Bank of Canada set to grapple with renewed trade war pressures in rate decision
Analysts say the central bank is waiting as tariffs lift inflation to 3% and threaten growth across Canada.
- On Wednesday, the Bank of Canada is expected to maintain its benchmark interest rate at 2.25 per cent as officials navigate an escalating trade war with the United States.
- President Donald Trump imposed 50 per cent tariffs on about 5 per cent of Canadian exports on August 22, prompting Canada to prepare retaliatory counter-tariffs starting September 8.
- Statistics Canada reported second-quarter GDP grew an annualized 3.3 per cent, though annual inflation hit 3 per cent in July, leading markets to price a 99 per cent chance of a rate hold.
- BMO chief economist Doug Porter and Oxford Economics director Tony Stillo expect the central bank to signal an easing bias, as trade threats outweigh resurgent inflation risks.
- Rates will likely remain steady through 2026, though a pronounced economic slowdown later this year could force a 0.5 per cent cut in 2027.
15 Articles
15 Articles
The Toronto Star
Bank of Canada set to grapple with renewed trade war pressures in rate decision
OTTAWA - The Bank of Canada finds itself in a familiar dilemma this week as the escalating trade war with the United States casts an uncertain light over Wednesday's interest
Bank of Canada Expected to Hold Interest Rate as Trade War Clouds Economic Outlook - Kindersley Social - Local Update, Sports, Events and more
The Bank of Canada is widely expected to keep its benchmark interest rate unchanged when it announces its latest decision Wednesday, as renewed trade tensions with the United States create fresh uncertainty for the Canadian economy. The central bank has held its key interest rate at 2.25 per cent for nearly a year. Until recently, …
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