Bank of Canada held today, no surprise.

The bigger message is that they are preparing us for either direction.

Cuts still make sense economically. Growth, jobs, manufacturing, housing is soft. And the US Fed still looks more likely to lower rates eventually than raise them.

But oil is the problem. The BoC can look through a temporary oil shock. But they also said they will not let higher energy prices turn into persistent inflation.

And then also, they pointed out,  that trade tensions are the bigger threat to the Canadian economy.

Their words:

“If the United States imposes significant new trade restrictions on Canada, we may need to cut the policy rate further to support economic growth.”

But if oil prices keep rising and stay elevated, they said “there may be a need for consecutive increases in the policy rate.”

Translation:

Trade risk and a soft economy point toward cuts.

Oil and inflation risk point toward holding longer, or even hiking, if higher energy prices start spreading into everything else.

Another big variable is the upcoming review of the Canada-U.S.-Mexico trade agreement.

For mortgages, this is a planning environment, not a guessing environment. There are many forces pulling in different directions to treat anything as certain.

If your mortgage is coming up for renewal, this is a good time to review the options early instead of waiting and hoping the rate picture gets simpler.

Next BoC date: June 10 (US Fed Jun 17), July 15 (US Fed Jul 29) US Fed decision expected later today, rate hold is expected.