Bank of Canada Officials Divided on Economic Rebound Sustainability

The Bank of Canada's governing council is split over how long the recent economic rebound will last. The central bank held its benchmark interest rate steady at 2.25 per cent for a sixth straight time on July 15, and minutes from their meeting show officials were growing more confident in the economy during the second quarter.

The Bank of Canada expects real gross domestic product rose 2.5 per cent on an annualized basis last quarter, and is forecasting modest growth to continue through the second half of the year and into 2027. However, some council members expressed concerns about the sustainability of this rebound beyond the near term.

The governing council noted that higher global oil prices and signs of a recovery in the housing market were supporting growth over the previous three months. They also acknowledged that surveys of businesses and a recent pickup in exports suggested firms were adapting to tariffs and persistent trade uncertainty from the United States.