All Eyes on Bank of Canada Ahead of July 30 Interest Rate Decision
Hey, so here’s what’s coming up — the Bank of Canada is set to make its next interest rate announcement on July 30, and while it’s definitely something economists and analysts are watching closely, no major surprises are expected this time around.
The current interest rate has been sitting at 2.75% since March, and it looks like the bank is planning to hold steady for now. That rate basically sets the tone for borrowing costs across the board — everything from mortgages to business loans uses it as a kind of benchmark. So, if you’ve got a loan or are thinking of taking one out, this decision definitely matters to you.
Now, why aren’t changes expected this time? Well, inflation is currently at 1.9% — pretty much in the sweet spot that Bank of Canada Governor Tiff Macklem is aiming for. It’s a good sign that things are somewhat under control, at least for now. But that doesn’t mean all is calm on the economic front. Economists are still keeping a close eye on potential inflation pressures, especially from things like U.S. tariffs, which are starting to affect the cost of goods.
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In fact, BMO’s vice-president of economics, Shelly Kaushik, said that even though inflation is being kept in check at the moment, the pressure on input costs caused by these tariffs could heat things up over the next year. That’s why the central bank is being cautious — they’re watching how these factors play out before making any sudden moves.
The Bank of Canada also released a statement recently noting that while businesses were bracing for some tough impacts due to tariffs and global uncertainty, the worst-case scenarios haven’t quite played out yet. Some companies have definitely felt the pinch, but others are managing to get by without major setbacks. It’s a mixed bag.
Looking ahead, there’s still a real possibility we could see more rate cuts before the end of the year. TD Economics has even predicted up to two more cuts, especially with the ongoing softness in Canada’s job market. But again, no firm timeline has been given — it all depends on how the economy performs over the coming months.
Governor Macklem has made it clear that any future rate changes will be made carefully and based on real-time data. He acknowledged that while consumer spending dipped a bit in the first quarter — partly due to those tariffs — overall, the economy has shown some surprising resilience. Business investment was actually stronger than expected, which is a good sign.
So, as July 30 approaches, the message is clear: no sudden moves, but plenty of watchful waiting. Let’s see what the Bank of Canada has to say next.
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