Monday July 14, 2025 | VICTORIA, BC
Editorial analysis by Mary P Brooke, Editor | Island Social Trends
When things seem undefined or complacent is a good time for a predator to pounce. That’s what the US President is probably strategizing in his next economic trade war move against Canada.
In that current economic reality it might be difficult for the Bank of Canada to be definitive about where their only tool — setting a benchmark interest rate — should land.
In the most recent Bank of Canada announcement on June 4, the keyword was uncertainty. When a person or situation is uncertain the usual response is to remain still and observe before determining a next move.
The uncertainty has continued but patience has not. Governments, businesses and households are needing to make economic decisions and movement is happening (e.g. project investments are changing, house mortgages are being postponed).
Oddly, there seems to be less anticipation about the next interest rate decision by the Bank of Canada. The current 2.75% rate (holding there since March 12, 2025) is neutral enough that a drop by any amount won’t activate many changes in financial decision-making by investors, businesses or households.
The good news in this is that interest rates seem to no longer be the antagonist. It’s almost as if interest rates have become benign in financial decision-making.
A drop to 2.5% probably wouldn’t make much difference now to most investors and mortgage holders. If it does get dropped to 2.5% on July 30 it might be experienced in the economy as a non-starter and not look good on the bank having a strong sphere of influence.
In that context, it’s easier to do nothing. It’s quite likely the Bank of Canada will hold their rate at 2.75% and let things coast along with a “let’s see what unfolds” stance.
Remaining dates in 2025:
After July 30, there are only three more interest rate announcement dates in 2025:
- Wednesday, September 17
- Wednesday, October 29
- Wednesday, December 10
===== RELATED:
- June 4: Bank of Canada holds interest rate at 2.75% (June 4, 2025)
- Bank of Canada holds interest rate at 2.75% on April 16 (April 16, 2025)
- Bank of Canada Governor: more uncertainty, tough decisions as trade war escalates (March 20, 2025)
- Bank of Canada drops interest rate to 2.75% (March 12, 2025)
- NEWS SECTIONS: BANK OF CANADA | BUSINESS & ECONOMY | TARIFFS & TRADE