Today, the Bank of Canada is set to announce whether or not there will be a shift in current monetary policy. The possible overnight rate change could either signal confidence in Canada’s growing economy or lend support that near-future economic growth is predicted to be conservative, at best.
The BoC’s announcement—scheduled today for just after 10 a.m. EST—comes just a day after Statistics Canada reported a 2.3% annualized rate of growth (for three months, ending on Sept. 30) in Canada’s gross domestic product (which excludes inflation). This is the fastest growth pace so far this year, but was met with a slowdown that started in September and has continued throughout the fourth quarter. The slowdown boils down to persistently low oil prices—and has put the brakes on Canada’s resource sector recovery, and hindered overall GDP growth.
In anticipation of today’s announcement, the C. D. Howe Institute released a report last week advising the BoC to maintain short-term rates at 0.5% until May 2016. They further suggested no increases until November 2016, when analysts suggested a 25 basis point jump to 0.75% in the BoC’s overnight rate.