The Bank of Canada is almost ready to join the other major central banks in cutting interest rates.

But not yet. The consensus agreed by Governor Stephen Poloz and his deputies this week was to leave the benchmark rate unchanged at 1.75 per until at least the end of October, when the central bank’s leaders next assemble to update policy.

The decision implies that policy makers think there is enough stimulus in the system to counter the effects of the trade wars for a little while longer. Exports of non-energy goods and services were lacklustre this spring, and business investment in machinery and equipment plunged in the second quarter. But with inflation at target, the central bank opted not to hold the line.

“Canada’s economy is operating close to potential,” the Bank of Canada said in its new policy statement, published Sept. 4. “However, escalating trade conflicts and related uncertainty are taking a toll on the global and Canadian economies. In this context, the current degree of monetary stimulus remains appropriate.”

The central bank estimates that Canada’s potential, or non-inflationary, rate of growth is about 1.8 per cent. The economy accelerated to an annualized pace of almost four per cent in the second quarter, making up ground lost over the winter when the economy nearly stalled.

Hiring is strong, wages are advancing at a fast pace, and the housing market has pushed through a rough patch. The benchmark lending rate is lower than inflation, an indicator that the economy is unconstrained by the cost of money, and the Canadian dollar is about three per cent lower than it was a year ago and about nine per cent lower than two years ago. Rate cuts by the Federal Reserve have pushed bond yields lower not only in the U.S., but around the world, including Canada.

That existing stimulus separates Canada from some of the countries where central banks have been cutting interest rates. Lower borrowing costs would spur new lending at a time when household and corporate debt already is at elevated levels. Most of Canada’s trade is with the United States, where domestic spending is strong, providing an additional buffer against the global slowdown.

“We do not see the need for the BoC to rush into rate-cut mode,” Sébastien Lavoie and Dominque Lapointe of Laurentian Bank told their clients last week in a note. “Trade tensions could ease. Germany, China, and the U.S. could announce fiscal stimulus measures. Additionally, Canada is already importing lower financing rates because of the global race to the bottom in bond yields.”

Most analysts and traders assumed the Bank of Canada would leave interest rates unchanged this week, while setting itself up to cut at meetings in October or December at the latest. The assumption is that the negative effects of the trade wars will eventually consume Canada the way they have countries such as Australia, Germany, and South Korea.

The Bank of Canada indicated that it’s constrained in taking out insurance against a global downturn by elevated levels of private debt. Policy makers noted that resurgent demand for home loans, “could add to already-high household debt levels, although mortgage underwriting rules should help to contain the buildup of vulnerabilities.”

Still, they were clear that the trade wars will determine the path of interest rates for the foreseeable future.

“As the bank works to update its projection in light of incoming data, Governing Council will pay particular attention to global developments and their impact on the outlook for Canadian growth and inflation,” the statement said.