๐จBank of Canada Update: Essential Highlights
The Bank of Canada stands firm on its policy rate and continues quantitative tightening. Check out these must-know takeaways:
1๏ธโฃ Policy Rate & QT:
๐ฏ Overnight rate is held at 4.5%, Bank Rate at 4.75%, and the deposit rate at 4.5%
๐ Quantitative tightening continues for a restrictive stance
๐ Ready to raise policy rate if needed to reach the 2% inflation target
2๏ธโฃ Global Economic Situation:
๐ Easing inflation: lower energy prices, normalized supply chains, tighter policy
โ๏ธ Core inflation in advanced economies indicates ongoing price pressures ๐บ๐ธ๐ช๐บ US & Europe growth is stronger than expected but set to weaken
3๏ธโฃ Canadian Economic Outlook:
๐ Demand exceeds supply, tight labour market
๐ฑ Stronger-than-projected Q1 growth
๐ฎ GDP growth weak in 2023, with gradual improvement in 2024
๐ Economy to grow by 1.4% in 2023, 1.3% in 2024, and 2.5% in 2025
4๏ธโฃ Inflation Expectations:
๐ CPI inflation at 5.2% in Feb, dropping to ~3% mid-year
๐ฏ Gradual decline to 2% target by the end of 2024
โ ๏ธ Challenges: slow expectation adjustments, elevated service price inflation & wage growth
The Bank is dedicated to restoring Canadian price stability, keeping a close eye on core inflation and key indicators.
๐๏ธMark your calendar for the next overnight rate target announcement on June 7, 2023, and the Monetary Policy Report on July 12, 2023! ๐๐ฅ
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