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BMO Will Be Looking For More Hawkish Signals From Bank of Canada's Summary of Deliberations Due Wednesday

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The Bank of Canada's April 29 meeting revealed more than usual despite the as-expected hold on rates decision, says Bank of Montreal (BMO).

Or, to be precise, Governor Tiff Macklem's statement did, adds the bank.

BMO notes the governor highlighted scenarios in which rates could go lower -- for example, to support growth if United States tariffs increase further-- or higher, to combat inflation if oil prices remain elevated. However, the latter could come with "a need for consecutive increases" since the overnight rate is already at the bottom end of the BoC's neutral range.

BMO will be looking through the Summary of Deliberations for more clues that point to this hawkish tilt when they are released at 1:30 p.m. ET on Wednesday.

The bank judges that the BoC would need a few bad consumer price index reports to prompt a hike, and it's still a long way from that as BMO recalls momentum in core inflation has been disinflationary since late last year, while subdued demand could limit the pass-through of higher costs.

For now, the bank continues to expect the BoC to remain on hold through 2026.

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