As mentioned in one of our previous postings, Bank of Canada Governor Stephen Poloz recently lowered his forecasts for first quarter economic growth largely because of the slump in oil prices and expressed that he is “comfortable with the amount insurance” provided by the 25-basis point rate cut earlier this year.
Now economists from Canada’s Big Five banks have shared their thoughts on the outlook for the remainder of the fiscal year. All seem to agree on their expectation that the first quarter will mark the low point in terms of economic growth this year, and therefore expect the Bank of Canada to hold the overnight rate at 0.75 per cent for the rest of this year.
Dawn Desjardins, Assistant Chief Economist with RBC, said that they “expect that there will not be a need for additional policy stimulus and, therefore, expect the overnight rate to remain [unchanged].”
As Douglas Porter, a chief economist at BMO said, “The Bank of Canada kept rates unchanged today, and sent some signals to expect more of the same for a while yet.”
Economists Frances Donald, Derek Holt and Dov Zigler with Scotiabank stated that agreed that “the main message from the BoC, for now, is that further rate cuts are off the table.”
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