Bank of Canada (BoC) continued to holds its rate today. Just dropped another classic “if-this-then-that” update. They’re not giving base-case projections anymore, just two trade war scenarios. Translation? They’re hedging.
Buried in the jargon: > Unemployment’s creeping up > Wage growth is slowing > Inflation (outside of shelter) is cooling > Excess supply is rising = weak demand
All signs point to rate cuts unless tariffs spike costs again. This is what a central bank sounds like when it’s trying to keep its options open. Their own words: “We will continue to assess… If a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained, there may be a need for a reduction in the policy interest rate.”
The US Fed met and held their rate today, so the gap between CAD and US is historically wide.
Next BoC: July 30, Sept 17, Oct 29, Dec 10
Fed: on the same schedule