Bank of Canada decision highlights June 9, 2021
- Overnight rate left unchanged at 0.25%, as expected
- Monthly asset purchases at $3B vs $3 billion prior
- Economic developments have been broadly in line with the outlook in the April Monetary Policy Report
- BOC maintains forward guidance on the path for the overnight rate
- Says global economic activity is picking up
- Notes that commodity prices have risen further, notably oil, and the Canadian dollar has seen a further appreciation
- Q1 GDP was below BOC forecast but "underlying details indicate rising confidence and resilient demand"
- CPI inflation will likely remain near 3% through the summer, it is expected to ease later in the year, as base-year effects diminish and excess capacity continues to exert downward pressure
- Full text
This is a total placeholder statement, which is exactly what was broadly expected. There was no change in language about the output gap closing which remains "sometime in the second half of 2022".
Guidance on QE continues to say purchases will be guided by the BOC assessment of the strength and durability of the recovery. Some people were looking for a stronger nod towards a July taper but the BOC may want to see more data before offering that signal. The July 17 meeting should be much more interesting.
