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Bank of Canada prematurely ends bond buying program in surprise decision. Loonie jumps
Bank of Canada decision highlights October 27, 2021 • Bank of Canada slows pace of QE to $0B/week vs $1B/week expected • Prior pace of QE was $2 billion per week • extraordinary forward guidance maintained • Supply shortages are 'limiting the economy's productive capacity' • Forces • Rates left at 0.25%, as expected • Estimates output gap at -1.25% to -2.25% • In the July MPR, the BOC estimated the output gap at -2.0-3.0% • In July, BOC saw output gap closing in H2 2022, now sees it in the 'middle quarters' of 2022 • Notes significant uncertainty around output gap • Sees GDP this year up 5.1% ... (full story)