Bank of Canada Rate Likely to Remain Unchanged

Most analysts are predicting that the Bank of Canada’s announcement tomorrow, Tuesday January 19th, 2010, will signal that things are improving but reiterate it’s previous commitment to keeping the overnight rate at it’s current .25%.

iMarketnews.com has a story about the Bank of Canada’s likely decision that includes some very interesting quotes, such as:

- Inevitably, the Bank will start to increase its rate, but not soon, most believe. That likely will happen “sometime this year,” says Eric Lascelles, chief rates strategist for TED Securities. However, he adds, “it is simply premature for the fireworks to start quite yet.”

- The Bank admits concern about rising household indebtedness, in this prolonged period of very low commercial interest rates stemming from the Banks benchmark rate.

- All 10 economists gathered together last week by the C.D. Howe Institute, an economic think tank in Toronto, voted that the Bank should hold its rate at 0.25%, and nine recommended the same for the March 2 setting.

I guess we’ll see what happens!