top of page

Experts react to Bank of Canada hold

The Bank of Canada's recent decision to maintain its policy rate has prompted reactions from experts, shedding light on the potential timeline for mortgage relief and the central bank's approach to inflation. This marks the fifth consecutive time the bank has held its rate as it strives to align with its inflation target of two percent.

Economists widely expected this move, reinforcing the notion that Canadians may have to wait until summer for any significant mortgage relief. While initial predictions hinted at an April date for rate cuts, the consensus has shifted towards a more probable adjustment in June.

Dawn Desjardins, Chief Economist at Deloitte Canada, emphasized the alignment of market expectations with their forecast of a June cut. In an interview with BNN Bloomberg, she noted that the bank is gradually moving towards a mode of rate cuts, emphasizing the need for a cautious and sustained approach.

Dominique Lapointe, Director of Macro Strategy at Manulife Investment Management, drew parallels between the Bank of Canada's March statement and its previous one in January. Lapointe highlighted an acknowledgment that wage pressure 'may be easing,' while cautioning that inflation, though moving in the right direction, remains uncomfortably high for the central bank. Lapointe predicts the bank will maintain its interest rates at five percent until it observes more progress on inflation.

Ashish Utarid, Assistant Vice-President of Investment Strategy at IG Wealth Management, expressed anticipation of the central bank initiating cuts in the near future. Recognizing signs of economic slowdown since mid-last year, Utarid mentioned the bank's cautious approach in dealing with core inflation levels. He argued that prevailing conditions make a compelling case for a reduction in interest rates, suggesting a growing probability of a mid-year move towards monetary policy easing.

Shannon Terrell, spokesperson for NewdWallet Canada, echoed the sentiment of a potential summer rate cut. She emphasized the delicate balancing act the bank faces – curbing inflation while stimulating a fatigued economy. Terrell indicated that relief from high rates could materialize in the summer, contingent on the continued cooling of inflation.

Looking ahead, the Bank of Canada has scheduled its next interest rate announcements for April 10 and June 5. These dates will be closely monitored by experts and market participants for any shifts in the central bank's stance, providing further insights into the trajectory of monetary policy and its implications for Canadians.

In summary, the Bank of Canada's decision to maintain its policy rate has elicited reactions from experts, with a consensus forming around the likelihood of a summer rate cut. As the central bank navigates the delicate balance between curbing inflation and stimulating the economy, Canadians are advised to stay tuned for developments in the coming months.