Bank of Canada holds key interest rate at 5 per cent, governor says rate cut in June ‘within realm of possibilities’
The Bank of Canada held its policy rate at 5 per cent on Wednesday, saying it needs to see a sustained decline in inflation before rate cuts can begin.
“I realize that what most Canadians want to know if when we will lower our policy interest rate,” said Bank of Canada Governor Tiff Macklem. “What do we need to see to be convinced it’s time to cut? The short answer is we are starting to see what we need to see, but we need to see it for longer to be confident that progress toward price stability will be sustained.”
The central bank projects inflation to ease from 3 per cent earlier in of 2024 to 2.5 per cent by the end of this year. Inflation is expected to return to target by 2025, and fell to 2.8 per cent in February.
Macklem did leave the door open for a possible rate cut in June during a news conference with reporters in Ottawa on Wednesday.
“Yes, it is within the realm of possibilities,” he said. “Look, I think we have been pretty clear, we are encouraged by what we have seen since January.”
While progress has been made in cooling inflation, costs in services and food remain elevated.
Risks remain to inflation outlook
There are also risks that remain that could potentially drive inflation up again. The central bank is concerned about three main areas that could push inflation higher. House prices could rise more than anticipated due stronger demand on supply. Shelter price inflation remains high at 7 per cent, driven by high mortgage costs and strong growth in rent.
Additionally, the bank is not convinced that wage growth, a key driver in costs, will remain stable. If weak productivity continues, firms could face higher price pressures.
Finally, global tensions such as the wars in the Middle East and in Ukraine, could impact global commodity prices further.
“We don’t want to leave monetary policy this restrictive longer than we need to,” said Macklem. “But if we lower our policy rate too early or cut too fast, we could jeopardize the progress we’ve made bringing down inflation.”
Canadian economy
The bank projects gross domestic product (GDP) growth to pick up in the latter half of this year, with the economy expected to grow by 1.5 per cent this year, 2.2 per cent next year and 1.9 per cent in 2026.
An increase in business investment, the completion of the Trans Mountain pipeline and population growth are the key factors that are leading to better growth in the economy.
Canadian exports are also expected to get a boost this year, fuelled mainly by higher demand from the United-States.
The next rate announcement is scheduled on June 5.
View original article here Source
Strap Tie Slippers for Women Crocodile Embossed Flat Sandals Cross Strappy Open Toe Summer Trendy Slide Sandals
$10.99 (as of April 16, 2024 20:29 GMT -05:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)
e.l.f. Squeeze Me Lip Balm, Moisturizing Lip Balm For A Sheer Tint Of Colour, Infused With Hyaluronic Acid, Vegan…
$4.97 (as of April 16, 2024 20:29 GMT -05:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)
CAMBIVO Knee Brace Support(2 Pack), Knee Compression Sleeve for Running, Hiking, Basketball, Arthritis, ACL,…
$26.99 (as of April 16, 2024 20:29 GMT -05:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)
Bedsure Satin Pillow Cases 2 Pack Queen - Grey Satin Pillowcase for Hair and Skin - Similar to Silk Pillow Cases…
$11.99 (as of April 16, 2024 20:29 GMT -05:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)
Sunstar 888JC GUM Advanced Care Flossers, Fresh Mint, Vitamin E & Fluoride, 150 Count (packaging may vary)
$5.77 (as of April 16, 2024 20:29 GMT -05:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)
Owala FreeSip Insulated Stainless Steel Water Bottle with Straw for Sports and Travel, BPA-Free, 32oz,…
$38.69 (as of April 16, 2024 20:29 GMT -05:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)
BenSorts Women Men Pillow Sandals Adjustable Buckles Slides Thick Sole
$28.49 (as of April 16, 2024 20:29 GMT -05:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)
Aqua Plus 6inches Thick Inflatable SUP for All Skill Levels Stand Up Paddle Board,Paddle,Double Action…
$239.99 (as of April 16, 2024 20:29 GMT -05:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)
Softsoap Antibacterial Liquid Hand Soap Refill - Clean Aloe Vera 1.47 Liters - Moisturizing Hand Wash, Savon a Main,…
$5.97 (as of April 16, 2024 20:29 GMT -05:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)