July rate cut 'more likely' than June: TD's chief economist

TD Bank’s chief economist says the Bank of Canada is likely to wait until July before cutting interest rates, despite many other economists calling for a cut at the bank’s next meeting in June.

“Markets are split on whether the Bank of Canada will cut interest rates in June. We think more likely July for the simple fact that it gives them a bit more time to observe what's happening on the inflation side,” Beata Caranci told BNN Bloomberg in a Tuesday interview.

“I say that because we had three good months in the U.S. where everybody was really optimistic that inflation was coming down swiftly and the U.S. Federal Reserve would be in a position to cut as early as the summer… those are now gone.”

Caranci said she thinks Canada’s central bank will continue to be cautious about moving too early on cuts in case inflation proves stickier than expected, adding that they can afford to stay on the sidelines for now.