But none of the panel of leading Canadian experts believe the bank will
The Bank of Canada will announce its January interest rate decision Wednesday but there is little expectation that any change is incoming.
Not that all economists and other experts agree that holding rates steady is the appropriate move in current conditions according to a panel convened by financial services comparison site Finder.com.
The panel includes Brian DePratto, senior economist at TD Economics; Moshe Lander, professor at Concordia University; Josh Nye, senior economist at RBC; and Hubert Marleau, chairman at Palos Capital.
The panel of 13 are 100% in agreement that the BoC will decide against a change this time around but 31% of them believe now is the right time for Governor Stephen Poloz to announce a cut.
“It [the Bank] seems to hope that the easing in monetary conditions brought about by rate cuts by 40-odd major central banks will do enough to stimulate economic activity in Canada without the Canadian dollar rising enough to impair competitiveness,” said Brett House, deputy chief economist at Scotiabank.
Another of the panel who says a cut is warranted is president of Econometric Research, Atif Kubursi.
“China's economy is slowing down particularly in two sectors of crucial importance to Canada – Auto sales is precipitously down and oil demand growth is likely to fall to half its value in 2019,” he said.
Housing affordability
The panel was also asked about their predictions for Canadian house prices.
Their expectation for the next 6 months across 15 housing markets suggests prices are set to increase in 10, drop in 2, and experience no change in three.
Housing affordability remains a key issue and Sebastien Lavoie, chief economist at Laurentian Bank Securities sees a potential risk.
“The risk is the return of frothy housing conditions. This brings us to the lingering housing affordability challenge. The number of Canadians owning a home will increase, but not the percentage of households owning a home. Too many millennials are either unable to buy or simply prefer to rent for longer,” he said.
