Changes to Bank of Canada Governing Council

Bank of Canada announces the appointment of two Deputy Governors

Bank of Canada's Macklem backs Fed independence ahead of Powell departure

Lead — The Bank of Canada Governor Tiff Macklem's recent comments regarding the Federal Reserve's independence suggest a stabilizing outlook for U.S. monetary policy amid leadership changes. Per the full note [source], Macklem expressed confidence that the Fed's institutional culture and conduct will remain intact despite Chairman Jerome Powell's impending departure. This perspective is crucial as it reassures markets already grappling with geopolitical inflation pressures. The desk views this as a positive signal for the USD/CAD cross, especially as it aligns with our broader expectations for currency stability in the face of potential rate adjustments.

Forward Guidance: Bank of Canada to hold interest rates as prices rise but economy wobbles

Per the full note [source], RBC Economics expects the Bank of Canada to hold rates steady on June 4, 2025, following a close call after April's pause. The decision is supported by upside inflation surprises and stabilizing consumer spending, while labor market weakness and trade risks argue for a cut. The bias is dovish hold, with market focus on Friday's employment report and Thursday's trade data for confirmation of the economy's trajectory.

Carolyn Rogers,Toni Gravelle: Release of the Financial Stability Report