POV: BOC Holding Steady One More Time

Consensus: The Bank of Canada will keep its target rate on hold at 0.25% Wednesday, while holding asset purchases steady at CAD4B/week. After the tide of heavy rate selling in anticipation of further improvement in global economies, the Bank will try to strike a balance between economic optimism and caution outlined in the dovish/hawkish risks below. A minority of analysts see the next policy announcement on April 21 as the more likely candidate for tweaking policy.

• Dovish risk: Not at the current meeting, but a third Covid wave and resulting lockdown drag on the economy provides dovish undertones to future guidance or future announcements.
• Hawkish risk: While the economic outlook has improved on balance, hiking rates after reaching and sustaining 2% inflation remains a long way off (late 2022- to 2023 est). Of the 20 sell-side analyst opinions outlined below, none expect a change in the target rate Wednesday, while half see no change in for the next two years.