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 labour-market strength support holding rates, though an unexpected downward 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 stabilit

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 labour-market strength support holding rates, though an unexpected downward 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.