Analysis: The Bank of Canada may suggest concerns about weakening demand.

Royce Mendes, Macro Strategy Director at CIBC Capital Markets, said that the Bank of Canada may indicate that officials' concerns about weakening demand are as high as their concerns about inflation risks driven by energy, and may even be greater. He said that given that core inflation is under control and GDP has declined in three out of the past four quarters, the Bank of Canada has limited room to hike interest rates to fend off inflation risks. "All signs suggest that the country's economy is experiencing typical demand shortages," Mendes said. In the first quarter, consumer spending slowed and domestic demand fell. Mendes said that senior officials at the Bank of Canada "no longer need to be solely focused on policy trade-offs related to high inflation and low growth. The team can instead focus on measures that may be needed if demand deteriorates further."