Bank of Canada may cut interest rates twice amid recession worries — Reuters poll

Economists polled by Reuters expect the Bank of Canada to cut interest rates twice before the end of the third quarter. However, TD Securities chief strategist Andrew Kelvin believes the central bank will keep borrowing costs at 2.75% in April, awaiting clearer data on the impact of trade tariffs.

While the Trump administration has announced a brief pause in rising duties, the outlook for Canada's GDP has dropped significantly. Experts are now forecasting growth rates of 1.2% this year and 1.1% next year, as reported by Reuters. Persistent tariffs on Canadian exports continue to pose serious risks to the economy, exacerbating negative labor market trends and dampening business activity.

According to the experts surveyed, the Bank of Canada is in a tough spot as it must juggle between taming inflation, which is running at 2.6%, and promoting economic growth. Updated forecasts suggest that price increases will remain substantial, averaging 2.4% in 2025 and 2.1% in 2026.

In this context, more than half of the economists polled expect interest rates to be cut in the coming months.