Is a Rate Cut Still Coming? Here’s What We Know Right Now

30 July 2025 is the next BOC meeting. 10 am EST will be when we know for certain - but here is a summary or my take on what I feel is changing / happening in the market.

The debate over whether the Bank of Canada will lower interest rates anytime soon is heating up. Recent shifts from major economists — including those at Scotiabank and RBC — suggest they now expect the Bank to hold its benchmark rate at 2.75% through the end of 2025. That’s what we call the “neutral” range — a rate that’s not boosting the economy, but also not slowing it down.

What changed? A mix of persistent inflation above 3%, along with growing uncertainty tied to trade tensions south of the border. Market expectations for a rate cut have cooled significantly.

Just a few weeks ago, a 25-basis-point cut was fully priced in by markets. Now? There’s only slightly better than a 50% chance of that happening.

Despite the noise, Canada’s economy is still showing signs of resilience. We added 83,000 jobs last month, and while the unemployment rate edged up slightly to 6.9%, it’s still relatively stable. Consumer spending is being supported by domestic demand, exemptions under the Canada-U.S.-Mexico agreement, and a growing “Buy Canada” movement.

It’s worth noting that while the economy isn’t booming, it’s not stalling either — and that’s why the Bank of Canada is in no rush to cut rates. Policymakers are watching closely to see how tariffs and trade tensions play out, especially how businesses may pass along rising costs to consumers, which could keep inflation elevated longer than expected.

What About Trade and Tariffs?

In related news, Prime Minister Mark Carney recently met with a bipartisan group of U.S. senators to discuss border issues, tourism, and, of course, tariffs. Some U.S. states — like Nevada and New Hampshire — are seeing fewer Canadian visitors, and they want to reverse that trend.

The group also tackled bigger issues like Canada’s digital services tax and the ongoing softwood lumber dispute. Meanwhile, the U.S. Commerce Secretary is holding firm on keeping certain tariffs in place unless Canada further opens its markets — a move Canadian officials are pushing back on.

Here at home, Canada’s premiers are taking a different approach. They’re focused on boosting domestic demand and encouraging Canadians to spend locally. There’s also talk of further diversifying trade partners to reduce reliance on the U.S. market.

What This Means for You

If you’re a homeowner, buyer, or investor keeping an eye on rates, the takeaway is this: the outlook has shifted. While a rate cut might still happen later this year, the odds are much lower than they were just a few weeks ago.

If you’re wondering how this could impact your mortgage or upcoming renewal, let’s talk strategy. Everyone’s situation is different, and a proactive plan can help you make the most of today’s economic landscape.