’Fasten your seatbelts’— BTIG strategists warn of coming turbulence
In this episode, I break down why the Bank of Canada chose to hold its interest rate at 2.75% and what that decision reveals about the country’s economic crosswinds—from inflationary pressure to slowing growth. Also in this episode:
- Global trade uncertainty remains high despite reduced recession fears, with U.S. tariffs and global growth trends shaping the BoC’s outlook.
- Canada’s strong Q1 GDP was boosted by exporters rushing shipments before tariff hikes.
- Job growth slowed and unemployment rose, especially in trade-exposed sectors.
- Inflation appears to be easing, but only due to the removal of the carbon tax—underlying pressures remain.
- CPI data shows more broad-based inflation, especially in services, raising long-term concerns.
- Businesses are bracing for higher input costs and plan to pass them on to consumers.
- The BoC debated cutting rates but held steady due to the conflict between inflation and slowing growth.
- Focus now turns to tariffs’ long-term impacts, labor market trends, and inflation expectations.
- Inflation might remain high even as growth slows, driven by global supply chain shifts.
- For investors, the rate pause offers no clear signal—volatility and uncertainty will persist.