Prime Minister Justin Trudeau has said he “will continue to ensure that the economy does not become subject to a slowdown that would hurt Canadians.” That’s good, because central bankers, who repeatedly covered for indecisive and craven legislators during the Great Recession more than a decade ago, don’t have much to offer this time. Politicians will determine the extent to which COVID-19 chokes economic growth.
To be sure, U.S. Federal Reserve Chair Jerome Powell, European Central Bank president Christine Lagarde and their counterparts will do what they can. Powell is hogging the early spotlight. He pulled the Fed’s policy committee together to approve an emergency interest-rate cut on March 3. The Bank of Canada followed on March 4 by also announcing a half-point rate cut to 1.25 per cent. Many economists think the Fed will cut interest rates again later this month at its regularly scheduled policy meeting, and that the Canadian central bank will cut interest rates again in April.
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