Bank of Canada to keep rates unchanged, rate cuts seen within the year: poll says

Reuter’s survey revealed that the Bank of Canada will keep its interest rates steady at 1.75% on Wednesday. However, monetary easing is seen to be imposed before the year ends, according to a significant number of economists surveyed in the poll.

Twenty of 34 or 60% (majority) of the economist-respondents said that Canada’s central bank would not move its benchmark overnight rate until the end of this year, relatively lower than the previous 70% votes that said the same thing in January.

“The labor market is starting to slow down, consumer spending is definitely not there, business investment is clearly disappointing and exports outside energy are not rising in any significant way,” Benjamin Tal, chief economist at CIBC Capital Markets said, implying a negative outlook in the Canadian economy.

According to the survey conducted on Feb. 24-27, only six economists believed that a rate cut is possible to occur on March 4, the next policy meeting schedule of the central bank.