Investors Worry About Bank of Canada Rate Rises

Filed in archive Recession on July 24, 2010

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The Bank of Canada is uncertain about its next move regarding interest rates. Its options are still open as to whether it will increase rates, particularly because of ambiguity regarding the recovery of the global economy. The Bank of Canada agrees with the United States Federal Reserve that the outlook for the world economy is still strangely uncertain. The bank has already raised rates twice, once on June 1 and recently on Tuesday. This has left investors worrying about whether the bank will raise rates again for a third time. However, the bank has reported that the economic recovery seems to be more prolonged than expected, especially due to the soft US recovery and the European debt crisis. The bank reported that the initial sharp economic rebound in Canada resulted from the low interest rates and fiscal stimulus that encourages consumer spending and increased housing investments.