Analysts expect rate cut as inflation fell to 2.7 per cent in June, but questions remain on how large a trim to anticipate
Bank of Canada Governor Tiff Macklem speaks during a news conference on the Bank of Canada 's rate announcement on June 5, in Ottawa.The Bank of Canada is expected to deliver a second dose of interest-rate relief this week, as inflation moderates and economic growth remains sluggish.
Mr. Macklem said last month that it’s “reasonable” to expect further rate cuts if price pressures keep easing. Since those remarks, May inflation data came in surprisingly hot. But the June numbers, published last week, showed inflation back on a downward path, with headline inflation There was a sour note in the June inflation data. The bank’s two preferred measures of core inflation, which strip out the most volatile price movements, moved higher on a three-month basis.
The unemployment rate in Canada has risen to 6.4 per cent from a record-low 4.8 per cent two years ago. Businesses aren’t laying off workers in large numbers, but job creation has failed to keep pace with rapid population growth. A looser labour market implies slower wage growth, which can influence how companies set prices.
“The economy is now operating with visible disinflationary economic slack, as evidenced by labour market softness and an extended run of mediocre growth that has trailed the Bank’s estimate of the economy’s non-inflationary potential,“ wrote Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, in a note to clients.
It might not, however, have a big impact on interest rates for fixed-rate mortgages. These are determined by bond yields. And bond markets have already adjusted in expectation of monetary policy changes, said Robert Hogue, assistant chief economist at Royal Bank of Canada, in an interview.
Canada News Breaking News Video Canadian Breaking News Breaking News Globe And Mail Breaking News Globe And Mail Canada News Photos World News Local News National News Us News Foreign News Sports News Arts News Life News Lifestyle Canada Traffic Canada Weather Trudeau Government Federal Government Canada Sports Canada Sports News Politics Politics News Political News Political Opinion Environment Economy Technology Education Travel Canada Alberta Bc British Columbia Manitoba Ontario Quebec Nova Scotia Pei New Brunswick Newfoundland And Labrador Nunavut Northwest Territories Yukon Globe And Mail
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Red and white all over for Canada Day, but why those colours?Analysts discuss the source and significance of Canada’s (unofficial) national colours
Read more »
Royal Canadian Air Force holds practice flypast over Ottawa on Wednesday ahead of Canada DayThe Royal Canadian Air Force (RCAF) held a flypast over downtown Ottawa and LeBreton Flats on Wednesday, as part of preparations for Canada Day.
Read more »
Royal Canadian Air Force to hold practice flypast over Ottawa on Wednesday ahead of Canada DayThe Royal Canadian Air Force (RCAF) will hold a flypast over downtown Ottawa and LeBreton Flats on Wednesday, as part of preparations for Canada Day. Aircraft are scheduled to fly over Ottawa between 12 p.m. and 3 p.m.
Read more »
Team Canada’s Tajon Buchanan breaks tibia in practice, surgery set for WednesdayWinger Tajon Buchanan is scheduled to undergo surgery Wednesday after breaking his tibia in practice ahead of Canada's Copa America quarterfinal against Venezuela.
Read more »
Bank of Canada considered waiting until July to cut ratesBank of Canada officials discussed whether to wait until July to cut interest rates, in order to confirm inflation is still on track to reach the central bank’s 2 per cent target.
Read more »
Bank of Canada's cutting cycle a 'big tailwind for Canadians': economistOne economist says that over the longer term, Canada’s interest rate-cutting cycle will spur strong economic growth relative to the U.S.
Read more »