Analysts at Rabobank note that the Bank of Canada raised the policy rate 25bp to 1.50% as was widely expected, while maintaining a cautious tone.
Key Quotes
“We maintain the same view held before this meeting; the BoC has a bias to raise rates and will do so if the market is pricing it in but we doubt data will allow to do so again this year.”
“Headline data may be relatively upbeat but a scratch below the surface unveils a very different picture with consumers being squeezed by higher debt servicing costs and rising cost-push inflation, while we see the outlook for trade and investment as uncertain at best.”
“The BoC revised down its forecast for GDP growth this year by 0.1ppt to 2.0% while revising up the outlook for 2019 by 0.2ppt to 2.2%.”
“The BoC revised up its forecast for CPI inflation this year by 0.1ppt to 2.5% while keeping its 2019 forecast steady at 2.1%.”
“The press conference was more dovish than the statement that accompanied the decision.”
Share
