BoC likely to leave rates unchanged for the remainder of the year: TD Economics

Quotes from TD Economics

- While Canada's headline inflation has slowed dramatically, it remains slightly higher than the Bank of Canada's forecast of 0.5% for Q1.  And while core inflation is holding just above to the Bank's 2% target, the BoC is very cognizant of the fact that the hit to growth from lower oil prices could filter through to the core measure.  This is one factor that led to the surprise rate cut in Jan.

- Developments that have taken place since the last BoC meeting last month suggest that another rate cut in March is unlikely.  In a speech earlier this week, BoC governor Stephen Poloz noted that Jan's rate cut buys them time to see how the economy responds; oil prices seem to have stabilized - a touch higher in Feb vs Jan; and today's inflation data is slightly ahead of the Bank's forecast.  As such, we now expect the Bank to leave rates unchanged for the remainder of the year.