Bank of Canada Keeps Q2 Output Gap, Neutral Rate Unchanged
The Bank of Canada estimates Q2 output gap between -1.5% and -0.5%, unchanged from April. Potential output growth for 2026 revised to 1.1% from 1.2%, while neutral interest rate midpoint remains at 2.25%-3.25%.
The Bank of Canada released updated estimates for the second quarter, indicating the output gap remains in the range of -1.5% to -0.5%, unchanged from its April Monetary Policy Report.
Potential output growth for 2026 has been revised lower to 1.1%, compared to the 1.2% forecast in April. The bank also held its assumption for the nominal neutral interest rate steady, with the midpoint at the 2.25% to 3.25% range, unchanged from April values.
Source: First Squawk