Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsEconomyCanadian bonds rally after Bank of Canada holds rates, cites weak economyBank of Canada policymakers are watching to see whether higher energy prices leader to broader inflation pressureAuthor of the article:Last updated 33 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.Bankof Canada Governor Tiff Macklem told reporters that officials don’t believe the economy is in recession, though output has contracted for two quarters in a row. Photo by HYUNGCHEOL PARK/PostmediaCanadian government bonds rallied across the curve after the Bank of Canada held its policy interest rate steady and Governor Tiff Macklem described the economy as “weak.”Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe yield on benchmark two-year Canadian debt was down to 2.836 per cent shortly after 11:30 a.m. New York time. Earlier in the day, it traded as high as 2.882 per cent.Macklem said policymakers are watching to see whether higher energy prices leader to broader inflation pressure. In that case, “there may be a need for consecutive increases in the policy rate,” Macklem said, echoing a statement from the previous rate decision on April 29. But bond traders appeared to dismiss that threat.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“It’s a bit surprising that Macklem largely repeated the language used in April, given the persistent weakness in Canadian economic indicators and the tame nature of underlying inflation,” Royce Mendes, head of macro strategy at Desjardins Securities, said in a note. “That said, markets aren’t taking the bait this time.”Macklem told reporters that officials don’t believe the economy is in recession, though output has contracted for two quarters in a row. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.