The policy rate may still require adjustments depending on how various risks develop.
The policy rate may still require adjustments depending on how various risks develop. Should the economy progress according to the base case, any changes to the policy rate will likely be minimal.
Ongoing generalized inflation triggered by sustained high energy costs could necessitate consecutive rate hikes. Significant new trade restrictions from the U.S. might force further cuts to the policy rate. Monetary policy must remain flexible as economic uncertainty is currently at unusually high levels.
Higher global oil prices boost the value of energy exports, even as they strain domestic consumers and firms. The conflict in the Middle East is anticipated to have a negligible impact on overall Canadian growth. Policy decisions will be heavily influenced by USMCA negotiations, Middle East tensions, U.S. tariffs, and energy costs.