Skip to content
Home » Loose Money Continues for the Holiday Season in Canada

Loose Money Continues for the Holiday Season in Canada

The Bank of Canada yesterday announced that it is keeping its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent, as well, which should mean that the Big Banks should not be changing their rates (but then again, they are free to do as they please).

Big Pile of Loose Canadian Money

This means that loose money rates at the Banks should continue on for a while. The Bank’s commentaries were telling as usual:

Inflation has evolved broadly in line with the outlook in the October MPR. Both total and core inflation are expected to increase and return to 2 per cent over the course of the next 12 months as the economy gradually absorbs the current small degree of slack, the growth of labour compensation remains moderate and inflation expectations stay well-anchored.

That is a sensible opinion, from my point of view. They do go on to say however:

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. Over time, some modest withdrawal of monetary policy stimulus will likely be required, consistent with achieving the 2 per cent inflation target. The timing and degree of any such withdrawal will be weighed carefully against global and domestic developments, including the evolution of imbalances in the household sector.

In other words, we will be raising rates, some time, but we are not really sure when, but we will be watching closely to see if any kind of economic recovery heats the economy up.

Feel Free to Comment

  1. Canadian Budget Binder – Ontario – Hi, I'm Mr.CBB, a Brit, married to a beautiful Canadian woman. We are in our early 40s with a 7-year-old son and live in the Greater Toronto Area. In less than 5 years, we wiped out our $265,000 mortgage with no help from anyone and are now 100% debt-free. Find out how we did it and how you can start your debt-free journey today. On Canadian Budget Binder, you will find loads of resources and a Free Downloads page that includes the CBB Budget Spreadsheet along with free printable downloads for your home Budget Binder. You have to subscribe to get the password, which will unlock all of these freebies. No big deal as it only takes minutes. Don't forget to click on the email that first comes to the email address you provided to activate your subscription. If you don't see it right away, check your Spam box. Join me as I share our Monthly Budget Update, Frugal Living Tips, and all topics related to Relationships, Gardening, Investing, Real estate, Retirement, Money, Marriage, Parenting, Food including Keto recipes, and MORE! It's a fun place where everyone is family. "I wish everyone could experience being rich and famous, so they'd see it wasn't the answer to anything." Jim Carey Please read the disclaimer and Privacy Policy in full on CBB. All information provided in this blog is the opinion of Canadian Budget Binder for entertainment purposes only and is in no way of professional advice. Please contact a professional financial advisor regarding your particular financial situation.

    That’s not surprising at all and when they do I hope everyone is prepared. You are right they can do as they please.

Leave a Reply Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Exit mobile version