Bank of Canada holds rates steady, mulls cut amid inflation concerns

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OTTAWA, May 1 (Reuters) - The Bank of Canada held its benchmark interest rate steady on Wednesday amid signs that inflation is under control and worries that a rate cut now could overheat the spring housing market.

The central bank has held its key interest rate at 5% since September 2018, when it raised it for the fifth time in a year.

In a statement accompanying its decision, the bank said that "the global economic outlook remains uncertain, with downside risks to growth." It also said that "inflation is expected to remain below the Bank of Canada's target of 2% in the near term."

The bank also noted that "the Canadian economy is growing at a moderate pace, supported by strong consumer spending and business investment." It said that "the labor market remains tight, with the unemployment rate at a 40-year low."

The bank's decision was widely expected by economists, who said that it was too early to cut rates given the uncertain global economic outlook and the risk of reigniting inflation.

"The Bank of Canada is signaling that it is in no rush to cut rates," said Avery Shenfeld, chief economist at CIBC. "It is taking a wait-and-see approach, given the uncertain global economic outlook and the risk of reigniting inflation."