Bank of Canada Stands Pat Amid Trade Tensions and Rising Oil Prices

The Bank of Canada maintained its policy rate at 2.25% on Wednesday, weighing the country's strengthening economy against rising inflation risks and trade uncertainty.

The central bank kept its overnight rate target unchanged, with the Bank Rate at 2.50% and the deposit rate at 2.20%. The decision aligns with its July outlook, but policymakers warned that inflation risks have increased due to elevated oil prices and new U.S. tariffs.

Canada's economy rebounded in the second quarter after a weak start to the year, driven by growth across consumption, housing, exports, and business investment. The unemployment rate also decreased in July, although labor demand remains subdued, and the economy still shows excess capacity.