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Inflation in Canada: BoC holds key interest rate steady

Published

11 months ago

December 6, 2023

OTTAWA –

The Bank of Canada ended the year with another interest rate hold as the economy slows and forecasters speculate on the timing of rate cuts in 2024.

The central bank announced its decision to keep its key interest rate steady at five per cent Wednesday, encouraged by evidence that higher rates are helping bring inflation down.

“Higher interest rates are clearly restraining spending: consumption growth in the last two quarters was close to zero, and business investment has been volatile but essentially flat over the past year,” the central bank said in a statement detailing its final decision of the year.

The combination of weaker growth and a cooling job market suggests demand is no longer outpacing supply in the economy, the central bank added.

This slowdown, the Bank of Canada has argued, is necessary to restore price stability.

The decision Wednesday carried few surprises as it marked the third consecutive time the Bank of Canada has opted to keep its key rate unchanged.

But as financial markets place their bets on when the central bank may start cutting rates — and Canadians eagerly await that turning point — the central bank is giving no hints on when that may happen.

Instead, it’s still keeping the door to more rate hikes ajar.

“Governing council is still concerned about risks to the outlook for inflation and remains prepared to raise the policy rate further if needed,” the central bank said, noting it wants to see underlying price pressures ease further.

But economists and market watchers don’t buy that more rate hikes are really on the table.

“They’re still trying to talk tough. They’re trying to tell people that it’s not a slam dunk that …they’re going to be cutting interest rates,” said BMO chief economist Douglas Porter. “But very few people are listening to them anymore.”

The central bank will have to switch to cutting interest rates soon enough, TD director of economics James Orlando said, as the unemployment rate continues to rise and spending in the economy takes a hit. But for now, it makes sense for the central bank to keep its guard up.

“A hold today was the only option for the BoC,” wrote Orlando in a note to clients. “But with inflation still above three per cent, we get why the BoC isn’t ready to declare victory.”

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Inflation has eased considerably over the last year, reaching 3.1 per cent in October. But economists are mindful that inflation has been somewhat volatile lately, and more evidence is needed that underlying price pressures are easing.

While financial markets are predicting rate cuts to start as early as the first quarter of next year, some commercial banks are taking a more cautious approach.

RBC, for example, expects the Bank of Canada to start cutting interest rates in the second half of next year.

“Our view is that they’re only going to start sort of cutting in this second half of 2024, once (it) become more obvious that inflation is truly going to return back to target and stay there,” said economist Claire Fan.

The Bank of Canada’s next rate decision, along with its updated economic forecasts, is set for Jan. 24.

A key factor that will drive the central bank’s decision on when to cut interest rates will be how the economy slows in the coming months.

Weighed down by higher borrowing costs, the Canadian economy has struggled to consistently grow this year. The most recent GDP report showed the economy contracted by 1.1 per cent on an annualized basis in the third quarter.

The labour market has also lost much of its steam as the unemployment rate creeps higher, reaching 5.8 per cent.

These trends are expected to continue.

Porter says the Canadian economy has not yet fully absorbed the Bank of Canada’s hefty rate hikes, suggesting a sluggish year is ahead.

“The economy is still trying to digest those rate hikes that we’ve had in the last two years,” Porter said.

“Our official view is for GDP to rise 0.5 per cent next year, which is extremely slow. It maybe doesn’t quite rise to the level of the definition of recession, but it’s going to feel pretty sluggish.”

This report by The Canadian Press was first published Dec. 6, 2023.

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Allen nets shutout as Devils burn Oilers 3-0

Published

7 hours ago

November 4, 2024

Anne Joseph

EDMONTON – Jake Allen made 31 saves for his second shutout of the season and 26th of his career as the New Jersey Devils closed out their Western Canadian road trip with a 3-0 victory over the Edmonton Oilers on Monday.

Jesper Bratt had a goal and an assist and Stefan Noesen and Timo Meier also scored for the Devils (8-5-2) who have won three of their last four on the heels on a four-game losing skid.

The Oilers (6-6-1) had their modest two-game winning streak snapped.

Calvin Pickard made 13 stops between the pipes for Edmonton.

TAKEAWAYS

Devils: In addition to his goal, Bratt picked up his 12th assist of the young season to give him nine points in his last eight games and now 15 points overall. Nico Hischier remains in the team lead, picking up an assist of his own to give him 16 points for the campaign. He has a point in all but four games this season.

Oilers: Forward Leon Draisaitl was held pointless after recording six points in his previous two games and nine points in his previous four. Draisaitl usually has strong showings against the Devils, coming into the contest with an eight-game point streak against New Jersey and 11 goals in 17 games.

KEY MOMENT

New Jersey took a 2-0 lead on the power play with 3:26 remaining in the second period as Hischier made a nice feed into the slot to Bratt, who wired his third of the season past Pickard.

KEY RETURN?

Oilers star forward and captain Connor McDavid took part in the optional morning skate for the Oilers, leading to hopes that he may be back sooner rather than later. McDavid has been expected to be out for two to three weeks with an ankle injury suffered during the first shift of last Monday’s loss in Columbus.

OILERS DEAL FOR D-MAN

The Oilers have acquired defenceman Ronnie Attard from the Philadelphia Flyers in exchange for defenceman Ben Gleason.

