North America

  • 2020-06-12 16:37


    By Greg Quinn

    OTTAWA (MNI) - The Bank of Canada's balance sheet grew CAD18 billion to a record CAD498 billion this week with government bonds and bills dominating the increase while the need for corporate liquidity waned.

    Federal t-bill holdings climbed CAD8 billion to CAD116 billion, and federal bonds by CAD7 billion to CAD145 billion, figures through June 10 posted late Friday showed. The bond purchases are faster than the BOC's minimum pledge to acquire at least CAD5 billion a week until the economic recovery is well underway.

    Governor Tiff Macklem may reiterate his pledge for aggressive action when he testifies at the House of Commons finance committee Tuesday, his first public remarks since taking over from Stephen Poloz on June 3.

  • 2020-06-12 14:14


    By Greg Quinn

    OTTAWA (MNI) - Canadian companies took on record debts in the first quarter as Covid-19 shutdowns took hold while heavily indebted consumers were propped up by relief payouts and mortgage deferrals.

    Companies excluding the financial sector took out a record CAD49.1 billion of non-mortgage loans, Statistics Canada said Friday from Ottawa. The debt-to-equity ratio surged to 212% from 189%, the highest since 2009, as the global crash reduced the value of shares faster than for corporate debt.

    Corporate debt climbed as industrial capacity use declined to 79.8% in the quarter from 81.8%, including a 74.4% rate for factories that was the lowest in a decade.

  • 2020-06-11 17:40


    By Evan Ryser

    WASHINGTON (MNI) - The Fed's balance sheet hit a record USD7.17 trillion, growing only slightly, in a week where the Fed announced a floor on monthly bond purchases.

    The snapshot released Thursday shows the Fed's portfolio increased by USD3.7 billion. Balance sheet growth in the week through June 10 was driven by Treasury purchases gaining USD16 billion to a record USD4.15 trillion.

    A decline in repurchase agreements by USD44 billion offset small increases in other areas, such as the corporate credit facility and the paycheck protection facility, according to the Fed data.

    As the balance sheet reaches 38% of GDP, it is set to grow larger as output shrinks and the Fed gets set to begin the "Main Street" lending facility.

  • 2020-06-10 15:31


    WASHINGTON (MNI) - The following is the portion of a transcript from Federal Reserve Chairman Jerome Powell's press conference on Wednesday:

    Q: I came across a statistic the other day that amazing me. Since the March 23rd emergency announcement, every single stock in the S&P 500 has delivered a positive return. I'm wondering, given the levels of the market right now, whether you or your colleagues feel there is a possible bubble blowing that could pop and set back the recovery significantly, or that we might see capital misallocation that would leave us worse off when this is over? Second default is about ranges and wealth and target the markets after the great financial crisis, that the fed did contradict to wealth inequality in in country.

  • 2020-06-10 15:26


    WASHINGTON (MNI) - The following is the portion of a transcript from Federal Reserve Chairman Jerome Powell's press conference after the FOMC meeting Wednesday:

    Q: Chairman Powell, the issue of inequality. What more can the fed do for the country? You said you don't target certain groups, but is there a way that you could use, for example, this last unemployment rate as a benchmark to something you want to meet or something that you keep track of.

    A: We track all kinds of demographics including the African-American unemployment rate, which reached an all-time low since the data started to be kept in the modern era. Of course, it's still close to twice the white unemployment rate or it was back then. It's certainly much higher now.

  • 2020-06-10 15:21


    WASHINGTON (MNI) - The following is the portion of a transcript from Federal Reserve Chairman Jerome Powell's press conference after the FOMC meeting Wednesday:

    Q: I wanted to follow up on fiscal policy you put out your summary of economic standards. What policy is factored in or not to those projections and how fiscal policy might do those projections. My other question is on main street you've mentioned multiple times that the fed and treasury are willing to expand the PRACHL further. My question is, what's the threshold for those types of changes? Is it just making sure that borrowers that want to borrow through the program are able to do that?

    A: In terms of the way we do forecasts is we don't to incorporate things we're uncertain about.

  • 2020-06-10 15:21


    WASHINGTON (MNI) - The following is the portion of a transcript from Federal Reserve Chairman Jerome Powell's press conference on Wednesday:

    Q: As you know, the vast majority of people have been laid off are expecting to be called by their employers. At this point, what is your expectation of how much of these job losses will be permanent?

    A: I don't have a reliable estimate of that. Clearly not everyone will go back, and I would say many will go back. What's going to be the remainder when, you know, we reach sort of the new normal. It's so uncertain but it can be a good number of millions of people in many estimates.

  • 2020-06-10 15:18


    WASHINGTON (MNI) - The following is the portion of a transcript from Federal Reserve Chairman Jerome Powell's press conference on Wednesday:

    Q: Two quick questions. One is if we have hit bottom for the economy? The second question is regarding the way that the pandemic has exacerbated racial inequality. I want to talk to what extent do you think you can factor in boast disparities when you think about maximum...

    A: I would say many forecasters had been expecting a bottom for the economy around the middle of the year with a huge range of uncertainty. I think the labor market -- the evidence of one jobs report is that the lab market may have hit bottom in may. We don't know that. We're going to see.

  • 2020-06-10 15:14


    WASHINGTON (MNI) - The following is the portion of a transcript from Federal Reserve Chairman Jerome Powell's press conference after the FOMC meeting Wednesday:

    Q: We saw 55 companies file for bankruptcy. Do you think it's too late, first of all? Second of all, the future of these facilities, is this a one-year impact on the economy through these facilities or is this a multiple year, and if so, how many years?

    A: We have significant interest, we think, and also remember, lots and lots of companies get financed, too. The banking are lending and the markets are open. You have a much better lending climate than certainly we had in February and March. We don't think it's too late, though, and we expect it to be up quite soon.

  • 2020-06-10 15:10


    WASHINGTON (MNI) - The following is the portion of a transcript from Federal Reserve Chairman Jerome Powell's press conference on Wednesday:

    Q: Chairman Powell I'm going to pick up on what Scott was asking a moment ago. You have been studious about threading this needle in the interviews you've given and speeches and colloquy that's followed. There's likely to be a need for more fiscal stimulus for policy in the future. I'll try a hypothetical here.