{"id":25693,"date":"2017-09-15T14:48:19","date_gmt":"2017-09-15T19:48:19","guid":{"rendered":"http:\/\/olduvai.ca\/?p=25693"},"modified":"2017-09-15T14:48:19","modified_gmt":"2017-09-15T19:48:19","slug":"yesterdays-watershed-central-bank-announcement-which-everybody-missed","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=25693","title":{"rendered":"Yesterday&#8217;s &#8220;Watershed&#8221; Central Bank Announcement Which Everybody Missed"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\/news\/2017-09-15\/yesterdays-watershed-central-bank-announcement-which-everybody-missed\">Yesterday&#8217;s &#8220;Watershed&#8221; Central Bank Announcement Which Everybody Missed<\/a><\/h3>\n<section class=\"node node-type-story node-full node-nid-603582\">\n<div class=\"content\">\n<p>In what may have been a watershed moment in monetary policy &#8211; which awkwardly was missed by almost everyone as a result of the concurrent launch of the latest North Korean ballistic missile which immediately drowned out all other newsflow &#8211; late on Thursday, the Bank of Canada held a conference on inflation targeting and monetary policy titled &#8220;<a href=\"http:\/\/www.bankofcanada.ca\/2017\/09\/monetary-policy-framework-issues-toward-2021-inflation-target-renewal\/\">Bank of Canada Workshop \u201cMonetary Policy Framework Issues: Toward the 2021 Inflation-Target Renewal<\/a>&#8221;\u00a0 in which, in a stunning shift of monetary orthodoxy, BoC Senior Deputy Governor Carolyn A. Wilkins <strong>said that Canada was open to changes in the BoC mandate. <\/strong><\/p>\n<ul>\n<li><strong>WILKINS: OPEN TO LOOKING AT `SENSIBLE&#8217; ALTERNATIVES TO MANDATE<\/strong><\/li>\n<\/ul>\n<p>Or in other words, lowering or outright abolishing the central bank&#8217;s inflation target, or explicitly targeting financial conditions and asset prices.<\/p>\n<p>While still early in the process, the BOC may be setting a precedent, one which other DM central banks may have no choice but to follow: If the Bank of Canada is going to look at alternatives to their mandate (with an emphasis on inflation), it &#8211; as several trading desks have suggested &#8211; could become the first central bank to officially change its mandate to reflect financial conditions that are too loose in the context of the current low r-star lowflation environment.<\/p>\n<p>In practical terms, this would mean that instead of seeking chronically easier conditions to hit legacy inflation targets around ~2.0% while inflating ever greater asset bubbles, one or more central banks could simply say that 1.5% (or less) is sufficient for CPI and call it a day, in the process soaking up record easy financial conditions and bursting countless asset bubbles.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Yesterday&#8217;s &#8220;Watershed&#8221; Central Bank Announcement Which Everybody Missed In what may have been a watershed moment in monetary policy &#8211; which awkwardly was missed by almost everyone as a result of the concurrent launch of the latest North Korean ballistic missile which immediately drowned out all other newsflow &#8211; late on Thursday, the Bank of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[16013,942,16012,4800,534,4318],"class_list":["post-25693","post","type-post","status-publish","format-standard","hentry","category-economics","tag-asset-price","tag-bank-of-canada","tag-central-bank-mandate","tag-inflation-target","tag-monetary-policy","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25693"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25693\/revisions"}],"predecessor-version":[{"id":25694,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/25693\/revisions\/25694"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}