Bank of Canada Holds Rate Amid Ongoing Trade War Uncertainty

The Bank of Canada has decided to hold its overnight interest rate at 2.25%, marking the seventh rate hold in a row. According to Jamie David, vice-president of mortgages at Ratehub.ca, this decision was widely expected and reflects the bank's difficult position in balancing between tariff-driven inflationary pressures and the risk that a prolonged trade war will slow economic growth.

'The Bank of Canada has little room to move aggressively in either direction,' said David. 'However, future rate cuts remain on the table if the trade war begins to weaken consumer spending, business investment, and employment.'

David also noted that fixed rate mortgages could move in either direction in the coming weeks, depending on how the trade war and conflict in Iran develop.