Bank of Canada Holds Key Rate Amid Ongoing Trade Uncertainty

The Bank of Canada has decided to keep its benchmark interest rate at 2.25% for the seventh consecutive time, citing uncertainty caused by new U.S. tariffs and the ongoing war in Iran.

Bank of Canada governor Tiff Macklem noted that the persistence of the Middle East conflict has increased inflationary risks due to higher global energy prices.

The Bank of Canada's policy rate remains unchanged, despite a rebound in economic growth, which surged 3.3% annually in the second quarter.

However, Macklem warned that the trade dispute with the United States poses an inflation risk if higher prices are passed on to consumers due to counter-tariffs.