BoC: 0.25% is the effective lower bound – TDS

With so much stimulus already in the system, there isn't much suspense around the April interest rate announcement by the Bank of Canada (BoC), per TD Securities.

Key quotes

“As long as Poloz is Governor, we see limited risk of another rate cut from the BoC.”

“If the BoC forecast errs on the optimistic side (-3.0% or higher on 2020 GDP) then it would imply a lower bar to additional asset purchases or rate cuts. Conversely, if the BoC takes a more pessimistic path (-5.0% GDP growth or below), it would suggest that they believe their announced policy stance is appropriate.”

“We look for 2020 CPI inflation forecasts of 1.3% and 2.2% in 2020 and 2021.”