For example,
Bank canada chooses status quo:
- First, the uncertainty about customs duties imposed by the United States in Canada is still high. Nevertheless, Discussions between the two countries are underway and US trade policy remains unpredictable.
- Second, even if American customs duties disrupt trade, the Canadian economy shows a certain resilience so far.
- Third, inflation is near our target by 2 %, but we see signs of underlying inflationary pressures.
“During this decision, the consensus was clear: leaving the key rate unchanged,” said Tiff Macklem. Nevertheless, We have also agreed that we must be cautious. Similarly, paying particular attention to the risks and uncertainties with which the Canadian economy is confronted ”.
Among the uncertainties identified by the BDC governor:
- To what extent the higher American customs duties make demand for Canadian exports. Moreover,
- How it is an impact on bank canada chooses status quo business investments, employment and household expenditure;
- With what scale and how fast the cost increases arising from customs duties and commercial disturbances are passed on to consumer prices;
- And how are inflation expectations evolve.
July monetary policy
In the context of the threats of new sectoral customs duties. the negotiations that are underway between the Canadian and American administrations, the Report on the Monetary Policy of July today provides a scenario of maintaining customs duties based on the rights in place or agreed on July 27, as well as two other scenarios – a climbing scenario and a scenario of de -escalation of customs rights.
As was the case in April. we do not find the usual reference projections for GDP growth and inflation in Canada and in the world.
“American customs duties are still too unpredictable so that we can provide a single forecast for the Canadian economy. bank canada chooses status quo ” said Tiff Macklem.
In the scenario of maintaining customs duties, global growth slows down modestly and is around 2.5 % at the end of 2025, before returning around 3 % in 2026 and 2027, according to the BDC.
“Until now, the global economic consequences of the United States’s trade policy has been less harmful than feared. American customs duties have disrupted trade in major economies. it slows up the expansion worldwide, but less than many observers expected it. Even if American growth seems to moderate, the labor market has remained solid, “analyzed the Governor of BDC.
In Canada, American customs duties disrupt trade, but overall, the economy shows a certain resilience so far. BDC expects GDP. which had displayed robust growth in the first quarter of 2025 due to exports preceded in anticipation of the entry into force of customs duties, fell by around 1.5 % in the second bank canada chooses status quo quarter, said the report.
“Canada posted robust growth in the first quarter of 2025. especially because companies have outstripped their orders in anticipation of the entry into force of customs duties. In the second quarter. the economy seems to have contracted, exports to the United States that has dropped significantly due to the slowdown that followed the Devanance of Purchases and Customs Rights that slowed down the American demand, “said Tiff Macklem.
However. he took care to add: “The growth of the expenses of Canadian companies and households is slowed down by uncertainty. »»
Bank canada chooses status quo
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