Canadian interest rates are almost certainly on hold until at least sometime next year
The Bank of Canada published a revised outlook on April 24 that shows the economy essentially stalled over the last six months, extinguishing the sparks that had caused policy makers to starting worrying about inflation.
Canada’s economy was cruising at the start of the last year when a plunge in oil prices, higher interest rates, and U.S. President Donald Trump’s trade wars converged to create a torrent of headwinds. In October, policy makers predicted GDP would grow at an annual rate of 2.3 per cent in the fourth quarter, and then in January they revised that estimate to 1.3 per cent. They also were overly optimistic about growth in the first quarter, predicting an annual rate of 0.8 per cent in the January MPR.
The Bank of Canada predicts a rebound in the second half, sparked by an annual growth rate of 1.3 per cent in the second quarter.
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