Canadian Mortgage Trends ~ May 13th, 2026
Bank of Canada officials discussed a “range of views” on the most likely path for interest rates last month, weighing various possible outcomes of the Iran war and a review of the North American trade agreement.
(Bloomberg) — Bank of Canada officials discussed a “range of views” on the most likely path for interest rates last month, weighing various possible outcomes of the Iran war and a review of the North American trade agreement.
Policymakers ultimately held the policy rate at 2.25% at their April meeting, arguing that borrowing costs were “appropriate” given their outlook for the economy and inflation.
Officials “did not rule out the need for adjustments to the policy interest rate,” according to a summary of deliberations released Wednesday. At the same time, they “agreed that in the base case outlook, changes to the policy interest rate could be expected to be small.”
But Governor Tiff Macklem and his council also reiterated that “uncertainty was unusually elevated,” and talked about multiple scenarios for U.S. trade policy and the ongoing war in the Middle East, which would require different responses for monetary policy.
If the U.S. adds new tariffs on Canadian goods, that may prompt rate cuts, officials said, but if persistently elevated oil prices driven by the Middle East conflict become entrenched in inflation and expectations, that would necessitate hikes.
The deliberations suggest a variety of views on potential outcomes of these two thorny issues facing the Canadian economy, with council repeating that it “may need to be nimble” in as they set interest rates and more evidence materializes.
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