MNI BRIEF: BOC Set To Cut In June Or July: Ex Deputy Beaudry

Canada's central bank appears poised to lower interest rates at one of the next two meetings in June or July, former deputy Paul Beaudry told lawmakers hours after officials held their key borrowing cost at 5% for a sixth straight meeting.

“In the short term I think we got some more news this morning that does seem to indicate that there will be a reduction of interest rates over the next little while” and possibly in June, Beaudry said at a hearing of the Senate banking committee. “It might go to July” he said, but it’s clear interest rates will decline “over the next little while.”

The pace of Bank of Canada cuts may be moderate, Beaudry said, especially amid signs that strong U.S. growth and inflation will keep the Federal Reserve under pressure to keep tight policy. Canada's dollar could weaken if the BOC gets too far ahead of Fed easing, Beaudry said. (See: MNI INTERVIEW: BOC Seen Cutting In June As Economy Fades-BDC)