Perspectives de mi-exercice 2025 du marché : la trêve commerciale donne une marge de manœuvre dans un contexte de pressions budgétaires croissantes

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Jennifer Lee, Brian G. Belski, June Zimmer juin 05, 2025 Renseignements sur les marchés

The U.S.-led trade war against China and other countries may be on pause for the moment, but uncertainty around what’s next still weighs on North America’s economy. At least investors are staying level-headed for now, said two BMO experts on a recent panel.

These were just some of the messages coming out of an exclusive market and economic outlook event in Calgary that featured Jennifer Lee, Senior Economist and Managing Director, BMO Capital Markets, and Brian Belski, Chief Investment Strategist, BMO Capital Markets, moderated by June Zimmer, Regional President for Western Canada, BMO Private Wealth.

April was marked by extreme volatility after the U.S. introduction of “Liberation Day” tariffs, but Jennifer Lee is now breathing easier after the U.S. and China stepped back from the brink. “We had the two leaders of the largest economies in the world basically walk up to the edge of the cliff, take a look over and then walk it back,” she said. “Whether or not they’ll make a deal remains to be seen, but the fact that they walked things back is good news.”

An evolving issue

The story isn’t over, of course. While the U.S. also paused many of the tariffs it announced on its other trading partners, including Canada, the end of the 90-day pause on tariffs still looms large. At the same time, the U.S. Court of International Trade recently struck down most of these tariffs and ordered the administration to stop collecting any duties that have gone into effect.

It’s still unclear what will happen on the July 8 expiration date.

In the meantime, Lee said the U.S. looks to be focused on negotiating new deals with its top 18 trading partners and there is optimism that deals will get done. “Hopefully, Canada makes the cut,” she said. “Everyone else is going to get a letter with a number that represents the cost of doing business in the U.S. We’ve been down this road before, but that’s how things are playing out right now.”

Tightening the belt

There’s also a new focus on fiscal austerity now that Moody’s has downgraded the U.S. government’s credit rating to AA1 from its highest level of AAA. While it wasn’t a shock that this happened, Lee noted the move would probably make it more difficult for the U.S. to pass its new tax and spending bill. “That’s not great news for longer-term rates,” she said. “It’s also not great news for the global economy.”

She said she expects growth in the U.S. to slow to about 1.3% this year and 1.4% next year. “That’s actually higher than we had before,” she noted. “We raised our growth forecast because of the 90-day pause with China, but it’s still down from the start of the year when we projected 2% growth for both years. Those are the scars of this trade war.”

That slow growth presents a problem for Canada, Lee said, given that 75% of our exports head to the U.S. and 55% of everything we import comes from there. “We’re expecting a technical recession here, with growth of just over 1% for the next couple of years. I don’t think any country is going to come out of this unscathed.”

More rate cuts to come

After a “very sticky” consumer price index report in April, Canada’s headline inflation came down a fair bit – a move Lee said was anticipated – but core inflation measures remain above 3%. “It’s really hard for a central bank that is trying to fight inflation to cut rates when inflation is actually heading higher,” she said.

While she’s waiting to see more data, Lee expects three more cuts to the Bank of Canada’s policy rate by the end of the year, bringing it down to 2%. In the U.S., the next Federal Reserve (Fed) rate cut will likely come in July, followed by six more by the end of next year. “We’ll probably see three more this year and three more next year,” she said of the U.S. Fed. “But again, things are going to be very, very fluid.”

Take stock of your strategy

When it comes to the markets, Brian Belski noted now is not the time to panic, reiterating his firm belief that the U.S. is in the midst of a 25-year secular bull market that began in 2009. Markets have begun to rally because investors are keeping their emotions in check and aren’t overreacting to the latest headlines. Going forward, he said he expects markets to be shocked into normalization and be less likely to experience the 20% swings we saw in April. “North America is still the greatest place in the world to invest in,” he added. “From our lens, there is absolutely, positively no reason to go anywhere else.”

In this normalized environment, Belski noted it’s time to move away from algorithms and get back to the basics of investing. “I believe we’ve entered what we like to call the golden age of stock picking,” he said. “You want to own stocks. You want to broaden your perspective and diversify your investments, becoming more stock- and thematic-centric. That’s what made us buy a little company called Apple in 2003.”

Diversity remains key, he explained, encouraging investors to own a little U.S., a little Canada and a little bit from other regions. “Whether it’s large cap, small cap, value stocks, dividend growth stocks – you should own a bit of everything.”

Breaking down barriers

Finally, Lee said she was hopeful the Canadian government will use the current crisis to make the tough decisions that will make the country a more competitive place. The previously announced $2 billion in infrastructure spending should have a positive spillover effect on the economy, but she noted she hopes to see cuts to personal and corporate taxes.

“But the obvious move, of course, is cutting down provincial trade barriers,” she said. “Over the past few months, I’ve realized that Canada is actually quite protectionist in our own right. We may not exude that, but we’re protectionist against each other. It would be very positive for the economy if we start breaking down those barriers.”