Bank of Canada expected to hold key interest rate for fifth consecutive time as economy stagnates
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- Bank of Canada is expected to hold its policy rate at 2.25% for the fifth straight meeting.
- Governor Tiff Macklem warned in April that a prolonged US‑Iran conflict and high oil prices could force consecutive rate hikes.
- Headline inflation came in at 2.8% in April, buoyed by gasoline prices.
- Core inflation is on target at 2%, matching the bank’s goal.
- GDP contracted 0.1% annualized in Q1 2024, following a 1% decline in the previous quarter, sparking a recession debate.
- Monetary Policy Report will not be released with the decision, leaving the press conference as the sole source of market‑moving guidance.
Why it matters: Investors and borrowers watch the BoC’s decision; a hold keeps borrowing costs steady for households and businesses, while the lack of a policy report forces market participants to rely on the governor’s remarks to gauge recession risk and trade‑policy impacts.
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