This was a given. At least in my opinion. Way too much global instability with a definite leaning towards inflation. I’m afraid worse inflation than we’ve already seen during and after Covid.- FinancialPost.com
The article cites a shaping up of our economy? That’s looking entirely possible. Whichever is the case, the interest rate cuts are over.
The Bank of Canada has done cutting interest rates for this cycle, say economists with Canada’s biggest lender, as trade tensions ease, fiscal support steps up and the country’s outlook improves.
Royal Bank of Canada’s forecast goes against Canada’s other Big Six banks, but it argues that much has changed since those chilly days in March when Canada faced the catastrophe of U.S. President Donald Trump’s 25 per cent tariffs.
It cites the U.S. Census Bureau, which reported in April that almost 90 per cent of U.S. imports from Canada remained duty free with the average effective tariff rate settling at 2.3 per cent
“While Canada’s economic path forward remains challenging, it appears considerably less treacherous than it did just a few months ago — a narrative that has yet to permeate the Canadian psyche,” said RBC chief economist Frances Donald and her team in a report out Friday.
Consumer sentiment surveys that plunged to record lows in March during the height of trade tensions have not translated into dire results for the economy. While not all economic data has been strong — employment, for example — consumer spending has held up relatively well, said Donald.
Canada also boasts considerable fiscal firepower to bolster the economy in a more effective way than the central bank can do. The new government has not released its budget yet, but tax deferrals, loan programs and employment insurance measures should shore up sectors hit by tariffs in the short term. The recently announced increase in defence spending could “significantly” add to growth in 2026, said RBC.