Poloz Holds Rates, Sees More Room for Canada's Economy to Grow
- Bank of Canada raises forecasts for potential output
- Swaps trading indicates two more rate hikes this year
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Bank of Canada Governor Stephen Poloz is showing faith in the economy’s ability to prolong its current expansion without fueling inflation, in a decision Wednesday that kept interest rates on hold even as he raised the outlook for growth.
The Ottawa-based central bank offered an upbeat assessment of an economic expansion that’s running close to capacity, and said borrowing costs will eventually rise. But policy makers indicated they are in no rush to thwart the expansion with rate hikes, particularly at a time when plenty of headwinds remain, such as trade uncertainties. The currency dropped and bond yields dipped slightly.