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With the Bank of Canada maintaining its trend setting interest rate at 0.5%, market watchers are turning their attention to the U.S. Federal Reserve this week. The FOMC will be releasing its latest interest rate decision on Thursday.

The U.S. Fed has made it clear it wants to raise rates but expectations are fading that there will be an increase this month. The slowdown in China and recent stock market volatility have triggered fears of a global recession. Those fears appear strong enough to have the Fed stand pat, for the time being at least.

The situation in China has some Canadian economists speculating about the possibility of another rate cut here. However, given the optimistic economic outlook for the second half of the year, it seems more likely the BoC will remain on the sidelines.

The Bank wants Canada's export sector to take over from debt-fueled consumer spending as the main driver of the economy.

Canada's debt to household income ratio hit a new, record high of 164.6% in Q2.

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