Mortgage Blog
Bank of Canada Rate Announcement - March 6, 2019
January 20, 2021 | Posted by: Ken Fadel
The BoC left its benchmark interest rate unchanged again at 1.75% today, and in doing so signaled that it might remain on the sidelines for an extended period of time.
The latest economic data released both globally and at home has pointed to a slowdown 'more pronounced and widespread' than the BoC had forecasted in January. Following growth of 3.00% in 2017 and 1.80% last year the BoC is now expecting a period of stagnant economic activity. This expectation was driven home by the latest Q4 GDP numbers released by Stats Can which showed the Canadian economy effectively stalled by growing just 0.40%, which was less than half of the BoC's forecasted rate.
Households have reduced their spending dramatically, the housing market has cooled considerably and exports and business investment have dropped as weak oil prices and trade tensions have taken their toll.
In its release, the BoC stated 'Given the mixed picture that the data present, it will take time to gauge the persistence of below-potential growth and the implications for the inflation outlook.' This would seem to suggest that the BoC's slow climb to higher rates is now on hold. Having said that, there was nothing in the BoC statement that pointed to any thought of cutting rates.
The next rate announcement is scheduled for April 24th.