Why central banks — including Canada’s — are finding it so hard to get interest rates back to ‘normal’ territory

Central bankers have long been crafting analogies to explain what they do — think taking away the punch bowl. Few have been as devoted to the art as Stephen Poloz.

With five interest-rate increases since 2017, the Bank of Canada is one of a handful to embark on sustained hiking. Poloz has even won international recognition for developing frameworks to manage the process. But there’s been no increase since October, and the Ottawa-based bank said last week that the cycle’s immediate future looks increasingly uncertain amid a global slowdown. Like the Federal Reserve, it’s essentially on hold, waiting to see what happens.

The goal is to assure as wide a chunk of the public as possible that policy makers won’t hike unless they’re sure the economy can cope with higher borrowing costs. As long as inflation isn’t a threat, they’ll put growth first. Gauge of HealthPoloz counters by pointing out that the leverage already out there makes tightening risky too. Plus, he sees potential long-term benefits from frontloading demand.

With the jobless rate at four-decade lows, and underlying inflation back near the two per cent target, there were signs that the economy was nearing its capacity — which is why Poloz began to hike. That raises an awkward question for Poloz, and maybe for some of his central-bank peers too: Has monetary policy already done all it can?

This makes me crazy! We have a mountain of personal debt because the Bank of Canada encouraged us to borrow. Now they clutch their pearls over the amount of debt we have. Ridiculous.

If income inequality had not become so severe debt loads would be more manageable. Don’t blame this situation on too much debt! Must fix real problem first!!! Incomes.

It’s because the World Bank doesn’t operate the way Canada’s own single central bank used to. Now we have 4 or 5 banks answering to World Bank ,not Canada🇨🇦

Bankers are Swimming in Cash! Bank Fees are gouging Canadians.

There is no “normal” the interest rate simply cools a roaring economy or jump starts a staggering economy- and Canada is staggering due to an outflow of capital business investment due to Trudeau’s high taxes and infrastructure failures....

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TD Securities predicts Bank of Canada will keep key interest rate on hold through 2020This builds on the firm’s forecast last week that the central bank would not hike its key interest rate target this year globebusiness I thought the economy was on fire Liberaleconomics globebusiness But why? They should increase it as they threatened🙄🙄🙄
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