Bank of Canada Maintains Interest Rate at 2.25% Amid Complex Economic Backdrop

The Bank of Canada has maintained its policy rate at 2.25% as it navigates a complex macroeconomic backdrop, characterized by a weaker growth environment and persistent excess supply.

Policymakers assess that the current stance is appropriately calibrated to balance competing forces within the economy, including a modest contraction in GDP in the first quarter of 2026 and temporary elevated headline inflation driven by energy prices.

The Canadian economy continues to operate below potential, with residual slack evident despite emerging signs of stabilization in labour market conditions and expectations for a near-term rebound in activity.