Analysts: Economic data not enough to force the Bank of Canada to cut interest rates

Dominique Lapointe, an analyst at Manulife Investment Management, believes that Canada's first quarter GDP growth of 2.2% does not indicate positive development in the new era of tariffs, but is also not enough to force the Bank of Canada to cut interest rates on June 4. Therefore, he expects the central bank to adopt a "dovish hold" policy, but believes that if signs of economic weakness persist, the central bank will cut interest rates in July, October, and December respectively. Lapointe pointed out that although GDP growth in the first quarter exceeded expectations, the growth was mainly driven by exports and inventory accumulation supported by the pre-tariff effect, while domestic demand remains fragile. He emphasized the need to continue monitoring whether second quarter data reflects further deterioration in domestic demand, and if consumption and investment do not improve, combined with trade policy uncertainty, the central bank may have to stimulate the economy through multiple rate cuts.