The downward surprise to CPI inflation in March, along with the first target-consistent gains in CPI-trim and CPI-median in eight months, at the margin raise the odds of a rate cut by the Bank of Canada tomorrow. Still, with the three-month annualised pace of those averaged core measures holding uncomfortably high at 2.7%, and downside risks to the economy easing as trade tensions with the US de-escalate, we expect the Bank to keep interest rates on hold, while it waits to assess the impact of retaliatory tariffs.
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