Andrew Kelvin, director of global and Canadian interest rate strategy at TD Securities, said that the combination of weak survey data and Canadian CPI data is enough to make the Canadian Central Bank cut interest rates again next week. The only downside is the acceleration of core inflation. But since overall inflation is lower than the Bank's forecast for the second quarter in April, and the overall interpretation of the economic outlook in the business prospects survey is mild, including wage declines and future inflation expectations, we should have all the conditions for another rate cut. We believe that a rate cut in July is feasible. There may be a longer wait-and-see period in September, and we need to see the core inflation momentum dissipate so that the Canadian Central Bank can further relax policy in the fourth quarter of this year.
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Instituciones: Banco Central de Canadá tiene motivos para recortar las tasas la próxima semana, o bien esperar hasta septiembre
Andrew Kelvin, director of global and Canadian interest rate strategy at TD Securities, said that the combination of weak survey data and Canadian CPI data is enough to make the Canadian Central Bank cut interest rates again next week. The only downside is the acceleration of core inflation. But since overall inflation is lower than the Bank's forecast for the second quarter in April, and the overall interpretation of the economic outlook in the business prospects survey is mild, including wage declines and future inflation expectations, we should have all the conditions for another rate cut. We believe that a rate cut in July is feasible. There may be a longer wait-and-see period in September, and we need to see the core inflation momentum dissipate so that the Canadian Central Bank can further relax policy in the fourth quarter of this year.