Bank of Canada holds benchmark interest rate steady

Risk-free rate stable amid easing inflation

Rate cut in June remains a possibility

The Bank of Canada held its benchmark interest rate steady on Wednesday, keeping it at 5%. The decision comes amid signs that inflation is easing, with officials acknowledging that a rate cut in June is within the realm of possibility.

The Bank's decision was widely expected by economists. In a statement, the Bank said that "recent data suggest that inflation is beginning to ease, with the headline CPI inflation rate falling to 6.8% in November from 7.0% in October. Core inflation has also moderated, with the CPI median and trim means both declining by 0.1 percentage points in November."

The Bank also noted that "the Canadian economy is still growing, but the pace of growth has moderated. GDP growth slowed to 2.9% in the third quarter from 3.2% in the second quarter. The Bank expects growth to moderate further in the coming quarters, as the impact of higher interest rates works its way through the economy."