The 6-foot-3 Attard has spent the past three season in the Flyers organization seeing action in 29 career games. The 25-year-old right-shot defender and Western Michigan University grad was originally selected by Philadelphia in the third round of the 2019 NHL Entry Draft. Attard will report to the Oilers’ AHL affiliate in Bakersfield.

UP NEXT

Devils: Host the Montreal Canadiens on Thursday.

Oilers: Host the Vegas Golden Knights on Wednesday.

This report by The Canadian Press was first published Nov. 4, 2024.

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Mahomes throws 3 TD passes, unbeaten Chiefs beat Buccaneers 30-24 in OT

Published

7 hours ago

November 4, 2024

Anne Joseph

KANSAS CITY, Mo. (AP) — Patrick Mahomes threw for 291 yards and three touchdowns, and Kareem Hunt pounded into the end zone from two yards out in overtime to give the unbeaten Kansas City Chiefs a 30-24 win over the Tampa Bay Buccaneers on Monday night.

DeAndre Hopkins had two touchdown receptions for the Chiefs (8-0), who drove through the rain for two fourth-quarter scores to take a 24-17 lead with 4:17 left. But then Kansas City watched as Baker Mayfield led the Bucs the other way in the final minute, hitting Ryan Miller in the end zone with 27 seconds to go in regulation time.

Tampa Bay (4-5) elected to kick the extra point and force overtime, rather than go for a two-point conversion and the win. And it cost the Buccaneers when Mayfield called tails and the coin flip was heads. Mahomes and the Chiefs took the ball, he was 5-for-5 passing on their drive in overtime, and Hunt finished his 106-yard rushing day with the deciding TD plunge.

Travis Kelce had 14 catches for 100 yards with girlfriend Taylor Swift watching from a suite, and Hopkins finished with eight catches for 86 yards as the Chiefs ran their winning streak to 14 dating to last season. They became the sixth Super Bowl champion to start 8-0 the following season.

Mayfield finished with 200 yards and two TDs passing for the Bucs, who have lost four of their last five.

It was a memorable first half for two players who had been waiting to play in Arrowhead Stadium.

The Bucs’ Rachaad White grew up about 10 minutes away in a tough part of Kansas City, but his family could never afford a ticket for him to see a game. He wound up on a circuitous path through Division II Nebraska-Kearney and a California junior college to Arizona State, where he eventually became of a third-round pick of Tampa Bay in the 2022 draft.

Two year later, White finally got into Arrowhead — and the end zone. He punctuated his seven-yard scoring run in the second quarter, which gave the Bucs a 7-3 lead, by nearly tossing the football into the second deck.

Then it was Hopkins’ turn in his first home game since arriving in Kansas City from a trade with the Titans.

The three-time All-Pro, who already had caught four passes, reeled in a third-down heave from Mahomes amid triple coverage for a 35-yard gain inside the Tampa Bay five-yard line. Three plays later, Mahomes found him in the back of the end zone, and Hopkins celebrated his first TD with the Chiefs with a dance from “Remember the Titans.”

Tampa Bay tried to seize control with consecutive scoring drives to start the second half. The first ended with a TD pass to Cade Otton, the latest tight end to shred the Chiefs, and Chase McLaughlin’s 47-yard field goal gave the Bucs a 17-10 lead.

The Chiefs answered in the fourth quarter. Mahomes marched them through the rain 70 yards for a tying touchdown pass, which he delivered to Samaje Perine while landing awkwardly and tweaking his left ankle, and then threw a laser to Hopkins on third-and-goal from the Buccaneers’ five-yard line to give Kansas City the lead.

Tampa Bay promptly went three-and-out, but its defence got the ball right back, and this time Mayfield calmly led his team down field. His capped the drive with a touchdown throw to Miller — his first career TD catch — with 27 seconds to go, and Tampa Bay elected to play for overtime.

UP NEXT

Buccaneers: Host the San Francisco 49ers on Sunday.

Chiefs: Host the Denver Broncos on Sunday.

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AP NFL:

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NHL roundup: Kuemper helps visiting Kings shut out Predators 3-0

Published

7 hours ago

November 4, 2024

Anne Joseph

NASHVILLE, Tenn. (AP) — Darcy Kuemper made 16 saves for his first shutout of the season and 32nd overall, helping the Los Angeles Kings beat the Nashville Predators 3-0 on Monday night.

Adrian Kempe had a goal and an assist and Anze Kopitar and Kevin Fiala also scored. The Kings have won two of their last three.

Juuse Saros made 24 saves for the Predators. They are 1-2-1 in their last four.

Kopitar opened the scoring with 6:36 remaining in the opening period. Saros denied the Kings captain’s first shot, but Kopitar collected the rebound below the goal line and banked it off the netminder’s skate.

Fiala, a former Predator, made it 2-0 35 seconds into the third.

The Kings held Nashville to just three third-period shots on goal, the first coming with 3:55 remaining and Saros pulled for an extra attacker.

Elsewhere in the NHL on Monday:

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DEVILS 3 OILERS 0

EDMONTON, Alta. (AP) — Jake Allen made 31 saves for his second shutout of the season and 26th of his NHL career, helping the New Jersey Devils close their western Canadian road trip with a 3-0 victory over the Edmonton Oilers.

Jesper Bratt had a goal and an assist and Stefan Noesen and Timo Meier also scored. The Devils improved to 8-5-2. They have won three of their last four after a four-game skid.

Calvin Pickard made 13 saves for Edmonton. The Oilers had won two straight.

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