US investment bank Morgan Stanley issued a report today that forecasts a change to the popular opinion that Ottawa will raise interest rates this year. The firm says that as oil prices have changed the game and will keep inflation lower, it expects that interest rates will not increase for some time, perhaps as far away as 2017. The Bank of Canada could make a cut this year though says the report. While this may be the good news, the bad points of the report include a downgraded forecast for Canada’s economic growth at 1.8 per cent this year and 1.5 per cent next; both are around 1 per cent lower than previous estimates. Morgan Stanley also believes that the Canadian dollar may hit US 80c sometime this year.
More market talk: