The Bank of Canada is expected to keep its key interest rate the same for the third time in a row when it makes an announcement at 9:45 a.m. ET today. This decision comes as trade talks with the United States remain tense, with a deadline coming up on August 1, and as Canada’s economy shows some signs of stress from the ongoing uncertainty.
Before the announcement, all economists in a Reuters poll agreed the Bank will likely keep rates steady. Even though the economy has been growing more slowly, the job market has sent mixed signals, and inflation is still higher than the Bank’s target. In a note to clients, BMO economist Robert Kavcic said both sides of the argument—raising or keeping rates—have valid points, so the Bank may wait to see how things develop.
Last month, Bank of Canada Governor Tiff Macklem said in a speech that interest rate policy can’t fix problems caused by a long-lasting trade conflict. “What we can do is make sure Canadians don’t have to worry about big changes in their cost of living,” he said.
The Bank also chose to leave rates unchanged in its last decision in June.
