“The big cut”
Although the film is gripping, “The Big Cut” could also be much more exciting.
The Bank of Canada (BoC) selected Wednesday to chop its key rate of interest to 4.75%. It is the primary rate cut since March 2020. With around $700 million price of mortgages coming up for renewal in Canada this 12 months, “The Big Cut” will affect many Canadians.
“We have made great progress in the fight against inflation. And our confidence that inflation will continue to move closer to the two percent target has grown in recent months.”
– BoC Governor Tiff Macklem
Macklem also said: “Headline consumer price index inflation has declined steadily over the course of this year, and underlying inflation indicators increasingly point to a sustained easing.”
However, within the tradition of central bankers around the globe, Macklem was also careful to make use of neutral language, mentioning that the BoC will take things “one meeting at a time.” He added: “We don’t want monetary policy to be more restrictive than necessary to get inflation back to target. But if we cut our policy rate too quickly, we could jeopardize the progress we have made.”
While the BoC was the primary G7 country to start cutting rates of interest, the European Central Bank followed suit on Thursday and lowered its key rate of interest from 4% to three.75%. Market experts are speculation that the BoC will cut the important thing rate of interest three or 4 more times in 2024. (The BoC’s rate of interest plan calls for 4 more announcements).
The BoC (and plenty of other central banks) have faced plenty of criticism in recent times. But in the event that they can cut rates of interest, restart economic growth and avoid one other rise in rates of interest, they deserve help. Such a Goldilocks scenario will surely qualify as a “soft landing” by most economists’ definitions.
If the BoC can slowly lower rates of interest while concurrently reviving economic growth – all without pushing up inflation – then that will undoubtedly be a “soft landing” by the definition of most economists.
Lululemon stops its slide, Nvidia overtakes Apple
It was a comparatively quiet week for earnings reports, but Canadian retailers Lululemon and North West Company updated investors on their most up-to-date quarterly results. Note: Lululemon reports its earnings in U.S. dollars, while North West Company reports its earnings in Canadian dollars. You may remember North West Company out of your history books, because the Winnipeg-based grocery chain is significantly older than Canada (1779 versus 1867).
Retail earnings highlights
The latest stock prices and sales from Lulu and NWC.
Lulu released a mostly positive earnings report and saw its stock rise 8% on Wednesday. This was welcome news for shareholders, who’ve seen the stock fall greater than 36% because the starting of the 12 months. North West Company shares were flat the day after the corporate announced earnings that were in keeping with expectations. (Read more about Lululemon’s earnings report.)
