{"id":105315,"date":"2021-01-23T23:11:03","date_gmt":"2021-01-23T23:11:03","guid":{"rendered":"https:\/\/fin2me.com\/?p=105315"},"modified":"2021-01-23T23:11:03","modified_gmt":"2021-01-23T23:11:03","slug":"macklem-says-canadian-economy-has-enough-stimulus-for-now","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/macklem-says-canadian-economy-has-enough-stimulus-for-now\/","title":{"rendered":"Macklem Says Canadian Economy Has Enough Stimulus for Now"},"content":{"rendered":"

Bank of Canada Governor Tiff Macklem said the nation\u2019s economy is flush enough with stimulus to survive the current downturn and doesn\u2019t need additional help from monetary policy.<\/p>\n

In an interview with Bloomberg News after a rate decision on Wednesday, Macklem said policy makers considered whether more measures were needed to spur growth — including a micro-cut of their 0.25% overnight policy rate — but determined that \u201cwe have a considerable amount of stimulus in place.\u201d The bank is expecting a quick recovery from a first-quarter contraction, a scenario that would eventually require it to pare back asset purchases.<\/p>\n

\u201cIf the economy plays out in line or stronger with our outlook, then the economy is not going to need as much quantitative easing stimulus over time,\u201d Macklem said. While the central bank has a number of tools it can use if needed to add stimulus, \u201cin our base case we don\u2019t expect that we will need to use them.\u201d<\/p>\n

In Wednesday\u2019s decision, the central bank expressed optimism the economy remains on track to fully repair damage from the pandemic by 2023, even as Canada struggles with a wave of new Covid-19 cases and lockdowns right now.<\/p>\n

Bank of Canada Rate Decision and Briefing: TOPLive Transcript<\/p>\n

Some analysts had speculated the central bank could turn bearish this week, with a fresh cut to shore up a recovery that is being hampered by a strengthening currency, on top of the worsening pandemic.<\/p>\n

In the interview, Macklem said that the stabilization of financial markets has made a small rate cut a viable option, if needed.<\/p>\n

\u201cWe discussed the degree of monetary stimulus we need, and if we thought we needed more, a micro cut was among the things we could do,\u201d Macklem said by video conference. The bank\u2019s governing council determined it wasn\u2019t necessary, he said.<\/p>\n\n\n<\/colgroup>\n\n\n\n
What Bloomberg\u2019s Economists Say…<\/th>\n<\/tr>\n
\n

\u201cDescribing the domestic outlook as \u2018stronger and more secure,\u2019 the Bank of Canada is preparing to look through near-term economic contraction and instead anchor on a strengthened medium-term outlook. Vaccine rollout and substantial additional fiscal stimulus in the U.S. could prove powerful tailwinds starting in the second quarter.\u201d<\/p>\n

–Andrew Husby, Bloomberg economist<\/p>\n

For the full report, click here<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

To be sure, there\u2019s no prospect of any quick withdrawal of stimulus either.<\/p>\n

At a separate press conference Wednesday, Macklem said any slowing of the QE program would be gradual. Nor is the the Bank of Canada poised to raise borrowing costs. It\u2019s pledged not to hike its policy rate until economic slack has been fully absorbed, something not expected to happen until 2023.<\/p>\n

There are other concerns. With inflation hovering below 1%, Macklem said the central bank is more worried about deflationary pressures than any temporary overshoot of its 2% target.<\/p>\n

\u201cWe are aiming for 2% but we are going to use the band and we are going to use the risk management framework to get there as quickly as possible,\u201d he said.<\/p>\n

The weakening U.S. dollar is another challenge, with any further broad-based depreciation a potential headwind.<\/p>\n

\u201cTo the extent that is weighing on our forecast and dampening growth in Canada, everything else equal, we\u2019d need more monetary stimulus to get back to our inflation target,\u201d the central banker said.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Bank of Canada Governor Tiff Macklem said the nation\u2019s economy is flush enough with stimulus to survive the current downturn and doesn\u2019t need additional help […]<\/p>\n","protected":false},"author":3,"featured_media":105314,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nMacklem Says Canadian Economy Has Enough Stimulus for Now - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/markets\/macklem-says-canadian-economy-has-enough-stimulus-for-now\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Macklem Says Canadian Economy Has Enough Stimulus for Now - Fin2me\" \/>\n<meta property=\"og:description\" content=\"Bank of Canada Governor Tiff Macklem said the nation\u2019s economy is flush enough with stimulus to survive the current downturn and doesn\u2019t need additional help [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/markets\/macklem-says-canadian-economy-has-enough-stimulus-for-now\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-01-23T23:11:03+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/01\/cfntalkfoto1200x760.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/markets\/macklem-says-canadian-economy-has-enough-stimulus-for-now\/\",\"url\":\"https:\/\/fin2me.com\/markets\/macklem-says-canadian-economy-has-enough-stimulus-for-now\/\",\"name\":\"Macklem Says Canadian Economy Has Enough Stimulus for Now - 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