Things can quickly change so get ready to see Bank of Canada actions speak louder than words over the coming year on interest rates. Read on.
index will return to two per cent in mid-2025. If this two-year prediction causes you concern that policymakers won’t be lowering rates for two years, fear not. It is quite amazing that they feel confident in making a prediction for two years out. Keep in mind that only 18 months ago, the overnight rate was still 0.25 per cent.Two years is forever in terms of economic predictions, and, as a result, we should assume virtually nothing based on the prediction of a two-per-cent CPI by mid-2025.
However, all was not rosy. The tech bubble burst in early 2000, and the end-of-year forecasts for 2001 were not great. GDP growth was expected to slip to between two and three per cent, according to private-sector forecasts. Among the concerns were the effects of previous increases in interest rates, higher energy prices and overall weakening confidence.
Did the Bank of Canada predict these moves in May 2000? No, it did not. At the time, it was clearly worried about higher inflation.The May 2000 Bank of Canada Monetary Policy Report said: “ … several key areas of uncertainty for the conduct of Canadian monetary policy in the period ahead. First, the momentum of demand in Canada from both international and domestic sources could continue to outpace expectations.
There was a clear slowdown ahead in the economy, but things got much worse when the completely unpredictable 9/11 attacks in the United States took place. That helped push a meaningful slowdown in 2001 to a much worse place. Whatever forced the economy to slow down, the impact was dramatic. The CPI was down to 0.62 per cent by November 2001. Now the central bank was in catch-up mode to try to spur the economy, so it quickly lowered the rate, eventually stopping declines in January 2002, when it was down to 2.25 per cent.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Big interest rate cuts ahead from the Bank of Canada if 2001 is any indicationThings can quickly change so get ready to see Bank of Canada actions speak louder than words over the coming year on interest rates. Read on.
Read more »
Djokovic to skip National Bank Open in Canada due to fatigueNovak Djokovic will not play at next month's Canadian Masters in Toronto due to fatigue, organizers announced on Sunday.
Read more »
Inflation has fallen, so why hasn't the Bank of Canada backed off rate hikes?Statistics Canada reported on Tuesday that inflation fell to 2.8 per cent in June, down significantly from the eye-popping peak of 8.1 per cent reached last summer.
Read more »
Inflation has fallen, so why hasn't the Bank of Canada backed off rate hikes?Canada\u0027s inflation rate has returned to the country\u0027s target range after a tumultuous couple of years of soaring prices.
Read more »
Bank of Canada should stop hiking interest rates now: Benjamin TalCIBC\u0027s Benjamin Tal talks about why he thinks the Bank of Canada has started overshooting with interest rate hikes. Watch here.
Read more »
Inflation has fallen, so why hasn't the Bank of Canada backed off rate hikes?Canada\u0027s inflation rate has returned to the country\u0027s target range after a tumultuous couple of years of soaring prices.
Read more »