Bank of Canada – mackaycartoons

Thursday June 6, 2024

June 6, 2024 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday June 6, 2024

Borrowers Ride the Wave of Rate Cuts Amidst Rising Living Costs

May 31, 2024

The economic landscape resembles a carnival ride for borrowers, offering moments of relief intertwined with daunting challenges. The recent decision by the Bank of Canada to cut its overnight rate for the first time in over four years has injected a sense of optimism into the economy. However, this optimism is tempered by the harsh reality of continuous rises in living costs. As borrowers embark on this rollercoaster journey, they must navigate the twists and turns of economic uncertainty while grappling with the impact of inflation on their financial stability.

News: Bank of Canada cuts key rate for first time in more than 4 years

March 11, 2024

Borrowers across Canada buckle up as the rollercoaster of economic recovery sets off. The Bank of Canada’s decision to cut its overnight rate by 25 basis points, a move not seen since the beginning of the pandemic, offers a glimmer of hope. With the policy rate now at 4.75%, borrowers anticipate lower borrowing costs, providing a much-needed respite from financial strain. Bank of Canada Governor Tiff Macklem’s confidence in the easing of underlying inflation levels adds to the sense of optimism, as borrowers brace themselves for a smoother ride ahead.

However, the rollercoaster takes an unexpected plunge, plunging borrowers into the harsh reality of rising living costs. Despite the rate cut, inflation remains a persistent threat, with the inflation rate standing at 2.7% in April. The economy’s growth of 1.7% in the first quarter of 2024 falls below expectations, signalling underlying challenges. While employment figures show signs of improvement, wage pressures continue to linger, casting a shadow over borrowers’ financial well-being.

March 5, 2024

As the rollercoaster navigates its twists and turns, borrowers find themselves grappling with economic uncertainty. Bank of Canada Governor Macklem’s cautionary remarks remind borrowers of the delicate balance between rate cuts and inflation management. The decision on further rate cuts hangs in the balance, with risks to the inflation outlook remaining a concern. Borrowers must tread carefully, mindful of the uneven progress in bringing down inflation and the potential risks posed by hasty policy decisions.

As borrowers disembark from the economic rollercoaster, they are left pondering the lessons learned from their turbulent journey. While rate cuts offer a glimmer of hope, the challenges posed by rising living costs loom large. It is imperative that borrowers, policymakers, and stakeholders alike come together to advocate for economic stability and financial resilience. By navigating the twists and turns of economic uncertainty with prudence and foresight, borrowers can steer towards a brighter, more equitable future for all.

Tuesday March 12, 2024

March 12, 2024 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday March 12, 2024

Roaring for Financial Justice: The Empowering Wave of Loud Budgeting

March 5, 2024

In the midst of economic tumult, a refreshing wave is sweeping over personal finance—the “loud budgeting” movement. More than a passing trend, it serves as a bold call to shift our resistance from loved ones to the architects of our financial struggles: corporations, employers, and governments. Loud budgeting isn’t just a financial strategy; it’s a spirited stand against consumerism, a declaration to reclaim control over our finances, especially in social settings.

Coined by comedian Lukas Battle and making waves on platforms like TikTok, loud budgeting encourages us to break free from societal expectations and boldly declare, “I have the money, but I choose not to spend it.” In a world bombarded with product advertisements and unattainable lifestyles, loud budgeting becomes a beacon of authenticity and empowerment.

Opinion: ‘Loud budgeting’ is a personal finance trend to watch

December 2, 2023

The movement doesn’t advocate for complete social withdrawal or the rejection of every invitation. Instead, it urges us to prioritize meaningful social engagements, steering clear of peer pressure to say ‘yes’ to every outing. Battle urges us to send a message to corporations about the impact of national inflation, shifting the narrative from “I don’t have enough” to the empowering stance of “I don’t want to spend.”

The true magic of loud budgeting unfolds in social gatherings, where turning down friends and relatives for activities you’d rather not spend on can be uncomfortable. Loud budgeting steps in as the remedy, providing a toolkit for open and clear communication about financial boundaries. It’s about fostering authentic conversations, breaking the taboo around discussing finances, and setting firm goals that align with individual values.

At its core, loud budgeting extends beyond personal conversations to challenge the real culprits against whom we can make a difference in the face of the affordability crisis: corporations, employers, and governments. We may be powerless against the fight against inflation and the transfer of “fun” money to cover skyrocketing borrowing costs, but after recruiting masses, loud budgeting can evolve into a resistance movement against these entities.

August 2, 2023

Loud budgeting should extend into challenging corporate practices like shrinkflation, demanding honesty and fair deals. Employers must also be under scrutiny, with our collective shout in boardrooms advocating for wages that match today’s financial challenges. Governments, too, are not spared; our collective energy becomes a plea for reconsidering tax hikes and efficient financial management.

