CME FedWatch odds for this afternoon's Fed decision have swung between 10.7% and 46.5% over two weeks. Odds for September have sat near 80% for most of that same stretch. The gap between a noisy number and a settled one is the real story heading into 2 p.m. ET.

CME FedWatch prices roughly a one-in-three chance of a hike Wednesday, nearly unchanged from last Thursday's peak despite oil's steepest three-session retreat since the war began. Canada's own inflation picture is calmer, but Canadian yields are not insulated from Wednesday's outcome.

The Federal Reserve's July meeting had become a genuine contest, with rate hike odds climbing on energy driven inflation fears. A seven per cent oil price collapse Monday morning arrives less than 48 hours before the vote, the same day the Bank of Canada's own deliberations summary from its sixth consecutive hold is released.

Headline CPI eased to 2.8% on a temporary drop in gasoline prices. With Brent back above $100 and new tariffs landing before the Bank's next decision, the disinflation may not survive July.

Market-implied odds of a July 29 Fed hike spiked past 46% and have since fallen under 17%, but oil is still climbing, and that leaves Governor Macklem facing the same inflation calculus with less certainty about what Washington does first.

The Bank of Canada held for a sixth straight meeting even as headline inflation eased, while a Federal Reserve under a new chair who refuses to signal its next move heads into its own decision next week.

Markets are pricing a December Fed increase with rising conviction as energy driven inflation persists south of the border, but Canada's own data point the other way, and the July 29 meeting is the first real test of the repricing.

Five days after the July 15 Monetary Policy Report built its inflation forecast on that assumption, a weekend that pushed the conflict's confirmed U.S. death toll to 17 sent WTI to a fresh high, testing the one number the Bank said would determine whether this hold turns into something else.

Wednesday's hold at 2.25 per cent came with a higher 2026 inflation forecast, a lower 2026 growth forecast, and the Governor's most upbeat tone since January. The mechanism connecting all three: a temporary, war-driven energy shock layered on top of a domestic recovery the Bank believes is only now broadening.

The Bank of Canada and Fed Chair Kevin Warsh both leaned hawkish this week citing energy-driven inflation, but U.S. CPI has already cooled to 3.5 per cent from a 4.2 per cent May peak, and Canada's own core measures barely moved.

The Bank of Canada announces at 9:45 a.m. Eastern with markets pricing a near-certain hold. Fifteen minutes later, Fed Chair Kevin Warsh faces the Senate to explain a committee that grew more hawkish in June even as US inflation cooled. Both are being asked to price the same barrel of oil.

US headline CPI posted its steepest monthly drop since 2020 and core cooled to 2.6%, but the data describes a month when the ceasefire was still holding, and the Bank of Canada makes its own call Wednesday against a very different backdrop.

June's FOMC minutes showed nine of twelve officials favouring higher US rates, the first hawkish signal of Kevin Warsh's chairmanship. The Bank of Canada meets the same day, expected to hold for a sixth consecutive time. The distance between the two paths is the story this week.

Statistics Canada releases June's jobs data this morning, the final input before the Bank's blackout closes ahead of July 15. Why a forecast as modest as 10,000 jobs carries outsized weight, and what it means for the rate path Canadian mortgage renewals are watching.

The jump followed hawkish Fed minutes under Chair Kevin Warsh and an oil driven bond selloff, and it happened six days before the Bank of Canada's blackout period lifts.

Governing Council's framework has been to treat war-driven energy prices as temporary, and Wednesday's sanctions snapback over the Strait of Hormuz is the toughest test of that framework yet.