Bank of Canada Stands Firm on Interest Rate Amid Inflation Worries

The Bank of Canada has decided to keep its key interest rate at 2.25% amid concerns about inflation. In a press conference, governor Tiff Macklem stated that while the economy is performing in line with expectations, inflation risks have grown due to global pressures such as the conflict in the Middle East and the US trade war.

Macklem emphasized that policymakers will continue to monitor how Canada responds to these external factors and are prepared to adjust monetary policy as needed. He noted that inflation is currently running at three percent, which is too high according to the bank's commitment to deliver a two percent inflation rate.

The governor highlighted the ongoing conflict in the Middle East as a significant risk factor, stating that its prolonged nature increases the likelihood of higher prices and inflationary pressures.