The Fundamental Shift in the Bank of Canada's Monetary Policy Approach
Steve Saretsky, realtor and housing analyst at Saretsky Group, welcomes Keith Dicker, founder and CIO of IceCap Asset Management, to discuss the US dollar, the monetary effects of the pandemic, and Canadian financial markets. Dicker states that Covid-19 has forced all central banks, including the Federal Reserve, into quantitative easing, which has weakened the US dollar. However, he argues that the reopening of economies will allow the dollar to regain its strength among global currencies. Furthermore, Dicker draws on his investment experience in Canada to examine the Bank of Canada’s response to Covid-19 and Canadian equity markets. He explains the reasoning behind the central bank’s unprecedented level of debt purchases as well as Canada’s affinity for financial stocks. Filmed on June 1, 2021.
Key Learnings: Dicker argues that the Bank of Canada and other major central banks will look to create a form of digital currency. Unlike cryptocurrency, these digital currencies remove the credit risk associated with depositing money at commercial banks. He states that central banks will have to consider the rate to pay on deposits as well as the logistical challenges associated with a large volume of individual deposits.