Courtesy of Mish.
The Bank of Canada admitted on Wednesday that Canada was in Recession. Well sort of.
Bank of Canada Governor Stephen Poloz is afraid to speak the “R-Word”. Instead, Poloz phrased it this way: “Real GDP is now projected to have contracted modestly in the first half of the year.“
Shades of Voldemort
Poloz further went out of his way to state the “R-word is unhelpful“.
Pressed by reporters to just come out and use the R-word, Poloz dug in.
“I just find the discussion quite unhelpful,” he sniffed. “It’s especially unhelpful when what has happened to the economy is very narrowly defined.”
Recession an Easy Call
Calling the Canadian recession was one of the easiest calls ever. I did so on January 31, in Canada in Recession, US Will Follow in 2015.
What made the Canadian recession easy to spot was the Canadian yield curve inverted out to three years following a surprise rate cut by the Bank of Canada on January 21.
It remains to be seen if the US follows. The US contracted in the first quarter, but the second quarter rebound was a bit stronger than I expected.
On January 21, in response to the surprise cut, I wrote Canadian Recession Coming Up: Yield Curve Inverts Following Unexpected Rate Cut; Loonie at Six-Year Low.
In that post I awarded Canada the “Blue Ribbon” for the first yield curve inversion of any major country following the great financial crisis. I am not aware of anyone else noticing or commenting on the yield-curve inversion at the time.
Denial Sets In Already
…
