BoC turning hawkish? What the analysts say
The Bank of Canada kept its benchmark interest rate at a record low Thursday, but surprised with slightly cheerier commentary that has economists wondering whether the central bank has brightened up enough to entertain a rate hike sooner rather than later. Mark Carney, governor of the Bank of Canada, highlighted an improving near-term outlook in pretty much every category of concern in his January rate decision, including the European credit crisis, the U.S. economic recovery, global financial markets and the health of the Canadian economy. "The heightened uncertainty around the global economic outlook has decreased in the weeks since the Bank released its January monetary policy report (MPR)," the bank said in a release explaining its rate decision. "Recent developments suggest that the outlook for the Canadian economy is marginally improved from the January MPR." Mr. Carney said the economy will likely grow faster than forecast in the first quarter due to temporary factors, but underlying momentum still points to an expected year of middling growth.
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