It couldn’t be any more boring than listening to the same old, same old from the Bank of Canada as they once again have kept interest rates unchanged at 1/2 of one per cent.
Both global and U.S. economic growth was lower than the bank expected in the second quarter, but the Bank is looking for significant strengthening in the second half of the year.
As has been previously announced, a second half substantial rebound is expected in Canada, as GDP growth will recover from the Alberta Wildfires.
Rebuilding of Fort McMurray will boost growth in the third quarter, aided by a forecast recovery in oil production and consumer spending should get an additional lift from Canada Child Benefit payments.
Then fourth quarter GDP should continue the improvement as Federal infrastructure spending starts to have more impact.
The Bank judges that the overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate, (read that as bank speak for ‘more of the same’), thus the target for the overnight rate remains at 1/2 per cent…and in our opinion could stay there for a long time before change starts to unfold.