As the Bank of Canada gears up for its next interest rate announcement on Wednesday, June 4, financial experts are divided on whether a cut is imminent — or if Canadians will need to wait longer for relief.
While some market watchers say more interest rate cuts are inevitable, others believe the central bank will hold steady for now, citing mixed signals in recent economic data. A Scotiabank report released last week points to Canada’s April inflation numbers as a complicating factor. Although the country’s inflation rate dropped, this was largely due to the cancellation of the federal carbon tax. Meanwhile, core inflation — a key metric closely monitored by the Bank — actually rose.
That divergence has prompted markets to dial back their expectations for an immediate rate cut. According to Scotiabank analysts, the data reinforces the likelihood that any significant easing of interest rates won’t happen until 2026.
But not everyone agrees. BMO’s chief economist, Douglas Porter, says April’s job numbers tell a different story — one of a cooling economy and weakening labour market. In his market commentary, Porter noted rising job losses and slowing wage growth, which he believes could push the Bank to act sooner.
“This is the first major data reading for April, and it shows that tariffs are already taking a material bite out of the economy,” he wrote. “This clearly increases the odds of a 25 basis-point rate cut in June.”
Currently, the Bank of Canada’s policy interest rate stands at 2.75%, a benchmark that influences everything from mortgages to lines of credit. All eyes will be on Ottawa next week as economists, homeowners, and businesses wait to see whether the Bank chooses to hold the line — or signal a shift toward lower borrowing costs.