'We’re expecting modest disinflation': Manulife investment strategist on Bank of Canada outlook

The Bank of Canada cut interest rates in June for the first time in four years, lowering the rate from five per cent to 4.75 per cent, and one chief investment strategist says economic trends point to more cuts in the coming months.

Kevin Headland, co-chief investment strategist at Manulife Investment Management, joined BNN Bloomberg on Monday to discuss what Canadian economic data could mean for future Bank of Canada decisions and says cooling inflation is a primary factor. 

“We’re expecting modest disinflation right along consensus,” said Headland. “Right now the market is pricey and just a hair over a 60 per cent chance of rate cut in July. We expect that to be the case as we see continued disinflation towards a two per cent target.”

Headland says cooling inflation with a two per cent target is the central bank’s “core mandate,” with future policy changes airing on the side of caution.