- Prior was 5.00%
- BOC ” still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation.”
- BOC “wants to see further and sustained easing in core inflation”
- Global economic growth slowed in the fourth quarter but US remained surprisingly robust
- In Canada, the economy grew in the fourth quarter by more than expected
- There are now some signs that wage pressures may be easing
- Year-over-year and three-month measures of core inflation are in the 3% to 3.5% range
- BOC continues to expect inflation to remain close to 3% during the first half of this year before gradually easing
Macklem opening statement highlights:
- In the six weeks since our January decision, there have been no big surprises
- We need to give higher rates more time to do their work.
- It’s still too early to consider lowering the policy interest rate
- Future progress on inflation is expected to be gradual and uneven, and upside risks to inflation remain
- We don’t want to keep monetary policy this restrictive for longer than we have to
There is no MPR but Macklem will speak at 10:30 am ET and is doing an interview at 2 pm ET.
Here’s a key quote that highlights some things to watch for:
Before our April decision, we will also get new information on corporate pricing behaviour and inflation expectations. We will be looking for the frequency and size of price increases to continue to normalize and for short-term inflation expectations to ease further.
USD/CAD is around 30 pips lower on the release. Leaving rates on hold is no surprise but there is no real hint of an April cut here so April odds are down to around 25% from 40%0
This article was written by Adam Button at www.forexlive.com. Source