Economists largely expect the central bank to keep rates where they are (for now).
Scotiabank’s vice-president of capital markets economics, Derek Holt, has maintained for months now that the bank hasn’t shown a reason to cut.
“Cutting now when it’s nowhere close to being priced and after holding since March could motivate markets to think that the [Bank of Canada] is priming for another round of easing. You can’t just take one chip out of the bag. Markets would probably price another cut for the July meeting and maybe add more later.
“You’d better have a lot of confidence that a cut now is the right thing to do given the risk that it could spark outsized easing of financial conditions compared to the policy rate adjustment itself.”
