The Bank of Canada (BOC) is expected to leave the key overnight interest rate on hold at 1.75% next month and year, as reflected by the latest Reuters poll of over 30 economists taken Nov. 19-26.
Key Findings:
“Forecasts on whether or not the central bank holds or cuts sitting on a knife’s edge through 2020.
That change in expectations was primarily driven by comments from BoC officials – Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins – who spoke last week at separate events about Canada’s monetary conditions being “about right” despite global trade tensions.
Every respondent in the poll expected rates to remain on hold at the conclusion of the BoC’s Dec. 4 meeting, in line with market expectations.
When asked if the Canadian economy actually needs a rate cut before the end of next year, a slim majority of economists – 13 of 24 – said no. Just a month back, a similar set of economists were slightly inclined toward a cut.
Notably, four of the top five major Canadian banks expected the BoC to cut rates at least once by end-2020.
After growing by a stronger-than-expected annualized rate of 3.7% in the second quarter, Canadian economic growth likely slowed to 1.2% in the third quarter.”
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