The Bank of Canada is expected to hold interest rates steady again this week in its rate decision.

Analysts expect the overnight lending rate, on which Canadian interest rates are based, to remain at 5% on Wednesday.

That would mark the fifth straight rate hold following 10 consecutive hikes designed to curb inflation between 2022 and first-half 2023.

“Luckily for the BoC, it has been gifted a little more time before it needs to cut rates,” wrote James Orlando, wrote James Orlando, a Toronto Dominion Bank senior economist, in a research note provided to Connect. “The fact that the economy has eked out modest, but still positive gains, means that a soft landing is still the base-case scenario. This allows the BoC to sit back over the next couple of months and ensure that inflation continues to grind lower. We think it will, which will allow the BoC to make its first rate cut in June.”

BoC officials have shifted their tone on possible rate hikes in recent months. Tiff Macklem, the BoC’s governor, has indicated that rate cuts are just a matter of time.

The BoC is seeking to get inflation closer to its 2% target before lowering the overnight rate. Inflation dropped to 2.9% in January. CIBC Deputy Chief Economist Benjamin Tal has cited high shelter expenses, particularly mortgage cost increases, as a primary contributor to inflation.

Rate cuts are widely expected to occur sometime between spring and the end of 2024, with some analyst predictions varying slightly.

Pictured: Bank of Canada Governor Tiff Macklem