Bank of Canada Holds Key Interest Rate At 5%, Hints At Rate Cut in June
Macklem hinted at the possibility of a rate decrease in June, asserting it to be "within the realm of possibilities."
The Bank of Canada has maintained its benchmark interest rate at five percent for the sixth consecutive occasion since July, indicating its intention to await sustained indications of decelerating inflation before contemplating rate reductions.
The central bank underscored that while inflation remains elevated, it acknowledged a downward trajectory in core inflation metrics, which exclude volatile components such as food and energy, in recent months.
Bank of Canada governor Tiff Macklem, addressing reporters in a post-announcement press briefing, acknowledged the predominant inquiry among Canadians regarding the timing of a potential policy rate reduction. He stated, “The short answer is we are observing the necessary signals, albeit we require a prolonged observation to ascertain confidence in sustained progress towards price stability. The recent downturn in core inflation warrants scrutiny to confirm its durability.”
Macklem hinted at the possibility of a rate decrease in June, asserting it to be “within the realm of possibilities.”
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