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Why Stephen Poloz isn’t ready just yet to pivot on interest rates

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Normally, we’d preview the Bank of Canada’s next policy decision closer to the actual date. But all the relevant data has been published, so why wait? Unless the central bank scraps its story, it will leave the benchmark rate at 1.25 per cent on May 30.

Canada’s dollar dropped half a cent against its U.S. counterpart on Friday, probably because new readings on inflation and retail sales suggest the economy is chugging along, not racing ahead at a pace that would alarm policy makers. The prices of financial assets linked to short-term interest rates put odds of an interest-rate increase next week at about 25 per cent.

Bank of Canada Governor Stephen Poloz and his lieutenants on the Governing Council will take note of those prices. When Poloz abandoned explicit forward guidance, he said he hoped investors would think harder about the economy and spend less time trying to guess what he might be thinking. The market’s current message: There’s no need to change policy.

The sudden wobble in the renegotiation of the North American Free Trade Agreement might also have influenced traders. Policy makers have characterized uncertainty about trade policy as the biggest headwind facing the economy because it’s a chill on investment. So the shift to a protracted negotiation, after politicians spent several weeks suggesting a deal was close, is a negative.

But trade never was going to play a major role in the May decision. The vibe around NAFTA was turning positive a month ago, and the Bank of Canada opted to leave the benchmark rate unchanged. Officials said they would stop worrying about trade only when they saw evidence that business investment was holding up. RBC Capital Markets said last week that its monitoring of company announcements suggests a modest increase in spending. Still, definitive data won’t be available until after May 30: Statistics Canada will release its tally of second-quarter gross domestic product the following day, and the central bank’s quarterly Business Outlook Survey is due on June 29.

That’s why the policy announcement scheduled for July 11 is the earliest the Bank of Canada could raise interest rates and remain consistent with what it’s said about how it would react to trade news, positive or otherwise. To move in May would require a noticeable change in other economic variables and that hasn’t happened.

To be sure, oil prices are about $15 a barrel higher than central bank’s current forecast, which is based on prices a month ago.

That will prompt some debate over the next 10 days as policy makers deliberate over where the economy is headed. Normally, a shift of that magnitude would represent a material change in Canada’s prospects. Yet there has been no discernible change in the value of the currency, the TSX or the outlook for economic growth, according to economists at Bank of Montreal. Higher crude prices mean the value of exports is rising, but those gains are being offset by doubts about whether the increase will last and the future competitiveness of Canada’s high-cost oil industry.

One indicator that would outweigh concerns about business investment is inflation. The Bank of Canada’s primary mission is to keep the consumer price index advancing at an annual rate of about 2 per cent. Statistics Canada reported the CPI increased 2.2 per cent in April from a year earlier, the third-consecutive month that inflation exceeded the central bank’s target. That’s noteworthy because annual price increases had brushed the target only three times in the previous three years.

The upward pressure on inflation could make the May decision a closer call than currency traders seem to think. The Bank of Canada cares more about three specially crafted inflation gauges than it does the headline number, which is often distorted by surges and plunges in energy and prices. Two of those three measures now are above 2 per cent, and the third is at 1.9 per cent, so for the first time since early 2012 all four of the key price indicators have been at target or higher. Sebastien Lavoie, a former staffer at the BoC who now is chief economist at Laurentian Bank Securities in Montreal, calculated that prices for 24 of the items in StatCan’s CPI basket were increasing at a rate faster than 3 per cent in the first quarter, compared with 22 that did so in 2017. The number of items that were cheaper declined to 30 from 34. The change suggests inflation is heating up, if only gradually.

“We still think it is preferable for [Bank of Canada] officials to remain on the sidelines at the May 30 monetary policy decision meeting,” Lavoie said in a note to his clients. “This being said, this decision is likely to be a close call given that two of the three core inflation measures are now above the 2% target.”

The two other factors that dominate the Bank of Canada’s narrative about the economy are household debt and Poloz’s contention that lower interest rates might actually help policymakers stay ahead of inflation.

