No Bank of Canada Rate Change

The Bank of Canada announced today that it is keeping its key rate unchanged, downgrading the economic forecast and no longer referencing the need for future rate hikes. The Bank noted that low oil prices and transportation constraints continue to affect the energy sector. Trade policy uncertainty and the global slowdown are also weighing negatively on other sectors. Weaker housing and consumer spending have also contributed to slower growth.

Even though the economy is expected to improve, the Bank deems that an accommodative interest rate policy continues to be warranted. The next rate-setting day is Wednesday, May 29th.

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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.

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Data is deemed reliable but is not guaranteed accurate by the REALTORS® Association of Edmonton.