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The Bank of Canada (BoC) left its policy rate unchanged last week, as was universally expected. The Bank also offered us some insight into our economy’s progress, or lack thereof.
Here are the highlights from the BoC’s latest statement, with my take on the meaning behind their messages:
- “The global economy is evolving largely as the Bank projected in its April Monetary Policy Report (MPR)” but the Bank noted that “ongoing geopolitical factors [are] contributing to fragile market sentiment”. That “fragile market sentiment” concerns the Bank because our GDP tends to move in the same direction as overall global GDP over time, so heightened geopolitical uncertainty pushes the BoC into a cautious, read-and-react position.