Bank of Canada Holds Interest Rate at 5%
Bank of Canada Holds Interest Rate at 5%
The Bank of Canada today held its policy interest rate steady at 5%, the fifth consecutive time the central bank has kept the interest rate stable. The Bank of Canada has signaled that further increases are unlikely, but it remains in a “wait and see” mode before determining when it might lower interest rates.
We know that inflation in January was 2.9%, which is within the Bank’s 2.0-3.0% preferred range, and has moved downward towards its 2.0% target. That said, the Bank noted that “core inflation” measures are higher and remain above historical averages, and that it expects inflation to remain near 3% for the first half of 2024.
“On April 10, the Bank will make its next rate announcement and release updated economic projections. Don’t expect a cut then either. Financial markets put the odds of a rate cut at roughly 30% at the April meeting, but the first 0.25% cut is not fully baked until July, and a summer cut is still where the smart money is.” – Stephen Tapp, Chief Economist, Canadian Chamber of Commerce
Read the Bank of Canada’s announcement >