Bank of Canada – Positive News

Yes, the Bank of Canada held its rate today (Mar 10, 2021). We are in recovery mode from the COVID pandemic with some “unevenness across regions and sectors.”

Here are a few key points from today’s announcement:

  • The US economic recovery appears to be gaining momentum as virus infections decline and fiscal support boosts incomes and consumption.
  • Global yield curves have steepened, largely reflecting the improved US growth outlook, but global financial conditions remain highly accommodative.
  • Oil and other commodity prices have risen.
  • The Canadian dollar has been relatively stable against the US dollar, but has appreciated against most other currencies.
  • In Canada, the economy is proving to be more resilient than anticipated to the second wave of the virus and the associated containment measures.  Activity in hard-to-distance sectors continues to be held back.
  • Consumers and businesses are adapting to containment measures, and housing market activity has been much stronger than expected.
  • Improving foreign demand and higher commodity prices have also brightened the prospects for exports and business investment.
  • The labour market is a long way from recovery, with employment still well below pre-COVID levels. Low-wage workers, young people and women have borne the brunt of the job losses.
  • The spread of more transmissible variants of the virus poses the largest downside risk to activity, as localized outbreaks and restrictions could restrain growth and add choppiness to the recovery.
  • CPI inflation is near the bottom of the 1-3 percent target band but is likely to move temporarily to around the top of the band in the next few months.

Read the entire Bank of Canada announcement here.