The Bank of Canada kept interest rates on hold at 0.25%...
You can read the full statement here...
...Or if you have more important things to be getting on with, I have picked out some key points for you...
- The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week
- Bank of Canada will hold current level of policy rate until inflation objective is sustainably achieved
- The economy is proving to be more resilient than anticipated to the second wave of the virus and the associated containment measures
- GDP growth in the first quarter of 2021 is now expected to be positive, rather than the contraction forecast in January
- Despite the stronger near-term outlook, there is still considerable economic slack and a great deal of uncertainty about the evolution of the virus and the path of economic growth
- The labour market is a long way from recovery, with employment still well below pre-COVID levels
- The spread of more transmissible variants of the virus poses the largest downside risk to activity, as localized outbreaks and restrictions could restrain growth and add choppiness to the recovery
- CPI inflation is near the bottom of the 1-3 percent target band but is likely to move temporarily to around the top of the band in the next few months.
- CPI inflation is then expected to moderate as base-year effects dissipate and excess capacity continues to exert downward pressure. Measures of core inflation currently range from 1.3 to 2 percent
- While economic prospects have improved, the recovery continues to require extraordinary monetary policy support
- We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s January projection, this does not happen until into 2023
- The Bank will continue its QE program until the recovery is well underway. As the Governing Council continues to gain confidence in the strength of the recovery, the pace of net purchases of Government of Canada bonds will be adjusted as required.