- Interest rates will stay at historic lows for years to come or until the 2% inflation target is "sustainably achieved."
- The Bank will continue buying government bonds at the current pace and maintain its monetary policy through the recovery phase of the pandemic.
- In a change from July, the Bank indicated it may ease off the quantitative easing a bit and removed language about being prepared to offer more stimulus.
Why it matters:
The Bank is a key (maybe the key) player in the economic recovery ahead because they are best positioned make cheap credit available and keep financial markets stable.
What the Bank is doing:
The Bank is a key (maybe the key) player in the economic recovery ahead because they are best positioned make cheap credit available and keep financial markets stable.
What the Bank is doing:
- Buying large amounts of government bonds which keeps the bond market liquid and allows governments to ramp up deficit spending needed to fund emergency programs.
- Growing their balance sheet by buying other assets like treasury bills and mortgage bonds to mitigate risk to the rest of the financial sector.
- Provide credit to individual banks and financial institutions to support their lending to businesses and households.
Basically, the Bank 1) keeps the financial system running smoothly by making liquid markets and 2) facilitating investment in the economy by keeping credit cheap.
What's next: Bank Governor Tiff Macklem is scheduled to hold a full news conference today where more details may be revealed.
What's next: Bank Governor Tiff Macklem is scheduled to hold a full news conference today where more details may be revealed.