Bank of Canada Holds Key Rate at 5%, Indicates Thinking Shifting Toward Rate Cuts

OTTAWA—The Bank of Canada held its key rate at 5 percent, as widely expected on January 24, and indicated that its thinking is shifting to how long interest rates need to be kept at their current elevated levels. The economy has been broadly slowing in line with the central bank’s expectations, which suggests that further rate hikes are not needed. But the latest readings on inflation and wage growth showed an uptick, which suggest a rate cut might be premature. January’’s BoC statement removed the phrase from December’s statement that the central bank’s governing council “remains prepared to raise the policy rate further if needed.”...