Carney Holds Rates Steady

Mark Carney held the overnight interest rate at 1% for the 11th consecutive meeting. Bond yields have also dropped to record lows in the past few weeks which have pushed CDN lending institutions to cut the 5 year rate to as low as 2.99% and the 10 year fixed rate to a record low of 3.89%.

Carney noted he is worried about the level of Canadian household debt with these low interest rates, but said the economy is too weak to justify higher rates anytime soon.

Bank of Canada seen on hold until 2013

A deteriorating European with slower growth and the longer we go without economy and weak global growth will keep the Bank of Canada from raising rates for at least another year, though an interest rate cut looks highly unlikely, according to a Reuters survey

The Reuters poll of 41 economists and strategists released on Tuesday showed the median forecast for the next interest rate hike was pushed back by three months to the first quarter of 2013 from the fourth quarter of 2012 projected in a November poll. The Bank of Canada's target for the overnight rate - its main policy rate - has been at 1 percent for more than a year.

Click here to read the complete article from Reuters Canada