Governor of the Bank of Canada Tiff Macklem speaks during a videoconference event with the Council on Foreign Relations at the Bank of Canada in Ottawa, on Thursday, Oct. 7, 2021. THE CANADIAN PRESS/Justin Tang

Governor of the Bank of Canada Tiff Macklem speaks during a videoconference event with the Council on Foreign Relations at the Bank of Canada in Ottawa, on Thursday, Oct. 7, 2021. THE CANADIAN PRESS/Justin Tang

Bank of Canada scheduled to make rate call, update economic and inflation outlook

Economists don’t expect rates to rise

OTTAWA — The Bank of Canada is scheduled this morning to announce what will happen to its trendsetting interest rate, and provide an updated forecast for the domestic economy.

The bank’s target overnight rate has been at 0.25 per cent since the onset of the pandemic, and governor Tiff Macklem has said increases won’t arrive until later next year when economy has healed enough from COVID-19.

Earlier this month, Macklem suggested the economy wouldn’t recover as quickly over that stretch as previously thought because of global supply-chain issues that have become more persistent than expected, alongside higher inflation rates.

That could be reflected in the bank’s quarterly monetary policy report, which sets out the Bank of Canada’s forecast for the economy and the pace of inflation over the next year.

Economists don’t expect the bank to raise rates this week, but do look for the central bank to announce a rollback of bond purchases as part of its quantitative easing program.

BMO’s Benjamin Reitzes says there is reason to believe the central bank will reshape the QE program to stop adding stimulus and rather maintain what’s already there, noting Macklem recently gave a speech on the details of such a move.

This report by The Canadian Press was first published Oct. 27, 2021.

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