-- The Bank of Canada is potentially on a long hiatus from policy rate changes, assuming growth and inflation evolve roughly in-line with current expectations, said Bank of Montreal (BMO).
Consistent with that, the BoC on Wednesday left the assumed neutral range unchanged at 2.25%-to-3.25% in its annual April refresh, noted the bank.
That leaves the current policy rate right at the low end of the presumed range.
Holding the neutral rate down is the stall in population growth and the drag that it has had on labor force growth, stated BMO.
Holding the neutral rate up is some improvement in productivity growth and firmness -- even a touch of upside -- in the United States neutral rates, which have an impact on Canada, according to the bank.
All things considered, BMO is comfortable with its view that the BoC is on hold this year.