(Bloomberg) — Policy-makers in Washington and Ottawa will take the spotlight in the coming week, with interest-rate cuts in those two capitals likely while the rest of the Group of Seven stays on hold.
North America will probably be the main setting for monetary action as a global quartet of major central-bank decisions plays out over little more than 24 hours, starting Wednesday with widely anticipated quarter-point reductions from the U.S. Federal Reserve and Bank of Canada.
The Bank of Japan, which is inching toward a potential rate hike, is predicted to hold off on such a move the following day, while European Central Bank officials have firmly signaled that their own meeting won’t lead to any further easing for now. The following week, the Bank of England is likely to keep its rate steady as officials await the government’s budget.
The impetus for action in North America reflects how worries about economic growth and the labour market on both sides side of the U.S.-Canadian border are acute enough to justify immediate moves — even though policy-makers remain focused on the danger of possible inflation pressure.
Across the Group of Seven industrialized nations as a whole, however, officials remain tentative, watching the impact of US President Donald Trump’s tariffs on global growth while gauging the domestic strength of consumer prices.
Aside from Japan’s slow push to tighten monetary policy, the current bias remains toward possible rate cuts, though without urgency. The outlook may become clearer by the final round of rate meetings for the year among G-7 members, in December.
What Bloomberg Economics says:
“Fed Chair Jerome Powell will likely characterize the cut as insurance against downside risks to employment. While the government shutdown has delayed official data, alternative data suggest continued downside risks to employment. Policy-makers have little reason to adjust their outlook from September, keeping another cut on the table for December.”
—Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou, Chris G. Collins and Troy Durie. For full analysis, click here
Elsewhere, inflation numbers from Australia to the euro zone, Chinese purchasing manager indexes and rate decisions in Chile and Colombia will be among the week’s highlights.
Meanwhile, Trump’s latest moves on trade will also be in focus. The U.S. president is slated to meet a host of Asian leaders during his three-nation tour of the region, with a Thursday sit-down with Chinese President Xi Jinping watched most closely.
Top trade negotiators for the US and China said on Sunday that they came to terms on a range of contentious points, setting the table for their leaders to finalize a deal.
The U.S. president’s visit coincides with the Association of Southeast Asian Nations summit in Malaysia and that of the Asia-Pacific Economic Cooperation in South Korea. He’ll also have a stopover in Tokyo.
Separately, Trump unveiled a flurry of deals, looking to shore up access to critical minerals and a market for U.S. agricultural goods. He dangled exemptions from his reciprocal tariff regime on key exports from Thailand, Cambodia, Vietnam and Malaysia as part of the agreements.
Additionally, top trade negotiators from the U.S. and Brazil are set to meet Monday after Trump predicted the nations could “pretty quickly” strike a trade deal as he met with counterpart Luiz Inacio Lula da Silva.
Closer to home, the U.S. president announced an additional 10% in tariffs on Canada in response to an advertisement by the province of Ontario that is critical of trade levies. Canadian Prime Minister Mark Carney offered a terse response, saying that his government is prepared to resume talks with the U.S. at any time.
U.S. and Canada
Friday’s mostly favourable September inflation data reinforced widespread expectations that the Fed will cut rates by another quarter point. Most officials are now primarily concerned by signs of weakness in the labour market, many also remain deeply uncomfortable with the current level of inflation.
In addition to lowering rates, policy-makers may also halt the runoff of Treasury securities from the central bank’s balance sheet. Money markets have flashed warnings that a continued runoff might soon imperil overnight liquidity.
Economic data releases in the coming week will be sparse given the ongoing government shutdown. On Tuesday, the Conference Board is expected to report that consumer confidence retreated for a third straight month amid anxiety about jobs. National Association of Realtors data due Wednesday is projected to show a gauge of contract signings for previously owned homes increased as mortgage rates eased.
The Bank of Canada is seen cutting its benchmark rate by 25 basis points to 2.25% on Wednesday, despite recent inflation and jobs reports surprising to the upside.
Policy-makers are likely to conclude that headline inflation of 2.4% and core measures averaging 3.15% are contained enough to justify delivering aid to the tariff-bruised economy.
On Friday, Statistics Canada will report gross domestic product by industry for August and a flash estimate for September. The data is likely to point to tepid third-quarter growth after expenditure-based figures showed a contraction between April and June.
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Last modified: October 26, 2025