Bank of Canada Interest Rate Cut More Likely in June After Jobs Shock
A shocking fall in the latest job numbers and a higher-than-anticipated rise in the unemployment rate have significantly boosted the odds of an interest rate cut when the Bank of Canada makes its next decision in June.
The tariff hit and growing fears of a recession underpin the labor market setback, as businesses cut jobs and implement hiring freezes to ride out the economic uncertainty. The bump in the joblessness rate coincides with weaker February GDP data, suggesting economic growth has been stalled by unresolved US tariffs on Canadian goods and retaliatory Canadian levies on US exports.
Analysts say this has implications for the central bank, which decided to pause rate cuts at its last meeting in April. A deterioration in the economic data since then has added pressure on the Bank to deliver another cut to help stimulate business and consumer spending. The Bank has scaled back its policy rate at seven times of its last eight meetings, taking it from a peak of 5.00% last summer to its current 2.75%.
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