As was widely expected, the Bank of Canada announced this morning that it is keeping its policy interest rate at 5.0%. Despite weak economic growth in Canada, this was the fourth announcement in a row with no change in the trendsetting rate.

According to today’s statement, the Bank does not expect inflation to return to the 2% target until next year and is concerned that “core measures of inflation are not showing sustained declines.”

The big question remains: when can we expect a rate cut?

The statement does not provide a timeline for future cuts, but given that the Bank’s Governing Council “wants to see further and sustained [emphasis added] easing in core inflation,” an early rate this spring seems unlikely as it will take time for this trend to be evident in the data.

Governor Tiff Macklem said in a statement on the new Monetary Policy Report that “we need to give these higher rates time to do their work,” reinforcing the message that it is not in a hurry to lower rates.

In terms of the Bank’s economic outlook, its forecast is basically unchanged from October with real GDP growth of 0.8% this year followed by a rebound of 2.4% in 2024.

Answer to the previous trivia question: According to Forbes, the Thompson family is the wealthiest in Canada with an estimated net worth in 2023 of US$54.4 billion.

Today’s trivia question: What precious metal was discovered on this day in 1848 by James Marshall at a sawmill in California?