Well, if that’s true then get ready for some low rates. Here’s a dose of doomageddon to back it up:
- Consumer confidence is at levels not seen since the 81-82 recession.
- Canada’s jobless rate is at a 3-year high (CTV)
- “We regrettably are going to have to expect continuing job losses in Canada. We are going to have substantial job losses.” – Finance Minister Jim Flaherty
- December was the worst month of U.S. job losses since World War II
- The U.S. “will see the first negative reading on the U.S. consumer price index since 1955…” — CIBC World Markets economist Avery Shenfeld.
- Barack Obama: “If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity. . . . In short, a bad situation could become dramatically worse.”
Bank of Canada Deputy Governor Pierre Duguay says the BoC is considering another interest-rate cut to counteract this negativism. Economists concur.
- According to CTV, analysts say the unexpectedly high jobless figures “will almost certainly mean that the Bank of Canada will cut interest rates on Jan. 20.”
- Rates may fall 1% by later this year according to economists from CIBC World Markets and Bank of Nova Scotia. (Bloomberg)
- TD economist Charmaine Buskas expects a potential 1/2% cut January 20
- Royal Bank’s chief economist Craig Wright sees a 1/2% cut as well, but also a “bottom” at that level. (Bloomberg)
The Bank of Canada’s next interest rate meeting is now ten days away. Its key lending rate is currently at 1.5%, a 50-year low.