Economic Indicators

Bank of Canada to suspend rate hike due to lower inflation

2023.02.21 13:52

Bank of Canada to suspend rate hike due to lower inflation
Bank of Canada to suspend rate hike due to lower inflation

Bank of Canada to suspend rate hike due to lower inflation

By Kristina Sobol  

Budrigannews.com – Data from Tuesday showed that Canada’s annual inflation rate fell to 5.9% in January, which was lower than expected. This should allow the Bank of Canada to keep interest rates the same at its next meeting while it lets previous rate hikes take effect.

Inflation was expected to fall to 6.1% from 6.3% in December, according to analysts. After a decrease of 0.6% in December, Statistics Canada reported that the consumer price index increased by 0.5 percent month over month. This was lower than the 0.7% gain that analysts had anticipated.

Statscan cited a base effect—a comparison to the strong result from the previous year—that ought to last through June. Prices surged in January 2022 during supply chain disruptions and tensions between Russia and Ukraine, reaching a peak of 8.1% in June.

Andrew Kelvin, chief Canada strategist at TD Securities, stated that the inflation figure “allows (the Bank of Canada) to stay on hold in March, despite the fact that the labor market was extraordinarily hot in the month of January.”

In January, the Bank of Canada became the first major central bank to say it would hold off on further increases as long as prices eased in line with its forecast, reaching a 15-year high of 4.5 percent.

Then, earlier this month, data revealed that Canada’s economy exceeded expectations by adding a net 150,000 jobs in January.

Money markets predicted a one hundred percent likelihood of a rate increase this year prior to the release of the inflation figures. They now see a chance of roughly 80%.

By the middle of 2023, the bank anticipates that inflation will fall to around 3%, returning to its target of 2% the following year. The next inflation report will be released following the March 8 policy-setting meeting of the central bank.

The Canadian dollar was exchanging 0.4% lower at 1.35 per U.S. dollar, or 74.07 U.S. pennies.

Prices increased by 4.9% in January, excluding food and energy, compared to 5.3% in December.

CPI-median and CPI-trim, two of the central bank’s most important indicators of underlying inflation, averaged 5.1% in January, down from 5.3% in December.

According to Doug Porter, chief economist at BMO Capital Markets, the Bank of Canada is “somewhat more comfort in their decision to go on pause at least temporarily” as a result of the January inflation figures.

He stated, “A nice antidote to some of those high-side surprises will definitely prove to be a low-side inflation read.”

According to the data, prices are falling more quickly in Canada than in the United States, where annual inflation increased by 6.4 percent in January. NYSE: Goldman Sachs likewise Bank of America stated that they anticipate the United States Federal Reserve raising interest rates three times more this year.

On Friday, Bank of Canada Agent Lead representative Paul Beaudry said its approach setting way can wander from national banks in different nations for however long expansion is at last carried down to target.

Adding to the ideal base impact, cell administrations fell 7.9% every year in January in the wake of expanding 2.5% in December, and purchasers paid 6.2% something else for traveler vehicles contrasted and 7.2% in December.

Food prices, on the other hand, increased 10.4% in January, slightly faster than the 10.1% increase in December. Mortgage interest costs, on the other hand, increased 21.2% annually in January, the largest increase since 1982.

In a separate development, retail sales increased by 0.5 percent in December, in line with forecasts, and Statscan’s flash estimate for January projects a 0.7 percent increase.

More:

Ireland will provide financial assistance to households

German business sentiment recovers in January-ZEW

Bank of Canada to suspend rate hike due to lower inflation

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 103,213.65 1.80%
ethereum
Ethereum (ETH) $ 2,330.10 10.12%
tether
Tether (USDT) $ 1.00 0.00%
xrp
XRP (XRP) $ 2.35 3.63%
bnb
BNB (BNB) $ 635.62 2.79%
solana
Solana (SOL) $ 171.77 6.90%
usd-coin
USDC (USDC) $ 1.00 0.00%
dogecoin
Dogecoin (DOGE) $ 0.205127 7.23%
cardano
Cardano (ADA) $ 0.780604 5.44%
tron
TRON (TRX) $ 0.261678 2.70%
staked-ether
Lido Staked Ether (STETH) $ 2,324.77 9.71%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 103,217.65 1.84%
sui
Sui (SUI) $ 3.89 0.58%
chainlink
Chainlink (LINK) $ 15.99 2.86%
avalanche-2
Avalanche (AVAX) $ 23.10 7.73%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,794.06 9.84%
stellar
Stellar (XLM) $ 0.294517 3.24%
shiba-inu
Shiba Inu (SHIB) $ 0.000015 6.60%
hedera-hashgraph
Hedera (HBAR) $ 0.200612 4.72%
hyperliquid
Hyperliquid (HYPE) $ 25.14 14.46%
the-open-network
Toncoin (TON) $ 3.27 2.11%
bitcoin-cash
Bitcoin Cash (BCH) $ 408.73 2.31%
leo-token
LEO Token (LEO) $ 8.75 0.96%
usds
USDS (USDS) $ 1.00 0.00%
litecoin
Litecoin (LTC) $ 99.24 6.76%
polkadot
Polkadot (DOT) $ 4.76 10.04%
weth
WETH (WETH) $ 2,332.70 9.39%
monero
Monero (XMR) $ 313.93 5.58%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,487.39 9.92%
bitget-token
Bitget Token (BGB) $ 4.48 0.90%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.39%
pepe
Pepe (PEPE) $ 0.000012 15.90%
pi-network
Pi Network (PI) $ 0.723354 12.98%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.27%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 103,106.63 1.64%
whitebit
WhiteBIT Coin (WBT) $ 30.34 0.41%
uniswap
Uniswap (UNI) $ 6.30 12.46%
bittensor
Bittensor (TAO) $ 425.85 2.49%
near
NEAR Protocol (NEAR) $ 2.89 10.03%
dai
Dai (DAI) $ 1.00 0.00%
aptos
Aptos (APT) $ 5.50 3.46%
okb
OKB (OKB) $ 53.69 1.91%
ondo-finance
Ondo (ONDO) $ 1.01 5.32%
aave
Aave (AAVE) $ 210.22 6.18%
susds
sUSDS (SUSDS) $ 1.05 0.01%
blackrock-usd-institutional-digital-liquidity-fund
BlackRock USD Institutional Digital Liquidity Fund (BUIDL) $ 1.00 0.00%
crypto-com-chain
Cronos (CRO) $ 0.101923 4.97%
ethereum-classic
Ethereum Classic (ETC) $ 19.09 5.84%
internet-computer
Internet Computer (ICP) $ 5.41 6.51%
official-trump
Official Trump (TRUMP) $ 14.34 15.57%