Staying ahead of shifting market conditions starts with the right intelligence. The August 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 bounced back strongly in Q2, with GDP growth revised up to 3.4% annualized—double the prior forecast—driven by resilient domestic demand and a net trade recovery.
- New US Section 338 tariff threats target roughly 5% of Canadian exports, with an estimated direct impact of just 0.4% of Canada’s GDP. Broader US tariff rates continue to edge lower as Section 301 measures replace expired Section 122 tariffs, consistent with a resilient US economy.
- The Bank of Canada is more comfortably on hold amid signs of a firming economy and soft core inflation, with modest rate hikes expected in 2027 as economic slack diminishes.
- The Fed remains on hold but is increasingly data-dependent under new Chair Kevin Warsh, who ended forward guidance.
“Canada’s economy bounced back strongly in Q2. Hiring picked up to drive the unemployment rate lower. Domestic demand remained resilient, while net trade recovered from a soft Q1.”
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