Bank of Canada Governor Stephen Poloz still frets about ultra-low inflation – just not quite as much as he did a couple of months ago.
And with that subtle shift in Poloz’s worry-metre, economists reckon the odds of an interest rate cut just got a lot longer today as the central bank left its key overnight rate unchanged at 1%.
In its rate statement, the central bank dialled back recent anxieties about disinflation. It acknowledged that prices are rising a bit faster than expected so far this year, but it also cautioned that “downside risks to inflation remain important.”
“Excess supply in the economy and competition in the retail sector will keep inflation well below the 2% target this year,” the bank said in its second rate announcement of 2014.
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