Canada: BoC's Macklem - Getting closer to lower-tariff scenario from April MPR

May 8, 2025 6:11 PM UTC

The BoC is getting less pessimistic about the tariff scenario, though we are not yet in the better of two scenarios outlined in April's MPR, just closer. Earlier today the BoC's Financial Stability Report saw resilience in the financial system with reduced consumer debt relative for income, while no

Canada Election: Liberal Victory Likely, Stable Policy Expected

April 25, 2025 4:21 PM UTC

Canada’s election takes place on Monday. A victory for the ruling Liberals looks likely, but polls are close enough to mean that a hung parliament or even a majority for the opposition Conservatives, while unlikely, is not to be ruled out. Should the Conservatives spring a surprise, a more concili

Bank of Canada - Proceeding carefully, but risks still lean towards further easing

April 16, 2025 4:28 PM UTC

The Bank of Canada left rates unchanged at 2.75% as expected. The statement concluded that the BoC will proceed carefully, noting that monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war, but it can and must maintain price stability in Canada. While this shows cauti

Canada: BoC's Macklem - Less forward looking but prepared to act decisively

April 16, 2025 2:09 PM UTC

The BoC left rates unchanged as expected. They will proceed carefully but are prepared to act decisively, meaning their options are kept open.

Canada March CPI - Correction lower led by travel costs

April 15, 2025 12:54 PM UTC

March Canadian CPI in falling to 2.3% yr/yr from 2.6% is significantly weaker than expected. Lower prices for gasoline and travel tours were cited as negative influences, the latter surely impacted by the unwillingness of Canadians to travel to the USA.  The BoC core rates are on balance slightly s

Bank of Canada Preview for April 16: Easing to pause, but unlikely to be done

April 8, 2025 2:04 PM UTC

The Bank of Canada meets on April 16 and we expect that strength in some recent data and high uncertainty will see rates left unchanged at 2.75%. There will be little forward guidance and the accompanying Monetary Policy Report may avoid providing its usual economic forecasts. We do not expect that

Canada - BoC Q1 Business Outlook Survey shows caution, Consumer Survey more pessimistic

April 7, 2025 2:57 PM UTC

The Bank of Canada’s Q1 business outlook survey is weaker, though probably not by enough to shock the Bank of Canada. The survey was conducted in February, when tariffs were a worry but not yet a reality. 

Canada March Employment - Consistent message of weakness

April 4, 2025 1:22 PM UTC

Canada’s March employment with a 32.6k decline is the steepest fall since a brief plunge in the lockdowns of January 2022 and highlights the recessionary risks posed by US tariffs. Unemployment rose to 6.7% from 6.6% while wage growth slowed significantly, to 3.5% from 4.0%.

Bank of Canada Minutes from March 12 - Debate over the 25bps easing, agreement to proceed carefully

March 26, 2025 6:19 PM UTC

The Bank of Canada has released minutes from its March 12 meeting, and these show some debate about the meeting’s decision to ease by 25bps to 2.75% and agreement to proceed carefully with further changes to policy. A lot can happen before the BoC next meets on April 16, but these minutes suggest

Canada: BoC's Macklem - Policy to be less forward looking

March 20, 2025 5:12 PM UTC

BoC Governor Macklem sees the Canadian economy as facing new uncertainty just after a soft landing had been achieved.

Canada February CPI - Acceleration clearer as sales tax holiday ends

March 18, 2025 12:51 PM UTC

February Canadian CPI at 2.6% yr/yr from 1.9% in January is significantly stronger than expected, with the rise inflated by the mid-February expiry of a sales tax holiday that started in mid-December. This will lift March data further. The Bank of Canada’s core rates are also stronger, suggesting

Bank of Canada - With risks on both sides, timing matters

March 12, 2025 3:47 PM UTC

The Bank of Canada eased as expected by 25bps to 2.75%, a level it sees as neutral. Given massive uncertainty clear forward guidance is impossible but they made no attempt to hide the gravity of the problem, Governor Tiff Macklem stating Canada is facing a new crisis from which the economic impact c

Canada: BoC's Macklem - Facing new crisis, impact could be severe

March 12, 2025 2:06 PM UTC

BoC Governor Macklem will weigh the impact of a weaker economy and higher prices, though today's easing shows the immediate focus is on the economy.

