Bank of Canada Goveror Mark Carney.
Economists will be paying close attention to the Bank of Canada’s interest rate announcement Tuesday, but not because they’re looking for a rate hike.
The main focal point will be changes to the bank’s growth and inflation outlook, as well as the balance of risks. Below we outline three things economists will be looking for during the bank’s announcement.
Dovish or hawkish?
As far as the overnight lending rate, which is currently at 1%, the likelihood of a surprise hike (or cut) on Tuesday is nearly nil, said Avery Shenfeld, chief economist with CIBC Economics.
But Tuesday’s announcement will likely bring a change of tone, he added.
“Given developments since the prior issue, Governor Carney’s team has no choice but to alter its message and, in the process, sound just a shade less dovish,” Mr. Shenfeld said.