Alaina Fingal underscores the transformative impact of authenticity and spending boundaries. Loud budgeting isn’t just about saving more money; it’s about paying off debts and creating a financial narrative aligned with personal values.

News: Understanding ‘loud budgeting,’ TikTok’s newest finance trend

March 27, 2023

In essence, loud budgeting becomes a form of financial self-expression, allowing individuals to navigate social pressures while staying true to financial goals. It challenges systemic issues and empowers individuals to reshape their financial narratives. This empowerment should extend to being a united call against practices that exploit us, ignore fair pay, and add unnecessary financial burdens. Our loved ones shouldn’t feel the weight of our frustrations. Instead, let’s channel our energy into a harmonious push for change.

Loud resistance against corporations, employers, and governments isn’t just valid; it’s a call for financial fairness. It’s a declaration that the cost of living shouldn’t be an impossible hurdle for us or our loved ones. As we navigate economic challenges, let’s raise our voices, join forces, and harness the strength of loud resistance for a future where financial well-being is something we all share.

So, as we ride the wave of loud budgeting, let’s collectively amplify our voices, resist the pressure to spend needlessly, and reclaim control over our financial destinies. It’s time to make our roar heard. (AI)

Tuesday March 5, 2024

March 5, 2024 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday March 5, 2024

A Closer Look at the Bank of Canada’s Interest Rate Strategy

September 8, 2023

In his recent article Mark Rendell delves into the Bank of Canada’s decision to maintain its interest rates, despite the recent decline in inflation. Rendell suggests that there is optimistic chatter about the potential reduction in borrowing costs due to the decreasing inflation rate. However, he questions whether this optimism is well-founded.

The Bank of Canada, according to Rendell, is expected to hold its policy rate at 5 percent for the fifth consecutive rate announcement. Despite a previous trend of increasing borrowing costs in 2022 and the first half of 2023, the bank has maintained a hold since July, waiting for sluggish economic activity to bring inflation back within the target range. Governor Tiff Macklem, in a departure from previous statements, indicated in January that additional rate increases are unlikely. However, he refrained from providing a timeline for rate cuts, emphasizing the importance of clear downward momentum in core inflation measures.

The Globe & Mail: Bank of Canada expected to hold rates steady, even with inflation back in target range

October 26, 2023

Rendell questions the prevailing notion that declining inflation will automatically lead to lower borrowing costs. He points out that interest rates may remain where they are, causing enduring pain for those who have become accustomed to paying relatively low amounts on loans and variable-rate mortgages.

The article highlights the mixed data that the Bank of Canada is currently evaluating, with economic growth in Canada being weak but avoiding the recession predicted by many economists. The inflation rate dropped to 2.9 percent in January, a significant improvement from the 8.1 percent in mid-2022. However, shelter inflation remains a concern, rising to 6.2 percent in January.

As the Bank of Canada contemplates easing monetary policy, the challenge lies in the balancing act of addressing shelter price inflation and a volatile real estate market. While interest rate cuts could provide relief to homeowners, they might also drive home prices higher, further challenging housing affordability.

October 22, 2019

Analysts predict that the central bank may start lowering interest rates around mid-year, possibly in June, but the article warns that 5 percent is not historically high. Any rate reduction is expected to be gradual and slow, nowhere near as low as before. The author advises people to get used to this level and spend within their means.

In conclusion, despite the optimistic narrative surrounding the decline in inflation, Rendell’s article suggests that the Bank of Canada’s cautious approach to interest rates may not guarantee an immediate reduction in borrowing costs. The article encourages readers to critically evaluate the potential impact of interest rate decisions on the broader economic landscape and individual financial situations. (AI)

Thursday October 26, 2023

October 26, 2023 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday October 26, 2023

From Food Banks to Interest Rates: A Tale of Two Economies

September 19, 2023

In yesterday’s announcements, we see two contrasting situations that shed light on different aspects of the Canadian economy. On one hand, we have the report on food banks, highlighting the growing number of Canadians struggling with high inflation and housing costs. On the other hand, we have the Bank of Canada’s announcement of holding the key interest rate steady, but with a possibility of future rate hikes due to persistent inflationary pressures.

News: Food Banks Canada report paints dire picture of Canada-wide affordability crisis

The report on food banks reveals the heartbreaking reality faced by many Canadians. The record-breaking number of people accessing food bank services reflects the challenges faced by individuals and families as they grapple with low wages, high rents, and rising costs. The report emphasizes that the issue of food insecurity is not limited to specific demographics but affects a wide range of people, including seniors, single mothers, low-income workers, people on social assistance, immigrants, and even those in higher income brackets. It calls for long-term social policy investments, such as affordable housing and increased fixed income rates, to address these challenges effectively.

