TORONTO, Jan. 11, 2018 /CNW/ – The C.D. Howe Institute’s Monetary Policy Council (MPC) called for the Bank of Canada to raise its target for the overnight rate, the very short-term interest rate it targets for monetary policy purposes, to 1.25 percent at its next announcement on January 17, 2018. While the Council called for the target to stay at 1.25 at the March announcement, it called for a target of 1.50 percent by July, and 1.75 percent in a year’s time.
The MPC provides an independent assessment of the monetary stance consistent with the Bank of Canada’s 2 percent inflation target. William Robson, the Institute’s President and CEO, chairs the Council. Council members make recommendations for the Bank of Canada’s upcoming interest-rate announcement, the subsequent announcement, and the announcements six months and one year ahead. The Council’s formal recommendation for each announcement is the median vote of the members attending the meeting. (When the median vote falls in the middle of a 25-basis-point range, the mean “breaks the tie”. On this occasion, the mean tipped the recommendation for January 2019downward to 1.75 percent.)
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SOURCE C.D. Howe Institute