From The Globe and Mail: 2024-04-10 07:00:00

The Bank of Canada kept its interest rate at 5 percent for the sixth time in a row, forecasting reduced inflation but increased economic growth. Speculation about a potential rate cut in June or July continues as inflation data for March and GDP numbers for February are set to be released soon.

Traders’ bets for a rate cut in June fluctuated with markets initially pricing in a 42 percent probability, rising to 52 percent during the press conference. U.S. inflation data caused the Canadian dollar to weaken, leading to increased bond yields. Fixed mortgage rates are expected to rise in response to these changes.

Economists are divided on the possibility of a rate cut, with TD Economics suggesting July is more likely while Bank of Montreal believes June remains a possibility. National Bank Financial notes that the Bank of Canada’s statement hints at potential rate cuts as they continue to monitor inflation trends before making a final decision.



Read more at The Globe and Mail: Bank of Canada holds key interest rate at 5%, but signals June cut in ‘realm of possibilities’