The Bank of Canada is taking a cautious approach to future interest rate hikes, according to recent deliberations. Monetary policymakers acknowledged that additional rate increases may be necessary to curb the broader impact of rising energy prices, but they emphasized the need for careful consideration due to ongoing uncertainties, particularly around U.S. tariffs and the Middle East conflict.
In a summary of deliberations released Tuesday, officials stated they would proceed with one decision at a time. The Bank of Canada had raised its interest rate to 2.5% late last month, marking the first hike since 2023. Governor Tiff Macklem noted that the central bank’s inflation outlook had been revised upward, with projections now forecasting inflation to exceed 3.5% by the end of 2026 and remain above 3% throughout much of 2027.