The Bank of Canada has left its benchmark interest rate unchanged at 1.75 per cent, where it’s been since October 2018.
The bank says the “outlook for the global economy has weakened” since its last rate announcement.
“Ongoing trade conflicts and uncertainty are restraining business investment, trade, and global growth. A growing number of countries have responded with monetary and other policy measures to support their economies,” said the bank in a release.
“Still, global growth is expected to slow to around 3 per cent this year before edging up over the next two years. Canada has not been immune to these developments.”
Canada’s central bank is holding despite the U.S. Federal Reserve cutting its rate for the third time this year.
Bank of Canada Governor Stephen Poloz had a number of competing indicators to consider.
Job growth in Canada is robust, with the lowest unemployment rate since record-keeping began in 1976.
“Growth in Canada is expected to slow in the second half of this year to a rate below its potential. This reflects the uncertainty associated with trade conflicts, continuing adjustment in the energy sector, and the unwinding of temporary factors that boosted growth in the second quarter,” said the bank.
The Bank says it will be paying close attention to consumer spending and housing activity going forward.
“The Bank of Canada was content to leave its chips on the table, betting that rates are already low enough to provide a cushion against slowing global growth, for now,” said Avery Shenfeld, chief economist at CBC Capital Markets, in a research note.
That said, the door was left ajar for a cut down the road, with the Bank noting global slowdown and saying that the resilience we've seen "will be increasingly tested.”
What this means for people shopping for a mortgage
Today’s announcement means mortgage rates won’t change right now, but they could down the road.
“Anyone who currently has a variable rate can expect their rate to stay the same, or possibly drop if the bank chooses to cut the rate,” said James Laird, co-founder of Ratehub, in a release.
“Anyone shopping for a fixed rate should expect the existing rates, or lower, to be available in the coming months.”
The Canadian dollar took a bit of a hit in the moments after the announcement, because of the Bank of Canada’s somewhat gloomy outlook.
“The statement didn’t explicitly indicate that Canada’s central bank is considering rate cuts in the near future, but its emphasis on the continuing vulnerability of the Canadian economy to global uncertainty was enough to prompt currency traders to drag the Canadian unit down from its lofty perch near its highs for the year before the statement,” said Don Curren, market strategist at Cambridge Global Payments.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.