# How Central Banks Use Structural Budget Deficits

Page: https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/how-central-banks-use-structural-budget-deficits
Text version: https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/how-central-banks-use-structural-budget-deficits.md
Podcast: [Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates](https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013)
Published: 2026-07-12T07:28:43+00:00
Episode link: https://audio.fexingo.com/business/monetary-policy-explained/episode-0106.mp3
Audio file: https://audio.fexingo.com/business/monetary-policy-explained/episode-0106.mp3
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Duration seconds: 582

## Resource

Episode 106 of Monetary Policy Explained with Fexingo. Lucas and Luna dive into the little-discussed concept of structural versus cyclical budget deficits and how central banks factor them into monetary policy. Using Canada's 2024–2026 federal budget as a case study, they break down why the Bank of Canada pays attention to the cyclically adjusted balance, how a high structural deficit can complicate interest rate decisions, and what the 'fiscal path' signals mean for inflation and the neutral rate. The hosts also touch on how markets interpret government spending commitments when central banks are trying to cool demand. No jargon overload—just a clear look at an often-overlooked input on the monetary policy dashboard. #StructuralDeficit #CyclicalDeficit #CentralBanks #BankOfCanada #MonetaryPolicy #FiscalPolicy #BudgetDeficit #Inflation #NeutralRate #Economics #CanadaBudget #FiscalDominance #GovernmentSpending #InterestRates #MonetaryPolicyExplained #FexingoBusiness #BusinessPodcast #LucasAndLuna Keep every episode free: buymeacoffee.com/fexingo

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