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Bank of Canada expected to hold key rate as it grapples with Iran war shock
Economists expect no change as gasoline prices rose 21% in March and lifted Canada’s annual inflation to 2.4%, the highest in months.
- The Bank of Canada is widely expected to hold its benchmark interest rate steady at 2.25% on Wednesday, with financial market odds for the hold standing at over 93% as of Friday.
- Conflict in the Middle East over the past two months has pushed global oil prices sharply higher, with the Strait of Hormuz closure driving headline inflation in Canada to 2.4% in March, up from 1.8% in February.
- Retail sales rose 0.7% in February, yet Governor Tiff Macklem signaled the bank will "look through" the oil price shock while monitoring core inflation. Nathan Janzen, assistant chief economist at Royal Bank of Canada, warned "the starting point for the economy going into this shock was not strong."
- The bank will release its quarterly Monetary Policy Report on Wednesday alongside the rate announcement, updating forecasts for inflation and economic growth. The federal government tables its spring economic outlook on Tuesday, a day before the decision.
- Financial markets are currently pricing between one and two quarter-point rate hikes from the Bank of Canada this year, beginning in October, though economists warn of persistent oil price volatility if the Strait of Hormuz remains closed.
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13 Articles
13 Articles
The Toronto Star+8 Reposted by 8 other sources
Bank of Canada expected to hold key rate as it grapples with Iran war shock
OTTAWA - The Bank of Canada will share how it's thinking about price pressures from the Iran war on Wednesday when it publishes a new monetary policy report and makes
·Toronto, Canada
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Coverage Details
Total News Sources13
Leaning Left2Leaning Right1Center6Last UpdatedBias Distribution67% Center
Bias Distribution
- 67% of the sources are Center
67% Center
L 22%
C 67%
11%
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