The BOC dropped their target range starting in June and has talked about QE although nothing was implemented. The Loonie dropped 5% in a matter of six weeks. The BOC has stated that they plan to keep rates at 25 bps until the end of the second quarter 2010.This is the small open economy effect with monetary easing. However we can also see the impact when growth starts to turn with a complete reverse in a matter of days. Talk about a reversal of fortune.
The BOC now thinks that the Great Recession is over with the Bank Governor Mark Carney believing that the economy will expand at a rate of 1.3 percent for the third quarter. and 3% in the fourth quarter. He also stated that "an extreme outcome" scenario is no longer a risk. This is after the Bank forecasted in April that the economy would drop 1% in the same period. This would mean that the Canadian recession was only nine months long.
The comments from the Governor also have some interesting twists. Carney states that a CAD gain will "an important brake" on growth and fats growth will not occur without inflation. The BOC expects inflation at 2% in 2011:2. Faster growth will lead to CAD appreciation and inflation which may be a concern but the worst is over.
The BOC now thinks that the Great Recession is over with the Bank Governor Mark Carney believing that the economy will expand at a rate of 1.3 percent for the third quarter. and 3% in the fourth quarter. He also stated that "an extreme outcome" scenario is no longer a risk. This is after the Bank forecasted in April that the economy would drop 1% in the same period. This would mean that the Canadian recession was only nine months long.
The comments from the Governor also have some interesting twists. Carney states that a CAD gain will "an important brake" on growth and fats growth will not occur without inflation. The BOC expects inflation at 2% in 2011:2. Faster growth will lead to CAD appreciation and inflation which may be a concern but the worst is over.
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