Overview

• A Reuters poll found 20 of 26 economists expect the Bank of Canada to hold its key rate at 2.75% at the June 4 announcement.
• Statistics Canada reported a 2.2% annualized GDP gain in Q1 2025 driven by export stockpiling ahead of planned U.S. steel and aluminum tariffs.
• Canada’s headline inflation fell to 1.7% in April after the carbon price removal, but core measures accelerated unexpectedly.
• The unemployment rate rose to 6.9% in April as manufacturing shed around 31,000 jobs, indicating growing labour market weakness.
• Despite the pause, markets and economists project at least two more quarter-point rate cuts this year with looming GDP contraction and tariff uncertainty.