Bank of Canada Keeps Interest Rate Steady Amid Global Turmoil

The Bank of Canada has decided to keep its key interest rate at 2.25% amid growing concerns over global conflict, rising energy costs, and new U.S. tariffs.

According to Governor Tiff Macklem, the governing council reviewed recent data and considered the risks to the economic outlook before making their decision.

Macklem noted that the conflict in the Middle East has persisted without a clear resolution since July, leading to high oil prices, while new U.S. tariffs are weighing on Canadian exporters.

The Bank reported that Canada's economy strengthened in the second quarter with GDP rising 3.3% after weak growth earlier in the year.

Macklem emphasized that the recovery is broad-based, with solid consumer spending and a pickup in housing activity, but warned that new U.S. tariffs pose risks to the sustainability of the recovery.