Canadian Overnight Rates Stay the Same

This is a good thing folks! The Bank of Canada announced their overnight interest rate at 4.25%, staying the course and not raising it (for now). The economy has grown as expected, or at least not outside of the hopes of the bank, so they do not see a need to raise interest rates for now.

The best quote is the following paragraph:

Over the projection horizon, domestic demand is the main driver of growth in Canada. With the U.S. slowdown now expected to be somewhat more prolonged than previously projected, net exports should exert a slightly greater drag on growth in 2007. The Canadian economy is projected to grow by 2.2 per cent in 2007 and 2.7 per cent in both 2008 and 2009, returning to its production capacity in the second half of 2007 and remaining there through 2008 and 2009. Core inflation is projected to decline to 2 per cent by the end of 2007. Total CPI inflation is projected to rise above the 2 per cent inflation target in the second half of this year, before returning to the target by mid-2008.

Let’s hope they are right, because higher interest rates in the near future could spell doom for a lot of folks carrying a very high debt load.