{"id":74479,"date":"2026-06-11T12:01:12","date_gmt":"2026-06-11T12:01:12","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2026\/06\/11\/posthaste-why-the-bank-of-canada-might-be-closer-than-you-think-to-ending-its-pause-on-interest-rates\/"},"modified":"2026-06-11T12:01:12","modified_gmt":"2026-06-11T12:01:12","slug":"posthaste-why-the-bank-of-canada-might-be-closer-than-you-think-to-ending-its-pause-on-interest-rates","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2026\/06\/11\/posthaste-why-the-bank-of-canada-might-be-closer-than-you-think-to-ending-its-pause-on-interest-rates\/","title":{"rendered":"Posthaste: Why the Bank of Canada might be closer than you think to ending its pause on interest rates"},"content":{"rendered":"<p> \n<br \/><iframe loading=\"lazy\" title=\"Canada&amp;apos;s high oil price &amp;apos;conundrum&amp;apos;\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/ArJb6SJxRJQ?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/01\/fp-posthaste-LOGO-01132023.jpg\" title=\"\" \/><\/p>\n<p> The Bank of Canada held interest rates at 2.25 per cent on Wednesday as it tries to balance the risks of a slowing economy against higher inflation, but one economist thinks the central bank might be closer to ending its five-decision-long pause, with September marking a possible turning point. <\/p>\n<p> \u201cIn our view, the bank is getting closer to ending its pause and is waiting for the data to tell it which way to go,\u201d Jay Zhao-Murray, chief economist at independent macroeconomic researcher Sibley Creek, said in a note on Wednesday. <\/p>\n<p> He said he has a couple of reasons for why the Bank of Canada is close to ending its pause, including that it dropped the word \u201cappropriate\u201d from Wednesday\u2019s statement in relation to the current level of rates and eliminated the phrase \u201cchanges in the policy rate can be expected to be small\u201d compared with the one issued on April 29. <\/p>\n<p> \u201cThe tell is that today\u2019s hold was framed purely as a balance of risks,\u201d he said. <\/p>\n<p> Zhao-Murray said the Bank of Canada emphasized that the slow growth and rising inflation resulting from the Iran conflict had created a \u201cconundrum for monetary policy,\u201d with the worry being that higher interest rates could slow the economy while cutting rates could feed inflation. <\/p>\n<p> He said he expects the Bank of Canada will have \u201cenough information\u201d by September to decide which scenario holds the upper hand: a stagnating economy undercut by trade troubles with the United States or inflation that has spread beyond the gas pumps to other consumer prices. The first could necessitate rate cuts, while the second could invite hikes. <\/p>\n<p> \u201cBack in April, the bank held rates out of patience \u2014 looking to buy time and wait out the oil price shock,\u201d he said. \u201cToday, it held rates out of a tension between two opposing forces.\u201d <\/p>\n<p> Zhao-Murray said once the Bank of Canada has decided which of the two scenarios holds the upper hand, it\u2019s possible a cut or hike could come with the release of the October monetary policy report. <\/p>\n<p> Derek Holt, head of Scotiabank Capital Markets Economics, said the Bank of Canada is overemphasizing the effects of the trade conflict, given that approximately 90 per cent of exports to the U.S. are entering duty-free while also benefitting from a depreciating Canadian dollar . <\/p>\n<p> He said Bank of Canada governor Tiff Macklem is ignoring the rising prices of other commodities besides oil and natural gas, \u201cwhich is just plain wrong.\u201d <\/p>\n<p> Scotiabank is calling for the interest rate to rise to three per cent by year-end. <\/p>\n<p> The rest of the big banks are calling for rates to remain on hold throughout 2026, while markets fully priced in one rate hike this year, based on Bloomberg\u2019s overnight interest rate swap data. <\/p>\n<p> Zhao-Murray said Macklem provided clues as to what he will be watching for when it comes to upgrading the importance of inflation, including core inflation, the share of consumer price index (CPI) components rising faster than three per cent and medium- and long-term inflation expectations. <\/p>\n<p> At the moment, those metrics are under control, with core inflation hovering just above the two per cent mark \u2014 the Bank of Canada\u2019s target. Policymakers on Wednesday said the share of the CPI basket rising more than three per cent is close to its historical average. <\/p>\n<p> The most recent Business Outlook Survey, released at the end of April, said one-year inflation expectations had climbed slightly, but remained below those recorded at the peak of the tariff conflict in 2025. <\/p>\n<p> \u201cIf those indicators are rising, it would be a blaring alarm that it\u2019s time to hike rates,\u201d Zhao-Murray said. \u201cIf they do start going up in the coming weeks and months, the game will be judging how much is enough to trigger a rate hike.\u201d <\/p>\n<ul class=\"related_links\">\n<li>Posthaste: U.S. Treasuries just got toppled from the world&#8217;s foreign reserve throne<\/li>\n<li>Posthaste: More Canadian businesses are falling behind on credit payments<\/li>\n<\/ul>\n<hr \/>\n<p> <em><strong> Sign up here to get Posthaste delivered straight to your inbox.<\/strong><\/em> <\/p>\n<hr \/>\n<p> <strong><br \/> <img loading=\"lazy\" decoding=\"async\" alt=\"\" class=\"aligncenter size-full wp-image-1758646\" height=\"114\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2019\/02\/subhead_leading.png\" width=\"838\" \/><\/strong> <\/p>\n<p><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/06\/Bank-of-Canada-June-10.png\" title=\"\" \/><\/p>\n<section class=\"story-v2-content-element article-content__content-group article-content__content-group--story\">\n<div class=\"story-v2-content-element-inline\">\n<p>The Bank of Canada held its key interest rate at 2.25 per cent for the fifth consecutive time on Wednesday.