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2025-07-30 18:11:30
[Bank of Canada Interest Rate Concern: Amid the Trade War, Can Data "Anchor" Policy?] ⑴ A recent Reuters poll indicates that the Bank of Canada is highly likely to maintain its benchmark interest rate at 2.75% for the third consecutive time. ⑵ This decision reflects that the impact of US-Canada trade tensions sparked by Trump's tariff rhetoric on the Canadian economy has been weaker than previously expected, reducing the need for additional monetary stimulus. ⑶ Economists also warn that signs of inflationary pressures persist, and further rate cuts could exacerbate the risk of rising prices. ⑷ Pedro Antunes, chief economist at the independent think tank Conference Board of Canada, noted that the Bank of Canada is awaiting the outcome of US-Canada trade negotiations before adjusting its monetary policy stance. ⑸ Data shows that core inflation pressures remained above 3% over the past month, at the upper end of its 1% to 3% target range. ⑹ Canada added 83,100 jobs in June, suggesting that the impact of US tariffs imposed this year may be limited so far. ⑺ Money markets currently price in only a 7% chance of a rate cut on Wednesday, and less than a 100% chance of a rate cut for the rest of the year. ⑻ Most economists believe that the uncertain tariff outlook, coupled with recent inflation and employment data, will prompt the Bank of Canada to remain on the sidelines at this week's meeting.
