The central bank’s policy rate, which informs lending rates on key products like Canadian mortgages, remains at 5.0 per cent for the sixth straight decision.The Bank of Canada’s rate tightening cycle began more than two years ago in an effort to rein in decades-high levels of inflation.. The central bank reaffirmed in an updated monetary policy report released on Wednesday that it expects inflation to return to its two per cent target in 2025.sent to your email, as it happens.
The Bank of Canada’s preferred metrics of core inflation have also begun to ease lately, hovering above three per cent in February. The central bank acknowledged this progress in its statement accompanying the rate decision on Wednesday, but said it was still looking for evidence that “downward momentum is sustained.”
Shelter price inflation also remains “very elevated,” the Bank noted, thanks to rising rents and mortgage costs. Monetary policymakers will continue to watch the evolution of inflation expectations, corporate pricing behaviour and wage growth as it decides where to take its benchmark interest rate next. The central bank noted that recent easing in the labour market suggests wage pressures are “moderating.”Spring housing market looms over the Bank of Canada’s rate decision.