Bank of Canada to keep interest rates unchanged at 2.75% on June 4 — Standard Chartered

According to Standard Chartered economist Dan Pan, the Bank of Canada will maintain its key policy rate at 2.75% at the June 4 meeting rather than cutting it by 25 basis points.

In April, the central bank opted to hold its interest rate steady, demonstrating a cautious stance on further monetary easing while awaiting concrete proof of the economic repercussions of Trump's duties.

The tariff cuts have partially offset some GDP deceleration risks and postponed the necessary policy shift, which currently aligns with the midpoint of the neutral rate range. That is why policymakers may prefer to extend the pause between easing cycles to avoid overstimulating the economy, particularly given year-to-date core inflation acceleration that argues against premature further easing.

Nevertheless, labor market weakness heightens the potential for policy accommodation. If the GDP figures on May 30 show a significant deterioration, the bank may reconsider initiating rate cuts at the June policy session.