Bank of Canada Rate Decision: Keep an Eye on Inflation and Global Economy

The Bank of Canada will soon make its next rate decision, and there are two things to watch out for. First, the trend in inflation. The Bank of Canada typically sets its interest rate based on the inflation rate in order to keep it at a healthy level. Secondly, the global economy should be monitored as it affects Canadian exports and investments which can have an impact on the country’s economic performance. In summary, when the Bank of Canada makes its next rate decision, observers should pay attention to both inflation trends and global economic conditions as they may influence the outcome.

What Causes Inflation?

Inflation is an increase in the overall price level of goods and services in an economy over a period of time. It is usually caused by an increase in the money supply, or when demand for goods and services outpaces the supply available. Other factors that can lead to inflation include increases in production costs, such as wages, taxes, or raw materials; or when there is a decrease in the availability of goods due to shortages. Inflation can also be caused by government policies such as printing more money or increasing interest rates.
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Picture source: Jason Blackeye