• Notes from The Desk | US CPI - Faint Progress April 12 2023

Notes from The Desk | Bank of Canada Decision – Patience Young Grasshopper April 12 2023

Notes From the Desk – Bank of Canada Decision – Patience Young Grasshopper


As expected, the Bank of Canada (BoC) held rates steady at 4.5%.  They also updated their economic forecasts:


  • Inflation is expected to fall to 3% this summer and to 2% by the end of 2024.
  • Growth numbers were tweaked to reflect the stronger-than-expected Q1.
    • 2023: 1.4% GDP (previously 1%)
    • 2024: 1.3% GDP (previously 1.8%)
    • 2025: Unchanged at 2.5%




  • Governor MacKlem believes that inflation can get to the 2% target without a deep recession or a significant rise in unemployment.
  • The BoC maintained the option to hike if tight labour markets prevent inflation from falling.
  • When asked about the potential for cutting rates, the Governor expressed that he did not anticipate cutting rates this year, despite the yield curve factoring in a cut for 2023.




  • Yields are modestly higher today.
  • Given the bond market is pricing in a cut later this year, we feel rates are vulnerable to moving higher on any upside surprises to growth or if inflation declines slower than anticipated.
Share this...
Share on email
Share on linkedin