April 13, 2023

In contrast, the Bank of Canada’s announcement focuses on the central bank’s efforts to manage inflation and ensure price stability. While the key interest rate remains steady for now, Governor Tiff Macklem has not ruled out the possibility of future rate hikes if inflationary pressures persist. The bank’s hawkish tone reflects its commitment to maintaining tight financial conditions to support economic growth and bring inflation back to the target of two percent. The bank’s quarterly monetary policy report forecasts slower economic growth in the short term but expects inflation to remain higher than the target until 2024.

News: Tiff Macklem to keep the Bank of Canada’s policy rate at 5 per cent, the highest level in two decades

December 10, 2021

These two announcements highlight the interconnectedness of economic factors and the challenges faced by individuals and the broader economy. While food bank usage reflects the struggles of everyday people, the Bank of Canada’s focus on inflation and interest rates demonstrates the central bank’s role in managing the overall economy. Both announcements underscore the need for comprehensive and coordinated efforts from both government and monetary authorities to address the issues of affordability, inflation, and social support.

Ultimately, it is crucial for policymakers to consider the broader impact of their decisions on the well-being of individuals and the overall economy. By addressing the underlying causes of food insecurity, such as affordable housing and livable wages, and carefully managing monetary policy to ensure price stability, a more balanced and equitable economic landscape can be achieved. (AI)

From sketch to finish, see the current way Graeme completes an editorial cartoon using an iPencil, the Procreate app, and a couple of cheats on an iPad Pro. If you’re creative, give illustration a try:

Friday September 8, 2023

September 8, 2023 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday September 8, 2023

Chilling the Economic Heat: Macklem’s Freezer of Monetary Mastery

June 9, 2023

In a rather peculiar act that could be likened to a magician’s control over a giant freezer’s thermostat, Bank of Canada Governor Tiff Macklem took the stage. With a flourish, he presented an economic spectacle that had the audience in awe.

Mr. Macklem, the orchestrator of monetary policies, confidently declared that the central bank’s prized 2-percent inflation target was “now within reach.” This proclamation came just a day after the central bank had hit the pause button on its monetary tightening efforts, maintaining its key interest rate at 5 percent after two rate hikes during the summer.

News: Bank of Canada’s Macklem says rates may be high enough to ease inflation

April 13, 2023

“With previous interest rate adjustments still percolating through the economy,” Macklem proclaimed, “monetary policy might just be chilly enough to restore price stability.” It was as if he possessed a magical dial to cool down the economy, akin to turning a giant freezer to lower temperatures.

However, amid this grand spectacle, ominous warnings lingered in the air. The governor cautioned that his team was ready to crank up the chill factor by raising rates again should consumer price growth stubbornly persist. Inflation, he lamented, was as elusive as finding ice cream in a snowstorm.

The Bank of Canada had embarked on an audacious journey, raising interest rates a whopping ten times in the past year-and-a-half. It was as if borrowers were trapped in a colossal freezer, with the mission to slow down spending and investment, allowing supply to catch up with demand, and, of course, to extinguish the flames of rising prices.

November 3, 2022

In a prior act of this economic drama, the bank had resumed its rate hikes after a five-month intermission, believing the economy was not cooling down swiftly enough to subdue inflation. However, a series of unfortunate events unfolded over the past month, changing the storyline and bringing a frosty breeze to the narrative.

Gross domestic product data revealed that the Canadian economy had indeed contracted in the second quarter, and the unemployment rate had increased by half a percentage point. Job vacancies, once as numerous as snowflakes in a blizzard, had dwindled compared to a year ago.

“The data since mid-July,” Macklem noted, “provide more evident proof that higher interest rates are moderating spending and restoring balance between supply and demand in the economy.” The central bank’s grip on the thermostat was undeniable.

Opinion: Tiff Macklem reads the tea leaves: Bank of Canada was right to hit pause on interest rates

May 2, 2020

Yet, this chilly saga was far from its conclusion. Macklem, the vigilant conductor, struck a hawkish tone when addressing inflation. Despite a decline in the annual consumer price index growth, core inflation measures stubbornly clung to higher levels. Taming the inflationary beast was proving to be quite the challenge.

Amidst it all, Macklem tackled two burning questions. Should the bank exclude mortgage interest costs when assessing inflation, a notion as icy as the Arctic itself? Or, should the bank abandon its 2-percent inflation target in favor of a loftier goal, a move that would send shivers down many spines?

Macklem, in his dramatic denouement, stood resolute. “You don’t raise the target just because you missed it,” he declared, as if to tell the audience that the freezer’s temperature setting was immutable.

The grand finale of this frosty performance left no doubt: the 2-percent target was sacrosanct, an anchor in the icy sea of economic fluctuations. Stability, it seemed, was found in keeping the cost of living frozen around this magical number. And so, the economic theatre lowered its curtains, with Macklem’s symphony of monetary control echoing in the ears of all those who dared to listen. (AI)