It says something when the thing most worth noting about the Bank of Canada’s policy announcement this week is the change of time.
The central bank will release the outcome of its latest deliberations on Wednesday rather than Tuesday, and at 10 a.m., an hour later than usual.
Inspired by the Federal Reserve’s new practice of multiple releases on the same day, the Bank of Canada decided last year to change its publication schedule and release policy decisions and it quarterly reports simultaneously. The Monetary Policy Report used to follow interest-rate announcements on Thursdays, followed by a press conference with the governor and senior deputy governor. Mark Carney and Tiff Macklem, the governor and senior deputy respectively, are scheduled to meet reporters on Wednesday.
Officials in the Bank of Canada’s communications department picked a good time to introduce a new schedule as expectations for revelations from policy makers rarely have been lower.
The evolution of the Canadian and global economies since the Governing Council last met in December leaves policy makers little reason to change course. Even the C.D. Howe Institute’s Monetary Policy Council sees no reason for change. That group, an assembly of academic and Bay Street economists that convenes to determine what the Bank of Canada “should” do, not what it “will” do, said last week that Mr. Carney would be right to leave the benchmark overnight target at 1 per cent, its setting for more than two years.
None of this argues for ignoring the Bank of Canada releases. There likely will be a revision of the central bank’s economic outlook, which could offer clues as to when the policy makers might finally raise interest rates.
Speaking in Kingston, Ont., earlier this month, Mr. Macklem acknowledged that the Canadian economy was growing slower than the Governing Council had foreseen at the time of its last Monetary Policy Report in October.
While hiring was strong at the end of 2012, exports were weak, and the housing market continues to deteriorate. Economists at Bank of Nova Scotia reckon Canadian gross domestic product advanced at an annual rate of 1.2 per cent in the fourth quarter, compared with the Bank of Canada’s current estimate of 2.5 per cent.
The consensus on Bay Street and Wall Street is for the Bank of Canada to raise its benchmark rate in the final quarter of 2013. However, slower growth means inflationary pressures will remain subdued for longer than the Bank of Canada estimated in the autumn. That could push an interest-rate increase into early 2014, since without the threat of inflation, policy makers have little reason to put upward pressure on the currency and to deter investment by raising borrowing costs.