Fengye Bank: The Bank of Canada is expected to shift to a more neutral stance by the end of the year.

Fengye Bank believes that while recent growth in Canada has slowed, this may only be temporary and therefore the Bank of Canada will not react to this. The bank also expects that the Bank of Canada will not react to the direct impact of rising oil prices on inflation, even though changes in the balance of inflation risks do need to be treated with caution. Therefore, Fengye Bank's analysis suggests that the Bank of Canada will begin to gradually withdraw monetary stimulus measures and shift towards a more neutral stance by the end of the year. This indicates that the central bank will maintain interest rates unchanged in the short term until the renegotiation of the USMCA agreement is resolved, and then raise interest rates three times in the second half of this year.