BoC to keep policy on hold this week – BBH

Analysts at BBH explains that the Bank of Canada is the only major central bank that meets and there is little doubt that policy is on hold.  

Key Quotes

“Under Governor Poloz, the central bank is very cautious despite a strong rebound in the last two quarters of 2016 (2.8% annualized pace in Q3 and 2.6% in Q4).  The economy expanded by 0.6% in January, which was twice the pace expected.  The labor market has been firm, even if exaggerated, which should help underpin demand going forward.  The central bank expects the output gap to take another year to close (mid-2018).  Bringing it forward could spark investors to anticipate a rate hike sooner.  Uncertainty about US policy (trade and fiscal) may discourage a significant change in rhetoric.”