What does this mean?<\/p>\n
Not long ago, stronger economic signals had investors expecting rates to stay put. But fresh numbers are changing that story: Canada\u2019s GDP growth has slipped, and the labor market hasn\u2019t added any net jobs since January 2025. In its September Fixed Income Monitor, National Bank highlights the pressure on policymakers \u2013 balancing stubborn inflation<\/a> and new tariffs against unmistakable economic slack. The bank now forecasts a rate cut as soon as September 17, and possibly another in October if weak conditions persist. While upcoming inflation data could muddy the decision, National Bank thinks it won\u2019t derail the move toward cuts. Still, the bank\u2019s caution runs deeper: it warns that Canada\u2019s widening deficits and rising debt could eventually threaten fiscal stability, with the potential to drive government bond<\/a> yields higher if investor confidence wavers.<\/p>\n Why should I care?<\/p>\n For markets: Markets brace for lower rates but fiscal risks remain.<\/p>\n Markets are already betting on soon-to-come rate cuts, with Canadian government bond yields ticking down and borrowing costs likely to ease for households and businesses. But persistent deficits and growing debt could reverse that trend<\/a>, pushing yields back up if investors start to worry about the country\u2019s fiscal path. So even as relief looks likely in the near term, markets will be paying attention to whether Ottawa keeps its longer-term promises.<\/p>\n The bigger picture: Canada\u2019s crossroads could shape global thinking.<\/p>\n Canada\u2019s push to support growth while managing mounting debt echoes a dilemma facing economies worldwide. National Bank\u2019s warnings recall times when sustained deficits rattled bond markets and dented confidence elsewhere. While Canada isn\u2019t in crisis mode, how it addresses debt and budget gaps could influence how investors see other developed markets trying to strike the same delicate balance.<\/p>\n IN PARTNERSHIP WITH OPENING BELL DAILY<\/p>\n Understand the data driving markets.\u00a0Join a\u00a0quarter of a million\u00a0investors who get Opening Bell Daily<\/a>\u00a0in their inbox. Sign up, and you\u2019ll start getting charts, economic data,\u00a0and Wall\u00a0Street analysis\u00a0you won\u2019t find anywhere else.\u00a0Subscribe for free\u00a0today<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"What\u2019s going on here? National Bank is flagging signs of a slowing Canadian economy, predicting the Bank of…\n","protected":false},"author":2,"featured_media":19837,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-19836","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/19836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=19836"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/19836\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/19837"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=19836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=19836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=19836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a><\/p>\n