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Global Economic Calendar

Bank Of Canada Expected To Hold Interest Rates Steady

The Bank of Canada is widely expected to hold interest rates at current levels at its next policy meeting on April 10.

A poll by the Reuters news agency found that 70% of economists expect Canada’s central bank to hold interest rates steady until June when it delivers its first rate cut in four years.

Money markets are also betting on a June rate cut and expect Canada to move ahead of the U.S. Federal Reserve.

The Bank of Canada raised its trendsetting overnight interest rate by 475 basis points over the course of 17 months, taking the rate to 5%. It has held the rate at that level since July 2023.

Canada's inflation rate has declined from a peak of 8.1% in June 2022 and the most recent labour force survey showed weakness in the national job market.

However, annualized inflation is currently at 2.8%, above the Bank of Canada’s 2% target.

Economists expect the central bank to keep rates elevated to help lower inflation further over the next few months before delivering a rate cut.

Along with the interest rate decision on April 10, the Bank of Canada will also deliver its latest monetary policy report, which provides quarterly projections on the economy and inflation.

Money markets are betting 78% that the Bank of Canada will lower interest rates by 25 basis points in June. A further 25 basis point rate cut in July is fully priced into the market.