Sharon Kozicki: Exceptional policies for an exceptional time - from quantitative easing to quantitative tightening

Remarks by Ms Sharon Kozicki, Deputy Governor of the Bank of Canada, at the Canadian Association of Business Economics, Ottawa, Ontario, 13 June 2024.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
17 June 2024

Good morning. Thank you, Bolanle, for your kind introduction. I am pleased to be here in my hometown of Ottawa with the Canadian Association for Business Economics.

I always enjoy speaking to a room full of economists and business professionals who are interested in the economy. You've long been some of the most engaged consumers of central bank speeches. The COVID-19 pandemic and subsequent rise in inflation have broadened the audience for speeches like this one. Canadians have questions for us at the Bank of Canada, and we want to answer them.

So today my overarching themes will be transparency and accountability. I will begin by taking you back to the start of the pandemic when the world faced a health and economic crisis like nothing we'd experienced before. I will walk you through what the Bank saw and how we interpreted that information. Then I will talk about some of the actions we took, particularly our use of two exceptional tools: quantitative easing, or QE, and extraordinary forward guidance.

I'll discuss some of the analysis we've done on the effectiveness of QE, which we used for the first time in the pandemic. I will also go into the unwinding of QE, known as quantitative tightening, or QT, which is a key part of the monetary policy cycle.

In the second half of my speech, I will dive more deeply into the Bank's efforts to assess our actions during the pandemic and learn from that analysis. I'll talk about some of the lessons that we've already shared with Canadians. And I'll give you some insight into a new review we are doing on our use of exceptional monetary policy tools in the pandemic, including details on how we will communicate the results of that work.