Bank of Canada Braces for Trade War Uncertainty in Rate Decision

The Bank of Canada faces a challenging decision on interest rates as trade tensions between Canada and the US escalate.

The central bank has maintained its benchmark rate at 2.25% for nearly a year, but recent tariff measures have introduced uncertainty into the economic forecast.

Economists believe that the Bank of Canada will stick to the status quo, but some warn that the trade war could lead to a slower pace of growth in the second half of the year.

BMO chief economist Doug Porter expects the third quarter to resemble the early days of the 2025 trade war, when a lack of clarity about tariffs weighed heavily on business activity.