The Bank of Canada's Summary of Deliberations delivered some dovish tweaks with the Bank expressing higher conviction that interest rates are sufficiently restrictive to bring inflation sustainably back to target. However, the Bank also repeated that inflation risks remain elevated and that they remain prepared to hike again if needed.

Even if the Bank is growing more comfortable with a 5% terminal rate, we believe any substantial discussion around easing will require more progress on the CPI front, and given the expected path of inflation we look for the Bank to remain on hold until July.