Here’s why the Bank of Canada could be done cutting interest rates for now

After a quarter-point cut in March, the Bank of Canada held its benchmark interest rate steady at 2.75 per cent in April and June.

The Bank of Canada has largely kept to the sidelines as it tries to get a sense of how U.S. tariffs will impact the economy — and some economists think it might just stay there.

After a quarter-point cut in March, the central bank held its benchmark interest rate steady at 2.75 per cent in April and June.

With last month’s jobs figures showing a surprise gain and core inflation levels holding steady at around three per cent, economists now broadly expect the central bank will continue its holding pattern at its next decision on July 30.

The central bank lowers its policy rate when it wants to encourage spending and boost the economy but keeps borrowing costs elevated when there are concerns inflation could pick up steam.

Most economists expect the Bank of Canada will deliver at least one or two more quarter-point cuts in the months ahead.

Lower rates would help shore up the economy in the trade war, the argument goes.

RBC is among a small group making the case for no more interest rate cuts from the Bank of Canada for the time being.

Frances Donald, RBC’s chief economist, said the central bank could opt to cut again amid “pockets” of weakness in the economy — a soft housing market and a sharp slowdown in tariff-struck sectors like manufacturing, to name a few.