The Bank of Canada is widely expected to keep its key interest rate at 2.25 per cent on Wednesday morning as the trade war with the U.S. clouds the economic outlook.
As of early Tuesday, financial markets were roughly pricing in 97 per cent odds of a rate hold in September, according to data supplied by the London Stock Exchange Group.
The central bank has remained on the sidelines since December, when policymakers signalled that the rate was “at about the right level” to keep inflation close to target while supporting the economy.
But now, U.S. tariffs and Ottawa’s countermeasures are threatening to slow the economy while putting pressure on inflation, complicating the path for future rate decisions.
Economists will be monitoring the tone of the bank’s communications for clues on how policymakers will respond to the trade war going forward.
The announcement is scheduled for 9:45 a.m. Eastern Time, followed by a press conference by governor Tiff Macklem and senior deputy governor Carolyn Rogers.
This is a developing story …
