The Bank of Canada held its policy rate at 5 per cent on Wednesday, saying it needs to see a sustained decline in inflation before rate cuts can begin.

The Bank of Canada held its policy rate at 5 per cent on Wednesday, saying it needs to see a sustained decline in inflation before rate cuts can begin.

The central bank projects inflation to ease from 3 per cent earlier in of 2024 to 2.5 per cent by the end of this year. Inflation is expected to return to target by 2025, and fell to 2.8 per cent in February.

The bank projects gross domestic product (GDP) growth to pick up in the latter half of this year, with the economy expected to grow by 1.5 per cent this year, 2.2 per cent next year and 1.9 per cent in 2026.

The next rate announcement is scheduled on June 5.

  • undercrust
    3·
    8 months ago

    I’ve said it before and I’ll say it again:

    The most provable cause of inflation is the increase in talking about expectations of inflation.

    In simpler language: Once we / the media starts talking about how we should expect inflation, corporations take that as permission to raise prices.