After Statistics Canada’s latest consumer price index revealed a 2.9 per cent increase in the annual inflation rate in March, largely boosted by higher prices for gasoline, one chief economist says the path towards a June interest rate cut seems clear. 

Excluding gasoline prices, Statistics Canada reported that the overall annual inflation rate for March was 2.8 per cent, a drop from 2.9 per cent in February. 

“It’s terrific news, really,” said Pedro Antunes, chief economist of the Conference Board of Canada, during an interview with BNN Bloomberg on Tuesday. 

“I think this is going to be another sign and insurance that the (Bank of Canada) is going to start to take that burden off of households by lowering interest rates come June,” he said, adding that the central bank has been “very careful around its messaging.”

“Perhaps some mistakes were made during the pandemic about where interest rates are going to go, and I think they’ve been very careful now in the downswing of things,” Antunes said. 

Despite anticipating a decline in rates this summer, Antunes also cautioned that the speed of the decline will be “slow.”

“Let’s not forget on the way down I think interest rate declines are going to be way slower and certainly take more time than when they came up,” he said.  

Antunes also mentioned that the U.S. is in a more precarious position when it comes to the prospect of rate cuts.

“In the U.S., they’re not having as much certainty around rates coming down,” he said. “This is why that differential on interest rates is causing the dollar to come down a little bit. But it’s also important to note that if U.S. rates stay high, that is going to have an impact on market rates even here in Canada as well.”

To watch Antunes’ full interview with BNN Bloomberg, click the video above.