As expected, the Bank of Canada held its key policy rate at 0.75% on Wednesday.
The policy statement showed that the Bank is still confident in its earlier assessment that, after a brief slump in Q1, the economic recovery is on track and that the January rate cut was enough insurance against the oil price slump. It did hint, however, that if financial conditions tighten, it will have to review the rate outlook.
"Overall, the statement suggested that the odds of another rate cut coming as soon as July have diminished. But given the uncertainty around the oil shock and the recent tightening in financial conditions, we still think that rates will be cut further well before year end." said Capital Economics
