The Bank of Canada (BoC) chose to maintain its benchmark interest rate at 5%, indicating a reluctance to pursue additional rate hikes amid a slowing economy. Governor Tiff Macklem stressed the need for increased confidence in inflation moderation before contemplating any shifts in monetary policy. Despite acknowledging public demand for lower interest rates, Macklem emphasized the importance of being assured of a return to the 2% inflation target. BoC remains wary of inflation risks, particularly in core measures, and anticipates economic growth remaining below one percent through the first quarter of 2024.

The Bank removed language suggesting rate increases, hinting at potential future rate cuts. This decision, the fourth consecutive hold, was widely expected by economists, with signals of possible rate reductions later in the year as economic growth is forecasted to improve in the latter part of 2024. The Bank highlighted reduced consumer spending due to higher prices and interest rates, coupled with a slowdown in business investment, despite job vacancies nearing pre-pandemic levels.