BoC considered holding off interest rate cuts until July, summary says

Bank of Canada Governor Tiff Macklem takes part in a news conference, after cutting key interest rate for the first time in four years, in Ottawa, Ontario, Canada June 5, 2024.

Ultimately, the encouraging trend in inflation seen in recent months won the day. The annual pace of CPI inflation has been below 3 per cent since the start of the year, after running as high as 8.1 per cent in 2022. The bank targets 2-per-cent inflation. It was 2.7 per cent in April.

Financial markets are pricing a roughly 65 per cent chance the central bank will cut again in July, according to Refinitiv data, and markets see at least two more rate cuts before the end of the year. The U.S. Federal Reserve is something of an outlier. It is dealing with more stubborn inflation and is not expected to start cutting rates until September at the earliest.

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