Bank of Canada Seen Holding Rates at 2.25% as Softer GDP Offsets Persistent Energy Prices
Updated
Updated · continuumeconomics.com · Jun 9
Bank of Canada Seen Holding Rates at 2.25% as Softer GDP Offsets Persistent Energy Prices
3 articles · Updated · continuumeconomics.com · Jun 9
Summary
June 10's Bank of Canada meeting is expected to leave the policy rate at 2.25%, with analysts looking for a slightly less hawkish tone than in April.
Softer-than-expected GDP and core inflation since the April 29 meeting have reduced the perceived risk of another rate increase later this year, even without new forecasts at this meeting.
Energy prices remain the main complication: the BoC had assumed oil would fall toward $75 by mid-2027, but prolonged strength could keep inflation broader and more persistent.
May CPI is forecast to rise 0.5% overall and 0.3% excluding food and energy, after April core inflation was distorted higher by delayed housing-related price updates.
Governor Tiff Macklem has said the bank will look through the war's immediate inflation impact but could still deliver consecutive hikes if persistent inflation takes hold.