Canada’s Monetary Policy Stuck Between a Rock and a Hard Place

Posted by Ed Devlin - Pimco

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cadWhen the Bank of Canada cut the overnight rate in response to the oil price plunge last year, it reduced the cushion between it and the other central banks who are engaged in non-traditional monetary policy.

After years of relying on monetary policy to lift Canada’s GDP, investors now look to the federal government to help provide a fiscal bridge to more sustainable economic growth. We believe Canadian real GDP will grow this year at 1.25%–1.75%.

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