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Results from the CSCE show that consumer sentiment improved this quarter, mainly due to recent interest rate cuts and the expectation of further cuts ahead. Consumers reported stronger spending plans. Still, they reported that high prices of many goods and services, economic uncertainty and elevated housing costs continue to weigh on spending decisions. Consumer confidence in the labour market has weakened and is now slightly below the survey average. Consumers’ inflation expectations have largely returned to historical norms.

On Monday, January 20, 2025, the Bank of Canada will release the fourth quarter issues of the Business Outlook Survey and the Canadian Survey of Consumer Expectations.

This paper provides an extensive evaluation of the performance of quantile vector autoregression (QVAR) to forecast macroeconomic risk. Generally, QVAR outperforms standard benchmark models. Moreover, QVAR and QVAR augmented with factors perform equally well. Both are adequate for modeling macroeconomic risks.

The Bank of Canada’s exceptional policy actions during the COVID-19 pandemic provided important support for the economy during the unprecedented shock, says a review published today.

On Friday, January 17, 2025, the Bank of Canada will publish its report on the exceptional policy actions undertaken in response to the COVID-19 pandemic. The documents will also include a review by an external panel of experts, and a response from the Bank’s Governing Council.

This review looks at the effectiveness of the Bank’s exceptional policy actions during the pandemic. It also draws several lessons that will help shape future decisions should these tools be needed again.