The Bank of Canada’s Wednesday rate announcement was “steady as she goes,” as it maintained its Quantitative Easing program and reiterated that rates should stay where they are until the second half of next year.
The overnight lending rate remains at 0.25%, where it’s been since last March. But that’s expected to change about a year from now, according to the BoC’s guidance.
“We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2% inflation target is sustainably achieved…this happens sometime in the second half of 2022,” its statement read.
The other hot topic was inflation, which the Bank expects will remain elevated over the short term.
“While CPI inflation will likely remain near 3% through the summer, it is expected to ease later in the year, as base-year effects diminish and excess capacity continues to exert downward pressure,” the BoC said.