(Bloomberg) — Policymakers in Washington and Ottawa will be in focus in the coming week, with the two capitals likely to cut interest rates while the rest of the Group of Seven industrialized nations hold steady.
North America is likely to be the main venue for monetary action as key decisions from the world’s quartet of central banks are due in less than 24 hours, with the Federal Reserve and Bank of Canada widely expected to cut interest rates by 25 basis points starting on Wednesday.
The Bank of Japan, which is gradually raising interest rates, is expected to delay a hike the next day, while European Central Bank officials are adamant that their own meeting will not lead to any further easing for now. The Bank of England is likely to keep interest rates steady over the coming week as officials await the government’s budget.
The impetus for action in North America reflects concerns about economic growth and labor markets on both sides of the U.S.-Canada border that are high enough to justify immediate action — though policymakers remain concerned about the danger of possible inflationary pressures.
Across the Group of Seven industrialized nations, however, officials remain tentative, eyeing the impact of U.S. President Donald Trump’s tariffs on global growth while gauging the strength of domestic consumer prices.
Aside from Japan’s slow push to tighten monetary policy, the current bias remains that a rate cut is possible but not urgent. The outlook may become clearer with the final interest rate meeting of the year by G7 members in December.
Bloomberg Economics’ view:
“Fed Chairman Jerome Powell is likely to describe this rate cut as insurance against downside risks to employment. While the government shutdown has delayed official data, other data suggests that downside risks to employment remain. Policymakers have no reason to adjust their outlook from September, leaving open the possibility of another rate cut in December.”
—Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou, Chris G. Collins, and Troy Durie. For the full analysis, click here
Elsewhere, inflation data from Australia to the euro zone, Chinese PMIs and interest rate decisions in Chile and Colombia will be the highlights of the week.
Meanwhile, Trump’s latest moves on trade will also be in focus. The U.S. president plans to meet with a number of Asian leaders during a trip to three countries in the region, with the most high-profile meeting with Chinese President Xi Jinping on Thursday.
The top trade negotiators of the United States and China said on Sunday that they had reached an agreement on a series of contentious issues, laying the groundwork for the two leaders to finalize a deal.
The US president’s visit coincides with the Association of Southeast Asian Nations summit in Malaysia and the Asia-Pacific Economic Cooperation summit in South Korea. He will also stop in Tokyo.
Separately, Trump unveiled a series of agreements seeking to strengthen access to critical minerals and markets for U.S. agricultural products. As part of the deal, he proposed exemptions from the reciprocal tariff system for key exports from Thailand, Cambodia, Vietnam and Malaysia.
Separately, Trump predicted during a meeting with Brazilian President Luiz Inacio Lula da Silva that the two countries could reach a trade deal “soon” and top U.S. and Brazilian trade negotiators are due to meet on Monday.
Closer to home, the U.S. president announced an additional 10% tariff on Canada in response to an Ontario advertisement criticizing trade taxes. Canadian Prime Minister Carney gave a brief response, saying that the Canadian government is ready to resume negotiations with the United States at any time.
United States and Canada
September inflation data released on Friday was the most favorable, reinforcing widespread expectations that the Federal Reserve will cut interest rates by another 25 basis points. Most officials are now primarily concerned about signs of labor market weakness, and many are also deeply uneasy about current levels of inflation.
In addition to lowering interest rates, policymakers may also halt the flow of Treasuries from central bank balance sheets. Currency markets warned that continued capital outflows could soon jeopardize overnight liquidity.
There will be little economic data released in the coming week given the ongoing government shutdown. On Tuesday, the Conference Board is expected to report that consumer confidence fell for a third straight month amid worries about jobs. Data released Wednesday by the National Association of Realtors is expected to show an increase in contract signings on previously owned homes as mortgage rates fall.
Despite surprising gains in recent inflation and employment reports, the Bank of Canada is expected to cut its benchmark interest rate by 25 basis points to 2.25% on Wednesday.
Policymakers may conclude that headline inflation of 2.4% and core inflation averaging 3.15% are under control enough to justify aid to the tariff-battered economy.
On Friday, Statistics Canada will report August gross domestic product by industry, as well as preliminary estimates for September. The data could point to tepid third-quarter growth after spending-based data showed a contraction in the April-June period.
©2025 Bloomberg
Visited 121 times, visited 121 times today
Bank of Canada Bank of Canada Preview Bloomberg Bank of Canada Bank of Canada Rate Forecast Doug Ford Federal Reserve Mark Carney Rate Cuts
Last modified: October 26, 2025
