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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.
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The Bank of Canada is facing a familiar dilemma this week, as the escalation of the trade war with the United States casts a shadow of uncertainty on Wednesday's decision on interest rates.
·Montreal, Canada
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The Toronto Star+11 Reposted by 11 other sources
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
·Toronto, Canada
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Coverage Details
Total News Sources30
Leaning Left7Leaning Right1Center8Last UpdatedBias Distribution50% Center
Bias Distribution
- 50% of the sources are Center
50% Center
L 44%
C 50%
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