By Ketki Saxena
Investing.com -- In a recent statement, Bank of Canada Governor Tiff Macklem addressed concerns regarding April's inflation increase - marking the first rise in ten months. He described this surge as an anomaly and reassured that consumer prices are expected to continue declining. Consequently, market expectations for another rate hike have been reduced.
The central bank has previously cautioned Canadians about potential rate increases. The surprising acceleration of inflation to 4.4% in April from 4.3% in March led some economists to predict a possible hike later this year.
The central bank increased its key overnight rate by 425 basis points between March last year and January, reaching 4.5%.
"Inflation has come down. It is coming down. We expect it will continue to come down," Macklem stated when asked about recently published inflation figures.
Macklem acknowledged that April's inflation was stronger than anticipated but refrained from further discussing monetary policy.
Prior to his comments, money markets estimated an 80% chance of a July rate hike; however, this probability dropped to 60% following his remarks.