The Bank of Canada is widely expected to keep its key interest rate unchanged at 2.25 per cent on Wednesday.
In October, governor Tiff Macklem signalled that policymakers would not consider further cuts, assuming economic growth and inflation evolved as forecasted.
“Governing council sees the current policy rate at about the right level to keep inflation close to two per cent while helping the economy through this period of structural adjustment,” he said.
Strong job growth since the summer is among the reasons central bankers would want to stay put in the last rate decision of the year, according to economists.
In November, the economy gained 54,000 jobs, while the unemployment rate fell to 6.5 per cent from 6.9 per cent in October.
At the same time, gross domestic product (GDP) for the third quarter came in above expectations at 2.6 per cent, compared to a 0.5 per cent projection by the Bank of Canada — though economists said details in the data were mixed.
“After pausing earlier this year to assess conditions, the Bank appears set for another multi-month hold,” BMO economist Robert Kavcic said in a note to clients on Monday. “Still, the economic risks remain skewed to the downside amid persistent trade uncertainty.”
As of Tuesday morning, financial markets had placed odds of 93 per cent in favour of the central bank standing pat on Wednesday, according to data supplied by the London Stock Exchange Group.
The rate announcement is scheduled for 9:45 a.m. It will be followed by a press conference at 10:30 a.m. with governor Macklem and senior deputy governor Carolyn Rogers.
