Bank of Canada (BoC) holds rates steady today. Acknowledges it cannot resolve trade uncertainty or mitigate effects of a trade war. Focus remains on maintaining price stability.

>Tone: Dominated by rising tariffs, uncertainty, and extreme market volatility.

>Canada: Economy slowing; employment down; wage growth softening.

>US: Signs of slowing growth; inflation expectations climbing.

>BoC outlook: Short-term inflation seen rising (tariffs/supply issues); longer-term expectations mostly stable. CPI drop expected in April due to carbon tax rebate.

>Inflation tension: Weaker demand is disinflationary; tariffs are inflationary—BoC monitoring how much gets passed to consumers.

>BoC focus: Watching tariffs’ impact on exports, business investment, employment, and household spending.

>>> My take: BoC didn’t cut due to tariff-driven uncertainty but has a dovish lean, signaling openness to rate cuts if risks persist.  US metrics increasingly unreliable—policy gap may widen further.

Next BoC: June 4, July 30

Fed: May 7 (88% chance of hold), then June 18  Wider CAD-USD rate gap = rising policy divergence risk