time since 1995, the central bank is reviewing not only the target, but also four alternative frameworks. That has some analysts concerned.

“If it ain’t broke, don’t fix it,” said Doug Porter, chief economist at BMO Capital Markets. “From my perspective, the bank’s current policy gives a lot of leeway to do what needs to be done.”

“It’s actually a bit ‘flirting with danger’ to change the language around the inflation target at a time when there is a lot of angst about inflation,” he added.

A Nanos Research poll last month found more than half of Canadians are not comfortable with the idea of giving the bank more flexibility to allow inflation to run hotter.

The central bank’s own outreach, conducted throughout 2020, similarly found that most Canadians support the continued use of inflation targeting, though many said they felt the 2% target does not accurately represent inflation.

“I think our framework is very good,” said David Dodge, a former governor of the Bank of Canada. “Everybody understands what our current framework is.”

As Canada‘s annual inflation rate hit 4.4% in September https://www.reuters.com/business/canadas-annual-inflation-rate-hits-44-september-highest-since-2003-2021-10-20/#:~:text=Inflation%20increased%20to%204.4%25%2C%20beating,2003%2C%20Statistics%20Canada%20data%20showed, its sixth month above the central bank’s target range, the bank has been taking a flexible approach to its target to allow for jobs to rebound. Employment has now returned to pre-pandemic levels.

At the same time, some 87% of Canadians are more worried about rising costs than losing their job or income, while 80% of Canadians say their earnings have not kept pace with rising grocery prices, according to an Angus Reid poll from last month.

The Bank of Canada last month signaled https://www.reuters.com/world/americas/bank-canada-signals-it-could-hike-rates-sooner-than-expected-2021-10-27 a first interest rate hike could come months earlier than had been expected amid more persistent https://www.reuters.com/world/americas/bank-canada-chief-supply-chain-problems-mean-inflation-set-be-more-stubborn-2021-10-14 global supply chain bottlenecks that are driving inflation.

SETTING A TARGET

The U.S. Federal Reserve last year announced a move from a 2% inflation goal to an average inflation targeting goal of 2% during a virtual central bankers’ meeting usually held annually in Jackson Hole, Wyoming. Average inflation targeting is one of four framework alternatives the Bank of Canada is studying.

“I don’t see this as being a Jackson Hole moment for the Bank of Canada. … The bank already had that flexibility before the Fed embraced it; they just have to use it,” said Derek Holt, head of capital markets economics at Scotiabank.

Andrew Kelvin, chief Canada strategist at TD Securities, said he expects the Bank of Canada to “enshrine” a more flexible target, whether by changing the framework or just making the existing flexibility more explicit.

“I think it’s just going to be a scenario where they sort of codify the philosophy and the actions that have guided them through this pandemic,” he said. “Because if they weren’t taking a flexible approach, rates would be higher today.”

(Reporting by Julie Gordon in Ottawa, editing by Steve Scherer and Jonathan Oatis)

News

Trump attends UFC championship fight in New York, taking a break from Cabinet picks

Published

11 hours ago

November 16, 2024

Anne Joseph

NEW YORK (AP) — President-elect Donald Trump walked out to a roaring standing ovation just ahead of the start of the UFC pay-per-view card at Madison Square Garden on Saturday night, combining two things close to his heart: fierce battles inside the octagon and New York City.

Trump was accompanied by UFC President Dana White and the pair headed to their cageside seats to Kid Rock’s “American Bad Ass.”

UFC aired a video package of Trump’s road to reclaiming the White House, calling it, “The great comeback in American History,” while fans stood and applauded. Trump, wearing a red tie, pumped his fist toward the crowd when the video ended.

The president-elect also had his clenched fists pumping back and forth and briefly danced to the Village People’s “YMCA” just outside the cage. He later again thrust his fist skyward as “Takin’ Care of Business” played.

Elon Musk, picked by Trump to lead a new Department of Government Efficiency, and House Speaker Mike Johnson, R-La., joined the president-elect and White at the Garden, as did Robert Kennedy Jr., Trump’s choice to lead the Department of Health and Human Services in his incoming administration.

Trump shook hands with the UFC broadcast team that included Joe Rogan. Rogan hosted Trump on his podcast for hours in the final stages of the campaign ahead of his election win last week. The announcers for the pay-per-view audience later declared, “Festive doesn’t even begin to describe” the scene before later proclaiming, “47’s in the building. Let’s go.”

The MSG crowd chanted “USA! USA!” right before the main card was about to start and then again throughout the action. After a year delay, Stipe Miocic is getting his shot at a third heavyweight championship reign when he battles current champion Jon Jones in the main event at UFC 309.

Trump is a longtime UFC enthusiast and frequent attendee of major fights. He made promoting hypermasculine tones a signature of his campaign — as he looked to further widen the gap among male voters between himself and his Democratic opponent, Vice President Kamala Harris.

Trump and his top supporters embraced alpha-male terms and often accentuated them with vulgar and demeaning language.

While campaigning, Trump appeared frequently on podcasts, gaming platforms, and with key supporters who described a vote for Trump as a way to demonstrate true manliness. While Trump taped a podcast with Rogan, who himself has spoken about hypermasculinity, Harris failed to do a similar appearance, citing scheduling conflicts.

