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Bank hints that smaller 25 bp hike likely to be the last

The Bank of Canada accompanied its smaller 25 bp hike with new guidance that it intends to hold the policy rate at the current 4.5% while it assesses the impact of the cumulative interest rate increases so far. While the Bank did not rule out future rate hikes entirely, the new guidance reinforces our view that the Bank’s next move is likely to be a rate cut, albeit not until later this year.

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