All signs are pointing to another interest rate cut this week.
Both the Bank of Canada and the US Federal Reserve have rate decisions this week and both would appear to be heading towards another quarter point reduction.
Here in Canada, the latest data – measures of things such as inflation, unemployment and retail spending – have not been good enough or bad enough to move the central bank off its track, a path which most economists say involves a reduction this month.
We saw inflation was slightly higher – something that usually results in higher interest rates, not lower; unemployment is rising as the labor market softens and retail sales figures were generally flat.
In Saskatchewan, the change in consumer spending over the summer was exactly zero.
So… there are not major indicators that are dramatically out of line which should green light a further softening of the Bank’s restrictive policy rate that had been designed to bring down inflation over the past few years.
This will be good news for those with variable rate loans as interest costs will drop.
