A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Apr 13 2015

Bank of Canada Rate Cut May Have Limited Impact

In January, the Bank of Canada (BoC) shocked markets by cutting rates to 0.75% against expectations of holding rates flat before raising them in late 2015 or early 2016. BoC Governor Stephen Poloz called the cut “insurance” against the decline in oil prices, and allowed for further cuts as necessary to boost the economy. With energy-related activities accounting for about 11% of GDP in the manufacturing-centric economy, the oil price plunge is setting the stage for a potentially “atrocious” Q1. However, it is unclear whether this rate cut will have much effect on the economy.

ECRI’s latest analysis examines the impact of BoC policy, providing insights into the effectiveness of looser monetary policy in Canada.

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The Song Remains the Same

ECRI February 23, 2015

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