Canada February Employment - Weather may explain this weak month, but tariff risks ahead

March 7, 2025 2:19 PM UTC

Canada’s February employment with a marginal rise of 1.1k has seen a pause after three straight strong months. With StatsCanada citing snowstorms as an issue not too much should be read into this subdued month, though trend is likely to slow in the months ahead as US tariffs are imposed. 

Bank of Canada Preview for March 12: Tariff risks justify a further 25bps easing

March 5, 2025 5:51 PM UTC

The Bank of Canada meets on March 12, and while the tariff picture is still anything but clear, we expect a 25bps easing to 2.75%. The economic damage done by the ongoing tension is already likely to be significant, and may become seriously so. Inflationary risks have increased, and the Canadian eco

Trump Latest Thinking

March 5, 2025 11:07 AM UTC

Bottom line: President Donald Trump signaled that he is committed to tariffs to raise revenue; bring production back to the U.S. and get fairer trade relations.  This three part approach will likely shape implementation of further product and reciprocal tariffs from April.  However, reports sugges

Trump Tariffs: Bad for The U.S. Worse For Canada

March 4, 2025 3:48 PM UTC

When Trump announced 25% tariffs on Canada and Mexico in February, we put up a piece outlining the likely economic consequences, which became dated by the end of the day as Mexico and Canada won a one month delay in return for some concessions at the border. We are now recycling that story, with som

Canada: BoC's Macklem - Outlines grim scenario for Canada if tariffs are imposed

February 21, 2025 7:43 PM UTC

BoC Governor Macklem sees limited scope for the BoC to undo the economic damage from tariffs, but would seek to keep price gains as one-time.

Canada January CPI - BoC core rates accelerate

February 18, 2025 1:53 PM UTC

January Canadian CPI at 1.9% yr/yr is in line with expectations, but up from 1.8% in December despite a sales tax holiday, with increases in the Bank of Canada’s three core rates suggesting some acceleration in underlying inflationary pressures.

Bank of Canada Minutes Back 25bps Easing, Less Clear on Potential Tariff Implications

February 12, 2025 7:09 PM UTC

The Bank of Canada has released minutes from its January 29 meeting, which show no signs that the decision to ease by 25bps saw much debate. Uncertainty due to tariff risks was seen as supporting the decision. However, should a trade war with the US be seen, the minutes show a more balanced view, co

Canada January Employment - Rate cuts helping, but tariff risk persists

February 7, 2025 2:40 PM UTC

Canada has delivered a strong employment report in January, with a 76k increase allowing unemployment to slip to 6.6% from 6.7%, though wages slipped to 3.7% yr/yr from 3.8%. This backs a Bank of Canada view expressed at January’s meeting that growth is responding to rate cuts without lifting infl

Trump Tariffs, or Not: Trying to Make Sense of a Policy Farce

February 3, 2025 11:46 PM UTC

So, after a weekend and a day of drama we are back to where we were on Friday morning. Forecast updates made on the imposition of tariffs will not be thrown in the trash can, but now will be held as an alternative should Trump decide to go ahead on March 1 after postponing them from February 1 (whic

Trump Tariffs: Bad for The U.S., to Canada and to Mexico

February 3, 2025 6:34 PM UTC

In announcing 25% tariffs on Canada and Mexico, as well as additional 10% tariffs on China, Trump exceeded the expectations of many, including ourselves. The situation is fluid with Mexico (but not yet Canada) receiving a one-month delay, but the risks of a lasting trade war need to be seriously con

