BoC keeps rates on hold as expected at 2.25%; Governing Council is continuing to look through the war’s near-term impact on headline inflation, but will not let higher energy prices become persistent inflation.

Recent data suggests that growth will resume in the second quarter but, even with some rebound, the economy is expected to remain in excess supply.  So far, there has been limited evidence of broad-based pass-through of higher energy prices to other consumer prices.  Total inflation is expected to hover around 3% in the near term before easing gradually towards 2%. Economic activity in Canada has been weak and uncertainty about US trade policy persists.  The conflict in the Middle East is ongoing and oil prices remain elevated. As the outlook evolves, we stand ready to respond as needed.