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BoC Chief Says Canada Will Ride Out the Storm

Mark-Carney Sound bytes from the Bank of Canada‘s Mark Carney, from a speech he gave yesterday:

  • “The Canadian economy is expected to begin recovering later this year.”
  • “…cutting the policy rate by 350 basis points since December 2007…with the usual lag…will have a powerful impact on economic activity and inflation.”
  • “Since the easing cycle began in December 2007, we have lowered the overnight rate by 350 basis points. The prime rate has fallen by 325 basis points, Bankers Acceptance rates (key short-term financing instruments for corporations) have fallen by about 380 basis points, and variable rate mortgages by about 185 basis points.”
  • “Our focus is clear, our actions consistent, and our objective explicit: 2% CPI inflation.”
  • “The Bank has taken into consideration the higher risk premiums demanded in today’s markets in setting its overnight rate. As well, it has taken into account the effect on future Canadian inflation of the lower level of foreign demand that has resulted, in part, from financial difficulties in other countries. The policy rate is lower than it otherwise would be in the absence of these difficulties.”  [CMT: As a result, rates may move up quickly once the economy heats up again…whenever that will be]