Household debt is about 100 per cent of GDP, compared to about 70 per cent in 2005, according to the International Monetary Fund’s new Global Debt Database. All that debt probably means consumers are more sensitive to changes in interest rates than they were in the past. So the BoC is looking for evidence that credit growth is slowing, but not so fast that it crushes domestic demand. And as you might expect, higher interest rates appear to be restraining consumer demand. StatsCan said last week that retail sales jumped 0.6 per cent in March from the previous month, but only because of a surge in automobile purchases. Most other retail segments are essentially unchanged from January 2017.

Sluggish retail sales support Poloz’s argument that Canada’s economy isn’t as strong as its 5.8-per-cent jobless rate suggests. He sees elevated rates of long-term and youth unemployment as marks of the financial crisis and the oil-price collapse. Higher interest rates risk killing growth that could pull more of those people into the labour market and Poloz has been crystal clear that he intends to do what he can to encourage that to happen.

“In some models of the economy, that would become a permanent thing, a hysteresis thing,” Poloz said of the elevated number of marginalized workers, while talking to me and a couple of other journalists in Washington last month. “Well, if it can happen in one direction, there is no reason with enough time that it can’t be reversed because it’s just people combined with new investment, just building more economic building blocks.”

He added: “You’ve got to believe we’re going to get a fair bit of that. But again I can’t guess how much, but I think it’s a really important phase.”

It will take some strong evidence to push Poloz off that course and there hasn’t been enough since then to force a pivot. Bottom line: low for a bit longer.

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COUP-IN-PROGRESS: White Collar Mafiosos Fauci, Pelosi, Cuomo & Cuomo Conspire to Topple Trump

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Let’s put THE GREAT SCAMDEMIC aside for a moment.

And let’s jump ahead to Election Day — November 3, 2020.

Three things are certain based on Deep State’s no-holds-barred MO.

First, the DEMs will steal the Senate just like they stole the House during the 2018 midterms.

Second, the DEMs will increase their majority in the House with even more election fraud and theft.

Third, the DEMs will either politically incapacitate Trump between now and Nov. 3…
or, they will outright steal the POTUS election now that the electoral process has been thrown into chaos and confusion…
or, they will let Trump win so that they can impeach and convict him in 2021 with their solid majorities.

Now let’s take a close look at THE GREAT SCAMDEMIC, and especially how it will be used to manipulate the 2020 election outcome.

This thing — THE GREAT SCAMDEMIC — goes way beyond the Democrats and Deep State.  It goes way beyond CROWNgate and Pedogate.  It goes way beyond the Rothschilds and the Rockefellers. It even goes beyond the Cahilla and the Khazarian Mafia … as well as the Black Nobility and the International Banking Cartel & Crime Syndicate.

THE GREAT SCAMDEMIC is so HUGE and has so many objectives that you know it’s the end … the final end … … … as in the “End-times” !

But that’s not the point here.

What happens between now and Election Day will determine the fate of the American Republic.  The future of the American people hangs in the balance with the 2020 outcome like no other election in U.S. history.

The election outcome (and process) will also dictate the inevitable consequences for the Democrat Party, as well the destiny of Deep State.  The Patriot Movement also stands to gain or lose a LOT!

This is why TPTB have strategically positioned so many Deep State Democrats all over the place.

We’re talking about white-collar mafiosos like Fauci, Pelosi, Cuomo & Cuomo.

The liberal power elite have installed a top hitman in every position that counts.

It’s like JFK driving through Dealey Plaza on November 22, 1963 surrounded by the 8 C.I.A. sniper nests (yes, there really were at least eight sniper’s nests).[1]

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FALSE FLAG ALERT: Obama Foundation tweeted about George Floyd on May 17th, a week before his supposed murder – UPDATE

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(Natural News) We have now confirmed that the Obama Foundation was tweeting about George Floyd on May 17th, more than a week before the day Floyd was reportedly killed by police in an act of violence that sparked the worldwide riots we’re all witnessing.

George Floyd was killed on May 25th. So what was the Obama Foundation doing tweeting about Floyd on May 17th, when nobody knew who he was?

