Will money supplies ease up?

Bank of Canada (photo CTV)

Canadian Press from Yahoo Finance By Julian Beltrame, THE CANADIAN PRESS

OTTAWA – The Bank of Canada is all but certain to again take an axe to interest rates Tuesday, but as economic woes deepen and money markets tighten – despite aggressive central bank action globally – a sense of the very real limits of monetary policy is emerging.

Canada’s central bank has already sliced 1.5 percentage points from its so-called trendsetting rate since October – three points in the last 13 months – but the economy continues to slide, and arguably, credit for companies and consumers is as tight as it has ever been.

As well, Canada’s chartered banks are balking at obediently following the Bank of Canada’s tune, as seen last month when they passed on only two-thirds of Governor Mark Carney’s dramatic three quarters of a percentage point cut. Read the Yahoo report