The Bank of Canada has held its key interest rate at five per cent for the sixth consecutive time since July, saying it will look for signs that slowing inflation is sustained before moving on rate cuts.
The central bank said that inflation is still too high, but noted that core inflation measures — which strip out volatile sectors like food and energy — have trended downward in recent months.
“I realize that what most Canadians want to know is when we will lower our policy interest rate. What do we need to see to be convinced it’s time to cut?” Bank of Canada governor Tiff Macklem said during a news conference following the announcement.
“The short answer is we are seeing what we need to see, but we need to see it for longer to be confident that progress toward price stability will be sustained. The further decline we’ve seen in core inflation is very recent. We need to be assured this is not just a temporary dip.”
Macklem said that a rate cut in June is “within the realm of possibilities.”
WATCH | Tiff Macklem responds to question about June rate cut:
Central bank being cautious about lowering interest rate, Macklem says
8 hours ago
Duration 1:42
The Bank of Canada on Wednesday again held its key interest rate at five per cent. ‘We are seeing what we need to see,’ governor Tiff Macklem said. “But we need to see it for longer to be confident that the progress towards price stability will be sustained.’ In response to a reporter’s question, Macklem said a rate cut in June is ‘within the realm of possibilities.’
While inflation cooled to 2.8 per cent in February, with price growth slowing across goods, food, clothing and services, high rent and mortgage interest costs continue to drive up the overall inflation rate.
The bank expects inflation will move closer to its two per cent target this year, and that it will reach it in 2025. The bank also expects solid GDP growth this year and in 2025, due to population growth and increased household spending.
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“As we consider how much longer to hold the policy rate at the current level, we’re looking for evidence that the recent further easing in underlying inflation will be sustained,” Macklem said.
The Bank of Canada first raised interest rates in March 2022, the beginning of an aggressive campaign to cool inflation that resulted in 10 rate hikes in less than two years.
Bank just needs to see ‘more of the same’: economist
“It seems like the Bank of Canada is telling Canadians that rate cuts are on the horizon and it might not be so long before they become a reality,” said economist Royce Mendes, managing director at Desjardins Capital Markets.
He said that the longer the bank holds interest rates at five per cent, the more it risks tipping the economy into an unnecessary recession.
Mendes added that he thinks the central bank will start cutting rates at its next meeting on June 5, and that it will continue to cut in small increments at subsequent meetings from then on.
WATCH | Earlier this year, Macklem explains why core inflation is so important:
‘Why do we care about core inflation?’ Bank of Canada governor explains
1 month ago
Duration 1:54
Tiff Macklem, governor of the Bank of Canada, says core inflation — which strips out volatile parts of the consumer price index — gives the bank a sense of where the trend is.
“All they needed to see for rate cuts to become a reality was more of the same, which is really great news,” Mendes said.
Economists have forecast that the Bank of Canada will lead the U.S. Federal Reserve in rate cuts as economic data in both countries have been diverging.
“The U.S. economy right now is extremely strong, whereas the Canadian economy is struggling,” Mendes said.
The U.S. economy grew at a faster pace than expected in the fourth quarter, while January GDP data shows that the Canadian economy began 2024 on a stronger note after last year’s weak activity.
U.S. inflation increased more than expected in March by 0.4 per cent after advancing by the same amount in February, pushing hopes of a Fed rate cut further into the second half of the year.
Macklem said he did not see a big impact from U.S. inflation on Canada.
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
