BOC: keeps rates unchanged at 1.25%; trade “growing source of uncertainty”
|The Bank of Canada maintained its target for the overnight rate at 1 1/4 per cent at the March 2018 policy meeting. The Bank Rate is correspondingly 1 1/2 per cent and the deposit rate is 1 per cent.
Here are some of the key highlights from the accompanying monetary policy statement.
• Trade developments are an important and growing source of uncertainty
• Higher rates likely warranted over time, but some continued policy accommodation will likely be needed to keep economy close to potential, inflation on target
• Repeats will remain cautious in considering future policy adjustments; guided by incoming data
• US government spending, tax cuts expected to boost US growth in 2018, 2019
• Global growth solid and broad-based
• Canada's Q4 GDP slower than expected due to higher imports; 2017 GDP in line with banks projections
• Gain in imports reflected stronger business investment, which adds to economies capacity
• Data shows pulling Ford of housing demand ahead of new mortgage rules, other measures
• Will take time to fully assess impact of regulations on housing demand and prices
• Continues to monitor economy sensitivity to higher rates: household credit growth has decelerated for 3 months
• Implications of federal government budget will be incorporated into forecasts in April
• Core inflation measures have edged up, consistent with an economy operating near capacity
• Wage growth has firm but lower than typical in economy with no labor market slack
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