<\/p>\n<\/p><\/div>\n<\/section>\n<section class=\"story-v2-content-element article-content__content-group article-content__content-group--story\">\n<div class=\"story-v2-content-element-inline\">\n<p>The central bank said weaker-than-expected economic activity in the first quarter of 2026 and rising inflation from higher energy prices were key concerns that informed the governing council\u2019s decision. \u2014 <em>Paula Tran, Financial Post<\/em><\/p>\n<\/p><\/div>\n<\/section>\n<section class=\"story-v2-content-element article-content__content-group article-content__content-group--story\">\n<div class=\"story-v2-content-element-inline\">\n<section class=\"story-v2-content-element article-content__content-group article-content__content-group--story\"><\/section>\n<section class=\"story-v2-content-element article-content__content-group article-content__content-group--story\">\n<div class=\"story-v2-content-element-inline\">\n<p>Read the full story here.<\/p>\n<\/p><\/div>\n<\/section><\/div>\n<\/section>\n<section class=\"story-v2-content-element article-content__content-group article-content__content-group--story\">\n<div class=\"story-v2-content-element-inline\">\n<hr \/><\/div>\n<\/section>\n<section class=\"story-v2-content-element article-content__content-group article-content__content-group--story\">\n<div class=\"story-v2-content-element-inline\"><\/div>\n<\/section>\n<p><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/subhead-1.jpg\" title=\"\"><\/p>\n<ul>\n<li><strong>Today\u2019s data<\/strong>: Canada building permits for April, U.S. initial and continuing jobless claims, producer price index for food and energy, household change in net worth<\/li>\n<li><strong>Earnings: <\/strong>Aurora Cannabis Inc., Transat AT Inc., Dollarama Inc., McGraw Hill Inc., Adobe Inc.<\/li>\n<\/ul>\n<p> <img loading=\"lazy\" decoding=\"async\" alt=\"\" class=\"aligncenter size-full wp-image-3080180\" height=\"114\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/07\/subhead_marketsam.jpeg\" width=\"838\" \/> <\/p>\n<p><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/06\/chart-0611-ph.jpg\" title=\"\" \/><\/p>\n<figure class=\"embedded-image\"><\/figure>\n<hr \/>\n<p> <strong><img loading=\"lazy\" decoding=\"async\" alt=\"\" class=\"aligncenter size-full wp-image-3080181\" height=\"114\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/07\/subhead_reads.jpeg\" width=\"838\" \/><\/strong> <\/p>\n<ul>\n<li>Scotiabank accelerates AI use to boost productivity and better manage risks<\/li>\n<li>John Risley\u2019s CFFI faces fight over key asset in $1.4-billion restructuring battle<\/li>\n<li>Trump says he won\u2019t renew CUSMA, signalling yearly reviews<\/li>\n<\/ul>\n<p> <img loading=\"lazy\" decoding=\"async\" alt=\"\" class=\"aligncenter size-full wp-image-2059284\" height=\"114\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2020\/04\/subhead_personal_finance_2.png\" width=\"838\" \/><span><\/span> <\/p>\n<p> Darren co-signed a loan for his cousin three years ago and never thought about it again since the payments were his relative\u2019s responsibility. Recently, he got a call from the lender informing him that the loan is a few months in arrears and his cousin won\u2019t return the lender\u2019s calls. What are Darren\u2019s options? Read FP Answers to find out more. <\/p>\n<hr \/>\n<p><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/11\/FP-West-Energy-Insider-Logo.png\" title=\"\" \/><\/p>\n<p> Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country\u2019s most important sectors. Sign up here. <\/p>\n<hr \/>\n<div class=\"x_elementToProof\"><span>Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at <\/span>wealth@postmedia.com<span><\/span><span> with your contact info and the gist of your problem and we\u2019ll find some experts to help you out while writing a Family Finance story about it (we\u2019ll keep your name out of it, of course).<\/span><\/div>\n<hr \/>\n<h2>McLister on mortgages<\/h2>\n<p> Want to learn more about mortgages? Mortgage strategist Robert McLister\u2019s Financial Post column  can help navigate the complex sector, from the latest trends to financing opportunities you won\u2019t want to miss. Plus check his mortgage rate page for Canada\u2019s lowest national mortgage rates, updated daily. <\/p>\n<hr \/>\n<h2>Financial Post on YouTube<\/h2>\n<p> Visit the Financial Post\u2019s YouTube channel for interviews with Canada\u2019s leading experts in business, economics, housing, the energy sector and more. <\/p>\n<hr \/>\n<p> <em>Today\u2019s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff and Bloomberg.<\/em> <\/p>\n<p> Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com . <\/p>\n<hr \/>\n<p> <em><strong>Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here<\/em> <\/p>\n<p><\/img><br \/>\n<br \/>\n<br \/>Posthaste: Why the Bank of Canada might be closer than you think to ending its pause on interest rates<\/a><br \/>\n<br \/>2026-06-11 12:01:12<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Bank of Canada held interest rates at 2.25 per cent on Wednesday as it tries to balance the risks of a slowing economy against higher inflation, but one economist&#8230;<\/p>\n","protected":false},"author":2,"featured_media":74480,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-74479","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/74479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=74479"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/74479\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/74480"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=74479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=74479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=74479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}