Bank of Canada Holds Rates Steady Amid Trade Tensions

The Bank of Canada has decided to keep its overnight rate at 2.25% for another year, according to a Reuters poll of economists.

This decision comes as policymakers are closely watching signs of rising inflation and weaker economic activity due to the ongoing trade tensions with the United States.

The survey, taken after Canadian Prime Minister Mark Carney walked away from the latest round of tariff negotiations on August 22, showed that all 35 economists expected the overnight rate to stay on hold at the conclusion of the Bank's policy meeting on September 2.

Economists believe that stable core inflation suggests demand remains weak, giving the central bank room to wait before raising rates. In fact, nearly half of economists (47%) said the BoC will raise rates at least once by end-Q2 2027.