BoC keeps rates on hold as expected at 2.25%; Governing Council is continuing to look through the war’s near-term impact on headline inflation, but will not let higher energy prices become persistent inflation.
- Recent data suggests that growth will resume in the second quarter but, even with some rebound, the economy is expected to remain in excess supply.
- So far, there has been limited evidence of broad-based pass-through of higher energy prices to other consumer prices.
- Total inflation is expected to hover around 3% in the near term before easing gradually towards 2%.
- Economic activity in Canada has been weak and uncertainty about US trade policy persists.
- The conflict in the Middle East is ongoing and oil prices remain elevated.
- As the outlook evolves, we stand ready to respond as needed.
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