Canada's Economy Begins to Rebound Amid Softer Inflation

The Bank of Canada maintained its interest rate at 2.25% for a sixth consecutive meeting, but the decision was overshadowed by the central bank's more optimistic economic outlook.

The Bank now projects GDP to rebound at a 2.5% annualized pace in Q2, supported by stronger exports and resilient consumer spending.

Inflation remains the key source of uncertainty, with headline CPI still running above 3% due largely to higher energy costs stemming from the conflict in the Middle East.

The Bank's policy stance remains firmly in wait-and-see mode, but recent data have increased policymakers' confidence that the economy is moving off the bottom rather than slipping further into weakness.