Bank of Canada Holds Rate Steady Amid Tariff Uncertainty

The Bank of Canada held its benchmark interest rate at 2.25% for the seventh consecutive time, as concerns over new U.S. tariffs and the ongoing conflict in Iran weigh on the central bank's outlook.

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

The economy is showing signs of rebounding, but new trade restrictions could hamper business confidence and lead to delayed investment and hiring decisions, Macklem said.

Monetary policymakers at the Bank of Canada are focused on keeping a lid on inflation and supporting economic growth, but acknowledge that they cannot offset the effects of tariffs or influence global energy prices.