Bank of Canada Likely to Hold Rate Steady on April 10th

The Bank of Canada is widely expected to hold its key interest rate steady at its upcoming policy announcement on April 10th. This comes after five consecutive decisions to maintain the current rate, suggesting a wait-and-see approach as the Bank gauges the impact of recent global economic developments.

While inflation remains a concern, recent news has provided mixed signals. On the one hand, February’s inflation rate dropped to 2.8%, still above the Bank's target of 2%. However, discussions surrounding the effectiveness of past interest rate hikes (Read: Have Bank of Canada's interest rate hikes over 2 years worked?) suggest the Bank may allow more time for these measures to take effect.

Canadian Inflation Rate, March 2024

Furthermore, ongoing global issues like the war in Ukraine and potential supply chain disruptions raise uncertainty about future inflation pressures. The Bank may hold its fire until the economic picture becomes clearer.

While a rate hike cannot be entirely ruled out, most analysts predict the Bank will maintain its current stance until June or September. The decision to keep rates unchanged would provide Canadians with a period of stability as they navigate rising costs associated with the carbon tax increase.

The Bank's following policy announcement is scheduled for June 5th. We will continue to monitor the situation and provide updates as they become available.

The rate announcement schedule for the remainder of 2024 is:

• Wednesday, June 5, 2024

• Wednesday, July 24, 2024

• Wednesday, September 4, 2024

• Wednesday, October 23, 2024

• Wednesday, December 11, 2024