The Bank of Canada’s key overnight rate stayed at 0.50% this week, so nothing much will be changing in terms of interest rates for a while longer (it seems). The statements made are:
In Canada, the economy’s structural adjustment to the oil price shock continues, but is proving to be uneven. Growth in the first quarter of 2016 appears to be in line with the Bank’s April projection, although business investment and intentions remain disappointing. The second quarter will be much weaker than predicted because of the devastating Alberta wildfires. … The economy is expected to rebound in the third quarter, as oil production resumes and reconstruction begins. … Inflation is roughly in line with the Bank’s expectations… Canada’s housing market continues to display strong regional divergences, reinforced by the complex adjustment underway in the economy. In this context, household vulnerabilities have moved higher. Meanwhile, the risks to the Bank’s inflation projection remain roughly balanced. Therefore, the Bank’s Governing Council judges that the current stance of monetary policy is still appropriate, and the target for the overnight rate remains at 1/2 per cent.
Things seem to be OK for now, and maybe the economy will pick up in the 3rd quarter, although I am intrigued about the statement of a “… complex adjustment underway in the economy…”. Is that a lowering of house prices? Wildly vacillating gas prices? Ludicrously expensive broccoli ? I doubt it, but it is a thought provoking statement.
My Writings for Week Ending May 27th
I did have a Happy Victoria Day, as I usually do. Did you realize that nothing is closed in Quebec on Victoria Day? We in Ottawa know this as we usually speed across the river to get beer on Victoria Day.
Our friends at Stats Canada pointed out we have Expensive Food and Shelter in April in Canada. Nothing really that new and exciting here, except that fresh food is getting darn expensive.
On the technology front I picked up a new computer (desktop) for my son and I learned about Bloatware and Cheap PCs. Assuming this is just harmless stuff can get you in trouble, make sure you clean your computers out and run anti-virus software.
A Money Thought
I always like useful financial sayings from movie characters.
“The most valuable commodity I know of is information.” —Gordon Gekko (Wallstreet)