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CIBC Economics

The Bank of Canada opted to not cut interest rates in June, but for those hoping for some interest rate relief on a variable rate mortgage, for example, I wouldn&#8217;t give up hope.
We do still expect to see some rate cuts over the next couple of quarters.
That&#8217;s not necessarily a good news story, because it reflects the sluggish state of the Canadian economy, as we get hit by tariffs and tariff uncertainty.
We&#8217;re expecting to see little, if any, economic growth over the next two quarters.
And while the Bank of Canada&#8217;s still concerned that inflation might heat up a bit in the wake of Canada&#8217;s tariffs on imports, we expect that to be a short lived spike in prices.
Broadly speaking, the economy needs some interest rate relief.
Interest sensitive sectors like housing are not showing any signs of life at this point, so we&#8217;ll need a dose of lower interest rates and perhaps later in the year, some fiscal stimulus to get the economy back on track.

The Bank of Canada holds firm on interest rates: Is relief on the horizon?

CIBC Economics

Avery Shenfeld

Managing Director and Chief Economist

CIBC Capital Markets