Several central banks, including the US Federal Reserve Board (Fed), will make interest-rate announcements this week. In Canada, inflation data is set to be released this week. Consumer prices are likely to come under scrutiny, with tariffs expected to raise them. Trade tensions have dominated the headlines over the past two months, and more trade talk is likely to come in the days ahead. Here’s what to watch for this week.

• Statistics Canada will release Canada’s inflation rate for February on Tuesday. Canada’s annual inflation rate was 1.9% in January, a tick below the Bank of Canada’s (BoC) target. The BoC expects inflation to pick up slightly in the months to come with the tax-free holiday coming to an end and the potential impact from tariffs.
• Canada’s retail sales will be announced on Friday. Retail sales rose by 2.5% in December. However, early estimates showed a 0.4% decline in January. Consumer confidence has been dropping amid economic uncertainty in response to tariffs, which could weigh on spending activity.
• The Fed makes its interest-rate announcement on Wednesday. The target range for the federal funds rate currently stands at 4.25%–4.50%. Markets expect the central bank to hold steady but will comb through statements to find any clues on the Fed’s predictions of how trade tensions will impact the US economy.
• Looking around the world, US retail sales will be announced today, the Bank of Japan’s rate decision on Tuesday, European inflation data on Wednesday, the People’s Bank of China’s rate announcement on Wednesday night and the Bank of England’s rate decision on Thursday.

It will be a busy week for economic announcements, which could cause some swings in financial markets. Canada and many other economies will closely monitor developments in global trade. Canada’s economy could struggle as tariffs are put into place. However, Canada’s economy has proven its resiliency over time and has overcome many downturns in economic conditions.

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