{"id":2700,"date":"2016-07-13T08:40:41","date_gmt":"2016-07-13T15:40:41","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=2700"},"modified":"2016-07-13T08:40:50","modified_gmt":"2016-07-13T15:40:50","slug":"bank-of-canada-holds-trend-setting-rate-at-0-5","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2016\/07\/bank-of-canada-holds-trend-setting-rate-at-0-5\/","title":{"rendered":"Bank of Canada Holds Trend Setting Rate at 0.5%"},"content":{"rendered":"

Pressures from global volatility and slow growth in the wake of the Brexit haven\u2019t deterred the Bank of Canada from its current monetary policy; the central bank has opted to maintain the overnight lending rate at 0.5%. The Bank Rate is correspondingly 0.75%, and the Deposit Rate is .25%.<\/p>\n

While it was widely expected that the BoC would hold status quo on rates, there was some speculation that a rate cut was in order due to Alberta\u2019s massive forest fires and the resulting impact on oil production. Flames forced many oil sands projects to shutter, cutting production by an estimated 40% – a gap of 1 \u2013 2 million barrels per day \u2013 and costing GDP and estimated $985 million.<\/p>\n

\u201cIn Canada, the quarterly pattern of growth has been uneven. Real GDP grew by 2.4% in the first quarter but is estimated to have contracted by 1% in the second quarter, pulled down by volatile trade flows, uneven consumer spending, and the Alberta wildfires,\u201d states the BoC\u2019s release. \u201cA pick-up to 3 \u00bd% is expected in the third quarter as oil production resumes and rebuilding begins in Fort McMurray.\u201d
\nWhile the BoC\u2019s projections remain close to those presented in April\u2019s Monetary Policy Report, it is reporting a revised forecast due to weaker business investment outlook, and a lower profile for exports as a result of weaker US investment spending.<\/p>\n

Real GDP is expected to grow by 1.3% in 2016, 2.2% in 2017, and 2.1% in 2018, as the Liberals make good on their promise to amp up infrastructure spending and investment.<\/p>\n

\u201cThe Bank projects above-potential growth from the second half of 2016, lifted by rising US demand and supported by accommodative monetary and financial conditions,\u201d it states. \u201cFederal infrastructure spending and other fiscal measures announced in the March budget will also contribute to growth.\u201d
\nThe BoC adds that consumer spending will also get a boost from the Canada Child Benefit.<\/p>\n

While the market volatility following the Brexit has led other nations\u2019 central banks to loosen monetary policy, Poloz has stated that Canada\u2019s lenders are resilient enough to withstand any fall out. However, it emphasizes hot housing markets are a main contributor to downside risks facing the economy.<\/p>\n

\u201cOverall, the risks to the profile for inflation are roughly balanced, although the implications of the Brexit vote are highly uncertain and difficult to forecast. At the same time, financial vulnerabilities are elevated and rising, particularly in the greater Vancouver and Toronto areas. The Bank\u2019s Governing Council judges that the overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate, and the target for the overnight rate remains at \u00bd%.\u201d<\/p>\n

Bank of Canada Holds Trend Setting Rate at 0.5%<\/a> by Penelope Graham | Canadian Real Estate Wealth<\/p>\n","protected":false},"excerpt":{"rendered":"

Pressures from global volatility and slow growth in the wake of the Brexit haven\u2019t deterred the Bank of Canada from its current monetary policy; the central bank has opted to … [read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-2700","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"\nBank of Canada Holds Trend Setting Rate at 0.5% • Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2016\/07\/bank-of-canada-holds-trend-setting-rate-at-0-5\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Bank of Canada Holds Trend 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