BofA Securities economist expects three interest rate cuts by Bank of Canada in 2025 starting in September

At the Bank of Canada's June meeting, officials decided to keep the interest rate unchanged at 2.75%. Bank of America Securities experts attribute the regulator's wait-and-see approach to the country's steady inflation figures and ongoing global trade uncertainty. According to Investing, markets had already priced in this outcome.

According to BoC Governor Tiff Macklem, the central bank's representatives have reached a consensus on near-term monetary policy. The rate will remain unchanged until officials become convinced of a steady slowdown in inflation and receive more information about the impact of US import tariffs on the Canadian economy. However, Macklem emphasized that exceptions could be made if economic conditions deteriorate suddenly. The regulator’s openness to lowering borrowing costs has led some investors to interpret its tone as increasingly dovish, Investing reports.

Notably, BofA Securities economist Carlos Capistran highlighted the Bank of Canada's less hawkish stance. He predicts that the central bank will begin cutting rates in the fall, with three 0.25% reductions in September, October, and December.