Ottawa: The Bank of Canada’s interest rate announcement will take place on Wednesday. Amidst the ongoing Canada-US trade dispute, economists predict that the central bank will not alter its benchmark interest rate. The general consensus is that the rate is likely to be maintained at 2.75 percent. Avery Shenfeld, Chief Economist at CIBC, states that persistent inflation and unexpected advancements in the labor market diminish the likelihood of a rate cut. The creation of 83,000 new jobs in Canada in June and the rise in annual inflation to 1.9 percent are key factors compelling the bank to refrain from cutting rates.
Meanwhile, Shenfeld expressed concerns that the tariff dispute with the US could impact Canada’s economy. He added that if the bank is convinced that inflation caused by tariffs is temporary, there might be a possibility of an interest rate cut. Given the persistent tariff threats from US President Donald Trump, Jean also clarified that the Bank of Canada might further cut rates to mitigate the economic impact.
