1019 ET - The Bank of Canada can afford to choose an "insurance" rate cut like it did in March, argues Royal Bank of Canada's Abbey Xu. The economist points to the easing in March headline inflation to 2.3% annually from 2.6% in February as cooling gasoline and travel-tour prices more than offset a bounce back in food prices after the end of the federal tax holiday. Xu says that while inflation is hotter than the 1.9% reading ahead of the two-month tax break, the latest data suggests inflation risks ahead of tariffs were subsiding. Royal Bank still expects tariffs will hurt Canadian exporters and prices are set to rise, and it anticipates one more quarter-point cut in interest rates after Wednesday to take the overnight rate to a terminal 2.25% in June. (robb.stewart@wsj.com; @RobbMStewart)
(END) Dow Jones Newswires
April 15, 2025 10:19 ET (14:19 GMT)
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