The Bank of Canada announced today that it is keeping the overnight rate unchanged as they monitor the evolution of NAFTA negotiations and the outlook for inflation. Household debt levels are improving, the housing market is stabilizing, and business investment and exports are “growing solidly”. The Bank noted that higher rates will be warranted but they “will continue to take a gradual approach.” The next rate-setting day is October 24th.
Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.
The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.
The next rate-setting day is October 22nd.