May 12, 2022
Interest rates
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Expectation-Driven Term Structure of Equity and Bond Yields
Recent findings on the term structure of equity and bond yields pose serious challenges to existing models of equilibrium asset pricing. This paper presents a new equilibrium model of subjective expectations to explain the joint historical dynamics of equity and bond yields (and their yield spreads). -
Assessing global potential output growth and the US neutral rate: April 2022
We expect global potential output growth to increase from 2.7% in 2021 to 2.9% by 2024. Compared with the April 2021 assessment, global potential output growth is marginally slower. The current range for the US neutral rate is 2% to 3%, 0.25 percentage points higher than staff’s last assessment. -
Potential output and the neutral rate in Canada: 2022 reassessment
We expect potential output growth to be lower in 2021 than anticipated in the April 2021 assessment. By 2025, growth is expected to reach 2.3%. We assess that the Canadian nominal neutral rate increased slightly to lie in the range of 2.00% to 3.00%. -
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March 3, 2022
Economic progress report: Controlling inflation
Bank of Canada Governor Tiff Macklem talks about the Bank’s latest interest rate announcement and what’s driving inflation in Canada. He also discusses how the Bank will manage the next step in the Bank’s balance sheet operations – quantitative tightening. -
March 3, 2022
Getting inflation back to target
Governor Tiff Macklem talks about the Bank of Canada’s decision yesterday to raise its policy interest rate. He explains that after two years of extraordinary stimulus, we are now on a path of rising interest rates. -
February 2, 2022
A Canadian interest rate benchmark regime for the future
Deputy Governor Toni Gravelle discusses some important changes that may be coming to Canada’s interest rate benchmarks. -
December 9, 2021
Keeping our eyes on inflation
Deputy Governor Toni Gravelle talks about the Bank of Canada’s decision yesterday to leave the policy rate unchanged. He explains the link between supply bottlenecks and high inflation and why the Bank thinks both will ease over time. -
December 9, 2021
Economic progress report: A recovery unlike any other
Deputy Governor Toni Gravelle provides an economic update and discusses the relationship between supply bottlenecks and inflation.