The November 2025 Monthly Forecast Update from RBC Economics includes a forward-looking analysis of Canadian, US and international financial market trends.
Highlights
- The Canadian government’s fall budget is set to lift deficit to GDP figures, but the uncertainly with the rollout has led to a wait-and-see approach for the impact on real near-term GDP growth.
- Early data in Canada points to signs of stabilizing conditions in broader labour markets, which reinforces the outlook that the worst of the tariff disruptions from behind us.
- The US government shutdown is not expected to have a lasting impact on the economy, lowering GDP growth in Q4 temporarily before reversing in Q1 2026. US labour markets have likely continued to soften gradually with an upward drift in the unemployment rate.
- The Bank of Canada is likely to maintain the overnight rate at 2.25% through the end of 2026, while the US Federal Reserve is expected to gradually reduce the fed funds target range to 3.25%–3.5% by mid-2026.
“Heading into 2026, we expect persistent spending resilience could add to inflation pressures, keeping the Bank of Canada on hold.”
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