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Monetary Policy & Inflation
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Bank of Canada (BoC) Interest Rate: The BoC has been in an easing cycle. It recently cut its policy rate in September 2025 to 2.5%.
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Rate Outlook: Many economists forecast at least one additional rate cut by the end of 2025, taking the overnight rate to around 2.25%.
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Inflation: Headline inflation is expected to remain within the BoC's target range (), but core inflation (excluding volatile items) is generally expected to remain elevated, around to through the second half of the year, before easing in 2026.
3. Labor Market
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Unemployment: The labor market is expected to soften further. The unemployment rate is projected to continue its upward trend, with some forecasts expecting it to peak around to by the end of 2025.
