At 2.75%, the BoC’s policy rate is sitting in what’s called the “neutral range” — it’s not actively stimulating the economy, but it’s not slowing it down either.

According to RBC’s Chief Economist Frances Donald, the Bank may proceed with caution. Some parts of the country, like Windsor, Ontario, are struggling with unemployment above 11%, while others, like Victoria, B.C., are thriving with jobless rates below 4%.

In a situation like this, I think another national rate cut might not be the right move. Instead, it may be smarter for the government to step in with targeted spending — whether it’s infrastructure or support for specific industries — especially in areas that need it most.

Why Inflation and Affordability Still Call for Caution

Inflation is still hovering around 3%, and based on what I’ve seen, many Canadians remain cautious — and for good reason. Oxford Economics even forecasts inflation could hit 3% again by mid-2026, due to ongoing global issues like tariffs and supply chain disruptions.

That’s why I believe more rate cuts could do more harm than good — the last thing the Bank of Canada wants is to reignite inflation after all we’ve been through.

What the Big Banks Are Saying (and What I’m Watching)

Here’s where Canada’s major economists currently stand:

• RBC: No more cuts unless there’s a bigger economic slowdown.
• BMO: Predicting three more cuts, with the final one in March 2026.
• Capital Economics: Expects rates to bottom out at 2.25%.
• Oxford Economics: Thinks we’re already in a mild recession and sees no more room for cuts.

Even BMO’s Doug Porter has pointed out that the markets are only pricing in one more rate cut — which tells me the Bank may be nearing the end of its easing cycle.

How This Affects You (and What I’d Do)

Whether you’re:

• Buying your first home in the GTA
• Refinancing a mortgage in Mississauga
• Running a business in Windsor
• Watching investment opportunities in B.C.

The Bank of Canada’s next move could have a real impact on borrowing costs and housing affordability in your area.

If it were me, and I was planning to lock in a mortgage rate or apply for a business loan, I’d act now — before more uncertainty sets in.

So, Where Do We Go From Here?

Right now, consumer spending is holding up, job numbers are stronger than expected, and government support is likely on the way. All this tells me the Bank of Canada might feel it’s done enough — at least for the moment.

That means we probably won’t see more cuts unless the economy takes a sharp turn. But it also means rates likely won’t rise either. A 2.75% neutral rate gives the Bank some much-needed breathing room.

I’ll be watching July 30 very closely — and I suggest you do too. That decision will give us a clearer sense of where the Canadian economy is headed next.