Bank of Canada poised to raise interest rates

The Globe and Mail- Mark Carney is likely to raise borrowing costs for the second straight time Tuesday, while continuing to sound a cautious tone as belt-tightening in Europe, efforts to restrain China’s growth, and plunging consumer confidence in the U.S. cast a pall over Canada’s prospects.

All 12 primary securities dealers and most economists say the central-bank governor will lift his main interest rate by another 25 basis points, to 0.75 per cent. The labour market has recouped most of the jobs lost during the recession and companies are seeing better demand, suggesting the private sector will be able to lead economic growth after federal and provincial stimulus largesse runs out later this year.

Investors are less confident about later decisions, and that may not change this week because Mr. Carney is likely to reiterate that his path to a more neutral, pre-crisis policy stance depends on the developing economic stories around the world…

Bank of Canada poised to raise interest rates - The Globe and Mail

Bay Street still betting on July rate hike

Ottawa Citizen- Bay Street economists are betting the Bank of Canada will raise interest rates again in July even though the central bank governor reinforced Wednesday that more hikes are no sure bet as aggressive budget-cutting measures in Europe threaten the pace of global growth.

In a speech in Charlottetown, Mark Carney said “considerable uncertainties” remain in the global economy, and that the paring back of debt among households, banks and countries had “barely begun, and will … temper the pace” of global growth.

The central bank raised its key interest rate by 25 basis points on June 1, based on stronger-than-anticipated domestic growth. Prior to Wednesday’s speech, the betting among economists and traders was for Mr. Carney to increase rates again on July 20.

Mr. Carney, however, appeared to dampen expectations Wednesday, arguing any further removal of stimulus from the strongest Group of Seven economy over the next two years had to be balanced against global developments…

Bay Street still betting on July rate hike

Behind the Bank of Canada’s interest rate decision

The Globe and Mail- A look at recent and historical data Mark Carney considered in making his decision…

Behind the Bank of Canada’s interest rate decision - The Globe and Mail

Carney warns of Greek dangers

Ottawa Citizen- The Greek debt crisis and high borrowing by many Western countries pose an indirect threat to the Canadian economy and could drag down the pace of growth if not resolved, Bank of Canada governor Mark Carney said Thursday.

Carney, in testimony to a Senate committee on banking, also repeated comments made earlier this week that there is no preordained timeline for the central bank to raise interest rates as Canada leaves the financial crisis behind. "The debt situation is one of the largest, arguably the largest, risk to securing the global recovery," he told the senators. "The net result of this would be negative for growth in Canada…”

Carney warns of Greek dangers

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