The Globe and Mail reports in its Saturday edition that until now, Bank of Canada Governor Stephen Poloz has insisted he still plans further rate hikes. The Globe's David Parkinson writes that Friday's dismal economic growth figures, however, may compel Mr. Poloz to change his stance. With the economy in a stall, The Globe says it is time to start mulling whether the next rate move could be down rather than up.
Statistics Canada reported that real gross domestic product grew a puny 0.4 per cent annualized in the fourth quarter, well below the BOC's most recent estimate of 1.3 per cent. December marked the third time in four months that the economy actually contracted.
The sobering news arrives as Mr. Poloz and his colleagues are in the midst of deliberations for this Wednesday's interest-rate decision. After three rate increases last year, the bank already put further hikes on hold in December. However, Mr. Poloz has continued to insist, as recently as last week, that rates still needed to move higher "over time." The bank is universally expected to keep its key rate at 1.75 per cent again on Wednesday. The Globe says if the BOC's brass are not talking about the possibility of a rate cut, they should be.
© 2019 Canjex Publishing Ltd. All rights reserved.