The Bank of Canada is expected to keep its key policy rate unchanged at 2.25% on Wednesday, as signs of an easing underlying price pressures give policymakers little reason to raise borrowing costs while a rebound in economic growth after a technical recession reduces the need for any stimulus.
Economic Growth and Inflation
The decision will be accompanied by the BoC’s quarterly Monetary Policy Report, updating forecasts for growth and inflation following an oil-price shock and continued United States trade uncertainty. Annual inflation rose to 3.2% in May, breaching the central bank’s 1%-3% control range for the first time since December 2023, after higher energy prices pushed up household costs.
However, measures of core inflation have remained close to 2% and gasoline costs have come down since the start of the US-Iran war. BoC officials have said there has so far been limited evidence that the energy shock is spreading broadly through consumer prices.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
