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.