The Globe and Mail reports in its Tuesday, April 2, edition that Bank of Canada Governor Stephen Poloz suggested on Monday that interest-rate cuts will not be necessary.
The Globe's Barrie McKenna writes that Mr. Poloz said,
"Recent economic data have been generally consistent with our expectation that the period of below-potential growth will prove to be temporary."
The BOC is one of the world's last major central banks still talking about raising interest rates amid the sudden global slowdown.
Canadian Imperial Bank of Commerce chief economist Avery Shenfeld said in a research note: "There was no food for those hungry for signs that the bank is contemplating a rate cut. Indeed, it's still putting weight on its view that things will get better."
For the moment, however, Mr. Poloz seems comfortable keeping the bank's key interest rate, now at 1.75 per cent, below neutral.
He repeated the bank's view that "the economic outlook continues to warrant a policy interest rate that is below the neutral range." The bank estimates that the neutral range is between 2.5 per cent and 3.5 per cent. Mr. Poloz played down the significance of the recent inversion of the typical interest-rate yield curve.
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