Bank of Canada: Monetary Policy Report—July 2026

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Canada’s economy is showing signs of improvement. Growth is picking up and inflation is projected to ease gradually from its recent spike. There are still important risks and uncertainties related to the war in the Middle East and US trade policy. Since the April Monetary Policy Report (MPR), global economic prospects have been dented by higher oil prices stemming from the Middle East conflict. At the same time, the build-out of artificial intelligence (AI) is supporting economic activity in a growing number of countries. Oil prices are still lower than their peak in April but the situation in the Middle East remains volatile. The path for global inflation is highly dependent on how the conflict unfolds. The US economy is growing at about 2½%, mostly because of strong consumption and booming AI investment. China’s economy is expanding solidly thanks to robust exports. Economic activity in the euro area has been weighed down by high energy prices, but is expected to strengthen in the second half of the year if energy prices come down as anticipated. The Bank projects global GDP growth will slow to 2¾% in 2026, mostly because of the effects of the Middle East conflict, and recover to around 3¼% in 2027 and 2028. Bank of Canada Governor Macklem: Inflation is poised to ease gradually, provided global oil prices decline, prepared remarks show. BoC: Near-term inflation expectations are sensitive to changes in gasoline prices, but longer-term inflation expectations remain well anchored. Bank Of Canada drops reference to consecutive hikes. BOC ALSO DROPS REFERENCE TO CUT

The Bank of Canada is set to deliver its fifth interest rate decision of the year this morning. Economists widely expect the central bank will remain on hold, keeping its policy rate at 2.25 per cent. Inflation has jumped above three per cent in recent months as higher oil prices from the Iran war sent gasoline costs skyrocketing over the spring. Officials ...

Economic activity increased at a slight to moderate pace in eleven of twelve Federal Reserve Districts in late May and June, while one District reported no change. The pace of growth was quite close to that of last period, when activity expanded in ten Districts, was flat in one, and down in one. Consumer spending edged up as higher prices, particularly for fuel, dampened sales in other categories. Several Districts noted declines in spending on discretionary items or trading down to more affordable varieties. Tourism was up, with some Districts receiving a boost from World Cup visitors. Auto dealers reported little change in sales, but spending on repairs grew as consumers held onto vehicles for longer. Agricultural conditions deteriorated due to lower commodity prices, higher input costs, and tighter credit. In the energy sector, oil and gas drilling increased. Manufacturing production grew modestly to moderately in most Districts, led by stronger orders from the data center, machinery, and defense sectors. Manufacturers in several Districts said supply chain issues were more common. Construction and real estate activity increased slightly overall, with several Districts noting growth in data center building. Financial conditions were stable on net, and commercial and consumer loan volumes were both up modestly. Commercial loan quality was stable, but consumer loan quality ticked down. Transportation activity increased modestly amidst ongoing supply chain changes related to higher tariffs and the conflict in the Middle East. Overall, activity in other service industries also was up modestly, with Districts highlighting growth in health care and professional services. Social service providers were Fed Beige Book: Contacts generally expected the economy to continue to expand in the coming months, but several districts noted elevated uncertainty in the outlook for fuel costs. Beige Book: "Economic activity increased at a slight to moderate pace in eleven of twelve Federal Reserve Districts in late May and June, while one District reported no change" Fed Beige Book: Employment rose on balance, with five districts showing modest, moderate, or solid gains in employment, and with seven districts experiencing little to no change. Just in | The latest Fed Beige Book reveals moderate price increases across nine districts, robust growth in two, and slight growth in one, with overall price growth remaining steady or slowing compared to the previous reporting period.