Monetary Policy Report—July 2025
Data available as: CSV, JSON and XML Available as: PDF Overview US tariffs are significantly higher than they were at the start of 2025, and US trade policy remains unpredictable. Inflation is near…
Overview
US tariffs are significantly higher than they were at the start of 2025, and US trade policy remains unpredictable. Inflation is near 2%, although underlying price pressures have picked up. With uncertainty about US trade policy still high, the outlook for the Canadian economy remains clouded.
Current conditions
Canadian economic activity has slowed considerably because of the trade conflict but is showing signs of resilience. While inflation is close to 2%, underlying inflation has risen to about 2½%.
Scenario assumptions
With some new tariff agreements in place, the range of trade policy outcomes has narrowed. Nevertheless, the situation remains fluid and difficult to predict. Canada’s economic outlook therefore continues to be highly dependant on assumptions about how US trade policy could unfold.
Outlook
Tariffs and trade uncertainty are expected to weigh on Canadian economic activity for some time. Inflation remains close to the 2% target over the scenario horizon.
Global economy
Global growth has slowed since the start of 2025 amid the ongoing shifts in US trade policy and the resulting uncertainty. Still, the global economy has remained resilient so far, even though US tariffs are at their highest levels in decades.
Risks
Considerable uncertainty surrounds the outlook for inflation. It is extremely difficult to predict how US trade policy will play out and how businesses, households and governments will react to a given level of tariffs. The outlook also faces risks that are not directly related to tariffs.
In focus
The path of US tariffs remains uncertain
Because the trade environment remains so uncertain, the path for Canadian growth and inflation is less clear than usual. If the trade conflict were to escalate or de-escalate, those shifts would alter economic outcomes.
The Monetary Policy Report is a product of the Governing Council of the Bank of Canada: Tiff Macklem, Carolyn Rogers, Toni Gravelle, Sharon Kozicki, Nicolas Vincent, Rhys Mendes and Michelle Alexopoulos.In brief: Monetary Policy Report
Learn about Canada’s inflation-control strategy, the objective of Canada’s monetary policy and the main instruments used to implement it. Our Valet API is designed to help you integrate your applications and processes with our data. For details, please see our documentation.Bank of Canada holds policy rate at 2¾%
The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. Content Type(s): Press, Press releasesMonetary Policy Report Press Conference Opening Statement
Governor Tiff Macklem discusses the Monetary Policy Report and the key issues involved in the Governing Council’s deliberations about the monetary policy decision. Content Type(s): Opening statements, Press, Speeches and appearancesPress Conference: Monetary Policy Report – July 2025
Release of the Monetary Policy Report – Press conference by Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers (10:30 (ET) approx.).
Content Type(s): Press, Speeches and appearances, WebcastsISSN 1490-1234 (Online)
Figures reflect the source report and its stated period. This article is for information and is not investment advice.
