Unpacking interest rate uncertainty in 2025

2026

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AI-generated summary

1) This paper analyzes the heightened uncertainty surrounding Bank of Canada interest rate decisions in 2025, attributing it primarily to an uncertain economic outlook rather than policy response ambiguity.
2) * Examines the impact of Canada-US trade tensions on investor difficulty in anticipating near-term interest rate decisions.
* Analyzes 2-year Government of Canada bond yield reactions to assess the sources of uncertainty.
* Investigates the sensitivity of bond yields to inflation and labor market data releases.
3) Interest rates, monetary policy, economic outlook, financial markets, Bank of Canada

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