Bank of Canada Seen Holding Rate at 2.25% for 6th Meeting as Inflation and Growth Risks Ease
Updated
Updated · Action Forex · Jul 11
Bank of Canada Seen Holding Rate at 2.25% for 6th Meeting as Inflation and Growth Risks Ease
3 articles · Updated · Action Forex · Jul 11
Summary
Wednesday’s policy decision is expected to leave the Bank of Canada’s overnight rate at 2.25%, extending a pause that followed 50 basis points of cuts last September and October.
Oil-driven inflation fears have faded as gasoline price increases have not broadly spread through consumer prices, business inflation expectations stayed anchored in May, and crude has since retreated.
Growth worries have also eased: Statistics Canada’s advance estimate points to 0.1% real GDP growth in May after 0.5% in April, keeping Q2 on track for about a 2% annualized rebound.
May and June labor data showed signs of stabilization after earlier job losses, while consumer spending stayed resilient and housing firmed in weaker markets such as Toronto and Vancouver.
With CUSMA still shielding most Canadian exports from U.S. tariffs and broader U.S. tariff rates edging lower, analysts expect the BoC to stay on hold through 2026.