Morningstar Asks If The Bank of Canada Will Follow Suit If The Federal Reserve Cuts Rates in September

08:07 AM EDT, 08/19/2025 (MT Newswires) -- Speculation is growing over whether Canada's central bank could resume interest rate cuts in September, as weak economic data from the United States suggests the U.S. Federal Reserve will cut rates next month, said Morningstar.

Canada's economy is inextricably tied to the economic well-being of the U.S., its largest trading partner, noted Morningstar. So when a rash of weak economic data sparked concerns in the U.S., Canadian analysts took note, and markets have been recalibrating their expectations for whether the Bank of Canada will restart easing at its next meeting on Sept. 17.

Domestic data will weigh more heavily on the BoC's rate calculations than the Federal Reserve's next move, it stated.

The BoC has held its policy rate steady at 2.75% at its last three meetings after making multiple cuts since last summer, including in January and March.

The door remains open for further BoC rate cuts, added Morningstar.

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