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Ukrainian Strike Targets Key Russian Missile Facility in Deep-Range Operation

    An employee controls an unmanned ground vehicle during an exhibition of Ukrainian drone makers, amid Russia's attack on Ukraine, in an undisclosed location Ukraine says it carried out a long‑range strike against a major Russian ballistic missile production site, marking one of Kyiv’s deepest attacks inside Russian territory since the full‑scale invasion began. According to Ukrainian security officials, the operation targeted a facility involved in manufacturing components for Russia’s Iskander missile systems—munitions frequently used against Ukrainian cities. While Moscow has not confirmed the strike, Russian regional authorities reported explosions and a subsequent fire at an industrial site. Kyiv has increasingly relied on domestically produced long‑range drones and missiles as Western military aid faces delays, and Ukrainian officials framed the attack as part of a broader effort to degrade Russia’s ability to wage war. The strike underscores Ukraine’s evolving stra...
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Why Higher Bond Yields May Not Stop the Bank of Canada from Raising Rates

                                                    


The Bank of Canada Governor, Tiff Macklem, recently spoke at an IMF meeting in Morocco, where he addressed the issue of surging bond yields and their implications for monetary policy. Bond yields are the interest rates that investors demand to lend money to governments or corporations. They reflect the market's expectations of future inflation and economic growth.

Macklem said that higher bond yields have indeed tightened financial conditions, meaning that borrowing costs for businesses and individuals have increased. This could potentially slow down the economic recovery process, as consumers and firms may reduce their spending and investment plans.

However, he also emphasized that higher bond yields are not a substitute for doing what needs to be done to get inflation back to the Bank's 2% target. He said that the Bank is looking for clear signs that underlying inflation pressures are easing before deciding whether to raise its overnight rate, which is currently at 5%.

The Bank has hiked its rate 10 times in 18 months, but it still does not see inflation slowing to its target until mid-2025. Macklem said that the Bank will weigh the trade-off between letting previous rate hikes work through the economy or raising again to counter sticky inflation.

The next interest rate decision will be announced on Oct. 25, along with an update of the Bank's economic forecasts. Macklem said that the Bank is not forecasting a serious recession, despite the unexpected contraction in the second quarter and the stagnation in the first two months of the third quarter.

He also expressed confidence in the strength of the labor market and the wage growth that will help households cope with higher mortgage rates when they renew their loans. The five-year yield on Canada's bonds has surged as high as 4.461% this month, its highest level in 16 years.

The Bank of Canada faces a delicate balancing act between supporting the economic recovery and containing inflation. Higher bond yields may make its job harder, but they may not deter it from raising rates if inflation remains stubbornly high.

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