He pointed to the Bank’s forecast that oil prices would gradually fall toward US$75 per barrel by mid‑2027, lifting near‑term inflation. Even so, the broader growth profile would remain “little changed” from January, with the output gap still putting downward pressure on inflation well into 2028.
While headline inflation has been pushed higher by the latest oil shock, the Bank see “little evidence” so far of a spillover into core measures and stressed it “will not let higher energy prices become persistent inflation.”
Shenfeld noted that the Governing Council highlighted both the level and persistence of oil prices, as well as whether they spread into other prices, as key to any future move.
The Bank of Canada may be entering an extended pause as global risks cloud the outlook. Sal Guatieri of BMO Capital Markets indicated rates could remain unchanged for a prolonged period, with inflation and geopolitical uncertainty shaping future decisions.https://t.co/j3Mw3xsCMf
— Canadian Mortgage Professional Magazine (@CMPmagazine) April 29, 2026
For David‑Alexandre Brassard, chief economist at CPA Canada, that caution is appropriate. “Oil prices are significantly higher than before the conflict, but there’s still considerable uncertainty around how long this will last,” he said.
“With no clear resolution around key supply routes like the Strait of Hormuz, a wait‑and‑see approach is warranted.”