Meanwhile,
Will bank canada maintain its:
This text is taken from the mail of the economy. Similarly, To subscribe, click here. Therefore,
What will the Bank of Canada do with the key rate on Wednesday? Consequently, Probably nothing, most economists say. Meanwhile, If the future proves them right. In addition, it would be the third time in a row that the central bank chooses to remain on hold.
“There is not too much doubt about this week’s decision. However, We expect situation when », Makes Matthieu Arseneau, deputy chief economist of the National Bank, in an interview with Duty. Furthermore, TD, BMO, CIBC, RBC and Desjardins economists share the same expectations.
Currently, the key rate – which affects interest rates in the country – is 2.75 %. Consequently, The last drop in the key rate dates back to March. Since then, he has will bank canada maintain its been kept unchanged twice, in April and June.
Admittedly. the Canadian economy was a little weakened in the first half due to uncertainty linked to customs duties, but this has not yet resulted in a drop in inflationary pressures, Arseneau explains. “This is the main reason why the Bank of Canada will be believed to be cautious,” said the economist.
In June, the annual inflation rate established 1.9 % in the country, according to data presented last week by Statistics Canada. But when the energy prices of the equation are removed, inflation was rather 2.7 % – up to the target range of the Bank of Canada in terms of inflation, which extends from 1 % to 3 %.
A neutral rate, really? – Will bank canada maintain its
After Wednesday’s announcement on the key rate. there will be three others left by the end of the year: one in September, another in October and one last in will bank canada maintain its December.
In the opinion of Matthieu Arseneau. “a monetary relaxation will be necessary by the end of the year”, of the order of two decreases of a quarter of a point each. Among other things. because “the investment intentions of companies remain anemic, as well as the intentions of hiring”, despite the rebound of employment in June, he maintains. Trade relations with the United States do not seem to improve either.
The economist also estimates that the key rate is not as neutral as it seems, at its current level of 2.75 %. Technically, it is at the center of the fork qualified as neutral by the Bank of Canada (2.25 %-3.25 %). But Matthieu Arseneau claims that the rate is actually restrictive since it remains much higher than it was during. the pandemic. Indeed, many households will undergo some pressure in the renewal of their mortgage loan.
“The average variation of mortgage will bank canada maintain its payments for borrowers who must renew their loan is an increase of 10 % provided for this year. ” said Arseneau, based on estimates produced by the Banque du Canada itself. The slowdown in the real estate market-which we see especially in British Columbia. Ontario, but not in Quebec-testifies to this pressure on the portfolio of Canadian households, he said.
The Bank of Canada will unveil its decision on the key rate on Wednesday at 9:45 a.m. it will also present its report on monetary policy. The governor of the institution, Tiff Macklem, will speak shortly after a press conference to justify the decision.
To watch in video
Further reading: Veleno will bring depth to the center, but can it fill the loss of Dvorak? – Occupied night for Montreal firefighters – A “Canada product” imported from the United States? Posters at the grocery store sow doubt – Drug traffickers target evacuated in Winnipeg – Depending on its neighbor, Canada lives to the rhythm of Trump’s shots.