Add The Bank of Canada to the list of flip-flopping central banks as it has now fully abandoned its bias toward raising interest rates as the economy grapples with a slowdown, bringing its policy into line with the Fed.
“Governing Council judges that an accommodative policy interest rate continues to be warranted,” officials led by Governor Stephen Poloz said in the statement.
“We will continue to evaluate the appropriate degree of monetary policy accommodation as new data arrive.”
The Bank of Canada is keeping its key interest rate unchanged as it releases a downgraded 2019 growth forecast that includes a prediction the economy nearly came to a halt at the start of the year.
The Bank of Canada slashed its GDP growth forecast to 1.2% y/y in 2019, from 1.7% previous, and projecting growth of just 0.3 per cent in the first quarter of 2019.
The decision leaves the trend-setting rate at 1.75 per cent for a fourth-straight announcement – a pause that followed governor Stephen Poloz’s stretch of five hikes between mid-2017 and last fall.
The reaction makes sense – a sudden weakening in the Loonie…
And Canadian bond yields are tumbling…