The Bank of Canada held at 2.25 per cent on September 2 while U.S. futures markets now price roughly seventy per cent odds the Federal Reserve hikes on September 16. Twelve months ago the two banks were cutting in lockstep.

The Bank held at 2.25% on September 2 and named gasoline-driven inflation as the reason to stay cautious. WTI has moved 7% higher since, ahead of the CPI print that lands before the October decision.

Canada lost 42,000 jobs in August as wage growth slowed to its weakest pace since 2017, even as tariff-driven gasoline costs pushed headline inflation to 3%. The two numbers are telling the Bank of Canada opposite things.

The overnight rate stayed at 2.25% on Tuesday, the longest hold streak of the cutting cycle. Governor Tiff Macklem says tariffs are a modest inflation risk. The bigger one is sitting in the Strait of Hormuz.

The unemployment rate held at 6.4% only because the participation rate slipped alongside it, landing squarely against Governor Macklem's new willingness to raise rates more than once if inflation persists.

Inflation has risen in three of the last four months while the policy rate has not moved since October, narrowing the gap between where rates sit and where the Bank's own target requires them to be.

Governor Macklem has attached explicit oil-price conditionality to the next rate move, while markets are pricing almost none of it.

July CPI came in at 3.0%, above target and rising, while an escalating trade war argues for cuts. Wednesday's decision resolves nothing; it just picks which risk the Bank tolerates longer.

A hold at 2.25% is the consensus call for September 2. The weekend's US-Iran exchange revives the same energy-price mechanism that pushed headline inflation to a war-era peak in May.

Statistics Canada releases second quarter GDP this morning, but the Bank of Canada's September 2 decision was already close to locked in before the data arrived.

Canada's benchmark yield touched a two-year high, retreated, and climbed back on Wednesday's inflation data. The path says more about the Fed than about the Bank of Canada's own case for holding.

Canada's 10-year yield eased to 3.65% from a 26-month high as trade war escalation overrode a 75,000-job July gain in shaping expectations ahead of the Bank of Canada's September 2 decision.

Bond markets price next Wednesday's Bank of Canada decision as a near certainty. The consequential rate event is three days earlier, when Fed Chair Kevin Warsh delivers his first Jackson Hole keynote.

GDP, jobs, and inflation all point toward tightening. Two unresolved events landing within days of the September 2 decision explain why the Bank moves last, not first.

The BoC's overnight rate has sat at 2.25 percent for six straight meetings, but the Government of Canada 10-year yield has climbed 34 basis points in the same window, driven by a US bond market the Bank of Canada does not control.

Headline CPI accelerated to 3.0 percent in July while core inflation barely moved, and the Federal Reserve's July minutes showed hawkish sentiment running deeper than the three known dissents.