As widely expected, the Bank of Canada decided to maintain its target for the overnight rate at 1.75% at its May policy meeting. Below are some key takeaways from the BoC's policy statement.
- Recent Canadian economic data are in line with the projections in the Bank’s April Monetary Policy Report (MPR).
- The oil sector is beginning to recover as production increases and prices remain above recent lows.
- Continued strong job growth suggests that businesses see the weakness in the past two quarters as temporary.
- The recent escalation of trade conflicts is heightening uncertainty about economic prospects.
- Removal of steel and aluminum tariffs and increasing prospects for the ratification of CUSMA will have positive implications for Canadian exports and investment.
- Recent data have reinforced Governing Council’s view that the slowdown in late 2018 and early 2019 was temporary.
- In taking future policy decisions, Governing Council will remain data dependent and especially attentive to developments in household spending, oil markets and the global trade environment.
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