A return to Madison Square Garden means revisiting the place where a comedian caused an uproar at a Trump rally last month by likening Puerto Rico to a “floating island of garbage.” Yet Trump continues to relish visits to New York, where he lived for decades, before moving to his Mar-a-Lago club in Palm Beach, Florida.

Trump’s son, Don Jr., also attended the fight.

Except for a day trip to Washington this week to meet for nearly two hours with President Joe Biden, and separately address House Republicans, Trump has been spending his time since his Election Day victory at Mar-a-Lago. The club has hosted galas and conservative events throughout the week.

Trump has been close to White for more than two decades.

White hosted a 2001 UFC battle at Trump Taj Mahal, a former casino-hotel in Atlantic City, New Jersey, and Trump has frequently attended UFC matches since – including during his 2024 campaign. Trump has turned up at fights recently with famous entourages, including White, musician Kid Rock and former Fox News Channel host Tucker Carlson.

In 2018, during Trump’s first term, he and White starred in a UFC video where the then-president was called the “Combatant In Chief.”

As Trump has strengthened his grip on the national Republican Party over the last near-decade, White’s personal political profile has grown exponentially. White spoke at the 2016 and 2020 Republican conventions, and when the party gathered in Milwaukee this past July. He also addressed the crowd at Trump’s Florida victory party in the wee hours of the morning after Election Day.

“This is what happens when the machine comes after you,” White said then. “What you’ve seen over the last several years, this is what it looks like: couldn’t stop him. He keeps going forward. He doesn’t quit.”

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Weissert reported from Palm Beach, Florida.

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Spencer Martin notches 1st career shutout as Hurricanes put 4 past Senators

Published

12 hours ago

November 16, 2024

Anne Joseph

RALEIGH, N.C. (AP) — Carolina’s Spencer Martin recorded his first career shutout and made 24 saves as the Hurricanes beat the Ottawa Senators 4-0 on Saturday night.

Martin, in just his second start of the season and his first home appearance, made 11 of his saves in the third period.

Jordan Martinook, Sebastian Aho, rookie Jackson Blake and William Carrier scored goals. Shayne Gostisbehere and Jordan Staal each provided two assists, and Martin Necas notched an assist to push his career-best points streak to 12 games.

Ottawa was blanked for the first time this season, and Senators goaltender Anton Forsberg also stopped 24 shots.

Martinook scored his sixth goal in his last six games eight minutes into the first period. Aho’s first goal in eight games came eight seconds into a power play in the final minute of the second period.

Blake’s power-play goal 43 seconds into the third period made it 3-0, and Carrier scored an empty-netter.

Takeaways

Senators: A three-game points streak ended in part because Ottawa faltered on special teams after not allowing a power-play goal in its previous four games. It went 0 for 4 on power plays.

Hurricanes: Carolina hasn’t lost consecutive games this season, returning from a three-game swing to the Western Conference to win its sixth consecutive home game.

Key moment

The Hurricanes had gone 1 for 13 on power plays across three games before converting twice in 85 seconds of game time.

Key stat

Martin became the third Carolina goaltender to notch a victory this season.

Up next

The Hurricanes host the St. Louis Blues Sunday, while the Senators begin a four-game homestand Tuesday against the Edmonton Oilers.

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Mitch Marner scores in overtime as Maple Leafs down Oilers 4-3

Published

12 hours ago

November 16, 2024

Anne Joseph

TORONTO – Mitch Marner scored 40 seconds into overtime as the Toronto Maple Leafs downed the Edmonton Oilers 4-3 on Saturday night.

Bobby McMann, with two, and Matthew Knies had the other goals for Toronto (11-6-2). Anthony Stolarz made 27 saves. Marner added an assist for a two-point night.

Connor McDavid and Leon Draisaitl, with a goal and an assist each, and Adam Henrique replied for Edmonton (9-7-2), which saw its three-game winning streak snapped. Stuart Skinner stopped 18 shots.

The Oilers lost defenceman Darnell Nurse after he took a hit to the head from Leafs winger Ryan Reaves in the second period.

With Toronto down 2-1 in the third, Knies and McMann scored 59 seconds apart to give Toronto a 3-2 lead before Draisaitl tied things with 1:29 left in regulation and Skinner on the bench for an extra attacker. Marner ended it in the extra period on a 2-on-1 with John Tavares.

McDavid became the fourth-fastest player in NHL history — behind only Wayne Gretzky, Mario Lemieux and Mike Bossy — to reach 1,000 career points Thursday at home against the Nashville Predators.

Takeaways

Leafs: Toronto captain Auston Matthews missed a sixth straight game with an undisclosed upper-body injury. The star centre, who remains listed as day-to-day, hasn’t played since Nov. 3.

Oilers: Edmonton head coach Kris Knoblauch dressed 11 forwards and seven defenceman with winger Viktor Arvidsson out injured for a second consecutive game.

Key moment

Nurse wheeled around Edmonton’s net early in the second before getting caught up high by Reaves. The blueliner was left bloodied and had to be helped to the locker room. Reaves was assessed a five-minute match penalty and booted from the game.

Key stat

Leafs forward Max Domi has now gone 13 games without registering a point. The 29-year-old has no goals and six assists this season.

Up next

Edmonton continues a three-game road trip Monday against the Montreal Canadiens. Toronto hosts the Vegas Golden Knights on Wednesday in the second of three straight contests at Scotiabank Arena.

This report by The Canadian Press was first published Oct. 24, 2024.

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