Lowest Interest Rates For First Time Buyers
Lowest Interest Rates For First Time Buyers
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Bank of Canada Wading Further Into Uncharted Territory
Bank Of Canada Wading Further Into Uncharted Territory
There was a lot of talk among economists before the April 21st, 2009 Bank of Canada (BOC) interest rate announcement. For the first time in many months it wasn’t clear exactly what the central bank would do. But in the end, it was more of the same with interest rates going lower by 0.25%.
The target level for the overnight rate now sits at 0.25%, the lowest level in history. Overnight rates are as low as they can go, and if the BOC wishes to further stimulate the economy they are going to have to resort to more unconventional methods like the US Federal Reserve has.
In a press release that was on the rather gloomy side of things, the BOC reiterated that the global economy was deteriorating faster than the bank previously thought. They also revised their forecasts for 2009 Canadian economic growth downward to –3.0% and said that the economic recovery would be more gradual than the bank previously thought. The bank also tempered its inflation forecasts, predicting that CPI inflation would bottom at -0.8% year-over-year in 2009, and not return to the bank’s 2.0% target level until 2011.
With the BOC reiterating that inflation concerns are nearly non-existent, they were also able to reassure the markets that "the target overnight rate can be expected to remain at its current level until the end of the second
Dan SumnerEconomist, ATB Financial April 21, 2009
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