BNY MELLON says markets expect the BOC to keep its policy rate at 2.25% and are
unlikely to consider cuts before Q4. Recent core inflation trends and
labor-market strength supports holding rates, though an unexpected downward trend
inflation surprise could bring easing back onto the agenda. Governor Macklem has
said the bank is prepared to "take action" if inflation expectations shift. BNY
MELLON adds that unless BOC communications prove materially more dovish or
hawkish than expected, policy stability should be market-neutral.
