As widely expected, the Bank of Canada maintained its target for the overnight rate at 1.75%. Below are some key takeaways from the BoC's policy statement.
- The Bank Rate is correspondingly 2 per cent and the deposit rate is 1 ½ per cent.
- The global economic expansion is moderating largely as expected, but signs are emerging that trade conflicts are weighing more heavily on global demand.
- Canada’s energy sector will likely be materially weaker than expected.
- The Canadian economy as a whole grew in line with the Bank’s projection in the third quarter, although data suggest less momentum going into the fourth quarter.
- Weighing all of these developments, Governing Council continues to judge that the policy interest rate will need to rise into a neutral range to achieve the inflation target.
- The appropriate pace of rate increases will depend on a number of factors.
- These include the effect of higher interest rates on consumption and housing, and global trade policy developments.
- The persistence of the oil price shock, the evolution of business investment, and the Bank’s assessment of the economy’s capacity will also factor importantly into our decisions about the future stance of monetary policy.
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