Canada Think Tank Forecasts Bank of Canada to Hold Rates Indefinitely Amid Broad Economic Weakness

A Canadian think tank forecast that the Bank of Canada may keep interest rates unchanged indefinitely, with the forecast horizon extending to 2030. According to Jin10, Signal49 said policymakers were trying to support a struggling economy until conditions return to normal toward the end of this decade. Signal49 expected Canada’s GDP to rise only 0.5% this year as the country faces near-zero population growth and uncertainty over U.S. trade policy. The think tank said higher energy prices and weak consumer confidence would limit growth in consumer spending. It added that, excluding infrastructure and defense, government spending would be constrained. Signal49 said broader weakness in the Canadian economy should reassure the Bank of Canada that inflation will be temporary.