Economists across the country are waiting for the Bank of Canada shoe to drop and send the interest rate down from the 5 per cent it has been for 10 months. Now it appears that will happen on June 5.
The just-announced decision to leave the rate unchanged brought this response from BNN Bloomberg’s Paul Bagnell, in an interview on CTV:
“In the subtle, oblique way that central bankers speak, when a central banker says a cut — in this case in June — is ‘in the realm of possibilities, that’s pretty dramatic stuff…for a bank.
“A lot of Bank of Canada watchers, economists, traders and investors believe now that a cut to the benchmark rate in June is more likely than it was before the Bank of Canada spoke.”
The much-anticipated drop in the rate in June is also expected to be the first of a series off cuts through the end of this year.
Bagnell also noted that the Bank of Canada announcement pointed out “while inflation is still too high and risks remain, CPI and core inflation have eased further in recent months…[and the Bank] will be looking for evidence that this downward momentum is sustained.”
He pointed out the Bank was “still concerned about the upside risks of inflation” in its previous announcement.
“That’s quite different from the March statement,” Bagnell added. “The ‘still concerned’ has been removed.”
The next interest-rate announcement is expected on June 5.