Rate cuts: will the Bank of Canada share its intentions?

Rate cuts: will the Bank of Canada share its intentions?

The Bank of Canada will announce its key rate on Wednesday, the first major decision of the year. Economists almost unanimously expect the central bank to maintain the status quo, but a rate cut in the spring looks less and less certain.

The recovery in inflation last month complicates the task of the Bank of Canada, which is still striving to return the inflation rate back to its 2% target.

Attacks in the Red Sea in recent weeks could worsen price growth for certain product categories, says Steve Ambler, an associate professor in the Department of EconomicsUQAM.

There are already several companies that have started sending their ships through South Africa due to the situation, which increases shipping costs. So, if it continues, it could worsen the situation in terms of inflationsays the economist.

Economist Rémi Vivès.

Rémi Vivès, Assistant Professor of Economics at Glendon College, York University, Toronto.

Photo: Efe Peker

Rémi Vivès, assistant professor of economics at York University’s Glendon College, adds that detours will be costly, especially in Europe, where road transport is now subject to an emissions trading system.

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