Canada Inflation Hits 30 Year High Of 6.7%

[Economy 52,854]

https://www.bnnbloomberg.ca/canadian-inflation-blows-past-expectations-spiking-to-6-7-1.1754297

 

Canadas latest inflation reading came at 6.7% the highest since 1991 as the economy overheats and grapples with supply chain disruptions

 

Canada along with USA have began aggressive monetary policy tightening in order to try to contain surging inflation both raising interest rates 50 basis points in last meeting and expected to do so again next meeting

 

High commodity prices also weigh. Canada in the past has had currency surge during Energy and Commodity booms which helps offset inflation but this time the currency is not responding much to the price of comodities

 

[Economy 52,854]

@PartySick not as bad as US 8.5% but looks like we tryna compete 

[AsleepOnTheCeiling 6,974]

Does the Canada tighten it's monetary policy the same way the U.S. does?

[Economy 52,854]

1 hour ago, TortureMeOnReplay said:

Does the Canada tighten it's monetary policy the same way the U.S. does?

Yes. Most Countries Central Banks more or less have the same systems in place

 

Both Countries are also starting Quantitative Tightening in addition to raising interest rates

 

In case your wondering what that is, it's the opposite of quantitative easing... Quantitative easing is when the Central Bank prints money and uses it to buy up things like bonds and equities (Japan invented it when they were trying to fight deflation). They mainly targeted Government bonds to force yields (in turn interest rates) even lower than a lower official trend setting rate can achieve alone by competing with actual investors to buy Government debt. That influences all rates in the economy like corporate bonds as well indirectly. It's stimulates the economy with the low rates and it increases the money supply in the system 

 

Quantitative tightening is the opposite. They literally sell bonds or equities they bought with printed money and after they sell it the money is destroyed from existence

 

So it puts a break on the economy, increases rates and it removes money from the system