Comments by Jean Boivin, a deputy governor of the Bank of Canada, have prompted speculation that the central bank is set to abandon its inflation target in favour of a price-level target.
The central bank, along with the Canadian government, will decide later this year whether it maintains its current monetary policy framework. And a price-level target is indeed one option up for consideration.
But is it likely to switch so soon? Read more
Perhaps market tensions are not quite as bad as feared? The European Central Bank has reported there were no takers today for its weekly offer of dollar liquidity. Last week, a single bidder received $500m, which was seen by some as the start of a trend. The ECB offers dollars in conjunction with the US Federal Reserves at an above-market interest rate – so use of its facility is a sign of bank distress. In the event, it seems that the problem last week was specific and temporary. At least for now… Read more