They may start teaching Bank of Canada policy statements in school. The vernacular of central banking lacks elegance, but Canada’s policy makers make up for it with brevity. The December 7 statement was a 317 words; the U.S. Federal Reserve used 610 words to explain why it did nothing last month. As I noted earlier this week, little had changed in the Bank of Canada’s world over the past couple of months. It made that point by issuing a press release that would fit inside a Christmas card.
Bank of Canada Governor Stephen Poloz and his deputies on the Governing Council had a few Holiday messages. The most important was that the jump in Canadian borrowing costs has nothing to do with conditions in Canada, in their opinion. “Following the election in the United States, there has been a rapid back-up in global bond yields, partly reflecting market anticipation of fiscal expansion in a US economy that is near full capacity,” the statement said. “Canadian yields have risen significantly in this context.”
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