Bank of Canada Interest Rates
- Monetary Policy Transmission with Endogenous Central Bank Responses in TANK
We study how the transmission of monetary policy innovations is affected by the endogenous response of the central bank to macroeconomic aggregates in a two-agent New Keynesian model. We focus on how the stance of monetary policy and the fraction of savers in the economy affect transmission.
Published: No date - How will mortgage payments change at renewal? An updated analysis
We update an assessment of potential changes in payments that mortgage holders could face at renewal in 2025 and 2026. We use an enhanced dataset (RESL2) that provides a more accurate starting point for mortgage balances.
Published: No date - Assessing the US and Canadian neutral rates: 2025 update
We assess both the US and Canadian nominal neutral rates to be in the range of 2.25% to 3.25%, unchanged from the range assessed in 2024.
Published: No date - Exploring the drivers of the real term premium in Canada
Changes in the term premium can reflect uncertainty about inflation, growth and monetary policy. Understanding the key factors that influence the term premium is important when central banks make decisions about monetary policy. In this paper, we derive the real term premium from the nominal term premium in Canada.
Published: No date - Monetary policy, interest rates and the Canadian dollar
Changes in domestic interest rates affect the value of the Canadian dollar less than changes in the risk premium do. These variations often occur when a broad shift in risk sentiment occurs in global markets. Ultimately, the value of the currency reflects long-term, slow-moving features of the economies.
Published: No date - High-Cost Consumer Credit: Desperation, Temptation and Default
I study the welfare consequences of regulations on high-cost consumer credit in the United States and find that borrowing limits have distributional impacts on households with self-control issues.
Published: No date - Using new loan data to better understand mortgage holders
The Bank of Canada is using an enhanced dataset that tracks the stock of outstanding mortgages and home equity lines of credit held by federally regulated lenders. This paper highlights some of the new details in the dataset and how they impact the Bank’s understanding of the mortgage market.
Published: No date - Keeping inflation at 2%
In his first public speech as a deputy governor, Rhys Mendes explains why higher interest rates were needed to get inflation back down to the 2% target and why we want it to stay there.
Published: No date - Sticking the landing: Keeping inflation at 2%
Deputy Governor Rhys Mendes discusses how monetary policy worked to bring inflation back down to target and why the Bank wants inflation to stay close to 2%.
Published: No date - Consumer Credit Regulation and Lender Market Power
We investigate the welfare consequences of consumer credit regulation in a dynamic, heterogeneous-agent model with endogenous lender market power. Lenders post credit offers and borrowers—some informed and others uninformed—apply for credit. We calibrate the model to match characteristics of the unsecured consumer credit market and use the calibrated model to evaluate interest rate ceilings.
Published: No date