Staff analytical notes

• Assessing the US and Canadian neutral rates: 2025 update

  Staff Analytical Note 2025-16 Frida Adjalala, Felipe Alves, William Beaudoin, Hélène Desgagnés, Wei Dong, Ingomar Krohn, Jan David Schneider

  We assess both the US and Canadian nominal neutral rates to be in the range of 2.25% to 3.25%, unchanged from the range assessed in 2024.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Economic models, Interest rates, Monetary policy JEL Code(s): E, E4, E40, E43, E5, E50, E52, E58, F, F4, F41

• Assessing global potential output growth: April 2025

  Staff Analytical Note 2025-15 Samuel Boulanger, Raheeb Dastagir, Daniel de Munnik, Eshini Ekanayake, Kun Mo, Walter Muiruri, Faiza Noor, Sabreena Obaid, Louis Poirier

  This note presents the annual update of Bank of Canada staff estimates for growth in global potential output. These estimates served as key inputs to the analysis supporting the April 2025 Monetary Policy Report.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Potential output, Productivity JEL Code(s): E, E1, E2, F, F0, F1, O, O3, O33, O4

• Potential output in Canada: 2025 assessment

  Staff Analytical Note 2025-14 Selam Abraham, Dany Brouillette, Alex Chernoff, Christopher Hajzler, Stéphanie Houle, Mark Kim, Temel Taskin

  We explore two scenarios for potential output growth to gain insights into the economic consequences associated with different possible trade policies. Scenario 1 includes limited US tariffs on Canadian exports. Scenario 2 adds a permanent, broad-based 25% increase in US tariffs on imports from all countries excluding Canada and Mexico.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Economic models, Labour markets, Monetary policy, Potential output, Productivity JEL Code(s): E, E2, E3, E4, E5

• Canadians’ access to cash in 2023

  Staff Analytical Note 2025-13 Heng Chen, Hongyu Xiao, Daneal O’Habib, Stephen Wild

  This study updates our measure of Canadians' access to cash through automated banking machines and financial institution branches. We find that in 2023 overall access to cash remains stable, while rural Canadians continue having less access.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Bank notes, Financial services, Regional economic developments JEL Code(s): J, J1, J15, O, O1, R, R5, R51

• The Contingent Term Repo Facility: Lessons learned and an update

  Staff Analytical Note 2025-12 Jessie Ziqing Chen, Parnell Chu, Scott Kinnear

  In 2024, the Bank of Canada reviewed and updated its Contingent Term Repo Facility policy, incorporating lessons learned from the COVID-19 pandemic and other global market developments, such as the UK gilt crisis in September 2022. This paper accompanies the March 17, 2025, Contingent Term Repo Facility market notice and provides background information and further details about the design of the revised policy.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Central bank research, Financial stability, Lender of last resort JEL Code(s): E, E5, E58, F, F6, F68, G, G0, G01, G2, G23

• Stress testing central counterparties for resolution planning

  Staff Analytical Note 2025-11 Katherine Brennan, Bo Young Chang, Alper Odabasioglu, Radoslav Raykov

  The Bank of Canada completed its first resolution plan for the Canadian Derivatives and Clearing Corporation (CDCC) in 2024. To estimate the resolution costs, we apply the extreme value theory method to simulate the credit losses that would result from extreme scenarios where multiple clearing members default at the same time.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Financial institutions, Financial markets, Financial stability, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): G, G1, G17, G2, G23, G28

• Is anyone surprised? The high-frequency impact of US and domestic macroeconomic data announcements on Canadian asset prices

  Staff Analytical Note 2025-10 Blake DeBruin Martos, Rodrigo Sekkel, Henry Stern, Xu Zhang

  Using almost two decades of detailed high-frequency data, we show how Canadian interest rates, the CAD/USD spot exchange rate, and stock market returns react to both US and domestic macro announcements. We find that Canadian macroeconomic announcements invoke greater responses in short-term yields, whereas US macroeconomic announcements play an increasingly important role in the yield movements of longer-term assets.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Asset pricing, Exchange rates, Financial markets JEL Code(s): G, G1, G14, G15

• Estimating the inflation risk premium

  Staff Analytical Note 2025-9 Bruno Feunou, Gitanjali Kumar

  Is there a risk of de-anchoring of inflation expectations in the near term? We estimate the inflation risk premium using traditional asset pricing models to answer this question. The risk of de-anchoring is elevated compared with the period before the COVID-19 pandemic and is higher in the United States than in Canada.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Asset pricing, Econometric and statistical methods JEL Code(s): C, C2, C22, C5, C58, G, G1, G12

• Natural disasters and inflation in Canada

  Staff Analytical Note 2025-8 Thibaut Duprey, Victoria Fernandes

  How do storms, floods and wildfires affect consumer prices? In the short term, natural disasters can significantly increase volatility in Canada-wide inflation. Over the long term, natural disasters influence inflation in shelter prices, especially when provincial output is already weak relative to trend.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Central bank research, Climate change, Inflation and prices JEL Code(s): E, E3, E31, Q, Q5, Q54

• Crisis facilities as a source of public information

  Staff Analytical Note 2025-7 Lerby Ergun

  During the COVID-19 financial market crisis, central banks introduced programs to support liquidity in important core funding markets. As well as acting as a backstop to market prices, these programs produce useful trading data on prevailing market conditions. When summary information from this data is shared publicly, it can help market participants understand current conditions and aid the recovery of market functioning.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Financial institutions, Financial markets, Market structure and pricing JEL Code(s): C, C5, C58, D, D5, D53, D8, D83, G, G1, G12, G14