Bank of Canada holds interest rate at 4.5%

The Bank of Canada has held the interest rate at 4.5%, the Bank Rate at 4.75% and the Deposit Rate at 4.5%.

It marks the second consecutive hold since rates started rising in March of last year ..which is good news for home buyers.

The bank is also continuing quantitative tightening.

Bank of Canada governor Tiff Macklem said we are on the right path.

“Inflation is coming back quickly and is forecast to be about 3% percent this summer. The economy is expected to grow modestly, even as inflation comes down,” Macklem said.

The economy grew in January and CPI inflation eased to 5.2% in February, the second month in a row it was lower than forecasted. Macklem said their target is to get inflation down to 2%.

He says inflation expectations have to come down further, service price inflation and wage growth need to moderate and corporate pricing behavior has to normalize.