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May 30, 2018BANK OF CANADA MONETARY POLICY The Bank of Canada maintained the overnight rate at 1.25 per cent. The Bank Rate is correspondingly 1.5 per cent and the deposit rate is 1.0 per cent. The Bank of Canada noted that developments since April reinforce the view that higher interest rates will be warranted to keep inflation near target and that the Governing Council will take a gradual approach to policy adjustments.
The Bank of Canada noted that global growth remains broadly on track with recent data pointing to some upside to the US outlook. However, ongoing trade uncertainty is dampening global business investment. Global oil prices have been higher than assumed in the Bank of Canada April Monetary Policy Report in part due to geopolitical developments.
The Bank of Canada continues to expect growth in Canada to be around 2 per cent in the first half of 2018. Exports of goods have been more robust than forecasted and machinery and equipment imports suggest a recovery in investment. Housing resale activity has remained soft in Q2 2018 as the market adjusts to new mortgage guidelines and higher borrowing rates. Labour income growth should support housing activity and consumption going forward.
Bank of Canada
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