The Bank of Canada will announce Wednesday morning what will happen to its trendsetting interest rate, and provide an updated forecast for the domestic economy.
The bank’s target overnight rate has been at 0.25 per cent since the onset of the pandemic, and governor Tiff Macklem has said increases won’t arrive until later next year when economy has healed enough from COVID-19.
Read more:
Firms still struggling to find workers, willing to pay more: Bank of Canada survey
Earlier this month, Macklem suggested the economy wouldn’t recover as quickly over that stretch as previously thought because of global supply-chain issues that have become more persistent than expected, alongside higher inflation rates.
That could be reflected in the bank’s quarterly monetary policy report, which sets out the Bank of Canada’s forecast for the economy and the pace of inflation over the next year.
Economists don’t expect the bank to raise rates this week, but do look for the central bank to announce a rollback of bond purchases as part of its quantitative easing program.
BMO’s Benjamin Reitzes says there is reason to believe the central bank will reshape the QE program to stop adding stimulus and rather maintain what’s already there, noting Macklem recently gave a speech on the details of such a move.
Read more:
Canada’s housing market unlikely to cool as new home buyers opt for variable loans