Bank of Canada Stands Pat on Interest Rate Amid Tariff Uncertainty

The Bank of Canada has kept its key policy rate at 2.25%, as widely expected, but highlighted rising inflation risks and uncertain growth prospects due to new U.S. tariffs.

The central bank noted that the benchmark rate has been unchanged for 11 months despite worsening trade tensions between Canada and the United States.

U.S. President Donald Trump's latest 50% tariffs on some Canadian imports took effect after the second-quarter GDP data, which showed a rebound at an annualized rate of 3.3%, but also faces competing risks from the escalating trade dispute.