Why the Bank of Canada is unlikely to cut interest rates again this week
Global News
The Bank of Canada is scheduled to make its next decision on interest rates on Dec. 10, but are they expected to raise them, cut them, or hold?
The Bank of Canada is scheduled to make its next decision about interest rates on Dec. 10, which will be its last chance this year to move the rates up, cut them, or hold them steady.
Most economists are expecting the central bank to hold its benchmark interest rate at 2.25 per cent after several mostly positive reports on the economy and job market, although another cut is still possible.
“So far, all that we’ve seen on the economic data is that it’s coming in a bit stronger, if anything, than the Bank of Canada was projecting. So I think that definitely cements a hold at this meeting,” says Claire Fan, a senior economist at Royal Bank of Canada.
Central bankers meet eight times per year to discuss monetary policy and provide an update to benchmark lending rates. This essentially sets the bar for commercial lenders and banks to build their own rates for their clients.
“No policy changes are expected at this meeting. No change is expected for the next several meetings at a minimum,” said Derek Holt, vice-president and head of Capital Markets Economics at Bank of Nova Scotia, in a statement.
Holt adds that “the key to success,” for Gov. Tiff Macklem at the Bank of Canada, is “to walk away from it all without rocking the boat.”
From mortgages to car loans and other lines of credit, customers looking to borrow money will usually pay more or less based on changes to monetary policy determined by the Bank of Canada at these meetings.
Clay Jarvis, a mortgage expert at NerdWallet Canada is also predicting the Bank of Canada will keep rates unchanged this week, which would also mean mortgage rates will likely stay mostly where they are.
