Economist: In the deteriorating labor market, it is "absolutely impossible" for Canada to raise interest rates.

Economist and head of Rosenberg Research David Rosenberg says that in the current situation of a weak labor market, it is "absolutely impossible" for the Bank of Canada to raise policy interest rates. "If it weren't for the oil price shocks related to the US-Iran war, the central bank might have already been discussing a plan to resume cutting interest rates," Rosenberg wrote. Employment data for April showed that the country's economy lost a net of 112,000 jobs in the first four months of 2026. However, he pointed out that fixed income traders have already reflected expectations of at least two rate hikes by the end of 2026. "The Canadian labor market is losing any vitality it may have had, and the resource gap for slowing inflation is widening," he said.