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2010

Interest rates, bank of canada, history

Money too Loose Continues

In December 2010, the Bank of Canada chose to maintain its key overnight rate at 1.0%, reinforcing a strategy of “loose money” to nurture a fragile economic recovery. This post unpacks the cautious tone of the central bank’s announcement, which acknowledged sluggish exports and a still-vulnerable economy despite strong household spending and business investment. With inflation appearing to behave and excess capacity still present, interest rate hikes were off the table. The post humorously reminds readers that while today’s rates seem low, they once hit 20%—and history can repeat.

Keywords: interest rates December 2010, Bank of Canada, monetary policy, low rates Canada, inflation target, economic recovery, fragile growth, deflation risk, Canadian finance

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