2014.10.2212:41:00UTC+00Td Economics: Next Boc Interest Rate Hike Unlikely until Second Half of 2015

Quotes from TD Economics:
- The Bank Canada once again maintained its overnight rate at 1.00% today, still viewing its current stance on monetary policy as balanced given the risks it sees to achieving its 2% inflation target.
- BoC has dropped its explicit reference to being "neutral" on the direction of future changes in the overnight rate. While the reference to very low borrowing costs fueling consumption and housing market activity and the heightened financial stability risks posed by household imbalances may be interpreted as more hawkish, the increased emphasis on downside risks to the outlook may be perceived by some as being more dovish.
- Overall, despite the changes on the margins, we see this as very much a do nothing interest rate announcement. The Bank has increased its outlook for 2014 and left the outer years unchanged, it continues to expect the current excess capacity in the Canadian economy to be gradually absorbed over the next 2 years. In this environment, TD Economics continues to expect the next interest rate hike won't be until the second half of 2015.