No Change in Interest Rate at Bank of Canada

No Change

The Bank of Canada announced this morning that it is maintaining its target for the overnight rate at 0.75 per cent.


CPI Down

The Bank noted that total CPI inflation has fallen as expected given the significant drop in oil prices, but core inflation has been temporarily boosted by a lower Canadian dollar.

Oil Watch

Regarding economic growth, the Bank expects the negative impact of lower oil prices to appear in the first half of 2015 before the economy recovers in the second half of the year. Overall, the Bank judges risks to its inflation outlook as balanced and considers the current degree of monetary policy stimulus appropriate.

percent house dollars

Enough For Now

Stable oil prices and core inflation still trending above the Bank’s 2 per cent target seems to have persuaded policymakers that the “insurance” purchased with January’s surprise interest rate cut is enough for now. That said, the ultimate impact of lower oil prices has yet to be fully realized and we expect monetary policy to be highly data dependent in coming months. If the Canadian economy experiences significant labour weakness or core inflation starts to trend lower, the Bank may opt to reduce rates at its next meeting in April or possibly early in summer.

Courtesy BCREA Reprinted with Permission

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*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

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