The Bank of Canada, as expected, left interest rates untouched this morning.
Looking at their forecast for future economic prospects, it looks like it could be the end of 2018 or early 2019 before we even get a hint of a rate hike.
Even with a stronger third quarter after a slow first half of 2016, the Bank statement underlines that there is still a significant amount of slack in the Canadian economy…lots of room to grow without impacting inflation.
This is a sharp contrast to developments in the U.S., which will raise rates next week.
The Bank does not rule out a rate cut if our economy continues to disappoint and underperform, and as the U.S. starts to raise rates, again, there will be no way Canada will follow suit…period – a negative impact going forward for the Canadian dollar.