The Bank of Canada (BoC) has set their first interest rate announcement of the year for Wednesday, Jan. 24 at 10 a.m. After a year and a half of rate hikes which peaked at 5 per cent on July 12, the bank has held that rate steady over three more announcements at the end of 2023.

While experts have been forecasting eventual rate cuts for 2024, it seems that won’t be coming for awhile.

“It’s basically 100 per cent likely that the bank will hold fire this week,” Benjamin Tal, deputy chief economist at CIBC, said.

The Consumer Price Index showed last week that inflation has risen once again in Canada to 3.4 per cent, up from 3.1 per cent in previous months, another likely indication that the rate will be held at the upcoming announcement.

Tal said that experts will be watching the language the BoC uses closely in the announcement. “The bank will continue to pay lip service to the risk that another hike is possible, but the likelihood of this happening is very low,” he said. “The market will start to look for hints regarding when the first cut will come.”

The economist noted that the market is currently calling for a first cut in April, but he expects that the bank will hint that the cut will come after that and that the market is too optimistic about the timing of the first cut. “A good guess that this point is June or July.”

The sentiment was echoed by RBC Economics, which noted in a report on Friday that they “expect the BoC to push back against the idea that a shift to interest rate cuts is coming soon.”

The report also forecasted a mid-year rate cut. “We expect the first decrease in the overnight rate to come around the middle of this year, and for that to be followed by 75 bps more later in the year to lower the overnight rate to 4% by the end of 2024.”

If rates hold, Canadians with variable-rate mortgages or a home equity line of credit can expect their rates to hold as well, though they should keep an eye on the BoC’s language to see whether a cut is on the horizon.