BOC Governor Carney repeats that he plans to keep rates on hold at 0.25% until at least  the end of Q2, a vow he has stuck with for nearly a year, If I’m not mistaken.

Here is the statement.

Could BOC Deputy Governor Jenkins be making the same mistake as Greenspan and Bernanke, in downplaying the existence of a housing bubble. He says he would certainly not say we are looking at a housing bubble. I hope for Canada’s sake he’s right…

BOC deputy governor Duguay repeats that the BOC will hold rates steady at least until the end of Q2. A strong CAD and lo US demand remain substantial drags on the economy, Duguay said.

The Canadian economy will recover lost ground by Q3 if the US and China don’t screw it up, says the BOC Governor.

They repeated their vow to keep them steady until at least mid-year.

The CAD is acting as a significant drag on the economy, the Bank said and inflation.

The economy will return to capacity by mid 20100 and be near the inflation target then.

USD/CAD is firming after the announcement.

Governor Carney had a comprehensive (and quite lengthy) interview with Canada’s BNN. Topics covered include the potential for a Canadian housing bubble, the potential for a double-dip recession, China’s asset bubbles, US debt bubbles….Start here.

• C$ could act as further drag on growth, put downward pressure on inflation
• maintains overall forth outlook despite weak Q3 GDP
• repeats retains considerable flexibility on monetary policy at low rates (QE)
• global economic recovery has improves since October

• Strong C$ will slow growth, dampen inflation pressures, delay return to 2% inflation target
• Repeats conditional BOC pledge to hold overnight rate at 0.25% until June 2010
• Repeats BOC can use QE if needed to carry out monetary policy

USD/CAD sits at 1.0616, funnily enough exactly where it was when I was doing my morning wrap up.  Go figure.

BOC Governor Carney says it looks as though the US economy is set for a substandard recovery and that this should reduce US consumption. Canada should seek other markets, as a result. The dollar will remain the reserve currency of choice for the foreseeable future, he said.

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