Macquarie Economist Now Sees Next Bank of Canada Rate Cut in October 2025 Vs Earlier View of This Month

07:49 AM EDT, 07/16/2025 (MT Newswires) -- Canada's underlying inflation measures rebounded in June, with trim/median averaging 0.25% month over month and 3.05% year over year, a result that is likely to give the Bank of Canada some pause after the moderation in May, said David Doyle, head of economics at Macquarie Group, after Tuesday's consumer price index data.

Durable goods and semi-durable goods continued to accelerate year over year, noted Doyle.

Macquarie expects, an uneven moderation in underlying inflation ahead. Unemployment is elevated and private sector wage growth has moderated sharply. Shelter inflation is likely to continue to subside with low population growth a driver.

The recent rebound in the Canadian dollar should also help alleviate pressure on import prices, stated the economist.

Tuesday's CPI data further lowered the odds of a July cut to about 10%, according to Doyle. Together with the strong labor market data for June released last week, this leads Macquarie to change its view on BoC policy.

Macquarie now sees two further cuts ahead -- for a total of 50 bps -- with the next cut likely to come in October. Previously, it had seen 75 bps of easing with the next rate cut on July 30.

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