VIEW Bank of Canada holds benchmark rate steady at 2.75%
TORONTO, April 16 (Reuters) - The Bank of Canada on Wednesday held its benchmark interest rate at 2.75%, its first pause after seven consecutive cuts.
MARKET REACTION:
COMMENTS
DOUG PORTER, CHIEF ECONOMIST AT BMO CAPITAL MARKETS
"Obviously it was a difficult decision. The market was much more torn - as were economists - than is normal ahead of a Bank of Canada decision, and understandably so, given the intense uncertainty. ... He's clearly laid open the possibility of getting a lot more aggressive if the economy deteriorates substantially. ... As long as Canada isn't the prime target for the trade war, I think that the Canadian dollar actually can improve here because the U.S. dollar is likely to remain under pressure over the next year in terms of yields."
ANDREW KELVIN, HEAD OF CANADIAN AND GLOBAL RATES STRATEGY AT TD SECURITIES
"Today's decision is in line with our expectation, but the Bank of Canada did seem a bit dovish on what is coming next, and I would reference today's decision to (BoC Governor Tiff) Macklem's March speech. We thought the bank was clearly laying out what their approach was going to be for conducting policy in an environment of trade uncertainty. And given that the economic data that we have seen in Canada has not been that negative, we did not think there was tangible evidence of a slowdown or clarity on the future path of the economy for the bank to preemptively cut rates, and they are weary about stoking inflation again. Therefore, we looked for a hold and it materialized. I do expect weakness to pile up, and the Bank will be forced to cut rates again. I think if you read in between lines there is a tinge of regret around allowing policy to remain too easy for too long following the pandemic and they would very much not like to repeat that mistake again."
NICK REES, SENIOR FX MARKET ANALYST AT MONEX EUROPE LTD
"While consensus had been split ahead of today's rate announcement, we do not think it should come as a surprise that the Governing Council chose to pause its easing cycle in this latest decision."
"Granted, headline inflation undershot expectations yesterday - this was largely the result of gasoline and travel prices, both of which should be discounted in BoC thinking. More importantly, underlying inflation metrics remain elevated, and are yet to reverse a surprise uptick seen in the February data."
"We think the Governing Council would have liked to pause easing in March to assess disinflation progress but were prevented from doing so by Trump (administration) tariff risks. With these having faded somewhat for Canada post-Liberation Day, and with a stronger loonie limiting imported inflation pressures, policymakers now have an opportunity to take stock."
STEPHEN BROWN, DEPUTY CHIEF NORTH AMERICA ECONOMIST AT CAPITAL ECONOMICS
"The Bank of Canada's decision to keep interest rates unchanged at 2.75% today was not a huge surprise given recent above-target gains in core prices, concerns about future price increases and uncertainty about the extent to which the economy requires additional policy support in the face of ever-changing trade policy. Nonetheless, the bank's communications were mostly dovish, which lends some support to our view that it will eventually cut interest rates to 2.0% this year, rather than pause at 2.25%, as market pricing implies."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time Out
a day ago
- Time Out
Toronto just surpassed Montreal in this world's top cities list
Don't look now, but Toronto has officially surpassed Montreal as one of the top cities in the world. According to the 2025 edition of the Global Cities Index, cities across the planet were evaluated across five core categories: Economy, Human Capital, Quality of Life, Environment, and Governance. Toronto showed up strong, coming in at 20th place, while Montreal barely made the top 50. Could it have anything to do with Montreal's high transport emissions, or the post-tropical cyclones and torrential downpours forecasted (again) for this summer? Oxford Economics is the world's foremost independent economic advisory firm, covering over 200 countries, 100 industrial sectors, and 8,000 cities and regions. Drawing on top-tier urban economic forecasts and a range of publicly available datasets, the Index builds a consistent global profile of the 1,000 largest cities. What is the world's top city? It should come as a surprise to absolutely no one that New York City topped the list as the world's top city. The urban giant ranked first in the Economics category as the economic capital of both the U.S. and, arguably, the world—boasting the largest metro economy globally, nearly double that of Los Angeles. While heavily reliant on finance, its stable GDP growth and future outlook remain strong. It also scores high in Human Capital, with a population of over 20 million, top universities, major corporate headquarters, and a highly educated, diverse population—though future growth may slow due to stricter immigration policies. What are the top 50 cities in 2025? Here are the top 50 countries according to the Oxford Economics' Global Cities Index 2025: 1. New York 2. London 3. Paris 4. San Jose 5. Seattle 6. Melbourne 7. Sydney 8. Boston 9. Tokyo 10. San Francisco 11. Los Angeles 12. Washington, D.C. 13. Dublin 14. Stockholm 15. Seoul 16. Zurich 17. Oslo 18. Copenhagen 19. Dallas 20. Toronto 21. Singapore 22. Munich 23. Brisbane 24. Chicago 25. Geneva 26. Denver 27. Amsterdam 28. Atlanta 29. Berlin 30. Houston 31. Perth 32. Luxembourg 33. Philadelphia 34. Brussels 35. Minneapolis 36. Vienna 37. Vancouver 38. Helsinki 39. Hamburg 40. San Diego 41. Phoenix 42. Basel 43. Montreal 44. Madrid 45. Miami 46. Tel Aviv 47. Austin 48. Bern 49. Gothenburg 50. Portland Why did Toronto surpass Montreal in this global ranking? Toronto is the top-ranked Canadian city thanks to its role as a national hub for business, finance, culture, and education. Scoring in the top 20 globally for both Economics and Human Capital, the city boasts strong GDP and employment growth, fuelled by high levels of international immigration. Home to Canada's largest banks and major universities like the University of Toronto, it's a centre for innovation and research. However, rapid population growth has strained housing supply, leading to affordability challenges and impacting its Quality of Life score. Environmental challenges and extreme weather also weigh on its overall ranking. Still, with strong governance, high life expectancy, and continued global appeal, Toronto is expected to remain a top performer for years to come. Meanwhile Montreal, the third Canadian city in the top 50, stands out for its strong Human Capital score, bolstered by world-renowned universities like McGill and a growing tech sector focused on AI and video games. It's also a key transport hub, home to major companies like Air Canada and Canadian National Railway. Once Canada's economic capital, Montreal now has the country's second-largest GDP, though lower wages in its dominant sectors contribute to some of the lowest incomes in North America. Still, housing is more affordable than in other Canadian cities, inequality is low, and residents enjoy high life expectancy and rich cultural offerings. Montreal's main weakness lies in the Environment category, due to high transport emissions and weather volatility. As climate change intensifies, reducing carbon output remains a key challenge for the city's economy.
