Huitong Financial News Royal Bank of Canada believes that the market generally expects the Bank of Canada to keep interest rates unchanged at 5% for the third time in a row, and it is unlikely that there will be surprises. But the outside world will look for signs of a slowdown in the economy and easing inflationary pressures in the statement to determine the focus of future rate cuts. The Bank of Canada will continue to monitor inflation risks and retain the option to raise interest rates. But we don't think it's necessary – the inflation data has improved significantly. Looking ahead, weak economic data should provide further evidence that the pressure to slow prices will persist. With more evidence that the economy is weakening, the focus has shifted from whether further rate hikes are needed to the timing of the first rate cut. We don't think the bank will rush to cut rates, and we expect the bank to keep rates unchanged in the first half of 2024 until the start of rate cuts in the third quarter.
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The Bank of Canada is expected to remain on hold, and the market will look for a time to cut interest rates from the announcement
Huitong Financial News Royal Bank of Canada believes that the market generally expects the Bank of Canada to keep interest rates unchanged at 5% for the third time in a row, and it is unlikely that there will be surprises. But the outside world will look for signs of a slowdown in the economy and easing inflationary pressures in the statement to determine the focus of future rate cuts. The Bank of Canada will continue to monitor inflation risks and retain the option to raise interest rates. But we don't think it's necessary – the inflation data has improved significantly. Looking ahead, weak economic data should provide further evidence that the pressure to slow prices will persist. With more evidence that the economy is weakening, the focus has shifted from whether further rate hikes are needed to the timing of the first rate cut. We don't think the bank will rush to cut rates, and we expect the bank to keep rates unchanged in the first half of 2024 until the start of rate cuts in the third quarter.