The Bank of Canada held the overnight rate target at 0.25%, but surprised markets by removing the conditional commitment to keep rates there until the end of the second quarter of 2010. This increases the likelihood of a rate increase in June.
The Bank of Canada has recognized stronger-than-expected near term growth in both the global and Canadian economic recovery, but remains cautious about the great amount of uncertainty that remains as monetary and fiscal stimulus unwinds.
Peter McKinnon
www.peterlmckinnon.com
peter_mckinnon@centum.ca
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