Bank of Canada Holds Firm Again

The Bank of Canada has held its overnight rate range at 0.75%-1.25%. I have highlighted the sections of the press release that have changed since the last release at the end of May:

The global economic expansion is proceeding broadly as projected in the Bank’s April Monetary Policy Report (MPR), with modest growth in major advanced economies and robust expansions in emerging economies.  The U.S. economy has grown at a slower pace than expected and continues to be restrained by the consolidation of household balance sheets and slow growth in employment. While growth in core Europe has been stronger than expected, necessary fiscal austerity measures in a number of countries will restrain growth over the projection horizon. The Japanese economy has begun to recover from the disasters that struck in March, although the level of economic activity in that country will remain below previous expectations.  In contrast, growth in emerging-market economies, particularly China, remains very strong. As a consequence, commodity prices are expected to remain at elevated levels, following recent declines. These high prices, combined with persistent excess demand in major emerging-market economies, are contributing to broader global inflationary pressures.  Widespread concerns over sovereign debt have increased risk aversion and volatility in financial markets.

In Canada, the economic expansion is proceeding largely as projected, although the expected rotation of demand is somewhat slower than had been anticipated. Household spending remains solid and business investment robust. Net exports remain weak, reflecting modest U.S. demand and ongoing competitiveness challenges, particularly the persistent strength of the Canadian dollar. Despite increased global risk aversion, financial conditions in Canada remain very stimulative and private credit growth is strong.

Following an anticipated slowdown in growth during the second quarter due to temporary supply chain disruptions and the impact of higher energy prices on consumption, the Bank expects growth in Canada to re-accelerate in the second half of 2011. Over the projection horizon, business investment is expected to remain strong, household spending to grow more in line with disposable income, and net exports to become more supportive of growth. Relative to the April projection, growth in household spending is now projected to be slightly firmer, reflecting higher household income, and net exports to be slightly weaker, reflecting more subdued U.S. activity. Overall, the Bank projects the economy will expand by 2.8 per cent in 2011, 2.6 per cent in 2012, and 2.1 per cent in 2013, returning to capacity in the middle of 2012.

Total CPI inflation is expected to remain above 3 per cent in the near term, largely reflecting temporary factors such as significantly higher food and energy prices. Core inflation is slightly firmer than anticipated, owing to temporary factors and to more persistent strength in the prices of some services. Core inflation is now expected to remain around 2 per cent over the projection horizon.  Total CPI inflation is expected to return to the 2 per cent target by the middle of 2012 as temporary factors unwind, excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers, and inflation expectations remain well-anchored.

The Bank’s projection assumes that authorities are able to contain the ongoing European sovereign debt crisis, although there are clear risks around this outcome.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be eventually withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered.
This was a significant re-write of the Bank’s periodic overnight lending rate press release, not surprising given recent developments in the US and Europe. It looks as if the Bank is setting the stage for an eventual raising of rates but their required optimism surrounding the European debt situation is, well, a bit optimistic in my view. Sorry, savers!
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pendantic
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pendantic

i see you've figured out how to make letters red.

keeperofthederp
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i thought that was just the blood from my eyes

keeperofthederp
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@jesse:

would be nice if goldman sachs execs got the same treatment

er, isn't the communist party tackling a corruption problem sort of like trying to eat one's own head?

https://downandoutinvancouver.wordpress.com/2011/

maybe the wildlife will deal with it?

real_professional
Member
WHOA! Interesting news – A real estate appraiser in Abbotsford told me that the banks have been strong arming them to "inflate appraisal values" in order to "make the numbers work". He mentioned that RBC is the worst of the bunch. He was saying that other than West Van, the Westside and other HAM areas the market is cold. He also went on to say that in Abbotsford if you bought a condo post 2007 you have pretty much lost money now. He pointed to the following example: A condo which went for $220k a year ago was foreclosed by the bank, that same condo was then sold by the bank for $120k. It was put back on the market a "little while" ago at $175k and is now has the ask dropped to $150k…. The problem, no bids. He… Read more »
Best place on meth
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Best place on meth

@jesse:

Hooray!

Two less immigrant investors settling in Shaughnessy.

Keep those heads rolling, Wen!

space889
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space889

@jesse: Wow those numbers are pretty mind blowing!! I wonder how much bribes their mistresses got to keep. I think the immediate family probably got nothing as all family assets are likely to be seized. But cash and bank accounts held by mistresses, that would be an interesting question.

900kCrackHouse
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900kCrackHouse

@Best place on meth: Lol, had a good laugh over this one.

900kCrackHouse
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900kCrackHouse

@space889: Speaking of mistresses, did you see Murdoch's asian wife punch out the guy who tried to stick a pie in Murdoch's face. Read her wiki, its an interesting tail. Gold digger!

