The Financial Post reports in its Thursday edition that Canadian interest rates are almost certainly on hold until at least some time next year.
The Post's Kevin Carmichael writes that the Bank of Canada published a revised outlook on Wednesday that shows the economy stalled over the last six months, extinguishing the sparks that raised inflation worries.
Governor Stephen Poloz and his deputies left the benchmark rate unchanged at 1.75 per cent, as expected. They also erased from their policy discussion any suggestion that interest rates could rise in the foreseeable future, a pivot that suggests the pause that began in December is now a hiatus.
Mr. Poloz called it a "detour," as the BOC's revised forecast predicts the economy will rebound to growth of about 2 per cent in 2020. Still, he conceded that the economy currently is so fragile that a negative shock would force policy makers to consider cutting interest rates.
"If everything turns out perfectly, there's no rush to suddenly get back in the saddle" and resume raising interest rates, said Mr. Poloz. "It's more a question of letting the data speak," he added. "Right now, we need some positive data to confirm that this outlook is the appropriate one."
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