Bank of Canada interest rate continues to hold steady
The Bank of Canada decision to hold the policy interest rate at 1.75% was largely expected by financial markets, but it does indicate:
- Trade tensions remain a major area of concern for the health of the global economy.
- Canadian economic growth forecast for 2020 was revised down as business investment and net exports remain areas of weakness.
- Guidance for future rate decisions has not evolved much, but it’s possible the Bank will have to match other Central Banks’ interest rate cuts.
- Decline in household spending would be one factor changing the current stance on interest rates.
Despite current rate stability, businesses should regularly monitor interest rates and financial markets for fluctuations. Check out our blog to explore more ag economics topics.
J.P. is the Vice-President and Chief Agricultural Economist at Farm Credit Canada. Prior to joining FCC in 2010, J.P. was a professor of agricultural economics at North Carolina State University and Laval University. He also held the Canada Research Chair in Agri-Industries and International Trade at Laval. J.P. is Past-President of the Canadian Agricultural Economics Society. He obtained his PhD in economics from Iowa State University in 1999.