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How Political Uncertainty Is Shaping Canadian Markets
By Validus - 28 September 2025
Kambiz Kazemi, Chief Investment Officer
Summary
In this BNN Bloomberg interview, Kambiz Kazemi, CIO at Validus Risk Management, shares his perspective on the forces shaping Canada’s economic outlook for 2025. He discusses the pressures facing households, the risks around rising bankruptcies and mortgage renewals, and the broader political uncertainty ahead. Kambiz also highlights how global economic desynchronization - especially the strength of the U.S. economy - is influencing markets, currencies, and investment strategy. His insights offer a grounded and accessible look at what Canadians and investors should be watching in the year ahead.
Takeaways
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Canada heads into 2025 with households carrying high debt levels, and many mortgages set to renew at higher rates
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Bankruptcies have risen year-over-year, though there are early signs that the pace may be starting to stabilize
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The Bank of Canada’s rate cuts aim to ease pressure, but the impact will take time to flow through the economy
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Employment remains the most important indicator to watch - steady for now, but a key risk if conditions worsen
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Political uncertainty could trigger an early federal election, with markets likely reacting positively to a potential Conservative win
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The U.S. economy continues to outperform, creating a widening gap that influences interest rates and currency movements
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The Canadian dollar may weaken further if Canada’s slowdown deepens or unemployment rises
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U.S. fixed income and increased foreign exposure may offer attractive opportunities for investors navigating 2025’s risks