This past Tuesday the Bank of Canada continued to hold thier overnight lending rate at 1 %. We may continue for another quarter with out a rate hike... however this time next year I expect rates to be higher. The recent mortgage rule changes, continuing depressed American recovery and the tempered concerns over further issues in the EU have combined to influence the Bank of Canada to hold thier rate. However, my opinion is that by the late summer our rates will start to increase. I expect this time in 2012, that the over night lending rate will be around 1.75%- Roland ______________________________________________________________________________ OTTAWA (Reuters) - The Bank of Canada held its key interest rate steady on Tuesday and signaled it may keep rates on hold for longer than markets had expected even though it nudged its economic growth forecasts higher. The central bank held its overnight lending target at 1 percent for the third straight time after leading the Group of Seven advanced economies last year by raising rates three times between June and September. "Any further reduction in monetary policy stimulus would need to be carefully considered," it said in a statement that repeated the language used in its two previous rate decisions. Canada's economy snapped back to life in late 2009 after a shallow recession but the initial galloping pace of growth has since slowed to a crawl, leaving policymakers wary of withdrawing extraordinary stimulus measures too soon. While nobody expected the bank to make another rate move as early as this month, some market players had bet on a more hawkish statement on rates to reflect the spillover effects of recently announced U.S. tax cuts and the U.S. Federal Reserve's bond-buying program. The bank did upgrade its economic outlook slightly, but it didn't change its medium-term forecast for a balanced economy by the end of 2012. It stressed that the high-flying Canadian dollar was hampering recovery in the export sector, the backbone of the Canadian economy, and that Europe's debt woes remain a black cloud over the global economy. Many analysts think the bank is unlikely to push Canadian rates much above their U.S. equivalents because this could send the Canadian dollar to fresh multiyear highs. And Monday's government decision to curb high household debt by tightening mortgage rules for a second time in less than a year could also let the bank delay a fresh rate hike further. SOURCE: http://ca.reuters.com/article/domesticNews/idCATRE70H46420110118 Thursday, January 20, 2011
Bank of Canada holds rates, the next step wil be an increase.
This past Tuesday the Bank of Canada continued to hold thier overnight lending rate at 1 %. We may continue for another quarter with out a rate hike... however this time next year I expect rates to be higher. The recent mortgage rule changes, continuing depressed American recovery and the tempered concerns over further issues in the EU have combined to influence the Bank of Canada to hold thier rate. However, my opinion is that by the late summer our rates will start to increase. I expect this time in 2012, that the over night lending rate will be around 1.75%- Roland ______________________________________________________________________________ OTTAWA (Reuters) - The Bank of Canada held its key interest rate steady on Tuesday and signaled it may keep rates on hold for longer than markets had expected even though it nudged its economic growth forecasts higher. The central bank held its overnight lending target at 1 percent for the third straight time after leading the Group of Seven advanced economies last year by raising rates three times between June and September. "Any further reduction in monetary policy stimulus would need to be carefully considered," it said in a statement that repeated the language used in its two previous rate decisions. Canada's economy snapped back to life in late 2009 after a shallow recession but the initial galloping pace of growth has since slowed to a crawl, leaving policymakers wary of withdrawing extraordinary stimulus measures too soon. While nobody expected the bank to make another rate move as early as this month, some market players had bet on a more hawkish statement on rates to reflect the spillover effects of recently announced U.S. tax cuts and the U.S. Federal Reserve's bond-buying program. The bank did upgrade its economic outlook slightly, but it didn't change its medium-term forecast for a balanced economy by the end of 2012. It stressed that the high-flying Canadian dollar was hampering recovery in the export sector, the backbone of the Canadian economy, and that Europe's debt woes remain a black cloud over the global economy. Many analysts think the bank is unlikely to push Canadian rates much above their U.S. equivalents because this could send the Canadian dollar to fresh multiyear highs. And Monday's government decision to curb high household debt by tightening mortgage rules for a second time in less than a year could also let the bank delay a fresh rate hike further. SOURCE: http://ca.reuters.com/article/domesticNews/idCATRE70H46420110118 
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