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The Bank of Canada (BoC) is widely expected to trim its benchmark interest rate by another quarter point on Wednesday, bringing it down to 2.25%. That would follow a similar move in September as the central bank continues its gradual easing cycle. The case for more cuts has been building. Growth has stalled, the labour market has lost momentum, and inflation remains stubbornly above target. Canada’s economy shrank by 1.6% in the second quarter, worse than forecast, while the job market surprised with a 60K gain in September, keeping the Unemployment Rate steady at 7.1%. Inflation remains a sticking point. Headline CPI rose 2.4% YoY last month, surpassing expectations, and core CPI climbed to 2.8%. The Bank’s preferred measures—Common, Trimmed, and Median CPI—also nudged higher to 2.7%, 3.1%, and 3.2%, respectively. Back in September, the BoC cut rates by 25 basis points to 2.50%, a move that markets had fully priced in. After that meeting, Governor Tiff Macklem struck a cautious tone, saying the inflation picture hadn’t changed much in the last few months. He pointed to mixed data and emphasised a meeting-by-meeting approach. While inflationary pressures appear somewhat more contained, he stressed that the Bank stands ready to act if risks start to tilt higher. Previewing the BoC’s interest rate decision, analysts at TD Securities noted, “We look for the Bank of Canada to cut rates by 25 bps to 2.25% in October, which we believe will mark the endpoint of its easing cycle. We do not believe stronger September data will be enough to keep the Bank on hold, but it should contribute to a more balanced tone in the statement as the Bank stresses a data-dependent approach going forward.” When will the BoC release its monetary policy decision, and how could it affect USD/CAD? The Bank of…

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Filed under: News - @ October 29, 2025 10:27 am