Does one pause beg another? Maybe not

Economics Reports

The Week Ahead

Does one pause beg another? Maybe not

Market expectations for the upcoming Bank of Canada meeting showed as much volatility as equities in recent days, both reacting to an equally volatile US policy outlook. The astronomical tariffs that the US put into effect presented a clear and present danger of a global recession, so most investors saw plenty of reason for Canada’s central bank to provide further rate relief. But then those same investors decided that Trump’s decision to “pause” those tariffs at 10% will bring a matching pause in rate cuts from the Bank of Canada. We find ourselves in the minority, believing that a quarter point easing is still warranted, and therefore are giving slightly better odds that that Governor Macklem will see it that way. 

Chief Economist, Avery Shenfeld, provides a deeper analysis in the Week Ahead report below. 

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