Bank of Canada Holds Steady as Trade War Clouds Economic Outlook

The Bank of Canada is expected to hold its key interest rate at 2.25 per cent on Wednesday, according to financial markets.

As of early Tuesday, markets were pricing in a 97 per cent likelihood of no change, based on data from the London Stock Exchange Group.

The central bank has kept the rate steady since December, when policymakers said it was 'at about the right level' to keep inflation close to target while supporting the economy.

However, U.S. tariffs and Ottawa's countermeasures are now threatening to slow down the economy and put pressure on inflation, complicating future rate decisions.