Here is an article from the Globe and Mail: Bank of Canada expected to hold line on interest rates again, but how long can it keep diverging from rest of world?
As far as titles go, it is one of the worst in a long time.
What has been happening? Several central banks have been reducing interest rates. Why? Because their economies are weak.
So why the Bank of Canada is not following? Because the Canadian economy is strong. Citing the article itself:
1. "Canada’s economic indicators have continued to hold up well during that time.[…]
2. The Canadian labour market added a stellar 135,000 jobs in August and September, […]
3. The Canadian housing market has found renewed traction,
4. […] Bank of Canada’s closely watched quarterly Business Outlook Survey, released the day after the federal election, indicated that Canadian business sentiment has held up relatively well in the face of the global uncertainty, which has badly hurt business confidence in many other parts of the world.
I could finish this by simply paraphrasing Bill Clinton: It is the economy, stupid. As the Canadian economy is strong, there is no need to reduce interest rates, regardless of what others are doing.
But it gets worse. The author writes that:
"[…] the most positive development may be the tentative trade pact reached between the United States and China earlier this month"
The problem: there is no trade pact. Trump announced one; the Chinese officials said nothing has been agreed to.
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