Bank of Canada Holds Rate as Tariff War Clouds Future

The Bank of Canada kept its benchmark overnight rate at 2.25% on Wednesday, extending a policy pause that has lasted nearly a year.

Policymakers weighed a resilient domestic economy against the deepening trade conflict with the United States.

Canada's retaliatory duties are scheduled to kick in on September 8, threatening to add fresh inflationary pressure just as price growth has crept back toward the upper end of the central bank's comfort zone.

The upside risks to inflation have increased, while new tariffs make growth prospects more uncertain.