Bank of Canada Holds Key Interest Rate at 5 Percent

The Bank of Canada is holding its benchmark interest rate at 5 percent for the sixth consecutive time since July, saying it needs to see evidence that “downward momentum” in inflation is sustained before it will cut rates. Although inflation remains high and “risks remain,” the central bank said it has begun to see the economic conditions necessary to convince it to drop interest rates. Economic data since the beginning of the year has boosted the bank’s confidence that inflation will continue to slow despite a rising economy, Bank of Canada Governor Tiff Macklem said. “I realize that what most Canadians want to know is when we will lower our policy interest rate,” Mr. Macklem said in an April 10 statement. “What do we need to see to be convinced it’s time to cut? The short answer is we are seeing what we need to see, but we need to see it for longer to be confident that progress toward price stability will be sustained.” ...