The Globe and Mail reports in its Monday, March 15, edition that the Bank of Canada began its first foray into quantitative easing about a year ago. The Globe's Rita Trichur writes that the BOC is spending about $4-billion a week and now controls almost 40 per cent of the market for Government of Canada bonds.
The side effects of this exotic economic elixir, when coupled with the BOC's promise to maintain a low interest rate policy, are asset bubbles -- including rollicking stock markets and rip-roaring housing prices in some regions that widen the gap between rich and poor.
It is a sticky situation. Governor Tiff Macklem has spent months warning that rising inequality with respect to jobs and incomes threatens the economic recovery. The BOC repeated that concern in its policy-rate announcement last Wednesday.
The BOC said: "The labour market is a long way from recovery, with employment still well below pre-COVID levels. Low-wage workers, young people and women have borne the brunt of the job losses."
The Globe says Mr. Macklem is rightly advocating for economic inclusion, or a "shared recovery," that benefits society as a whole, but there is only so much the BOC can do to achieve that goal.
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