The Bank of Canada's communications blackout for its July 15 decision begins this morning. Because the Monetary Policy Report is published alongside the rate announcement in January, April, July, and October, the blackout runs eight days rather than the usual seven, starting on the Tuesday before the Wednesday decision. From this morning until the press conference at 10:30 a.m. Eastern on July 15, Governor Tiff Macklem and the rest of the Governing Council will not speak publicly about the economic outlook or the direction of policy.
The Bank enters that silence holding its policy rate at 2.25 percent, where it has sat since October 2025 across five consecutive decisions. Its most recent public statement, from the June 10 hold, described the setting as balancing a genuine dilemma: a soft domestic economy against energy driven inflation that the Bank continues to treat as transitory rather than broad based.
The Inflation Data the Bank Is Deciding Into
Statistics Canada's May reading, released June 22, showed headline CPI at 3.2 percent year over year, up from 2.8 percent in April and the fastest pace in the current cycle. Gasoline was the dominant driver, rising 33.2 percent year over year as the Hormuz disruption pushed pump prices to levels not seen since June 2022. The Bank's preferred core measures told a calmer story: the trimmed mean rate held at 2 percent and the median rate at 2.1 percent, both within the Bank's target band and largely unmoved by the headline's acceleration.
June's CPI reading will not be published until July 20, five days after the Bank's decision. This is a structural feature of the release calendar, not an unusual gap, but it means the Governing Council enters its blackout and makes its July 15 call with May's data as the most recent inflation print available, at the exact moment headline inflation has been accelerating on energy.
Headline CPI has climbed in three of the last four months while the Bank's core measures barely moved, and that gap between the number in the headlines and the number the Bank actually targets is the story the Governing Council takes into its blackout today.
Headline CPI has accelerated for three straight months on gasoline prices tied to the Hormuz disruption, even as the Bank's core measures stayed anchored near target. June's reading lands five days after the Bank's decision.
Why the Attack Landed at the Worst Possible Moment for a Public Explanation
Iran's Islamic Revolutionary Guard Corps fired on two commercial vessels transiting the Strait of Hormuz Monday night, according to Axios and CNN, both citing unnamed US officials, hours before the Bank's blackout takes effect this morning. The timing means the single most relevant new fact for the Bank's energy price assumptions arrived at almost the last moment the Bank could have addressed it publicly, and now cannot, for the eight days leading into the decision itself.
WTI crude settled at $68.55 on Monday, still down 13 cents on the session and trading near its lowest level in more than four months, a product of OPEC+ agreeing on Sunday to raise output targets by another 188,000 barrels per day starting in August, the fifth consecutive monthly increase. Whether the attack proves to be a genuine reversal of that supply led decline or another short lived spike, as a similar incident in late June was, will now play out entirely without Bank of Canada commentary to help calibrate the market's read.
The Widening Gap With the Federal Reserve
The policy divergence between Ottawa and Washington continues to widen. The Federal Reserve under Chair Kevin Warsh held its own rate in June, but its dot plot showed a majority of participants now expecting at least one increase before year end, a reversal from the cuts the committee had projected as recently as March. The Bank of Canada, by contrast, is priced by markets at roughly a 95 percent probability of another hold on July 15, with essentially no probability assigned to a cut and only a small tail probability of a hike.
The Government of Canada five year bond yield closed at 3.03 percent on July 6, having eased three basis points from the prior session, a level that reflects a market still comfortable with the Bank's hold path even as the Fed leans the opposite direction. Whether that comfort survives the blackout period intact depends substantially on how the Hormuz situation develops over days the Bank cannot comment on.