ThursdayLottoestimatedjackpotDave McCleme, governor of the Bank of Canada, saidLottoestimatedjackpotAs inflation falls and stays low, the Bank of Canada may soon start cutting interest rates. McCleme pointed out at the meeting of the Finance Committee that the signs of another decline in inflation heralded the approaching time for interest rate cuts, but the central bank needed to be confident that the trend would continue.

He further explained that Canada's economic growth has slowed, an oversupply of goods, stable wage growth, and a cooling labour market have all helped to push prices down. These are the key inflation indicators that the central bank is concerned about are moving in a positive direction.

Still, the current policy rate of 5% has been dampening demand in the real estate market, and McCleme predicts that the housing market will pick up this year, and house prices are expected to rise. He pointed out that housing cost inflation is the main driver of overall inflation in Canada.

The Bank of Canada is expected to announce its next interest rate decision on June 5th. At the same time, the outlook for interest rate cuts in the US seems less clear. Federal Reserve Chairman Colin Powell recently said that as inflation is still high, the possibility of cutting interest rates is not clear.

McCleme also mentioned that one of the main reasons why inflation in Canada is falling faster than in the United States is that the Canadian economy is relatively weak. He warned that if interest rates in Canada were lower than those in the United States, it could lead to a devaluation of the Canadian dollar.

Douglas Porter, chief economist at Mandike Bank, also commented that Canada has the conditions to cut interest rates first. Porter said that if the Fed is expected to cut interest rates in the future, the Bank of Canada can even cut interest rates again without putting too much pressure on the Canadian dollar.

Although the depreciation of the Canadian dollar may increase the cost for Canadians to spend in the United States, this may be good for the Canadian economy as a whole, as dollar-denominated exports will become more price competitive.