Canada November GDP - A weak month with tariffs threatening

January 31, 2025 2:18 PM UTC

November Canadian GDP with a 0.2% decline was weaker than the -0.1% estimate made with October’s release, where the increase was unrevised at 0.3%, The preliminary estimate for December is for a rise of 0.2%, which if accurate would leave Q4 GDP near a 1.8% annualized estimate made by the Bank of

Bank of Canada eases by 25bps as expected, sees balanced risks if a trade war can be avoided

January 29, 2025 4:21 PM UTC

The Bank of Canada eased by 25bps to 3.0% as expected, and confirmed the ending of Quantitative Tightening, as had been outlined by Deputy Governor Toni Gravelle on January 16. The BoC has delivered some fairly optimistic forecasts, but these are made assuming an absence of tariffs, given that the B

Canada: BoC's Macklem - Optimistic provided trade war can be avoided

January 29, 2025 3:12 PM UTC

BoC Governor Macklem sees the economy as well positioned provided a trade war can be avoided.

Canada: BoC's Gravelle - Sees QT ending in first half of 2025

January 16, 2025 5:49 PM UTC

These comments from BoC Deputy Governor Gravelle outlining an end to QT by mid 2025 allow the January 29 meeting to focus on rates. We expect a 25bps easing.

Bank of Canada Preview for January 29: Easing to continue but more cautiously

January 13, 2025 5:23 PM UTC

The Bank of Canada meets on January 29, and will make its decision a few hours before one is made by the FOMC. The BoC decision will be following two straight easings of 50bps, though minutes from the last meeting, on December 11, showed a debate between 25bps and 50bps, and that they expected a mor

Canada December Employment - Strong job growth but again flattered by the public sector

January 10, 2025 2:26 PM UTC

Canada has followed a healthy 50.5k increase in November employment with a substantially stronger 90.9k increase in December, though the acceleration in full time work to 57.5k from 54.2k was marginal. While some of the detail is less impressive, the data suggests the economy is gaining momentum, as

Canada November CPI - Subdued but little further progress on BoC core rates

December 17, 2024 2:06 PM UTC

November Canadian CPI is slightly weaker than expected overall at 1.9% from 2.0% yr/yr, and subdued on the month, though there was little further progress on the Bank of Canada’s core rates. This supports expectations that the BoC will ease further, but at a more gradual pace than the 50bps moves

Canada: BoC's Macklem - Inflation risks balanced around 2% target

December 16, 2024 8:37 PM UTC

The latest comments from BoC Governor Macklem back the more cautious message delivered on December 11.

Trump Tariff Threats Causing Policy Division in Canada

December 16, 2024 6:19 PM UTC

Trump’s tariff threats are being felt in Canadian politics, with Finance Minister Chrystia Freeland’s resignation, due to disagreements with Prime Minister Justin Trudeau’s plans to give the economy fiscal support, with Freeland preferring to “keep the powder dry” given the risks Canada fa

Bank of Canada delivers a second straight 50bps easing but sees a more gradual approach in 2025

December 11, 2024 4:29 PM UTC

The Bank of Canada has delivered a second straight 50bps easing, taking the rate to 3.25%, as largely expected. This puts the rate at the upper end of the 2.25-3.25% range the BoC sees as neutral, and Governor Tiff Macklem stated he now anticipates a more gradual approach to policy. We expect three

Canada: BoC's Macklem - Anticipates a more gradual approach to policy

December 11, 2024 3:05 PM UTC

The Bank of Canada delivered a second straight 50bps easing but Governor Macklem anticipates a more gradual approach going forward.

