Bank of Canada to hold key rates steady amid recession concerns

Posted on March 8, 2024   |  

The Bank of Canada (BoC) is expected to keep its key overnight rate steady at 5%, despite signs of easing inflation and slow economic growth.

Inflation has consistently remained above the BoC's 2% target for three years, despite high rates. However, Canada's economy has managed to avoid recession and may be gaining strength.

January's inflation rate dropped to 2.9%, falling within the BoC's target range of 1%-3%. Core price measures also showed a decrease.

The BoC's governing council will announce its decision on the overnight rate later today, having kept rates unchanged in the past four meetings.

There is a 44% chance of a rate cut as early as April, according to money markets, with full pricing for a rate cut in June.