Wed, April 24, 2024 at 9:35 AM EDT
Business
Macklem says central bankers must speak simply or risk losing public trust – Yahoo Canada Finance
OTTAWA — The head of the Bank of Canada is making an international pitch to his fellow central bankers to better connect with average citizens lest they lose public trust and face an existential crisis.
Governor Tiff Macklem said Thursday maintaining trust is key for central banks during the economic crisis caused by COVID-19, as well as for rebuilding once the pandemic passes.
He points to declining trust in public institutions and experts, as well as the rise of political populism in the wake of the 2008 financial crisis as trends central bankers cannot brush off.
Macklem says it’s more important, yet harder, for central banks to be trusted sources of information at a time when they have rates near-zero and are using unconventional policy tools.
For the Bank of Canada, that has meant a foray into what’s known as quantitative easing, which is a way for central banks to push money into the economy to encourage lending and investment.’
Speaking at an annual meeting hosted by the Federal Reserve Bank of Kansas City, Macklem said central bankers shouldn’t sound like “oracles delivering messages from an ivory tower.”
“The imperative is to step boldly beyond market transparency and engage with the public to explain how our actions serve our economy-wide objectives,” Macklem said.
“This means listening to more people, understanding their perceptions — accurate or not — factoring in broader public views into our policy decisions and communicating with people on their terms, not ours.”
The remarks to the meeting in Jackson Hole, Wyo., capped a week of messages from the Bank of Canada about reaching a broader audience as it looks to renew the foundation of its policy decisions.
The foundation for some 25 years as been targeting an annual inflation rate of two per cent, and adjusting its key interest rate to keep prices and the economy steady. The path of the bank’s policy rate influences the rates charged for loans and mortgages, for example.
Inflation has collapsed as economic restrictions have been put in place to curb the spread of COVID-19. National inflation readings in April and May showed price declines, or deflation. Inflation itself is expected to stay low this year and next.
What the Bank of Canada has heard is that people don’t feel like prices are coming down, but rather going up. They are spending less on things that cost less, like gasoline, and more on things where prices are rising.
“We need to find out and understand what is preoccupying the public, including the perspectives of communities and groups we have not been very good at reaching,” Macklem said. “And we need to address those preoccupations.”
The bank has slashed its key rate to 0.25 per cent, which is as low as it will go and where Macklem says it will stay until the economy rebounds. The pronouncement provided a forward-looking statement to markets and marked a shift from Macklem’s predecessor, Stephen Poloz.
In his talk Thursday, Macklem said central banks can’t keep talking to what a Bank of England officials labelled “MEN,” meaning markets, economists and news services.
He noted that the Bank of Canada has seen a sharp increase in traffic to its website, with its plain-language guide to the economy and social media posts getting twice as many views than before the pandemic.
More traditional content like speeches and the bank’s monetary policy report has seen an increase in traffic of over 10 per cent, Macklem said.
This report by The Canadian Press was first published Aug. 27, 2020.
Jordan Press, The Canadian Press
Continue Reading
Business
Oil Firms Doubtful Trans Mountain Pipeline Will Start Full Service by May 1st
|
Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.
In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.
Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.
After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.
“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.
The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).
The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.
The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.
Business
Tesla profits cut in half as demand falls
|
Tesla profits slump by more than a half
Tesla has announced its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.
It caps a difficult period for the electric vehicle (EV) maker, which – faced with falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.
Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts’ predictions of just over $22bn.
But the decision by Tesla to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading.
It did not reveal pricing details for the new vehicles.
However Mr Musk made clear he also grander ambitions, touting Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.
However, Tesla has already been on a charm offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
It also said its situation was not unique.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” it said.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
However, Mr Musk sought to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce stood at more than 140,000 late last year, up from around 100,000 at the end of 2021, according to the company’s filings with US regulators.
Musk’s salary
The car firm is also facing other issues, with a struggle over Mr Musk’s compensation still raging on.
On Wednesday, Tesla asked shareholders to vote for a proposal to accept Mr Musk’s compensation package – once valued at $56bn – which had been rejected by a Delaware judge.
The judge found Tesla’s directors had breached their fiduciary duty to the firm by awarding Mr Musk the pay-out.
Due to the fall in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still greater than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the firm being moved from Delaware to Texas – which Mr Musk called for after the judge rejected his payday.
Business
Stock market today: Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck
|
Tech stocks rose on Wednesday, outstripping the broader market as investors welcomed Tesla’s (TSLA) cheaper car pledge and waited for the next rush of corporate earnings.
The Nasdaq Composite (^IXIC) rose roughly 0.6%, coming off a sharp closing gain. The S&P 500 (^GSPC) was up 0.2%, continuing a rebound from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Tesla shares jumped nearly 12% after the EV maker’s vow to speed up the launch of more affordable models eclipsed its quarterly earnings and revenue miss. That cheered up investors worried about growth amid a strategy shift to robotaxis and the planned cancellation of a cheaper model.
The results from the first “Magnificent Seven” to report have intensified the already high hopes for Big Tech earnings, that the megacaps can revive the rally in stocks they powered. The spotlight is now on Meta’s (META) report due after the market close, as the Facebook owner’s shares rose after the Senate voted for a potential ban on rival TikTok. Microsoft (MSFT) and Alphabet (GOOG) next up on Thursday.
Meanwhile, Boeing (BA) reported better than expected first quarter results before the opening bell with a loss per share of $1.13, narrower than the $1.72 estimated by Wall Street. Shares rose about 2% in morning trade.
Live6 updates
-
Health16 hours ago
Remnants of bird flu virus found in pasteurized milk, FDA says
-
Art21 hours ago
Mayor's youth advisory council seeks submissions for art gala – SooToday
-
Health20 hours ago
Bird flu virus found in grocery milk as officials say supply still safe
-
Investment20 hours ago
Taxes should not wag the tail of the investment dog, but that’s what Trudeau wants
-
News20 hours ago
Peel police chief met Sri Lankan officer a court says ‘participated’ in torture – Global News
-
Media15 hours ago
Vaughn Palmer: B.C. premier gives social media giants another chance
-
Art21 hours ago
An exhibition with a cause: Montreal's 'Art by the Water' celebrates 15 years – CityNews Montreal
-
News12 hours ago
Amid concerns over 'collateral damage' Trudeau, Freeland defend capital gains tax change – CTV News