Belfast Telegraph
a day ago
- Belfast Telegraph
Trump's tariffs ‘could see 1,000 fewer jobs in NI over next 15 years'
The Department for the Economy has released modelling of the impact of President Trump's tariffs on Northern Irish exports, which model a range of scenarios. Since the US President's 'Liberation Day' in April, there has been concern around the world about the impact of US tariffs on global trade and national economies. From April 4, the US imposed a 10% tariff on UK goods entering the US. After signing the 'Prosperity deal' between the two countries, the tariff on UK steel has remained at 25%, avoiding the jump to 50% imposed on other nations. DfE said it had used a framework called 'Computable General Equilibrium' to model a variety of outcomes of the tariffs. Uncertainty has accompanied the tariff policy as President Trump has already instituted pauses for a number of them, and has hinted at the possibility of deals with individual nations. There is also uncertainty as to what industries will be hit, as Trump has long favoured tariffs on steel, for example, but other industries such as pharmaceuticals have hoped to avoid tariffs altogether. The 1,000 fewer jobs does not refer to job losses, but to how many fewer positions would be created as compared to a situation where the tariffs were not imposed. The baseline scenario would still result in 800 fewer jobs being created in Northern Ireland, with a general reduction to GDP of around £85m, or 0.15%. DfE has considered four different outcomes, which include a 10% tariff that excludes pharmaceuticals, a 10% tariff that includes that industry, a 10% general tariff with a 20% rate for pharmaceuticals and a 10% general tariff that excludes aerospace products. While the overall impact may be low, the department anticipates a greater hit to exports within industries, modelling a baseline scenario reduction in the machinery sector of 2.24%. In a scenario where pharmaceuticals are hit by a 20% tariff, the department anticipates that sector would fall by 4.77%. The conclusion to the DfE report highlights the potential impact on the regions within Northern Ireland. 'It is also likely that many of the businesses impacted will be in specific geographic areas e.g. Mid Ulster and Armagh, Banbridge and Craigavon council areas. 'This is due to the importance of the manufacturing and pharmaceutical industries to these areas, which will have implications for the regional balance agenda being taken forward by the department. 'In addition, the tariffs will negatively impact business investment over the long term which will serve as a headwind against efforts to increase investment and improve productivity.' The model is based on the impact to exports, and does not incorporate the changes to imports, or the effects of potential retaliatory tariffs from the EU. A tariff is an additional cost applied to imports, typically imposed on goods or services where they cross national borders.
Reuters
a day ago
- Reuters
TSX futures rise ahead of key US, Canada jobs data
June 6 (Reuters) - Futures tied to Canada's main stock index rose on Friday as investors awaited domestic employment figures and monthly payrolls data from the U.S., while signs of easing tensions between Washington and China fueled trade optimism. The S&P/TSX index futures were up 0.2% at 6:52 am ET (1052 GMT). The monthly U.S. non-farm payrolls report, scheduled at 8:30 am ET, will help investors assess the impact of President Donald Trump's trade policies on the labor market. Canada's monthly unemployment data is also due at 8:30 am ET. This week, Trump doubled tariffs on imports on steel and aluminum; Canada is the largest seller of the metals to the U.S. Canada's Industry Minister Melanie Joly said on Thursday that Prime Minister Mark Carney and Trump are in direct communication as part of Ottawa's bid to persuade Washington to lift tariffs. Meanwhile, a highly-anticipated phone call between Trump and Chinese President Xi Jinping on Thursday, which Trump said led to "a very positive conclusion," offered hope the trade war between the world's two largest economies might start to de-escalate. Additionally, China called on Friday for steps to improve bilateral ties with Canada, saying there were no deepseated conflicts of interest, following a spike in trade tensions with many of Beijing's Western trade partners this year. In commodities, oil prices slipped but were on track for their firstly weekly gain. Gold prices firmed while copper ticked up; both were set for weekly rises. Canada's main stock index edged higher on Thursday as higher oil prices boosted energy shares and investors assessed prospects of Canada reaching a trade deal with the U.S. FOR CANADIAN MARKETS NEWS, CLICK ON CODES: TSX market report Canadian dollar and bonds report CA/ Reuters global stocks poll for Canada , Canadian markets directory
