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Canadian Money Brief: 5 Things to Know Today — May 18, 2026

  A quick scan of the five stories shaping your wallet right now — from the Bank of Canada's next big decision to your mortgage renewal and a brand-new federal agency hunting financial criminals. 1 Bank of Canada Rate Holds at 2.25% — Next Decision Is June 10 The Bank of Canada kept its overnight policy rate steady at 2.25% at its April 29 meeting, citing a rise in energy-driven inflation and ongoing uncertainty from U.S. tariffs. Governing Council held firm while acknowledging a rate hike could become necessary if oil-linked price pressures prove persistent. The next announcement lands on Wednesday, June 10, 2026 — mark your calendar. Why it matters: Your variable-rate mortgage, HELOC, and lines of credit are directly tied to this rate. With bank prime rates sitting at 4.45%, every meeting counts. 2 Markets TSX Slips Below 34,000 as Bond Yields Spike The S&P/TSX Composite Index finished last week down close to 2%, sliding under the 34,000 mark. A global bond market selloff...
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Bank of Canada Poised for Significant Rate Cut Amid Economic Slowdown

 

The Bank of Canada is widely expected to reduce its key policy rate by 50 basis points next week, marking its fourth consecutive rate cut and the first substantial reduction outside of the pandemic era in over 15 years. This anticipated move aims to stimulate economic growth as the country grapples with falling prices and sluggish consumer and business spending.

The central bank’s decision, set to be announced on October 23, will likely bring the benchmark rate down to 3.75% from the current 4.25%. This follows a series of rate cuts that began in June, prompted by consistent signs of cooling inflation and weakening economic growth.

Governor Tiff Macklem has indicated that the Bank of Canada is increasingly concerned about the risks of a faltering economy and declining inflation. Recent data has shown that Canada’s GDP growth has been minimal, with a mere 0.2% increase in July and a likely stall in August. Additionally, headline inflation for September was recorded at 1.6%, below the central bank’s target range.

Economists and financial markets are largely in agreement about the upcoming rate cut, with a Reuters poll showing that two-thirds of economists expect a 50 basis point reduction. This move is seen as necessary to support the economy, despite some concerns about potential inflationary pressures.

The Bank of Canada’s upcoming monetary policy report will provide further insights into its economic forecasts and the rationale behind its decision. As the central bank navigates these challenging economic conditions, its actions will be closely watched by markets and policymakers alike.


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