The Bank of Canada could begin lowering its key interest rate as soon as its next decision, governor Tiff Macklem said after the central bank decided to hold it steady for now.
Economic data since January has increased the central bank’s confidence that inflation will continue to slow even as economic growth picks up, governor Tiff Macklem said.While the Bank of Canada's conditions to begin lowering interest rates have been met, it needs to see price pressures ease for longer to make sure the decline in inflation is sustained.
The Bank of Canada's latest announcement suggests although the central bank is largely encouraged by the progress made so far on the inflation front, it plans to continue taking a cautious approach with its monetary policy decisions. "All those things are good. I think they just want to see those trends continue," Kronick said of the central bank.
Along with the rate announcement the Bank of Canada released its quarterly monetary policy report, which suggests the likelihood of a “soft landing” — whereby inflation slows without a significant economic downturn — has increased.
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