Household imbalances, an uneven export recovery and, more recently, the slump in oil prices are all downside risks to the economic and inflation outlook. That's three reasons for the Bank of Canada to extend its long pause in interest rates in 2015. Nevertheless, even if the Bank keeps its policy rate at only 1.00%, it may find it hard to keep longer-term market interest rates low, particularly if those rates begin to rise in response to a normalisation of policy rates by the US Fed.
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