Dr. Sherry Cooper is the Chief Economist for Dominion Lending Centres and provided an update!
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Summary:
- The Bank held its target overnight rate at the effective lower bound of 25 basis points with the clear notion that negative policy rates are not in the cards.
- The Bank will rely on large-scale asset purchases–quantitative easing (QE–of at least $5 billion per week of Government of Canada bonds.
- In Canada, real GDP fell by 11.5% (39% annualized) in the second quarter, resulting in a decline of just over 13% in the first half of the year.
- Housing activity has been particularly robust with substantial existing home sales in July and August.
- The construction of new homes surged to the highest level in more than a decade in August following a sharp increase in July.