UPDATE: Some people are saying that Twitter retroactively alters images from the history of your timeline when the source URL changes its image. However, what investigators have already confirmed is that the Twitter URL validator was used by the Obama Foundation to validate this image on May 17th, in advance of releasing it publicly. Thus, the image was VALIDATED more than a week before Floyd’s claimed death. This, combined with the new video analysis that claims George Floyd’s death was faked using crisis actors, raise serious questions about the authenticity of this event, which appears to have been planned and carried out for political purposes, right in time for the 2020 election. The Obama Foundation Twitter picture is only a tiny fragment in the larger picture that is now emerging of a pre-planned false flag event.

The answer, of course, is that the whole thing was planned in advance. Just like on 9/11 when the media was reporting that the WTC 7 building had collapsed even while it was still standing in the frame directly behind them, it looks like the Obama Foundation got its wires crossed and accidentally started tweeting about George Floyd a week in advance.

Once the first tweet accidentally went out, they couldn’t delete it without raising suspicion about it, so they just left it up and are relying on Big Tech’s censorship to make sure nobody learns the truth that this was all planned in advanced and rigged as public theater.

In fact, there is growing evidence that George Floyd isn’t even dead. We’ll cover more on that later. We’ve already documented the fact that actors are now posing as cops as part of a rioting psyop (psychological operation) that’s being used to brainwash more people into supporting the communist uprising.

YouTube is now banning all videos that discuss the Obama Foundation tweet about George Floyd on May 17th, and Facebook has made sure that no one can share any link from NaturalNews.com as a further suppression of truthful, independent reporting.

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COVID: The squeeze play on the population

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It’s a con as old as the hills. The ancient chieftain of a little territory looks out across his domain and says to his top aide, “You know, we have these clusters of people worshiping different gods. That’s not good for business. Our business is CONTROL, so we need UNITY. Make up the name of some god, and go out there and sell it. Take down those little shrines and tell all the people they have to believe in the new deity. Use force and censorship when necessary. Later on, I may decide I’M really the name you chose for the new god. We’ll see. If you have any trouble right away, call me on my cell. I’ll be out sunning by the pool.”

Unity of thought. That’s what controllers are after.

In the case of this fake epidemic, the population must view WHAT IT IS in the way public officials and the press are describing it. Dissenting analysis must be pushed into the background.

Here is a 4/9 Bloomberg News headline: “5G Conspiracy Theory Fueled by Coordinated Effort.” [1] A sub-headline states, “Researchers identify disinformation campaign but not source.” The article begins: “A conspiracy theory linking 5G technology to the outbreak of the coronavirus is quickly gaining momentum…”

Obviously, such wayward thinking has to be stopped. And down further in the Bloomberg article, we have chilling news: “Some social media companies have taken action to limit the spread of coronavirus conspiracy theories on their platforms. On Tuesday, Google’s YouTube said that it would ban all videos linking 5G technology to coronavirus, saying that ‘any content that disputes the existence or transmission of Covid-19’ would now be in violation of YouTube policies.”

“In the U.K., a parliamentary committee on Monday called on the British government to do more to ‘stamp out’ coronavirus conspiracy theories, and said it was planning to hold a hearing later this year at which representatives from U.S. technology giants will be asked about how they have handled the spread of disinformation on their platforms.”

Independent analysis of the “epidemic” hangs in the balance. The masters of control want to maintain an information monopoly.

It goes without saying that, in order to achieve this monopoly, detailed surveillance of Internet content is necessary.

Another type of surveillance is also part of the squeeze play. Apple.com has the story (press release, 4/10) [2]:

“Across the world, governments and health authorities are working together to find solutions to the COVID-19 pandemic, to protect people… Since COVID-19 can be transmitted through close proximity to affected individuals, public health officials have identified contact tracing as a valuable tool to help contain its spread. A number of leading public health authorities, universities, and NGOs around the world have been doing important work to develop opt-in contact tracing technology.”

“To further this cause, Apple and Google will be launching a comprehensive solution that includes application programming interfaces (APIs) and operating system-level technology to assist in enabling contact tracing. Given the urgent need, the plan is to implement this solution in two steps while maintaining strong protections around user privacy.”

Read more…

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