The Bank of Canada is widely expected to lower interest rates at the conclusion of its latest policy meeting today (Sept. 17).
Markets have priced in a 25-basis point interest rate cut from Canada’s central bank, which would lower its benchmark overnight rate to 2.5%.
After cutting interest rates to start the year, the Bank of Canada has held its benchmark interest rate steady at 2.75% for the past three meetings.
The latest inflation data for August showed that consumer prices rose 1.9% in August year-over-year, up from 1.7% in July.
Inflation remains below the Bank of Canada’s annualized 2% target and is largely benign currently.
Economists say they expect the Bank of Canada to further reduce interest rates as the economy has weakened due to U.S. tariffs and the labour market has slowed.
Canada is not the only central bank that’s expected to lower interest rates on Sept. 17. The U.S. Federal Reserve is also widely expected to cut rates by 25-basis points.
It would be the U.S. central bank’s first interest rate reduction this year and comes amid signs that the American economy and labour market are also slowing down.