Canada November Employment - Strong job growth came largely in the public sector

December 6, 2024 2:29 PM UTC

Canada’s 50.5k increase in employment was stronger than expected in November, and fully explained by a 54.2k rise in full time work. However, with 45k of the new jobs created coming in the public sector the data is less impressive than it initially seems. With unemployment up and wages slower we c

Bank of Canada Preview for December 11: Another 50bps easing with tariffs threatened

December 2, 2024 2:16 PM UTC

The Bank of Canada meets on December 11, and we expect a second straight 50bps easing, to 3.25%. While October’s inflation data was a mild disappointment the underlying picture looks subdued. While there are some signs the economy is starting to respond to lower rates, with Q3 GDP having disappoin

Canada October Employment - Details mostly positive, suggesting economy regaining momentum

November 8, 2024 1:53 PM UTC

While Canada’s 14.5k October rise in employment was not very impressive on the headline, the details are mostly positive and support a view that the Canadian economy is starting to regain momentum now that the Bank of Canada is easing monetary policy.

Bank of Canada Minutes Show Strong Consensus For Larger 50bps Move

November 5, 2024 6:58 PM UTC

The Bank of Canada has released minutes from its meeting on October 23, which accelerated the pace of easing to 50bps, to 3.75%, after three straight meetings in which the rate was eased by 25bps.  While members considered another 25bps move, there was a strong consensus for taking a larger step.

Canada August GDP - Flat but September seen stronger

October 31, 2024 1:41 PM UTC

August Canadian GDP was unchanged with July revised down to 0.1% from 0.2%, but the preliminary estimate for September is for a stronger rise of 90.3%. This would leave Q3 up by around 1.0% annualized, below a recent 1.5% Bank of Canada estimate, though would suggest a stronger base to start Q4.

Updated Bank of Canada View: One More 50bps Easing in December, Three 25bps Moves in 2025

October 23, 2024 4:05 PM UTC

The Bank of Canada has accelerated the pace of easing, cutting by 50bps to 3.75% after three straight meetings when policy was eased by 25bps.  The accelerated pace of easing was largely as expected and follows headline inflation data moving back to target.  The BoC wants to lift the pace of GDP g

Canada: BoC's Macklem - Took bigger step because inflation is back to target

October 23, 2024 2:03 PM UTC

Bank of Canada Governor Macklem notes on target inflation as a justification for accelerating the pace of easing to 50bps.

Bank of Canada Preview for October 23: Close call for 25bps rather than 50bps

October 15, 2024 6:18 PM UTC

The Bank of Canada’s October 23 decision looks a close call between a fourth straight 25bps easing to 4.0%, which is our expectation, or a 50bps move to 3.75%.  The BoC can feel increasingly confident of core inflation returning to the 2.0% target in 2025, though tentative signs of growth regaini

Canada September CPI - Subdued, pause in BoC core rates downtrend likely to be temporary

October 15, 2024 12:59 PM UTC

September Canadian CPI is weaker than expected overall at 1.6% from 2.0% yr/yr, and subdued on the month, though there has been a lack of further progress on the Bank of Canada’s core rates, largely because year ago data dropping out was also subdued and below where trend then was. This leaves nex

Canada July GDP - Stronger but Q3 unlikely to reach BoC's forecast

September 27, 2024 1:43 PM UTC

July Canadian GDP with a 0.2% increase exceeded an unchanged preliminary estimate made with June’s data though the preliminary estimate for August is unchanged. If September is unchanged too Q3 would rise by 1.0% annualized, well below a 2.8% Bank of Canada projection made in July. Reaching the Bo

Canada: BoC's Macklem - Seeking stronger economic growth, slower core inflation

September 24, 2024 5:10 PM UTC

Canada August CPI - Strengthens the case for accelerating the pace of BoC easing

September 17, 2024 1:12 PM UTC

August Canadian CPI looks clearly subdued, with the headline of 2.0% from 2.5% back on the Bank of Canada target and the BoC’s core rates all slowing and now averaging only a little above the target. 

Canada August Employment - Detail mostly weak

September 6, 2024 1:43 PM UTC

Canada’s August employment report with a 22.1k increase is in line with expectations on the headline and an improvement from two straight near flat moths, but weak in the detail. The employment gain came fully on a 65.7k rise in part time employment with full time work falling by 43.6k, while unem