The Globe and Mail reports in its Monday, April 22, edition that the Bank of Canada is expected to signal a long hibernation as it trims its economic forecast and tweaks its language this week. The Globe's Michael Babad writes that observers believe the BOC will unveil a bearish short-term view and cautious longer-term outlook when it releases its interest-rate decision and monetary policy report on Wednesday.
The Globe says the BOC is expected to hold its key overnight rate at 1.75 per cent, and signal that change is not coming any time soon.
Economists expect the BOC to tweak the language of its statement, removing a previous reference to future rate increases at some point down the road. At the same time, it may also try to rid the market of speculation that rates could fall.
Bank of Montreal analyst Benjamin Reitzes says: "While a policy rate change isn't on the table at this meeting, there's plenty to watch for to help fine tune the bigger picture outlook. Expect a cautious BOC with some hints of optimism in an effort to dampen any rate cut speculation."
As Laurentian Bank Securities economist Sebastien Lavoie put it, there is "no spring thaw or recession in store for Canada."
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