The argument can be made that, you know, what's the need to hike rates if we have this degree of slack currently in places? Shouldn't that absorb any sort of nascent price pressure risks that we see coming from the supply shock?

I guess that's the debate that's going on amongst the members of the Bank of Canada's governing council.

How much slack is there in the economy? And is it enough to offset the inflationary pressures from higher global energy prices? And the answer to that is no.

Different people will come to different conclusions.

Some, it seems like from Governor Macklem's comments, some on the Governing Council believe that it is indeed enough to offset and maybe more than offset the upward inflationary pressures from higher energy prices.

Others on the Governing Council will say, well, yes, there is slack there.

in the Canadian economy, but the Canadian economy is not weak enough to offset the higher energy prices.

I mean, would you agree with that assessment or do you have something more nuanced to give our listeners?

Why, why do we use this new technical recession designation? Is there, is there a specific reason for that?

I'm gonna be brutally honest with you.

It's a very unfortunate term.

I find it to actually be a, a juvenile term.

It, it, it's just a measurement of whether two consecutive quarters were in negative territory, a-and, and that doesn't really tell us all that much.

Uh, if you look at a chart of real GDP, um, the two consecutive quarters we've just seen, or the three out of the four that you mentioned, look nothing like what the past five recessions have looked like in Canada in terms of the depth of the drawdown or the breadth of the industries experiencing weakness or the regions experiencing weakness.

So you know, the, the term technical recession really doesn't capture anything that would necessarily indicate to us that there is a recession.

The bond market freaked out.