A March Rate Cut Looks Less Likely: Poloz Feb 27th

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A March Rate Cut Looks Less Likely: Poloz
For years, the Bank of Canada’s rate announcements have been somewhat anti-climatic; with the Overnight Lending Rate held at 1 per cent since September 2010, it became a safe assumption for market watchers to forecast status quo each time the BoC made their statement. That changed this January, when the Bank blindsided borrowers and economists alike with a 25-basis point cut. The next rate announcement approaches on March 4, and the potential outcome is arguably the most anticipated in recent history.
Until this week most economists were forecasting a rate cut of another 25 basis points. But now Bank of Canada Governor Stephen Poloz has thrown that into speculation with recent speech he made at the University of Western Ontario, remarking that the Bank had taken the right amount of “insurance” when it cut rates in January. He stated, “The downside risk insurance from the interest rate cut buys us some time to see how the economy actually responds,” adding, “The oil-price shock is an important setback in our progress toward full capacity, full employment and stable inflation because it is a net negative for economic growth…

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