North America

  • 2020-01-24 10:45

    --Ex-Kansas Fed President Sees Steady Rates This Year

    WASHINGTON (MNI) - The Federal Reserve won't be able to reverse ultra-easy monetary policies for at least a decade, adding risk to the financial system, former Kansas City Fed President Thomas Hoenig told MNI.

    The Fed is getting stuck in a world of ample bank reserves and extensive bond purchases in a financial system already characterized by excess leverage, Hoenig said in an interview. Hoenig also saw little chance the Fed will move its policy rate this year.

    "Now QE is the policy tool -- they're trapped and I don't see how they're getting out of it anytime soon," he said.

  • 2020-01-23 13:10

    --Canadian Finance Minister Says He Has More Firepower For Downturn

    OTTAWA (MNI) - Canada's finance minister said Thursday deficit spending is taking pressure off the central bank to drive growth with ultra low interest rates, and he has plenty of firepower to deal with any future downturn.

    Bill Morneau said the current deficit of roughly 1% of GDP helps make sure the central bank isn't alone in supporting growth. The government introduced a family tax cut after being re-elected late last year and before that moved to mirror U.S. tax cuts on new business investment.

  • 2020-01-22 11:43

    By Greg Quinn

    OTTAWA (MNI) - Following is the text of Wednesday's press conference from BOC Governor Stephen Poloz and Senior Deputy Carolyn Wilkins:

    "Good morning. Senior Deputy Governor Wilkins and I are glad to be here to answer your questions about today's interest rate announcement and our Monetary Policy Report (MPR). Before turning to your questions, let me briefly summarize the substance of Governing Council's deliberations.

    You will recall that in October we were most occupied with the deteriorating global outlook. We could see clearly that this was affecting Canada's economy too -- not only through exports and the manufacturing sector, but also through the effects of heightened uncertainty on firms' investment decisions.

  • 2020-01-22 10:00

    By Greg Quinn

    OTTAWA (MNI) - Text of the BOC decision released Wednesday from Ottawa:

    The Bank of Canada today maintained its target for the overnight rate at 1.75 percent. The Bank Rate is correspondingly 2 percent and the deposit rate is 1.50 percent.

    The global economy is showing signs of stabilization, and some recent trade developments have been positive. However, there remains a high degree of uncertainty and geopolitical tensions have re-emerged, with tragic consequences. The Canadian economy has been resilient but indicators since the October Monetary Policy Report (MPR) have been mixed.

    Data for Canada indicate that growth in the near term will be weaker, and the output gap wider, than the Bank projected in October.

  • 2020-01-22 10:00

    By Greg Quinn and Anahita Alinejad

    OTTAWA (MNI) - The Bank of Canada held its key interest rate at 1.75%, dropping a phrase about borrowing costs being appropriate to say it's watching for signs that slower-than-expected growth will persist.

    Geopolitical and trade tensions remain high and may be spreading into Canada's resilient domestic economy, adding slower job growth and consumer spending to already shaky investment and exports. The slowdown that started in the fourth quarter will extend into the first quarter of this year and move the economy away from full output, the Ottawa-based BOC said Wednesday.

  • 2020-01-21 14:11

    By Evan Ryser

    WASHINGTON (MNI) - The Federal Reserve is practically engaging in quantitative easing without officially announcing such a policy, President Donald Trump's top economic adviser Larry Kudlow said Tuesday.

    Asked whether the Fed's Treasury bill purchases is another way for the Fed to quietly do QE, "I basically do," Kudlow said in a panel in Davos, Switzerland.

    "The net effect is they are expanding the balance sheet, whatever you wish to call it. I think it's not a coincidence that the stock market and housing market -- and indeed asset prices -- are rising again," he told the World Economic Forum.

    "The stock market has been a mirror of all this stuff. It's almost uncanny," Kudlow said.

  • 2020-01-20 12:04

    --Railway Strike Curbed Shipments Following UAW Strike

    OTTAWA (MNI) - Canada will likely report the fifth decline in factory sales in six months for November, with shipments disrupted again by labor strikes.

    Sales declined 0.4% according to the MNI economist median, following a 0.7% October decline. While the previous report showed disruptions from a UAW strike that hit auto production, November is hurt by a CN railway worker strike.

    The declines could again pull down GDP on the month and take fourth-quarter growth further away from the BOC's estimate to below a 1% annualized pace.

  • 2020-01-20 07:00

    By Evan Ryser

    WASHINGTON (MNI) - Climate change threatens the price stability targets of central banks and the damage could force them to rescue the financial system again, the Bank for International Settlements said in a research paper Monday.

    Central banks may have to become "climate rescuers of last resort" and buy large sets of devalued or carbon-intensive assets, said the paper from the Switzerland-based BIS.

    "A new global financial crisis triggered by climate change would render central banks and financial supervisors powerless," said the paper by BIS Deputy General Manager Luiz Awazu Pereira da Silva and co-authors Patrick Bolton, Morgan Despres, Frederic Samama and Romain Svartzman.

    Central banks have a role to play in avoiding such an outcome, like providi

  • 2020-01-17 12:45

    By Jean Yung

    WASHINGTON (MNI) - Federal Reserve Governor Randy Quarles on Friday laid out proposals to increase transparency in how the Fed supervises banks, including giving them more time to review their stress test results and seeking public and Congressional input on the Fed's supervisory guidance.

    The Fed Board could provide more transparency on the design of its stress test, make their requirements less "volatile" from year-to-year and allow firms more time to review their results, Quarles said in remarks prepared for an American Bar Association meeting in Washington.

  • 2020-01-17 08:34

    By Evan Ryser

    WASHINGTON (MNI) - President Donald Trump is sending long-delayed Federal Reserve Board of Governors nominations of Judy Shelton and Christopher Waller to the Senate for confirmation, according to an announcement from the White House on Thursday.

    Shelton, a former adviser to President Trump's 2016 presidential bid and controversial economist who most recently served as the U.S. executive director at the European Bank for Reconstruction and Development, and Waller, the research director and executive vice president of the St. Louis Fed, were originally named as potential nominees by Trump in early July in the form of a tweet.

    Shelton has been nominated to a term expiring in Jan. 2024 and Waller to a term expiring in Jan. 2030.