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Results of the second-quarter 2026 survey show that consumers’ near-term inflation expectations remain elevated amid ongoing trade tensions and rising concerns about oil and energy prices linked to the war in the Middle East. The CSCE indicator remains low as consumers still view the economic environment as challenging. High prices and economic uncertainty continue to weigh on household spending plans, particularly among households expecting the war to significantly raise inflation. At the same time, perceptions of the labour market improved modestly as fears of job loss eased, particularly in sectors highly sensitive to trade.

We present a simple model to study the risk sensitivity of capital regulation. A banker funds investment with uninsured deposits and costly capital, where capital resolves a moral hazard problem in the banker’s choice of risk.

Using a rich data set on government spending forecasts in Japan, we provide new evidence on the effects of unexpected changes in government spending when the nominal interest rate is near the zero lower bound (ZLB).

This paper studies how the credit expansion policy pursued by the Chinese government in an effort to stimulate its economy in the post-crisis period affects bank–firm loan contracts and the macroeconomy. We build a structural model with financial frictions in which the optimal loan contract reflects the trade-off between leverage and the probability of default.

We provide empirical evidence on the impact of oil supply shocks on global aggregates. To do this, we first extract structural oil supply shocks from a standard oil-price determination model found in the literature.

How do banks adjust their loan rate markup in response to macroeconomic shocks?

Today, I'd like to discuss some of the crucial issues that we have been dealing with during this period. I'll begin with a brief overview of some key events that have led to the turbulence that continues to upset financial markets and that greatly contributed to the remarkably wide credit spreads that we now witness.

Economists disagree about the factors driving the substantial increase in residual wage inequality in the United States over the past few decades. To identify changes in the returns to unobserved skills, we make a novel assumption about the dynamics of skills (especially among older workers) rather than about the stability of skill distributions across cohorts, as is standard.

As Canada's central bank, we are committed to conduct monetary policy in a way that fosters confidence in the value of money. This is our primary responsibility. But the Bank has a number of other functions that are very important to economic life in Canada. We promote the safety and soundness of the financial system.

This note analyzes mortgage stress tests, a macroprudential tool. We find that when mortgage stress tests are applied to all mortgage purchase originations, they improve credit quality and reduce credit and house price growth. They also improve the resilience of borrowers to financial shocks, such as the large increase in interest rates during 2022–23.