Economist predicts a more 'dovish' stance from the BoC amid 'clear hold'

One economist expects more dovish rhetoric from the Bank of Canada and an all-but-certain decision to hold interest rates at five per cent.

Claire Fan, an economist at RBC, said in an interview with BNN Bloomberg on Tuesday that Wednesday’s announcement from the central bank is “expected to be a bit uneventful” and predicts a “clear hold” at five per cent. She added that over the last few meetings, the Bank of Canada has shifted progressively to more “dovish” messaging and believes that trend will continue. 

“The bank will probably continue to highlight data on (a) softening economic backdrop. That includes a softer print for GDP (gross domestic product), even though a positive but still the details were quite a lot weaker than what we had expected, alongside (a) persistently higher unemployment rate, barring a small tick lower in January,” Fan said.  

“So that softening macro backdrop will likely be reiterated by the Bank of Canada as seen in the context of progress made to really get inflation lower.”