The Bank of Canada maintained interest rates at 2.75%, citing strong data and ongoing uncertainty from U.S. tariffs. Governor Tiff Macklem described the economy as 'softer but not sharply weaker,' acknowledging a stronger-than-expected GDP growth driven by exports. However, he cautioned that the upcoming quarters might see a slowdown, as the first quarter's strength could be misleading. Furthermore, while headline inflation decreased to 1.7%, core inflation rose above the Bank's target, prompting attention to inflationary pressures that may necessitate further scrutiny in economic policy.
In his opening remarks, Bank of Canada governor Tiff Macklem stated that 'the first quarter borrows economic strength from the future,' indicating a weaker outlook for the second quarter.
Macklem noted that recent inflation numbers, particularly the rise in core inflation above three percent, have 'got our attention,' signaling persistent inflation concerns.
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