Brokers – and Canadians in general – await the Bank of Canada rate decision, which is set to be released later today, and one Canadian bank believes it will maintain the current 0.5% benchmark.
“All told, our current tracking is for real GDP growth to run around the 2-2.5% range over the second half of this year. This growth trajectory is consistent with the profile outlined by the Bank of Canada in its July Monetary Policy Report,” TD writes in its latest Weekly Bottom Line report. “As a result, we expect the Bank of Canada will leave the overnight rate unchanged at next Wednesday’s interest rate announcement.”
It’s a decision that will likely be welcome by brokers. A decrease to the overnight benchmark – which some of have considered a possibility – could stir public worries about the state of the economy. That economic volatility, of course, would discourage many buyers from making large purchases, such as homes.
TD was the second bank to maintain the BoC would hold its rate.
“We expect the Bank of Canada to remain on hold on Wednesday with the overnight rate unchanged at 0.5%,” Derek Holt, vice president of Scotia
Economics, writes in the bank’s latest economic forecast. “It will be a statement-only affair with no forecast updates or press conference.
They will come next in October.”
Meanwhile, 40 leading economists suggest there will be no change later today, according to BNN. Analysts forecast the chance of a hike at 55%, but not until 2017.