- Inflation: Despite record spending and the Bank pumping money into the economy, inflation fell to -0.1% and is expected to only reach 0.6% by the end of the year.
- Interest Rates: The Bank is keeping them at 0.25%, the lowest they've ever been.
- Rebound: The report assumes no major second wave of COVID and an end to the virus by mid-2022.
What is the Bank doing?
- Keeping interest rates low. The Bank has pledged to keep interest rates at record lows until at least 2023. Tiff Macklem, the Bank's Governor, also said rates wouldn't be going lower than that. Sad news for everyone hoping to see the rates go negative.
- Buying more government bonds... $5 billion each week, to be precise. Macklem said this will continue until the recovery picks up pace.
- And buying them more often. It's doing weekly purchases, rather than bi-weekly, to keep liquidity flowing into financial markets.
Will it be enough?
- A second wave. If there's another round of lockdowns, all bets are off.
- Global market instability and bad corporate debts, a risk which the Fed's top regulator warned of today.
- America. We're tightly connected to the U.S. economy, and things there aren't going so great (have you noticed?). 3 of the top 6 U.S. banks are stockpiling cash to handle future losses... $47 billion at this point, in fact.