Bank of Canada Sticks to 2.25% Rate Amid Trade Uncertainty

The Bank of Canada has maintained its key policy rate at 2.25%, citing solid economic growth in the US and recent data coming in line with forecasts. This decision was made despite ongoing uncertainty around trade talks between Canada and the US, which have led to new tariffs being imposed by both countries.

Bank Governor Tiff Macklem emphasized that while these tariffs may hit targeted sectors hard, they are not expected to have a significant impact on overall economic activity. The Bank also noted that energy prices remain high due to ongoing conflict in the Middle East, but did not expect this to have a large direct impact on inflation.

The Governing Council's decision was based on an assessment of recent data and evolving risks to the outlook, with Macklem stating that uncertainty about the sustainability of economic growth has increased. However, he also noted that the Bank is prepared to adjust monetary policy as needed in response to changing circumstances.