Bank of Canada likely to wait until at least June before cutting rates: Reuters

By Mumal Rathore and Indradip Ghosh
Reuters
January 19, 2024
Category: Finance & Economics
Region: Canada

The Bank of Canada will wait until at least June to cut its key interest rate as price pressures remain sticky, according to a firm majority of economists in a Reuters poll. …Despite the economy slowing because of the BoC’s 475 basis points of rate hikes, progress on inflation has remained uneven. The latest data showed consumer prices rose 3.4% year-on-year last month from 3.1% in November, above the central bank’s target of 1-3%. That, alongside high wages and elevated core inflation, has weakened the case for an early rate cut. …All 34 economists expected the BoC to hold its overnight key interest rate at 5.00% on Jan. 24 and in March and around two-thirds or 22 of 34 survey respondents forecast it would be June or later before the central bank cuts rates. The other 12 predicted the first rate cut in April, in line with market expectations.

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