The Bank of Canada’s decision to hold its overnight rate at 2.25% on April 29 anchors the 96.2% market-implied probability of no change at the June 10 announcement. Persistent slack in the economy, evidenced by an unemployment rate near 6.7% and an output gap in the -1.5% to -0.5% range, continues to outweigh the temporary lift in headline CPI to 2.4% in March from elevated energy prices tied to Middle East developments. Core inflation measures remain anchored near 2.2%, consistent with the Bank’s base-case projection for inflation to ease back to the 2% target by early 2027. Traders therefore price continuity in the absence of data showing sustained pass-through to broader prices. A hotter-than-expected May CPI release or signs of accelerating growth could introduce modest upward pressure on rates, though such shifts remain low-probability scenarios under current conditions.