Staying ahead of shifting market conditions starts with the right intelligence. The July 2026 Monthly Forecast Update from RBC Economics helps you stay a step ahead with timely, forward-looking analysis of the trends shaping Canadian, US and international financial markets.
Highlights
- Canada’s economy is on track to rebound in Q2, with GDP growth now tracking at 2.2% (up from a prior estimate of 1.7%), driven by resilient household spending, recovering business investment and expanding net trade. Meanwhile, the US economy is now expected to expand 2.2% in both 2026 and 2027.
- Annual GDP growth for 2026 revised up slightly to 0.7% from 0.6% while the 2027 outlook remains at 1.5%.
- CUSMA exemptions continue to protect most Canadian exports from US tariffs, and the agreement remains intact despite no formal extension on July 1.
- The Bank of Canada (BoC) held the overnight rate at 2.25% in June, with no changes expected through 2026 and modest hikes anticipated in 2027 (contingent on continued economic improvement). The Federal Reserve held rates steady in June with a decisively hawkish pivot.
- Canada’s unemployment rate remains elevated, supporting the BoC’s view that rates at the lower end of the neutral range remain appropriate.
“Canada’s economy likely rebounded in Q2 after two quarters of stagnating activity. Consumer spending has proven resilient over a period of high gasoline prices cutting into households’ buying power. Business investment has strengthened, and net trade is set to add significantly to growth.”
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