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On Wednesday, the Bank of Canada will have its monetary policy meeting. Wells Fargo’s analysts, like market consensus, expect no change in the key interest rate (0.25%). They consider the BoC could use the meeting to address the future path of its QE program. 

Key Quotes: 

“With interest rates effectively at 0% in Canada, it is unlikely policymakers make any new adjustments to policy rates. However, with the Bank of Canada still engaged in asset purchases, it is more likely policymakers use (…) meeting to address the future path of its quantitative easing program. Since the global spread of the virus took shape, the BoC started its first QE program on record, purchasing C$5B of government bonds per week.”

“More recently, the BoC scaled back the size of its asset purchases, buying C$4B of bonds per week. In our view, it is likely BoC policymakers address the future size of asset purchases as we head into 2021 and seek to provide market participants with guidance on whether and when asset purchases could be scaled back again.”

“With the Bank of Canada easing off the monetary easing pedal, fiscal stimulus will likely take most of the burden for economic support going forward.”