Bank of Canada Rate to Remain at 1%

Stephen Poloz, Bank of Canada Governor

CBJ – Bank of Canada Governor Stephen Poloz is set to extend the Bank’s key overnight lending rate at an even 1%, marking the longest uninterrupted change in the interest rate since World War II.

It’s virtually impossible to find an economist who will go on record as saying Poloz will move the interest rate from its current position. This would make it the longest same rate since February 1944 to September 1950, exceeding the October 1950 to January 1955 hiatus.

Diverging interest rates in 2015 would help Canadian bonds outperform the U.S. for a fourth straight year, according to Bank of America Merrill Lynch data. Ten-year Canadian yields are expected to rise to 2.5% over the next year from 1.86% Nov. 28, less than the U.S. increase to 3% from 2.16%.

According to Statistics Canada, the nation’s economic growth slowed to a 2.8% annualized pace in the third quarter from 3.6% the prior three months. In contrast, U.S. growth came in at 3.9%.


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