Economy hotter than estimated, Bank of Canada says
Filed Under Main Content · Tagged: Bank Canada, Bank Of Canada, Benchmark, Core Inflation, Domestic Spending, Downside, Economy, Fourth Quarter, Globe And Mail, Globe Mail, Inflation Outlook, Inflation Risks, Mark Carney, Nod, Pledge, Target
Globe and Mail- The Bank of Canada kept its benchmark lending rate at a historic low 0.25 per cent Tuesday, while hinting that policy makers are on closer guard for shifts in the inflation outlook that might force them to rethink their pledge to stay on hold through midyear.
In the statement accompanying Tuesday’s decision, Governor Mark Carney and his rate-setting panel acknowledged that growth and inflation have been hotter than policy makers projected in their January forecast, saying the economy’s 5-per-cent growth in the fourth quarter was “spurred by vigorous domestic spending and further recovery in exports.”
Also, in a nod to the fact core inflation came in at the central bank’s 2-per-cent target in January, sooner than policy makers had anticipated, they sounded a somewhat more hawkish tone on price gains. The central bank said the risks to their inflation outlook are now “roughly balanced,” as opposed to language from previous statements which had said inflation risks were “tilted slightly to the downside…”
Economy hotter than estimated, Bank of Canada says – The Globe and Mail
Central bank urged to hike interest rates after June
Filed Under Main Content · Tagged: Bank Canada, Bank Of Canada, Basis Points, C D Howe, C D Howe Institute, Canadian Economy, Inflation, Interest Rate, Interest Rates, Pace, Pledge, Preferred Target, Rate Hikes, Rate Increases, Sharp
Times Colonist- The Bank of Canada should uphold its conditional pledge to keep its key policy rate at 0.25 per cent until July but should then embark on sharp rate hikes of 50 basis points at every announcement date until mid-2011, says an analysis prepared for the C.D. Howe Institute.
The call for sharp rate increases after June emerged yesterday, one week before the Bank of Canada releases its latest interest-rate statement. Recent data indicate the Canadian economy likely expanded in the final quarter of 2009 at a faster pace than the central bank expected (four per cent versus 3.3 per cent), and inflation is now closer to the central bank’s two per cent preferred target than it previously envisaged…
