Interest rate hikes appear to be on the back burner for the foreseeable future after Bank of Canada Governor Mark Carney said Thursday that overstretched households and weak US demand would crimp economic growth in the coming months.
At a speech in Windsor, Ontario, Carney said Canadians should brace for months of “modest” economic growth, acknowledging this will be reflected in the bank’s revised forecast to be released October 20th, in which third- and fourth-quarter estimates would be lowered. Any additional increases to interest rates in this environment would warrant “caution,” he added.
The remarks reinforced a growing belief among Bay Street traders that the odds of another rate hike this year were dwindling to nearly zero. Plus, data released Thursday indicated the economy contracted in July by 0.1% from June levels, the first monthly decline in almost a year.
Economists said Thursday’s speech and the GDP report point to a central bank that’s done with rate hikes for now. Click here to read the full article
