Institution: Bank of Canada may not consider rate cut options after Q1 GDP decline

Royce Mendes, Managing Director of the Capital Markets Department at Jiading Huafu Cooperative Bank, stated that the Bank of Canada is unlikely to overreact to the unexpected 0.1% annualized decline in first-quarter GDP. He pointed out that Canada's first-quarter per capita GDP grew at an annualized rate of nearly 1%. Mendes said, "The fact that per capita GDP actually grew will limit the central bank's ability to respond to the economic slowdown." Mendes maintains his forecast that the Bank of Canada will not change its interest rate policy in 2026. He added that, given the weaker-than-expected GDP report, fixed income traders are starting to scale back bets on a rate hike.