Canada's Central Bank Keeps Rates Steady Amid Volatile Oil Prices
The Bank of Canada's Governing Council is confident that the economy has rebounded in the second quarter of 2026, but members are divided over how long this momentum will last.
The central bank kept its policy rate at 2.25% on July 15, holding firm for the sixth consecutive time. It projected annualized GDP growth of about 2.5% for the April-to-June period, a rebound from an economy that had broadly stalled over the prior year.
However, confidence has its limits, as oil prices remain volatile and inflation risks linger. The conflict in the Middle East drove global benchmark crude to around $120 per barrel in April before a provisional US-Iran agreement brought it back to around $75 in June.
New tariffs announced by U.S. President Donald Trump are adding fresh uncertainty to Canada's economy, raising concerns about homebuyer confidence, interest rates, and the path forward for the housing market.