Bank of Canada Holds Rates Steady In The Face Of Tariff Uncertainty–More Rate Cuts Coming The Bank of Canada held its benchmark interest rate unchanged at 2.75% at today’s meeting, as expected by half of the market, to mark the first hold following 225 basis points of cuts in seven consecutive decisions. The governing council noted […]

Weak Canadian Job Creation Is The First Fallout From The Trade War Today’s Labour Force Survey for March was weaker than expected. Employment decreased by 33,000 (-0.2%) in March, the first decrease since January 2022. The decline in March followed little change in February and three consecutive months of growth in November, December and January, totalling 211,000 (+1.0%). The employment rate—the […]

Global Tariff Uncertainty Sidelined Buyers Canadian existing home sales plunged last month as tariff concerns moth-balled home buying intentions. According to data released Monday by the Canadian Real Estate Association, transactions fell 9.8% from January. Activity was at its lowest level since November 2023. Benchmark home prices declined 0.8%, and new listings plunged, more than […]

  No one Benefits From Tariffs   Despite having negotiated the current trade agreement among the U.S., Mexico, and Canada during his first administration, Donald Trump broke the terms of that treaty on Saturday. He triggered a global stock market selloff after fulfilling his threat to impose tariffs on Canada, Mexico, and China. These levies […]

Bank of Canada Cuts Policy Rate By 25 BPs The Bank of Canada (BoC) reduced the overnight rate by 25 basis points this morning, bringing the policy rate down to 3.0%. The market had anticipated a nearly 98% chance of this 25 basis point reduction, and consensus aligned with this expectation. The Federal Reserve is […]

Positive News On The Inflation Front The Consumer Price Index (CPI) increased by 1.8% year-over-year in December, a slight decrease from the 1.9% rise in November. The main contributors to this slowdown were food purchased from restaurants and alcoholic beverages bought from stores. Excluding food, the CPI rose by 2.1% in December. On December 14, […]

  Chrystia Freeland Resigns On The Day of The Fall Economic Statement   Finance Minister Freeland rocked markets today by submitting her resignation from Cabinet. Trudeau had asked her to take another Cabinet post, but she declined in a scathing letter accusing Trudeau of “costly political gimmicks” like “bribe-us-with-our-own-money cheques for $250 and a two-month GST […]

Bank of Canada Cuts Policy Rate By 50 BPs After three consecutive 25 bp rate cuts, the BoC slashed the overnight rate by 50 bps this morning, bringing the policy rate down to 3.75%. The market had priced in 90% odds of a 50 bp move, where consensus coalesced. The combined slower-than-expected GDP growth and back-to-back weak inflation […]

More Good News On The Canadian Inflation Front   The Consumer Price Index (CPI) rose 2.0% year over year in August, the slowest pace since February 2021, and down from a 2.5% gain in July 2024. Core inflation measures averaged 2.35% y/y and excluding mortgage interest, headline inflation was a mere 1.2%–well below the Bank’s target inflation level of […]

Bank of Canada Cuts Rates Another Quarter Point Today, the Bank of Canada cut the overnight policy rate by another 25 basis points to 4.25%. This is the third consecutive decrease since June. The Bank’s decision reflects two main developments. First, headline and core inflation have continued to ease as expected. Second, as inflation gets […]