Bank of Canada Governor Tiff Macklem on July 30, 2025. [livestream]
Sunday September 14, 2025 | VICTORIA, BC [Posted at 4:07 pm PT \ Updated 4:31 pm]
Editorial analysis by Mary P Brooke, Editor | Island Social Trends
The next Bank of Canada interest rate announcement scheduled for September 17 is likely to result in ‘steady as she goes’ for the rate itself amidst an economic scenario that is anything but steady.
For at least the last two rate announcements (June 4 and July 30) Bank of Canada Governor Tiff Macklem has underscored the instability factor of economic uncertainty that is largely a result of economic aggression by the United States toward Canada.
He and his team held the interest rate at 2.75% in the footsteps of holding it there on April 16 after having dropping the rate to 2.75% on March 12 down from 3.5%).
Bank of Canada Governor Tiff Macklem and Deputy Governor Carolyn Rogers delivered the July 30, 2025 rate announcement. [livestream]
Keeping the rate steady now is almost more of a psychological signal about making slow and steady decisions than it is about tinkering with a response to unemployment, GDP and Consumer Price Index numbers.
Many households are heavily in debt. Other than mortgage debt, reducing the central interest rate rarely helps households that rely on credit cards to make ends meet at month’s end (as credit card companies almost never respond to the central bank’s rate reductions with any sort of interest rate reduction of their own).
The only imaginable justification for a rate drop this week might be to help those with variable rate mortgages and those with fixed-rate mortgages about to come due. And possibly, if the new federal Major Projects Office seems to be needing a signal that economic growth and diversification are the right track to be on.
Holding the rate at 2.75% since March:
Rates from March 2024 to September 2025:
(Table by Island Social Trends | Data source: Bank of Canada)
DateRateMarch 1 to June 5, 20245.0%June 6 to July 24, 20244.75%July 25 to Sept 4, 20254.50%Sept 5 to Oct 23, 20244.25%Oct 24 to Dec 11, 20243.75%Dec 12, 2024 to Jan 29, 20253.25%Jan 30, 2025 to March 12, 20253.0%March 13, 2025 to present2.75%
US impact:
The United States has upended the usual global fiscal order that has been developed and relatively steady since after World War II. The world is on a new course where the United States economy is king. The US had led the economic order for decades but in open competition with most other economically significant nations. Now, under President Donald J Trump, it’s all about the United States.
Trump wants to protect American assets, build more American businesses, see more production and manufacturing within the borders of the US, and charge any other country for access to what is currently the largest and most robust economy in the world.
Global politics:
Unemployment is up in Canada while GDP is down. But the big the trouble comes in through global politics. Trump may find himself having to soften his economic tariff-warfare against Allies if Russia continues to escalate its threats against the West. Russia’s invasion of Ukraine has now lasted over three years, and recently drones over Poland and Romania indicate that Russia is testing the patience of western democracies.
A visit with Trump in Alaska in August gave Russia’s President Putin an opportunity to have the United States be polite to Russia in public though it also hopefully Trump an opportunity to share what were hopefully a few private moments of negotiation with the Russian leader.
Scramble for domestic resilience:
In Canada the economy now scrambles to fortify some domestic resilience; Prime Minister Carney is keeping his government’s nose to the grindstone in rolling out directions and organization for economic development (e.g. major projects to create jobs, enable more resource development, and facilitate shipping) and social infrastructure development (e.g. fast-tracking of housing construction).
As for the interest rate, keeping it steady will be one small measure toward signalling some confidence that Canada will stand strong while weathering this economic storm which still includes an element of protecting our sovereignty. There’s really not much else that Canada can do as a small player in the G7.
After this week’s Bank of Canada rate announcement, just two more rate announcements remain in 2025, on October 29 and December 10.
If things get much worse between the US and Russia (including its strengthening ties with China and India), the United States may come more firmly knocking at Canada’s door for resources and territory (not unlike Russia has done with Ukraine).
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