Monetary policy transmission

• Real Exchange Rate Decompositions

  Staff Discussion Paper 2022-6 Bruno Feunou, Jean-Sébastien Fontaine, Ingomar Krohn

  We break down the exchange rate based on an explicit link between fixed income and currency markets. We isolate a foreign exchange risk premium and show it is the main driver of the exchange rate between the Canadian and US dollars, especially on monetary policy and macroeconomic news announcement days.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Asset pricing, Exchange rates, International financial markets, Monetary policy transmission JEL Code(s): E, E4, E43, F, F3, F31, G, G1, G12

• Household Heterogeneity and the Performance of Monetary Policy Frameworks

  Staff Working Paper 2022-12 Edouard Djeutem, Mario He, Abeer Reza, Yang Zhang

  Consumption inequality and a low interest rate environment are two important trends in today’s economy. But the implications they may have—and how those implications interact—within different monetary policy frameworks are not well understood. We study the ranking of alternative frameworks that take these trends into account.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Monetary policy and uncertainty, Monetary policy framework, Monetary policy transmission JEL Code(s): D, D3, D31, D5, D52, E, E2, E21, E3, E31, E5, E52, E58
• March 3, 2022

  Economic progress report: Controlling inflation

  Remarks (delivered virtually) Tiff Macklem CFA Society Toronto Toronto, Ontario

  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.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Coronavirus disease (COVID-19), Domestic demand and components, Expectations, Inflation and prices, Interest rates, International topics, Monetary aggregates, Monetary policy, Monetary policy and uncertainty, Monetary policy communications, Monetary policy implementation, Monetary policy transmission, Price stability, Recent economic and financial developments, Sectoral balance sheet
• March 3, 2022

  Getting inflation back to target

  Speech summary Tiff Macklem CFA Society Toronto Toronto, Ontario

  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.

  Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Coronavirus disease (COVID-19), Domestic demand and components, Expectations, Inflation and prices, Interest rates, International topics, Monetary aggregates, Monetary policy, Monetary policy and uncertainty, Monetary policy communications, Monetary policy implementation, Monetary policy transmission, Price stability, Recent economic and financial developments, Sectoral balance sheet