scroll to top arrow or icon

{{ subpage.title }}

A view of the skyline and buildings at Shinjuku district during sunset in Tokyo, Japan June 20, 2021.

REUTERS/Pawel Kopczynski

Will Japan raise interest rates … to zero?

Japan’s central bank will debate a landmark interest rate rise next week that could bring interest rates to a staggering 0% after nearly a decade of negative rates.

As the saying goes, there are four types of economies: developed, underdeveloped, Argentina, and Japan. While most countries have been working hard to cool inflation, Japan has struggled with the opposite problem, deflation, since the 1990s. Lower prices at the grocery store are nice, but consumers pay for it on the other end: Businesses see revenues fall, struggle to pay their debts, and lower wages or downsize to break even (mostly the former in Japan). The economy stagnates and ordinary families suffer.

Read moreShow less

Federal Reserve Chair Jerome Powell testifies to the Senate Banking Committee in Washington, DC.

Jasper Colt-USA TODAY via Reuters

Central bankers forecast clouds, with a chance of rate cuts

The millions of homeowners who have seen their mortgage payments double in recent years would no doubt concur with Mark Twain in his assessment of bankers – as the type of people who lend you an umbrella when the sun is shining and want it back as soon as it starts to rain.

Hopes for a break in the monetary policy clouds were frustrated this week as two North American central bankers said that interest rate cuts remain some way off.

Read moreShow less

Governor of the Bank of Canada Tiff Macklem walks outside the Bank of Canada building in Ottawa, Ontario.

REUTERS/Blair Gable

Know when to hold ‘em

On Wednesday, the Bank of Canada held its key rate unchanged at 5% – the third time it has done so since July. It noted that the global economy is slowing, along with inflation, but the softening numbers weren’t enough for it to lower rates. It also noted the rise in shelter inflation – rents and high mortgage costs due to elevated interest rates.
Read moreShow less

Shawn Fain, president of the United Auto Workers (UAW) speaks as President Joe Biden joins striking UAW members on the picket line in Belleville, Mich., in September.

REUTERS/Evelyn Hockstein

Could union wage hikes worsen inflation?

It may be cold out, but bankers up north are sweating thanks to a flurry of union settlements that could, according to a new report from Toronto-Dominion Bank, have “staying power.”

For years, unionized workers’ pay failed to keep pace with inflation, but now labor negotiators are pressing to close the gap. The successful UAW strike in the United States led to 11% wage increases, and Canadian union settlements, though not as high, are rising as workers try to make up for ground lost to inflation.

Read moreShow less

Subscribe to our free newsletter, GZERO Daily