Canada's cenral bank makes big jump in its key interest rate to fight inflation

    Canada column for Sunday, April 17/22

    THE CANADIAN REPORT

   By Jim Fox

    Canada’s central bank has made its biggest key interest rate increase in 20 years in the battle against inflation.

   The jump in the key rate of the Bank of Canada by .50 percent to 1 percent is said to be the first of more – perhaps raising the target several times this year.

    “With inflation well above target and the economy moving in excess demand, there is a need to normalize monetary policy relatively quickly,” said Bank Governor Tiff Macklem.

   The bold move was necessary as inflation and economic growth has passed the bank’s forecasts.

   For consumers, what it means is a bonus for those with money in the bank and higher fees for those with variable-rate mortgages and loan payments.

   The central bank rise also prompted commercial banks to increase their prime-lending rates to

2.7 percent.

   Originally, the bank’s prediction early this year was an annual rate of inflation at an average of 5 percent for the first half of the year but it is now 6 percent.

   World events pushed inflation higher with higher prices for commodities such as gasoline and food, budging the rate from its historic lows of 0.25 percent.

   “A robust jobs market with unemployment below pre-pandemic levels is driving demand and consumer spending at a feverish pace,” Macklem said.

    ---

    At the height of the pandemic’s sixth wave, Ontario’s top doctor couldn’t be found to comment publicly because he was taking a vacation in the Caribbean, reporters learned.

   At a news conference last week – the first in almost five weeks for Dr. Kieran Moore –

 Premier Doug Ford said he “never rests and works around the clock for the people of Ontario.”

   Health Minister Christine Elliott and Ford mentioned that he was at a medical conference.

   “While Dr. Moore was away, we had an acting chief medical officer of health as well as five assistant medical officers of health who were closely following the situation in Ontario,” Elliott said.

   Moore now recommends that the provincial government extend remaining mask mandates in settings such as hospitals, long-term care and public transit after the current end date of April 27.

    --

    Facts and figures:

   Canada’s dollar is steady at 79 cents U.S. while the U.S. dollar returns $1.25 in Canadian funds, before exchange fees.

   The Bank of Canada’s key interest rate has jumped to1 percent while the prime lending rate at commercial banks is 2.7 percent.

   Canadian stock markets are mixed, with the Toronto index up at 21,855 points while the TSX Venture index was down at 884 points.

   The average price for gas in Canada is lower at $1.69 a liter or $6.42 for a U.S. gallon in Canadian funds.

   Lotto Max: (April 12) 3, 5, 7, 19, 32, 34 and 50; bonus 25. (April 8) 1, 2, 14, 15, 21, 26 and  29; bonus 4.

   Lotto 6/49: (April 13) 9, 27, 31, 33, 45 and 49; bonus 20. (April 9) 12, 28, 34, 41, 46 and 49; bonus 2.

    ---

    Regional briefs:

   - There are reminders of winter in Winnipeg and across Southern Manitoba as a multi-day storm dumped snow and brought high winds. Environment Canada said the storm left behind up to 50 cm (two feet) of snow. The highest amounts of snow fell in the south and the Interlake and Parklands regions. There were also blizzard warnings for southeastern Saskatchewan at mid-week. Earlier rain resulted in the province using flood controls in the Red River Floodway before the snow.

 -30-

 canadareport.blogspot.com