Accidents can happen to any economy. Over the last year, Canadian industry has experienced troubled exports in the energy and gas sectors and our GDP has been essentially flat. Both the US and Canada have gone through many extended flat-stretches; which were then followed by growth. However, the US economy is very fragile at the moment, and we (Canada) are what amounts to ‘guilty by association’. To add fuel to the fire, there are enough clouds on the global horizon have concerns for the near future.
These considerations, and until this global economy is on a more solid track… the Bank of Canada is going to be very patient in raising rates. They are no longer worried that lower rates will trigger inflation; therefore the need to withdraw the monetary stimulus has diminished.
Bottom line? Interest rate hikes, at least for the immediate future, look unlikely. The next Bank of Canada meeting is Jan 18.
North Vancouver, BC V7P 1S6
P. 604.983.3273 tf. 877.983.3273
F. 604.983.3278 tf. 866.983.3278
C. 604.710.1500 tf. 888.552.JOHN