Van MD
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Van MD
[update from the frontlines] this is my most recent foray http://translate.google.com/translate?hl=en&i… If I go to the mortgage broker right now, i can easily put 25 +% DP and buy my current rental 2BR sub-penthouse condo unit at current price. But I don't, because I can calculate and think. I rather preserve my capital, wait until a reasonable price correction, then go in and buy at: I rather preserve my capital, wait until a reasonable price correction, then go in and buy at: 1. lower price 1. Lower price 2. 40-50% DP 2. 40-50% DP Why not? Why not? Now, my friends are above-average income for young main-stream Canadian. If you think even a top-1% income-earner have "problem ith financial ability", then what about the several hunded-thousand 25-30s year old Canadians? You would think they'd have more "problem with financial ability",… Read more »
keeperofthederp
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@900kCrackHouse:

i was just reading that the other day

i especially like the part where after an American couple sponsored her to immigrate from China, she started fucking the husband, nearly 30 years her senior. Once she realized he couldn't pay for her grad school, she found someone else who could.

Brittany
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Brittany

Yup.Keep the rates low. That'll fix the problem. Just ask Japan. Its gonna be a slow long burn.

keeperofthederp
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http://www.westca.com/News/article/sid=200811/lan

in china they call her 'the milk of god' apparently

LOL

i remember seeing my first boobies, too

Van MD
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Van MD
[Update from the frontlines – late entry] Resident pumper Mr.Ma started a new thread re: MLS# V890362 http://www.realtor.ca/PropertyDetails.aspx?Proper… "few weeks ago it was on sale for $899k, now it's going for $938k; in 2009 it was only listing for $570k. Can a realtor help me check what the sale price was in '09? Let's make the housing bears taste the bitterness of not having bought in time!" it drew the following responses: "if this house is listed for $977k in 2 weeks, will you buy?" "the owner must be thinking that price will go down, that's why he's selling now" "don't fool us with just a single high listing" "this house looks alright, but it's right below the flight path" Then I responded with a translation of the VCI post few days ago re: the house in richmond that can't… Read more »
Van MD
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Van MD

and if you have time, do read my translated post

Perhaps you will enjoy the way I told the story, and perhaps you'd think it's better than the original version : )

Vansanity
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Vansanity

Just saw a piece last week on "Brain Drain" that the city of Vancouver will be facing, moving forward. Did they ever call it!

Already this week I've had the conversation with 3 friends that are planning on moving away due to the disproportionate ratio between the cost of living:income.

One is going to Calgary and the other two are going to UK and Australia (Australia has its own housing bubble to deal with but it sounds like the incomes are higher in their field).

Best place on meth
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Active Member
Best place on meth

@Van MD:

Please tell Mr. Ma that the few houses that are still selling in Richmond are routinely going for 10% below ask.

Best place on meth
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Best place on meth

@Best place on meth:

Having just said that, one of the most expensive houses ever sold in Richmond just changed hands today.

Asking $8.5M, sold for $6.85M

Note the "refrection" pool.

Best place on meth
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Best place on meth
painted turtle
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painted turtle

I went to Safeway (Point Grey) and noticed a HAM lady driving a brand new Land Rover.

She came to buy a bottle of shampoo with her teenage daughter. But she had forgotten her Safeway card, so she was asked to pay full price and forget about the $0.50 discount. She refused to pay full price, tried everything to convince the cashier. Finally she left pretty upset without buying anything.

I just could not help laughing out loud 😉

Van MD
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Van MD

@Best place on meth:

Hey Meth, is your source of the 8.5M mansion a realtor/someone involved then? (because I may need to quote a source to make my post believable…or maybe I don't have to )

I better grab a screen cap ASAP when I get home before they pull this listing from MLS. Thanks!

VanCity Guy
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VanCity Guy

@painted turtle:

If only she knew that she could have just given her phone number to the cashier to receive the Safeway club discount… but there was likely language barrier.

I just find it amusing that she burned more than 50c worth of gas to get to and from the Safeway… but she returned home with nothing. Wow.

A scene of things to come?

gordholio
Member
Re Abbotsford: I'm still on the realtor hot sheets for Abbotsford because we were toying with the idea of low-balling an offer out there before we got smarter and opted to rent again. And I can tell you this: Maybe 25% of the homes we've looked at in the past YEAR have sold. Nice places on the east side, up the mountain, that are *still* listed after being on the market for months – many, many months. More than that though are the price reductions. They're everywhere. I get a fresh new batch every day. It's dying out there, just like it died in Chilliwack before that, the Okanagan before that, etc. And to that I say: GOOD! DIE, DIE, DIE! Bring your death a little closer to greater Vancouver. It's tentacles are already in Langley and Surrey. I can… Read more »
Mainland Chinese Dip
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Mainland Chinese Dip

Yes…we not want crooked peepulz.

Maybe execution too harsh….

I think date with Libby Davies worse !

Maybe not…..

keeperofthederp
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@painted turtle:

passive aggressiveness is what we canadians do best

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