Stephen Poloz held bank of Canada rates steady for the third consecutive month however, he left the door open for a rate hike on July 11.
He sited various improvements in the economy. First quarter economic growth is expected to be above the April projected 1.3% making the Canadian dollar rally suppressing fears that the bank was behind the eight ball because of a recent rise in gas prices.
Uncertainty still remains on the NAFTA front however, business investment picked up in the first quarter and the Business Outlook Survey will be released in late June giving insight into business intentions ahead of the next rate policy meeting.
Housing activity remained soft as the housing market adjusts to new mortgage guidelines and higher interest rates. There is an expectation that the slowing housing market will recover with solid labour growth and consumption of goods will contribute to economic growth in 2018.
The bottom line is that there may be a rate hike in July and another in October. The rate was raised 3 times last year but it appears that the bank is waiting to see what happens to housing this year and the trade situation before making further decisions.
To read the full article, please visit Dr. Sherry Coopers summary of the Bank of Canada announcement. http://ow.ly/lVWh30kgcEX