• Prior was 0.50%
• Maturing Government of Canada bonds on the Bank’s balance sheet will no longer be replaced starting April 25
• “The Governing Council judges that interest rates will need to rise further”
• “The timing and pace of further increases in the policy rate will be guided by the Bank’s ongoing assessment of the economy and its commitment to achieving the 2% inflation target.”
• Supply disruptions and increases in commodity prices are primary drivers of upwardly-revised outlook for inflation
• Core measures of inflation have all moved higher as price pressures broaden
• There is an increasing risk that expectations of elevated inflation could become entrenched

Forecasts:

• BOC expects 3.5% GDP growth this year vs 4.0% in January
• Sees 2023 GDP at 2.5% vs 3.5% in January
• Sees 2024 GDP at 3.25%
• Expects 5.3% inflation in 2022 vs 4.2% in Jan
• Expects 2023 inflation at 2.8% vs 2.3% in Jan
• Sees 2024 inflation at 2.1%

USD/ CAD  was trading at 1.2654 ahead of the release and after a quick move lower it’s at 1.2650 now. There’s no guidance here on the pace and size of upcoming rate hikes so we will have to wait for the press conference for more details at 11 am ET. So far, everything is in line with estimates.