On Wednesday, the bank left its key overnight interest rate on hold at 4.50%, becoming the first major central bank to suspend a tightening campaign as inflation eases. Inflation slowed to 5.9% in January, still far above the BoC’s 2% target.
The BoC has said it will hold rates as long as inflation drops as it forecast in January, hitting 3% at about mid-year. Data since then have painted a “mixed picture,” Rogers said.
“We’ll still need more evidence to fully assess whether monetary policy is restrictive enough to return inflation to 2%,” Rogers said in a speech in Winnipeg to the Manitoba Chambers of Commerce. “If evidence accumulates suggesting inflation may not decline in line with our forecast, we’re prepared to do more.”
Money markets are almost fully pricing in another rate hike by September.
Rogers later told reporters the bank still believed the economy was dealing with excess demand, adding it would take some time before balance…
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